MORNING BID-It's all about the Fed (and FAANGs)

A look at the day ahead from Dhara Ranasinghe.

The U.S. Federal Reserve concludes its first meeting of the year later on Wednesday and Chairman Jerome Powell will likely reiterate that it's too early to discuss tapering asset purchases.

Financial markets, where 10-year Treasury yields hit 10-month highs earlier this month on expectations of a fiscal boost from President Joe Biden's adminstration, will be watching closely.

So far, there is no sign the Fed will veer from its current stance. Interest rates are pinned near zero and no change is expected for perhaps three years to come. The economy remains about 10 million jobs short of where it was last February.

Still, a note of caution is apparent in equity markets, off their highs, and currencies too with the dollar drifting sideways.

Ongoing concerns surrounding the vaccination process and virus mutations may also weigh -- global coronavirus cases have now surpassed 100 million.

But upbeat earnings from Microsoft are providing support -- its shares rose 5% in extended trading on Tuesday after it reported its Azure cloud computing services grew 50%. Microsoft shares gained about 41% last year as COVID-19 shifted computing to areas where the software maker has bet big.

All eyes now on Facebook and Apple earnings later in the day.

South Korea's LG Display Co meanwhile reported its highest quarterly profit in over three years on Wednesday and Profits at China's industrial firms grew for the eighth straight month in December.

And for those concerned that an "irrational exuberance" is taking hold in stock markets, GameStop should remain in focus after skyrocketing for a fourth straight day on Tuesday thanks in part to a tweet from Elon Musk.

Other key developments that should provide more direction to markets on Wednesday: * German consumer confidence data * U.S. corporate earnings: AT&T, Boeing, Blackstone, Nasdaq, Apple, Facebook, Tesla, Whirlpool * SEB Q4 net profit tops forecasts, targets higher dividend * U.S. to sell $28 bln of 2-year notes, Germany to sell 4 bln euros of 10-year Bunds * Markets watching for syndicated bond deal from Greece *Unicredit holds board meeting; sources say Andrea Orcel to be new CEO

(Reporting by Dhara Ranasinghe)