News Headline Summary

US MID-SESSION UPDATE 12/12/12

In US equities the DJIA and the S&P 500 trade in positive territory while the Nasdaq 100 trades flat, although moves before the major event of the day, the FOMC rate decision, were slim. Equity markets started the session with minor moves to the downside as participants awaited the FOMC decision. Comments from Washington regarding the fiscal cliff continue to indicate that negotiations are intensifying with both parties saying they are committed to making a deal. Aetna were among the best performers in the S&P rising 4% after the company gave a better than expected earnings forecast for 2013. The major moves of the day followed the FOMC rate decision where as expected QE was extended to a total of USD 85bln and rates were unchanged at 0.25%, the surprise of the day was that the Fed are following the ‘Evans Rule’ so these historically low rates are here to stay. For a full break down of the FOMC rate decision and its implications please see the RANsquawk website. Treasuries trade lower following the optimism regarding the fiscal cliff negotiations, though a bounce was seen after a well received 10y note auction. The news of additional QE, as expected, also weighed on T-notes.

EUR/USD trades near session highs that were seen after the rate announcement following weakness in the USD subsequent to the news of additional QE, this is a trend also observed across other USD pairs including GBP/USD and AUD/USD.

WTI and Brent crude futures trade in positive territory with prices being supported by USD weakness. Also contributing to the move to the upside was the news that the IEA raised their global demand forecast for 2012 and 2013.

12 Dec 2012 - 12:32 - Fixed Income - Source: RANsquawk

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