Wednesday, January 27, 2010
U.S. equity markets are trading flat to better ahead of this afternoon’s Fed interest rate policy announcement. Traders will most likely be focused on whether the Fed votes to extend
or end its mortgage buyback program as this will have a direct effect on the U.S. housing industry.
If this announcement turns out to be a non-event, then stocks could feel pressure as the focus will shift back to the possible developing slowdown in the global economy. This news has
been causing traders to take risk off the table as traders seek shelter in lower risk assets.
Treasury futures are trading flat to higher. Look for Treasury futures to rise if the Fed votes to extend its mortgage buyback program. This stimulus measure has kept pressure on
interest rates.
The direction of February Gold will be dependent on the direction of the Dollar. A stronger Dollar will put pressure on precious metals. Any hint at higher interest rates is likely to
drive the Dollar higher and gold lower. A surprise announcement about inflation will …
