FOREX TRADING

U.S. Market Update

Dow +150 S&P +18 NASDAQ +37.5

US equity indices opened higher for a second consecutive morning today and gained steadily in early trading. Dollar weakness is feeding into the picture, as the greenback continues to absorb fallout from the UK Independent’s sensational (and now mostly discredited) claims about major industrial and crude producing nations dumping the dollar for oil trading. Spot gold shot above its all-time highs of $1,032.40 before the open, to trade around $1,041 in mid-morning action. Australia became the first major nation to raise interest rates, as the RBA said it was time to begin withdrawing monetary stimulus ahead of the global economic recovery. Front-month crude is strong on all the optimism, with the contract trading just shy of $72 this morning. Treasury prices are a bit softer ahead of this afternoon’s $39B 3-year note offering. The 10-year yield has returned to 3.25% while the long bond has climbed back above 4%.

The regional banks are making steady gains hand in hand with everybody else, with the notable exception of Marshall Ilseley, which warned investors that its Q3 loss would be nearly twice the expected amount. MI’s CEO said that while the firm is seeing some improvement in credit quality, it still assumes the recession will be a big factor for several more months. Shares of MI were up 6% on improving credit quality metrics included with the guidance call, but have fallen to around even in early trade. (more…)