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Current Futures: Dow +6.00, S&P +0.90, NASDAQ +0.50

European markets found the strength to open in the green, even though the Asian and the U.S. shares finished the trading session lower. U.S. futures closely followed the major indexes from Europe, and advanced overnight.

The financials were the top gainers in Europe, both on the German Dax and on the U.K.’s FTSE. On the U.K.’s FTSE, the only sector that declined was raw materials, after the same sector dragged lower the Asian markets. Commodity stocks declined as copper and oil posted strong declines on Wednesday, reducing the profit margin of the companies that are active in this industry. Only three stocks declined on the German Dax, and all of them posted very small declines. The top gainer was ThyssenKrupp, after Bank of America upgraded the stock to “buy”.

Later today, during the U.S. session, three major central banks will announce their new monetary policy stance. The three are the European Central Bank, which is expected to maintain the overnight rate at 1.00%, the Bank of England, which is seen maintaining the current 0.50% interest rate and leaving the size of the asset buying program unchanged, and the Bank of Canada, which should also leave its interest rate unchanged. TheLFB-Forex.com Trade Team notes that, all three major central banks reached the limits of conventional monetary policy, and there is not too much they can do in this field. The only thing left to do for the three is to continue the aggressive quantitative easing policy, but this has a very negative effect in the long run, including a very high level of inflation. 

The amount of news circulating in the market has been limited ahead of the three interest rate decisions. However, some rumors made their way to the top, including the Federal Deposit Insurance Corporation planning to drop the loan program, which would have helped private institutions buy toxic assets. To some extent, this was at the core of Treasury’s plan to scrap toxic assets off the bank’s balance sheets.
Hedge funds and other institutional investors were supposed to access a loan through the FDIC to buy the toxic assets in an auction type of sale (to assure the “appropriateness” for both the buyer and the seller). However, the FDIC halted the program saying that the financial markets have now retuned to normality. This echoes Mr. Geithner’s comments made one week earlier. 

Overnight, the Japanese Nikkei lost 72.71 points (0.75%) to 9,668.96. The Australian S&P/Asx slipped 82.60 points (2.06%) to 3,934.60. The U.K. Ftse added 25.86 (0.59%) to 4,409.31, while the German Dax advanced 33.08 points (0.65%) to 5,087.61

Crude oil for July delivery was recently trading at $67.30 per barrel, higher by $1.20.

Gold for July delivery was recently trading higher by $5.20 to $970.90.

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