Yields, Commodities Rise After Fed Action

123jump.com Staff
16 Dec, 2009
New York City

Federeal Reserve left its overnight lending rate range unchanged and signaled that the economy is improving and continued its stance of low rates for an extended period of time. Metals and commodities gained in trading. Credit Suisse agreed to a $536 million fine.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – The U.S. Fed left its overnight lending rate range unchanged and signaled that the economy is improving and continued its stance of low rates for an extended period of time. Metals and commodities gained in trading. Credit Suisse agreed to a $536 million fine.[/R]

Federal Reserve left its target rate range unchanged between zero and 0.25% and expressed optimism that the U.S. economy is improving. The rate committee also reiterated in an accompanying statement that rates will remain low for an extended period of time.

U.S. stocks traded sideways after the inflation rose at a faster pace and the Fed left rates unchanged. The CPI in November increased 0.4% after rising at 0.3% in October and the inflation in the Euro zone was 0.5%. UK unemployment was stable at 7.9%.

Nvidia Corporation led gainers in the S&P 500 index after the Federal Trade Commission sued Intel for monopolistic behavior. Adobe Systems reported a loss in the fourth quarter. Citigroup is set to price its $22 billion public offering and was sued by Abu Dhabi to annul its contract to purchase stocks that may lead to $7.5 billion loss.

British Air and its cabin crew union meet to avoid a strike during the holiday period. UK unemployment rate for the quarter ending in October was unchanged at 7.9% with 2.49 million unemployed. Banks and miners led the gainers in London trading.

Banks in Europe gained on the hopes that European regulators will delay the implementation of capital requirement rules. Greece plans to trim its fiscal deficit to 8.7% in the next year and S&P lowered its rating on the Greek sovereign debt. Credit Suisse agreed to $536 million fine from the U.S. and New York regulators.

Mumbai stocks edged higher after DB Corp IPO was oversubscribed nearly 40 times. National Stock Exchange will begin trading at 9:00 am from December 18. More and more Indian companies are looking to expand outside India as they gain competencies and confidence.

North American Markets

Dow Jones Industrial Average decreased 10.88 or 0.1% to a close of 10,441.12, S&P 500 Index edged higher 1.25 or 0.1% to 1,109.18, and Nasdaq Composite Index increased 5.86 or 0.3% to close at 2,206.91. Toronto TSX Composite Index added 53.65 or 0.2% to 11,637.04.

Latin American Markets Indexes

Mexico Bolsa Index increased 53.67 or 0.2% to 31,956.25 and Brazil Bovespa Stock Index fell 688.41 or 1% to 68,622.40.

Europe Markets Review

In London FTSE 100 Index closed higher 34.49 or 0.65% to 5,320.26, in Paris CAC 40 Index increased 41.73 or 1.09% to close at 3,875.82, in Frankfurt DAX index higher 92.09 or 1.58% to close at 5,903.43. In Zurich trading SMI increased 92.92 or 1.44% to close at 6,532.32.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 93.93 or 0.93% to 10,177.41, and Hang Seng index in Hong Kong decreased 202.18 or 0.93% to 21,611.74, and CSI 300 index in China lower 22.62 or 0.63% to 3,560.72. ASX 200 index in Australia decreased 11.60 or 0.25% to 4,661.90. The FTSE Bursa KL Composite index in Malaysia was lower 1.78 or 0.14% to 1,269.03.

The Kospi Index in South Korea decreased 1.61 or 0.10% to close at 1,664.24. SET index in Thailand closed higher 6.37 or 0.90% to 716.01. JSE Index in Indonesia increased 27.81 or 1.11% to 2,522.54. The Sensex index in India increased 35.61 or 0.21% to 16,912.77.

Commodities, Metals, and Currencies

Crude oil increased $2.06 to $72.75 a barrel for a front month contract, natural gas edged down 4 cent to $5.48 per mBtu and gasoline increased 3.24 cents to 187.75 cents.

Soybean future closed up 5.00 cents to $10.67 a bushel. Wheat futures closed down 0.5 cents in Chicago trading to $5.37 a bushel. Sugar closed higher 1.12 cent 25.94 cents.

Gold increased $15.80 in New York trading to close at $1,138.00 per ounce, silver closed up $0.27 to $17.72 per ounce and copper for the front month delivery increased 5.40 cent to $3.19 per pound.

Dollar closed lower against euro to $1.453 and edged higher against the Japanese yen to 89.77.

Yield on 10-year U.S. bonds increased to 3.60% and with 30-year maturities closed unchanged at 4.52%.