Technology Firms Lead the Dow Jones Spread Betting Market After Positive Results
Posted on | January 20, 2012 | No Comments
Equity markets have paused for breath today after four days of gains with investors exercising caution ahead of the weekend and any news about a conclusion to the Greek debt talks, ahead of next Monday’s European finance ministers meeting.
The main gainers on the FTSE 100 today have been the telecommunications sector after Vodafone won its case in an Indian court overturning an Indian tax demand of $2.2bn.
Indian based Essar Energy has continued its recent roller coaster ride spending time at the bottom and the top of the FTSE today.
The oil and gas sector has been the worst performing sector today after a downbeat note from brokers Credit Suisse which suggested that the forthcoming earnings from the big oil companies could well miss expectations to the downside.
BP, BG Group and Royal Dutch Shell have all slid back.
Mining stocks also slipped back after HSBC manufacturing PMI in China contracted for the third month in a row.
Oil services group Petrofac is having a day to forget after being downgraded by JP Morgan to “neutral”
US markets opened mixed as investors digested last night’s announcements from the technology giants, Microsoft, Google, IBM and Intel. While Microsoft, IBM and Intel beat expectations along with positive updates, Google came in short of analyst expectations.
General Electric earnings also disappointed even though EPS beat expectations, revenues fell short of market expectations, as the company saw an 18% drop in Q4.
The biggest movers on the Dow Jones are unsurprisingly IBM, Microsoft and Intel, all posting good gains while amongst the worst performers is General Electric, while Google shares have dropped by over 5%.
US existing home sales for December rose by 5%, slightly below expectations of 5.2%, while the November number was revised lower to 3.3%.
After falling for four days in a row the US dollar looks set to post its first positive day since last Friday as investors take profits on some of the euro gains seen this week.
The pound has also had a better day after December retail sales came in as expected, posting a rise of 0.6%, pushing the yearly rise to 2.6%
The results have helped raise some hope that next week’s Q4 GDP numbers aren’t as grim a read as we fear that they might be.
Even though the rise in retail sales is welcome, judging by the recent figures from the retail sector, the rise may have come at a cost to retailers margins.
Copper prices have slid back from their 200 day MA after Chinese manufacturing data on the HSBC measure contracted for the third month in a row, raising fears about a prolonged downturn.
In gold spreads trading, prices continue to trade in between their 200 day MA support and the trend line resistance at $1,670, from the September highs at $1,920.5.
Crude oil prices have slipped back towards the bottom end of their recent range. This comes with concerns about a China slowdown and the lack of any progress in Greece produces some slippage on recent gains as prices close the week back near their Monday opening levels.
Orange juice prices are back near all-time highs on supply concerns after the US halted imports and stockpiles dropped by 65%. Reports of citrus greening in Texas and cold weather in California haven’t helped either.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Successful French and Spanish Auctions Boost Euro Forex Spread Betting Markets
Posted on | January 19, 2012 | No Comments
Equity markets have been dragged up by their bootstraps today on the back of firmer banks after this morning’s French and Spanish auctions saw higher demand and lower yields. This comes as the LTRO money continued to grease the wheels of the European Banking system.
Biggest risers are Barclays, Royal Bank of Scotland and Lloyds, all up by more than 5%, while in Italy Unicredit is on a tear, up 10%.
It hasn’t just been about the outcome of the auctions though with some positive trading statements helping sentiment, with some good news from the retail sector, making a change from the predominant doom and gloom in recent days.
Primark owner Associated British Foods saw revenues from the store rise 16%, boosted by a strong Christmas trading period.
On the downside Indian based energy company Essar Energy has continued its recent roller coaster swings, the biggest faller as fears rise about the viability of its debt covenants in the wake of this week’s Indian court ruling.
FTSE new boy Polymetal is also lower after being valued at fully priced by Nomura with a “reduce” rating, despite posting strong Q4 sales.
Publishing group Pearson has also had a rough day despite posting a strong Q4, and raising its guidance for the year, the shares have slipped back. However, the market had been front running a good number for most of this week, so there is probably an element of profit taking here.
The pharmaceutical sector is the worst performing sector today led lower by AstraZeneca on the back of a “reduce” rating and uncertainty about an experimental diabetes drug which failed to win regulatory approval from US regulators.
