The US Federal Reserve has unveiled greater purchases of securities in order to inject fresh stimulus into the economy: ´´The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. ´´

The US ISM services index rose from 53.2 to 54.3 in October, above forecasts for a reading near 53.5. Most key components were higher including orders and employment. The ADP employment index revealed that private sector employers added 43,000 positions in October. And factory orders rose by 2.1pct in September.

European shares fell for the first time in five days as investors awaited the Federal Reserve decision. The FTSEurofirst index fell by 0.4pct, with the UK FTSE down 0.2pct and the German Dax down 0.6pct.

US sharemarkets gyrated on the news of the Federal Reserve securities purchases but settled as the size of the stimulus met expectations. General Motors has also unveiled details of its US$13 billion initial public offering. The Dow Jones closed higher by 26pts or 0.2pct with the S&P 500 up 0.4pct and the Nasdaq was higher by almost 7pts or 0.3pct.

US treasuries rose (yields lower) on Wednesday after the Federal Reserve decision. US 2yr yields fell 2pts to 0.332pct and US 10yr yields fell 2pts to 2.574pct.

The US dollar gyrated markedly on the Federal Reserve monetary policy announcement but it has since resumed its slide against major currencies. The Euro is ending US trade near US$1.4140 after trading from US$1.3990 to US$1.4160. The Aussie dollar is ending the US session near session highs of US$1.0044 after trading as low as US99.90c. And the Japanese yen is currently around 81.10 yen per US dollar after trading from JPY80.55 to JPY81.55.

US crude oil prices hit fresh six-month highs on Wednesday after data showed that US inventories of gasoline fell more than expected last week. The Nymex crude oil contract rose by US$1.04 or 1.2pct to US$84.94. In after-hours trade oil was trading near US$85.10 a barrel.

Base metal prices generally eased on the London Metal Exchange on Wednesday, the exception being nickel, up 0.3pct. Other metals fell between 0.5-2.1pct as traders squared positions ahead of the Federal Reserve decision. And the Comex gold futures price fell by US$19.30 an ounce to US$1,337.60 ahead of the Federal; Reserve decision. In after-hours trade gold has lifted to US$1,346 an ounce.

Ahead: In Australia, retail trade, international trade and car sales data are released. News Corp releases its profit result. In the US weekly jobless claims and productivity data are released.

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