Global Markets Rebound on back of Favorable Macro-Economic Policy

Global commodity and equity markets have staged a rebound from recent lows after the United States government signaled its intentions to prolong an economic stimulus program.

Chairman of the US Federal Reserve Bank, Ben Bernanke, in testimony before the US Congress yesterday stated the United States Central Bank stands ready to broaden monetary stimulus. The Fed has pledged to keep rates low at least until the middle of 2013 amongst other measures to stimulate the global economy if need be.

As at 11:24 AM US Eastern time, markets across the Americas were up, the Nasdaq Composite Index had gained close to 0.95%, the S & P 500 Index was also up half a percent. In Europe markets fared even better with the French CAC 40 index up 4.08%, and the German DAX Index up 4.61%.
Markets were also helped as the international Monetary Fund’s European Department director Antonio Borges stated that the Washington Based lender would be willing to participate in a secondary bailout for Greece.

Commodity markets staged a comeback today on the news from policy makers, with the S & P GSCI up by as much as 2.1% in trading today. According to Bloomberg, Oil gained as much as 3.7 percent to $78.46 a barrel in New York, while copper rose as much as 3.1 percent to $7,009.75 a metric ton on the London Metal Exchange.

“Commodities are rallying on the back of higher risk appetite and prospects of more Fed action after Bernanke’s comments,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s a macro- and sentiment- driven rally after the massive losses recently, and may continue for a while, though the risks remain to the downside.”