U.S. equity markets surged to the upside following a strong opening on bullish comments from Fed Chairman Bernanke. In a speech before other central bankers, Bernanke said the global economy was emerging from recession. Thin conditions because of summer vacations and option expiration may have helped contribute to the spike to the upside. Traders are a little pessimistic about this market into the close as many feel the rally was overdone and vulnerable to a profit-taking correction.
September Treasury Bonds and Notes weakened following Bernanke’s positive comments and after the release of the better than expected U.S. existing home sales report. Traders may be pricing in the possibility of the U.S. leading the world out of the recession and being the first central bank to raise interest rates.
The Euro opened the New York Session sharply higher following the release of better than expected economic reports out from France and Germany. The reports showed surprise improvements in French manufacturing and German services. This news set the table for a spike to the upside until Fed Chairman Bernanke declared that the U.S. economy was on the verge of emerging from the recession. His statement sent the Dollar soaring putting downside pressure on the Euro.
The Japanese Yen erased early morning gains to post a loss at the midsession. Overnight the Yen was trading higher because of the reversal of the carry trade following weakness in Asian stock markets. The surge in U.S. equity markets and the thought of an economic recovery in the U.S. encouraged traders to buy the Dollar and sell the Yen throughout this morning’s trading session.
December Gold rallied sharply higher following a weaker opening in the U.S. Dollar. Despite the intraday rally in the U.S. Dollar and equity markets, gold was able to hold on to almost all of its gains. This could be because traders are thinking about inflation now that Bernanke has just about declared an end to the global recession.
December Crude Oil is trading better at the midsession but not as strong as one would expect following the news that the global economy was emerging from recession. Demand is expected to increase as the global economy improves, but today’s light advance could be an indication that the rally earlier in the week may have been overdone. Crude oil did hit a new high for the year, but the lack of follow-through to the upside led traders to take profits and perhaps wait for a dip to buy.
September Treasury Bonds and Notes weakened following Bernanke’s positive comments and after the release of the better than expected U.S. existing home sales report. Traders may be pricing in the possibility of the U.S. leading the world out of the recession and being the first central bank to raise interest rates.
The Euro opened the New York Session sharply higher following the release of better than expected economic reports out from France and Germany. The reports showed surprise improvements in French manufacturing and German services. This news set the table for a spike to the upside until Fed Chairman Bernanke declared that the U.S. economy was on the verge of emerging from the recession. His statement sent the Dollar soaring putting downside pressure on the Euro.
The Japanese Yen erased early morning gains to post a loss at the midsession. Overnight the Yen was trading higher because of the reversal of the carry trade following weakness in Asian stock markets. The surge in U.S. equity markets and the thought of an economic recovery in the U.S. encouraged traders to buy the Dollar and sell the Yen throughout this morning’s trading session.
December Gold rallied sharply higher following a weaker opening in the U.S. Dollar. Despite the intraday rally in the U.S. Dollar and equity markets, gold was able to hold on to almost all of its gains. This could be because traders are thinking about inflation now that Bernanke has just about declared an end to the global recession.
December Crude Oil is trading better at the midsession but not as strong as one would expect following the news that the global economy was emerging from recession. Demand is expected to increase as the global economy improves, but today’s light advance could be an indication that the rally earlier in the week may have been overdone. Crude oil did hit a new high for the year, but the lack of follow-through to the upside led traders to take profits and perhaps wait for a dip to buy.
