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Current Futures: Dow -30.00, S&P -3.60, NASDAQ -6.75s
European markets are trading in the red, after Asian markets declined from a seven-month high. U.S. futures also moved lower during the overnight session, following the spot markets.
On Wednesday, the Fed minutes showed that the voting committee still sees a prolonged recession for the U.S. economy. Furthermore, they downgraded 2009 assessments saying that a slow recovery may come only in 2010. TheLFB-Forex.com Trade Team notes that this is not what the market had expected to see from Fed officials and again contradicts the recent “green shoots” cited recently in the financial media. To add further signs of doubt over the current economic activity, former Fed Chairman Greenspan said that banks still need large amounts of capital.
Unidentified sources said that the ECB debated at the last interest rate meeting to buy 125 billion euros in financial assets, instead of the 60 billion euros that were officially announced. This might have happened, as the ECB members were not able to find a compromise in the very large voting committee.
“The size of the asset buying program in the Euro-area is very small compared to the size of the economy,” TheLFB-Forex.com Trade Team. “The $60 billion are just 0.6% of the size of the Euro-area economy, and even a smaller percentage when compared with the size of the covered bond market. As such, some might argue that the decision to run an asset-buying scheme was taken only to calm the financial markets, since Mr. Trichet already denied any future plans to increase its size,” TheLFB-Forex.com Trade Team notes.
Overnight, the Japanese Nikkei declined 80.49 points (0.86%) to 9,264.15. The Australian S&P/Asx fell 10.70 points (0.28%) to 3,813.90. The U.K. Ftse shed 73.24 points (1.64%) to 4,395.07, while the German Dax slipped 73.63 points (1.46%) to 4,965.31.
Crude oil for June delivery was recently trading at $61.50 per barrel, lower by $0.50.
Gold for June delivery was recently trading higher by $4.10 to $941.20.
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