US markets close flat; commodities extend fall

**Fed delivers along market expectations; muted reaction as a decision already priced in

Fed says

- Extends Operation Twist by USD 267 billion for 6 months; it will now halt at end 2012 as against June 30 earlier

- Cuts GDP forecast range for 2012 to 1.9 - 2.4% from 2.4 - 2.9% earlier

- Unemployment forecast now at 8 - 8.2% as against 7.8 - 8% earlier

- Inflation expectations remain largely unchanged

- Language Change: Open to further easing 

“The Committee is prepared to take further action as appropriate to promote a stronger economic recovery“.

**Focus back to Europe

German Chancellor Angela Merkel to agencies: No concrete plans for the ESM to purchase periphery sovereigns

Alert: Eurozone heads of state meeting will be held tomorrow; French President Francois Hollande has been pushing for purchases 

ECB officials: Rate cuts are likely to be discussed at next meeting 

Alert: ECB non governing council will be meeting today

US markets at close: Dow Jones, S&P 500 Index and Nasdaq Composite were flat

European markets at close: DAX was up 0.5% and FTSE rose 0.6%; CAC went up 0.3%. Italy rallied 2.1% and Spain gained 1.5%

Asia Today

Nikkei moved up 0.9% whereas Hang Seng, Kospi, Straits Times, Taiwan Weighted and Shanghai were down 0.3-0.5%

Currencies

Dollar index hit a high of 81.7 post Fed while fell to 81.2 intraday. It settled at 81.58

Dollar index was largely unchanged at 81.56 today morning

Euro touched a high of 1.274 yesterday, before closing at 1.270 to the US dollar.

It was at session low of 1.267 today morning

US dollar was in the green as against Yen and Australian Dollar today 

Commodities

Brent crude was at its lowest since December 2010 that settled down over USD 3 a barrel at USD 92.7 a barrel

WTI crude closed down below USD 82 a barrel; EIA inventory moved up by 2.9 million barrels as against forecast of 1 million barrels

Crude corrected further today morning

Brent crude is currently at USD 92.2 a barrel, down 0.5% while WTI crude was down 1% at USD 80.6 a barrel

Gold was volatile yesterday; it hit intraday low of around USD 1520 an ounce post Fed, but got back above USD 1600 an ounce by close

Gold futures fell 0.9% to USD 1600 an ounce this morning

LME Copper was down around 1% yesterday

What to watch out for

EZ PMI’s, Consumer Confidence 

UK Retail Sales

US Initial jobless claims

US Existing home sales

Philadelphia Fed Index

FHFA Home Price Index

US Leading Indicators