U.S. Stock Index futures are trading better at the mid-session, fueled by strong demand for equities following a string of better than expected earnings and outlooks for better earnings by a few major companies. Trading could become rangebound, however, as traders await results from Apple, Inc. after the closing bell.

Treasury futures are feeling downside pressure as investors ask for higher yields in order to compete with the rise in equity prices. Some traders feel that the rise in rates reflects the possibility of the Fed implementing a tight monetary policy more sooner than expected, but recent economic reports do not warrant such a change. Today’s drop in December Treasury Bonds and December Treasury Notes, in my opinion, is more of an asset allocation play between those demanding the lower yielding fixed instruments for the higher yielding equities.

An increase in appetite for higher risk and higher yielding assets is helping to push the U.S. Dollar to another new low for the month. The December Euro is bumping up against the psychological 1.50 resistance area. Traders are beginning to wonder if the European Central Bank will begin to express concerns about the rise in the Euro and its possible detrimental effect on the Euro Zone economy. The December British Pound turned around after trading lower most of the morning. Although upside momentum is strong, conflicting stories regarding whether the Bank of England will expand or end its asset buyback program could influence the trade later in the session.

December Gold is up but in a tight range. Today’s action reflects concerns that the rise in gold may be overdone. The break in the U.S. Dollar should have boosted the Gold market to a new high, but buyers never stepped in. Last week, gold began to diverge from the Dollar which set up a temporary set-back. Although there is nothing to stop the gold from rising further, given the weaker Dollar, the lack of buying interest makes this market vulnerable to downside pressure.

Expectations of an increase in demand for energy because of the start of the economic recovery are helping to boost December Crude Oil prices. Speculators continue to support this market which is now in a position to trade above $80 for the first time in months.