US spread betting markets opened higher on the back of the firmer tone in Europe, shrugging off the negative news on the Eastman Kodak bankruptcy.
The banking sector led the gainers getting a boost from better than expected earnings reports from Morgan Stanley and Bank of America.
Morgan Stanley beat expectations of a loss of $0.57c a share, posting a loss of $0.15c a share, while revenues also came in slightly better than expected at $5.71bn.
Bank of America came in on expectations of $0.15c a share but surprised with an increase in revenues.
Technology shares will also be in focus this evening when Google, Intel and IBM report Q4 earnings with Google expected to post $10.49c a share, Intel $0.61c a share and IBM $4.62c.
US economic data came in mixed with a strong improvement in weekly jobless claims, coming in at 352k, well below expectations of 384k, however housing starts for December missed expectations, dropping 4.1%, well outside expectations of -0.7%.
The latest Philadelphia Fed survey was also slightly disappointing, even though it exceeded December’s 6.8 number it missed expectations of 10.3, coming in at 7.3. New orders also slipped back coming in at 6.9 from 10.7.
In forex spread betting, the US dollar has continued to underperform today with the Swedish and Norwegian Krona the best performers.
The Australian and New Zealand dollar have slid back with the kiwi sliding after consumer prices rose 1.8% on the quarter, well below expectations of 2.6%.
This raises expectations that interest rates won’t need to be raised any time soon and raised the prospect that rates may be cut.
The Aussie dollar also came under pressure after jobs data showed that employment numbers dropped by 29.3k missing expectations of a rise of 10k.
The weak employment number has raised concerns that the RBA may well cut rates especially if the CPI follows the New Zealand example and falls below expectations.
The Norwegian and Swedish krona saw good gains as these relatively safe currencies saw some capital inflows, given their relatively higher yields.
The euro has had another positive day on the back of this morning’s Spanish and French debt auctions pushing above 1.2900 and looking to test 1.3000 for the first time since the beginning of January.
Copper has hit its highest levels since September on the back of firmer equity markets and a weaker US dollar.
Optimism that the Chinese authorities could well ease capital requirements has also helped boost expectations of higher demand with the red metal pushing up towards its 200 day MA for the first time since August last year.
Crude oil prices have risen on the more positive US jobs outlook, while inventory data is expected to show a slight shortfall from the previous week.
A reiteration by Iran’s UN Ambassador that closing the Straits of Hormuz remained an option also kept prices underpinned.
Gold prices hit one month highs today but have slipped lower after failing to break above resistance at the 200 day MA and resistance from the $1,920 highs at the $1,672 level.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Euro Spread Betting Market Boosted by Successful German and Portuguese Auctions
Posted on | January 18, 2012 | No Comments
Markets have traded broadly sideways for most of the day racked by indecision as to the next move.
News that the IMF were looking to boost their reserves by about $500bn to around $1trn saw markets push higher in the morning session. However, the move proved somewhat short-lived given that there seemed to be some opaqueness about where the said funds were going to be coming from.
Concerns about global growth continue to weigh on the upside after the World Bank cut its global forecast for 2012, by over 1%, with Europe expected to contract 0.3%.
The biggest riser of the day was yesterday’s biggest faller, Essar Energy as the company sought to appeal against yesterday’s court ruling regarding its tax liabilities.
Also higher is fund manager Man Group after the company reported it was looking to cut costs in the wake of shrinking assets under management.
Carnival Cruise Lines is also making a comeback despite the continued negative news flow from the Costa Concordia tragedy.
On the downside Tullow Oil has taken a bit of a hammering after reporting a production delay in one of its African oil fields due to mechanical problems.
US spread betting markets have pushed higher on the back of a fall back in inflationary pressures in December as factory gate prices fell 0.1%, while industrial production for December recovered less than expected, rising 0.4%, after November’s revised 0.3% fall.
Goldman Sachs earnings surprised to the upside coming in at $1.84c a share, above expectations of $1.24c, while revenue growth missed on the downside.
Banking shares have led the gains with JP Morgan and Bank of America leading the way.
Biggest faller is oil giant Chevron after reports of a fire burning on a rig off the coast of Nigeria.
