Finexo Market news and Recommendations

• FX: CHF and JPY retreating after the rescue/bailout of AIG and the FOMC decision to keep rates at 2%. USD edging higher.

• Fixed Income: 10-years trading in big ranges, directionless.

• Stocks: US and APAC sessions +1% higher. Europe stock are down by 2-3%.

• Commodities: Crude Oil finally seeing some buying interest. Precious metals are consolidating.

• The markets are enjoying a broad based relief rally from the Fed assistance package that has been granted to AIG, the largest insurer by assets in the US. Considering the large potential implications of a the insurance company’s failure, Federal Reserve has decided to lend AIG $85B in return for a 80% share in the company stock, effectively nationalizing the firm.

• While leaving the policy rates unchanged at 2%, the US central bank can now be observed to focus increasingly on targeted, emergency short-term loans instead. The bank has also changed its general collateral policy, as it now allows securities firms to use stock holdings as loan collateral.

• The general rally in equities and carry trades also looks to extend to crude, with the oil prices rebounding from the steepest decline in 4-yr period. The oil prices have already seen a near 39% drop from the highs reached this year and have so far found support just above the $90 mark.