TODAY FOREX IN REVIEW

Although the ECB Bazooka has had a calming effect on most European markets, there are still cracks appearing, mainly centered on Spain. Outspoken German Finance Minister Schaeuble reiterated his opposition to further Spanish bailouts, commenting that it could instigate a fresh round of crisis with respect to increasing the bank bailout. Based on the recent deposit outflows, Spain's banks will need to raise fresh capital to shore up balance sheets as bad loans continue to grow. Meanwhile a two-day meeting has begun in Cyprus, the next casualty of the sovereign debt crisis. Equity indices closed mostly lower with the French CAC 40 plunging -1.18% while the Italian MIB lost -1.07%. The FTSE 100 and Swiss SMI outperformed peers, rising 0.65% and 0.36% respectively. EURUSD continued its climb, rising above the 1.30 handle to 1.3013.

Asian stocks are soaring following the newest quantitative easing announcement from the U.S. Federal Reserve. Equity indices are higher across the board as the Hang Seng soars 2.52% followed by a 1.54% move higher in the Nikkei. The Australian ASX is also stronger, rising 1.07%. As global central bankers go ahead and add stimulus in Europe, Asia, and the U.S., risk appetite has roared back as confidence returns. Commodities, especially energy and precious metals have jumped on the announcement with WTI crude oil cruising over the $98 handle to $98.94 per barrel. Gold has continued its momentum higher, rising to $1774.70 while silver is surprisingly weaker, falling -0.24% to 34.695. Major asian currencies are trending higher against the dollar led by the 0.51% gain in NZDUSD followed by the 0.34% rise in AUDUSD.

Ben Bernanke's decision to ease further has been the impetus for major upside in risk assets as capital flows into equities and commodities. Quantitative easing 3 will be focusing mainly on mortgage backed securities which are to be purchased at a rate of $40 billion a month with no final date set for purchases to end. The rate statement came as expected with the Federal Reserve adjusting the extended rate policy language to "mid-2015". The plan is to combat labor market weakness and return the U.S. to a more sustainable growth path. Equity indices increased their ascent to the highest levels since 2007 led by the 1.63% gain in the S&P 500. The Dow Jones added 1.55% while the Nasdaq returned 1.33%. The dollar index has fallen -0.18% as investors move out of safe-haven assets as "risk-on" mentality returns.
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