In FX spread betting, the US dollar has slipped back across the board today on the back of a combination of slightly firmer equity prices and the IMF report of a boost to its lending capabilities.
The US dollar has also come under pressure after monthly December PPI dropped 0.1% racing expectations that the Fed could well embark on further QE given that inflationary pressures appear to be muted.
A successful two year German auction, as well as a successful 3 month Portuguese T-bill auction, has also boosted sentiment towards the single currency.
Even 11 month bills saw yields come lower proving that the ECB’s LTRO’s were having the desired effect.
Reports that Greek debt talks have restarted has also boosted hopes that some form of deal will be done soon. The IMF reports haven’t hurt sentiment towards the euro either.
The pound has had an indifferent day losing ground against the euro after unemployment data came in mixed but continued on its upward trend as the ILO measure increased to 8.4% and the number of out of work hit a 17 year high.
The Swiss franc gyrated wildly this afternoon after an apparent trader error, or “fat finger” trade saw the cross move up and down 40 pips in two minutes.
Traders remain nervous about possible SNB intervention given how close the currency is to the peg floor at 1.2000, hence the twitchiness around any sudden moves.
In gold spread betting, the precious metal saw prices continue to ratchet between the support at the 200 day MA and the resistance from the highs just above $1,670.
Crude oil prices continue to remain mixed with Brent prices lower and US crude prices higher, but both trading either side of the flat line.
Copper prices continue to remain resilient despite the uncertain outlook as markets look forward to an imminent easing of monetary policy in China ahead of the start of Chinese New Year.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Spread Betting: Concerns are Raised as Four Hungarian Banks are Downgraded
Posted on | January 17, 2012 | No Comments
The Spread Betting Markets - Last Week:
While many spread betting investors hoped last week would see higher volumes and volatility than the first week of 2012, trading finished with more of a whimper than a bang. This was down to continued European fears and a prosaic start to quarterly earnings season.
Ratings agency Fitch cut four Hungarian banks and Mario Draghi noted his concerns about the stability of the state as one of the serious risks remaining in the Eurozone.
Nicolas Sarkozy responded to rumours about a French downgrade, calling the ratings agencies ‘exasperating’.
The Swiss National Bank reiterated its commitment to keeping the franc pegged to the euro at or above the 1.2 level.
Central bank chairman Philipp Hildebrand resigned after news leaked about a controversial currency trade on his wife’s account just weeks before the initial pegging.
Headwinds on the high street limited equity gains. Outdoor equipment store Blacks, recently placed in administration, was sold to JD Sports for £20m. Sports Direct, 21% owner of Blacks, expressed disappointment that their earlier bid was rejected and estimates it has lost over £50m in equity in Blacks over the last two years.
Supermarkets further highlighted the tough consumer environment. Tesco’s Christmas trading fell short of expectation and Britain’s largest grocer issued its first profit warning in over 20 years. Wm Morrison and Sainsburys shares also felt sector knock-on.
In the US, two Dow constituents reported. Alcoa’s Q4 earnings were disappointing, and the metals manufacturer blamed charges associated with limiting its smelting operations.
JP Morgan’s results were also a bit short, with investment banking revenues down 52% compared to 1 year ago, though commercial and retail banking making good strides.
The Spread Betting Markets - The Coming Week:
Monday was quiet since US equity markets were closed in observance of Martin Luther King Jr Day.
Statements from Rio Tinto and Burberry come on Tuesday and Man Group on Wednesday.
It’s a big week for US banks, with quarterly earnings from Citigroup and Wells Fargo on Tuesday, Goldman Sachs on Wednesday, and Morgan Stanley, Bank of America, American Express and BB&T on Thursday.
Tech giants Microsoft and Google also report after the close Thursday.
Spread betting is a leveraged product. It carries a high level of risk to your capital and, as it is possible to lose more than your initial investment, it may not be suitable for all investors. Therefore, ensure you understand the risks involved and seek independent advice if necessary. The tax treatment of spread bets may be subject to change in the future.
Article by Spreadex
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Indices Spread Betting Markets Rally to Resistance Levels but Remain Cautious
Posted on | January 16, 2012 | No Comments
Our upside expectations have been met successfully with markets now at decision levels once again.
