Thursday August 6, 2009 - 13:23:41 GMT
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Forex Hound - www.forexhound.com
Equity Traders Looking at Strong Opening
The surprise announcement by the Bank of England this morning and the report that U.S. Initial Jobless Claims declined more than estimated is helping to trigger a strong rally in the U.S. equity markets.
Look for U.S. equity markets to open higher driven by the news that the BoE will spend another $84 billion to help stimulate the U.K. economy out of its current recession. In addition, news that the U.S. weekly jobless claims declined is sending out a signal that recessionary pressures may be easing.
September Treasury Bonds and Notes are under pressure this morning. Yesterdayâ€™s bearish news that the Treasury will auction another $75 billion in debt next week is still lingering on the minds of traders. A strong rally today in the equity markets is expected to keep even more pressure on the Treasuries.
The Dollar is trading higher versus the September British Pounds. This morning the Bank of England announced an extension of its asset buyback program and voted to increase funding by $84 billion. This news took the wind out of the sale of the uptrending September British Pound. The September Euro is trading flat to lower. This morning the European Central Bank announced that it interest rates were â€śappropriateâ€ť for the current economic situation in the Euro Zone.
December Gold is trading higher this morning because of the news from the Bank of England. The more by the BoE is expected to weaken the British Pound because it entails the â€śprinting of money.â€ť The type of program being implemented can lead to inflation if applied improperly.
Results are mixed this morning in the energy complex. Higher equity markets are likely to be supportive for September Crude Oil, but a stronger Dollar may put a limit on any gains.
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