The release of the US Federal Reserve minutes last week merely cemented the markets' belief that further stimulus measures to prop up the US economy are highly likely following the next meeting in November.

Despite some doubts about the actual effectiveness of any new measures, in light of rising unemployment and high levels of debt, equity markets surged above their recent highs and closer to their highest levels this year.

The markets were also helped by better than expected third-quarter earning from a number of key companies.

JP Morgan surpassed expectations with a 23% leap in profits but was not rewarded by a share price rise. Concern about future Basel 3 capital requirements for banks and the raising of Tier 1 capital ratios also continue to weigh on the banking sector.

Mexican precious metals miner Fresnillo was in favour after it said silver production reached a record level in the third quarter. The company said it is on track to achieve its production targets for 2010 of 340,000 ounces of gold, and 41.1 million ounces of silver, while Rio Tinto was also up after having its price target raised to 4,500 by S&P equity research.

Vodafone also gained ground after a Nomura upgrade. The Japanese broker raised its target price to 200p, raised its earnings forecast, and kept a 'buy' rating.

On the technology side, Intel's Q3 results exceeded expectations, coming in at $0.52c a share, against an expectation of $0.50c, equating to a 59% jump in Q3 profit. Apple also continues to push higher, hitting $300 for the first time ever as buyers look to front-run the company's results due out next week.

EURO/DOLLAR

The Fed and European Central Bank continue to go in completely different directions with respect to their monetary policies but the catalyst for more selling of the dollar turned out to be the decision of the Monetary Authority of Singapore to widen the trading band for the Singapore dollar over concerns about rising inflation. This propelled the single currency through the $1.4025 resistance area which should now act as support in the near-term.

This now targets a move towards $1.4195, the 25 January highs, followed by $1.437. A failure to sustain this break suggests a move back towards the $1.38 level.

EURO/STERLING

The break above 0.88p saw the single currency spill over to 0.8838p, and fall short of the 0.8895p area, which is a 61.8% retracement of the 0.941p down move.

The failure to close above the 0.881p area keeps the onus slightly on the downside and a retest of the 0.87p level.

However, the single currency is currently finding support at about 0.877p and needs to push below these lows to target the previous week's low at 0.8698p.

Noises about further quantitative easing (QE) from British policy-makers have undermined the pound and have continued to limit its upside.

COMMODITIES

Commodities remain buoyant with gold reaching new all-time highs and threatening to breach the $1,400 level and silver just falling short of the $25 mark, its highest level for 30 years. Copper also remains strong, trading at $3.85.

Crude oil is also fairly robust on the back of a weaker US dollar after Opec left production targets unchanged.

Corn hit its highest levels for over two years after the US department of agriculture forecast that supplies in the world's top exporter would shrink to a 14-year low. This year's yield would still be the third-highest on record, but concerns in other parts of the world about grain supplies have spooked the markets, with soybeans also getting dragged higher.

News that the EPA will allow an increase in the percentage of ethanol in petrol is supporting this upswing. Almost a third of this year's corn crop will be converted to ethanol while 20% of the crop is exported annually.

The corn price now looks set to test its 61.8% retracement area between $5.85 and $5.95, its highest levels since the 2008 peaks of around $7.70, which would put it on course to have almost doubled in price since the 2009 lows at $3.02.

Brenda Kelly and Michael Hewson, CMC Markets www.cmcmarkets.ie