QE

The FTSE 100 has slumped 3%, gold has dropped 5% and gilt yields have spiked to their highest level in over a year as the prospect of an end to US QE rattles markets.

Markets across the globe tumbled overnight after the US Federal Reserve announced it may slow down asset purchases by the end of the year.

Bank of England (BoE) governor Mervyn King was defeated in his final bid to inject more stimulus into the UK economy, minutes from last month's minutes show.

Emerging market debt managers have been taking underweight positions in local currency bonds as they expect the dollar to strengthen once the Fed turns off the QE tap.

US markets followed shares across Europe higher overnight, while the dollar also surged, ahead of the latest Federal Reserve meeting in the States which may map out a QE exit strategy.

Equity income stocks could be among the biggest losers from an environment in which investors prepare for a tapering of US QE, investors have warned.

The last month has seen financial markets become increasingly unnerved by suggestions the US Federal Reserve is beginning to contemplate curtailing the rate of quantitative easing.

PROPERTY

The continued weakness of sterling against the US dollar has prompted fund buyers to move out of sterling-hedged share classes and into unhedged or dollar-denominated positions.

Japanese equities gave up nearly 200 points overnight as the Bank of Japan (BoJ) disappointed the market by opting to keep its monetary policy unchanged, failing to address concerns over bond market volatility.