Investing: Something to cheer about!

My speculation is that when you wake up later today, Global markets are set to rise at least another 0.8 - 2% until end of week taking cue from B Bernanke delivery of the Fed fund rate and statement.

In summary,

• QE2 will end in June,
• No change in Fed fund rates of 0-0.25% for another 1-2 Fed meetings (3 months)
• probabilty of QE3 has fallen;  as inflation has risen;

As a result

• Commodities add to gains there was no Fed surprise - Gold (closes at record $1528) silver and crude oil rose
• Commodity currencies strengthen as speculators take on more risk while VIX is at the low end around 15.35
• USD index closed at the low for 2011 at around 73.3!
• DJI, Nasdaq and S&P 500 (up 0.6% at 1356, highest since June 2008) all closed at record 2011 levels!
• US 10 year note yield rises 5 bp to 3.36%

If all is well, I would see continued risk appetite in equities, comodities and commodity currencies. Inflation to continue on the rise with respective countries using various monetary policies keeping inflation in check

However, risk appetite will be kept in check (temporary) with

• Geopolitical situation in MENA
• Earthquake (after shocks) in Japan and
• Possible situations in PIIGS with Greece and Portugal in focus

unless situations worsen.

Happy Investing!