Crude oil price extends further gain and rallies +2% to 71.7 in European morning. After Fed's comments, strong GDP data from the Eurozone fueled optimism for economic growth and improved oil demand.

In 2Q09, GDP in the 16-nation region Eurozone contracted -0.1% qoq, better than market expectation of -0.5%, following a -2.5% decline in the prior quarter. The reading indicated the pace of contraction has slowed down. Except for Netherlands, all major economies showed pleasant surprises with Germany and France turning into growth again on annualized rate.

Stock markets surge after the report. Germany's DAX index rises +1.3% to 5421 while France's CAC index adds almost +1%. In UK, the FTSE 100 index climbs to 10-month high after Prudential's earnings results beat estimates.
In Asia, stock advanced after the Fed signaled recession is ending. The MSCI Asia Pacific Index rose +1.6%. Hong Kong's Hang Seng Index added more than +2% as the blue chip Hutchison Whampoa and Cheung Kong reported better-than-expected earnings results.

High-yield currencies fight back for the second day as economic outlook gets stronger. The Euro rises to 1.426 while the pound soars to 1.66 against USD. Investors who had parked capitals in USD-denominated asset for safe-haven investment or speculations that the Fed would increase interest rate sooner than previous forecast probably changed strategies.

Gold price also rises above 960 as the dollar weakens. However, it will be difficult for the precious metal to stage a meaning rally as the dollar refuses to have deep correction. Moreover, diminished expectation on inflation also curbs interest in gold.

In the post-meeting statement, the Fed's view on inflation was the same in previous meetings. 'The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time'.

While hovering at high level year-to-date, TIPS breakeven rate suggested that anticipation for inflation has moderated. We believe this is the outcome after governments across the global reiterated low inflationary risk despite massive stimulus strategies.