Asian trade: Asian markets are trading mixed tonight, on a light volume, as the Nikkei is closed for business and the U.S. major indexes finished the trading session lower. U.S. futures continued to decline during the Asian session, having the S&P fall as much as 0.40%.
U.S. markets closed lower for the first time in the last few days, as investors became skeptical about the Fed’s actual influence over the real economy. Moreover, commodities soared as traders considered that the Fed’s decision to intervene in the debt market will spark inflation.
From a global perspective, the worst thing possible would be to assist another bubble in the commodity market, like last year. Not only because the economy is running without credit, but if commodities become more expensive it would also wipe out consumer incentive. The global economy could go very easily from recession –the current state – to inflationary recession, which would probably be a decisive hit for global economy.
Out of the 19 commodities that make up the Reuters/Jefferies CRB Index, every one of them rose yesterday. Among others, Silver rose 13%, the most since 1979, gold rose a whopping $69.70 or almost 8%, while crude touched $52 per barrel. The question now is, if the commodity market will be able to support these gains.
Tonight, the Nikkei was closed for business. The Australian S&P/Asx fell 2.80 points (0.08%) to 3,477.40.
Crude oil broke above the $50 benchmark. Crude oil for April delivery fell $0.60 to $51.10.
Gold retraced some of the gains seen in the last day of trading, tonight. Bullion for immediate delivery fell $6.50 to $952.30.