U.S. equity futures rose in premarket trading ahead of the Federal Reserve policy decision. Also, Fiscal cliff talks seem to be progressing and Democrats are willing to discuss completely rewriting the tax code, a key point of the Republican caucus. However, such a move might delay any deal into the new year.

In other news, North Korea launched a new rocket, sending a satellite into space. The rocket's trajectory took it over the Japanese island of Okinawa.

Goldman Sachs, in a new research note, believes that the Reserve Bank of Australia should cut rates to 2% throughout 2013 from the current 3% to weaken the Aussie dollar and spur growth.

Eurozone industrial production for October fell by 1.4%, reaching an annualized rate of decline of 3.6%. Economist forecast production to increase by 0.2% to reach an annualized decline of 2.3%.

• S&P 500 futures rose 2.3 points to 1,433.80.
• The EUR/USD was higher at 1.3024.
• Spanish 10-year government bond yields fell to 5.405%.
• Italian 10-year government bond yields fell to 4.68%.
• Gold rose 0.3% to $1,714.70 per ounce.

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Commodities

Commodities were higher ahead of the FOMC decision and also on general risk-on sentiment in markets. WTI crude futures rose 0.43% to $86.16 per barrel and Brent crude futures rose 0.58% to $108.64 per barrel. Copper futures gained 0.49% to $370.45 on hopes that the Aussie dollar would weaken, boosting Australian exports of Dr. Copper. Gold was higher and silver futures rose 0.48% to $33.18 per ounce.

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Currencies

Currency markets were in clear risk-on mode as investors sold the dollar and the yen and bought riskier currencies. The EUR/USD was higher at 1.3024 and the dollar rose against the yen to 82.85, the highest since April. Overall, the Dollar Index fell 0.09% with notable weakness seen against the euro, the Swiss franc and the Swedish krone. The AUD/USD was also higher despite the Goldman call, rising 0.11% to 1.0540. One of the biggest movers was the EUR/JPY, which gained 0.56% to 107.92.

Premarket movers

• Apple (AAPL) shares rose 0.85% premarket as the company is reportedly testing different models of an Apple TV, signaling that the product could come to market in the near future.
• E. I. Du Pont De Nemours (DD) shares rose 2.52% premarket after the company announced a new share buyback of $1 billion, or about 2.5% of the company's market cap.
• Berkshire Hathaway (BRK.B) shares rose 0.3% premarket following positive comments from a Seeking Alpha post.
• Bank of America (BAC) shares rose 0.48% premarket ahead of the expected FOMC easing.

Earnings

• Costco Wholesale (COST) is expected to report first quarter earnings per share of $0.93 vs. $0.80 a year ago.
• Joy Global (JOY) is expected to report fourth quarter earnings per share of $1.91 vs. $1.83 a year ago.

Economics

On the economics calendar Wednesday, MBA purchase applications are due out and import and export prices will shed further light on Tuesday's trade data. However, all eyes will be on the FOMC decision released at 2:30 pm and the ensuing updated economic forecasts and press conference. Many economists are calling for the Fed to roll the purchases of the ending Operation Twist into QE3, thus increasing the size of the latter program. In addition, economists have been speculating that the Fed will abandon its target date guidance and adopt an indicator-based methodology, setting policy goals to line up with improvement in key economic indicators such as the unemployment rate.

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