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Long-end of Treasury Complex Reacts Negatively to Fed Statement

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Dec 16, 2009.

  1. futuretrends24

    futuretrends24 New Member

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    Today’s sample of Futures Analysis from FuturesHound.com

    Stock indices managed to eke out a small gain after the Fed left interest rates alone but offered more details as to how it plans to exit its stimulus programs. Although the Fed said the employment situation was improving equity traders failed to take notice and instead focused on the thought of higher interest rates. Stock indices weakened shortly after the release of the FOMC announcement when buyers failed to show up. The charts indicate that the way of least resistance is down with 1096.75 the first target for the March E-mini S&P 500.

    The thought of higher interest rates helped pressure the Treasury complex with the long-end of the market taking the brunt of the selling. With the Fed slowly exiting from the asset purchase business, longer-term yields will now be allowed to rise. This put the pressure on the March Treasury Bonds.

    February Gold finished sharply higher. The weaker Dollar had little to do with today’s rally. Although the Fed implied that inflation was not an issue, yesterday’s uptick in PPI started the rally this week. Oversold factors could be contributing to the strength and there is always the possibility that central banks are buying again. The chart indicates a rally to $1155.50 is likely. This would complete a normal 50% retracement of the recent decline.

    Read full article at FuturesHound.com as well as Futures Analysis, Futures Education and exclusive timely market Gann Analysis

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