We have seen the bullish momentum continue into last week’s trading session but this week may require a little caution.
After reaching above the resistance levels we did see the indices spread betting markets pullback to almost where they had started. This suggests that the upside may start to see some weakness for this week ahead.
There is also a potential for a major trend reversal at hand. Gold prices also reached our expected upside levels but currently look a little weak and may pullback lower before the upside trend resumes.
FTSE 100 may pullback lower…
If the FTSE 100 fails to climb higher this week then the index may be looking to fall lower. We notice that the index is starting to fail at holding onto intraday high prices.
Typically a market shows early warning signals by creating both chart patterns coupled with bar signals.
Some global indices are already showing their hands and the UK Index may be one of several indices that could see a correction take place.
If the FTSE falls below 5580 then 5480 should provide support. It would require a move above 5725 to negate short term bearishness and tackle the 5820 target this week.
Dow Jones in-between key levels…
The Dow Jones has now found itself stuck in-between two levels at 12350 - 12545 where it will need to breakout from to determine its next move.
If the index fails at 12350 support and more importantly trades below 12300 then the lower level of support at 12130 could kick in. The trend remains bullish until we see red bars.
We remain on bullish ground until the momentum weakens and sees range expansion to the downside.
The concern is also that a potential 5 wave pattern may be completing at current levels, indicating that the move up may be in its final stages before a correction commences.
Gold reaches upside target…
So far the gold spread betting market has played out nicely to see the upside level reached as previously suggested.
However the appearance of a Red Bar now indicates that if we see Gold trade below $1640 then the commodity may start to trade to the downside and seek support at $1575 again.
This remains a key support level for now and also could see a reverse Head and Shoulder pattern in the making.
For the Bulls, the price of Gold will need to get above $1680 to reach for the $1785 level and possibly even higher levels depending on how much momentum can be gained over the coming weeks.
Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.
Spread Betting and CFD comments by Sandy Jadeja, Chief Technical Analyst, City Index.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither City Index nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Shares Spread Betting Markets Slip on Weak Italian Bond Auction and Rumours of French Downgrade
Posted on | January 13, 2012 | No Comments
After a positive start to the morning, shares spread betting markets found gains slowly evaporate after this morning’s Italian bond auction flattered to deceive.
Despite lower yields, demand was surprisingly underwhelming with a bid to cover of 1.2, which was surprisingly low given the better than expected auction results seen the day before.
The erosion in sentiment hasn’t been helped by some credible reports in the afternoon session that ratings agency Standard and Poor’s was getting ready to deliver on its threat from December to downgrade a number of Eurozone countries as early as today.
It is reported that Germany is not one of the countries to face a downgrade.
A major concern surrounds France, especially in relation to its contribution to the EFSF, the EU bailout fund, where a downgrade to the fund’s second biggest contributor would effectively hole the fund below the proverbial water line.
It is important to stress that none of this has been confirmed by S&P who are expected to make an announcement later this evening, despite French media extensively reporting the fact.
The biggest losers today have been in the telecoms sector with Vodafone sliding back after a broker note suggesting that the shares could be exposed to some weakness in Europe.
Surprisingly financials have stood up rather well to this afternoon’s sharp sell-off with Barclays and RBS holding up fairly well, with the Scottish bank benefiting from a broker upgrade from broker Seymour Pierce.
Hedge fund Ashmore is also continuing to gain on the back of yesterday’s positive trading update.
US markets opened lower on the back of EU downgrade talk; though the tone had been decidedly weaker after JP Morgan reported earnings in line with expectations at $0.90c a share of lower than expected revenues.
Economic data has been mixed with the US trade deficit for December rising to $47.8bn from $43.3bn in November.
University of Michigan consumer confidence came in better than expected at 74, well above expectations of 71.5.
The EUR / USD market has tumbled this afternoon on talk that ratings agency Standard and Poor’s has made good on its threat to downgrade France. French TV is also reporting that the downgrade has taken place; the only question is by how many notches.
Irrespective of the number of notches the downgrade will have consequences for the EFSF bailout fund, making it much more expensive to raise money.
News that the Greece voluntary PSI talks have ground to a halt hasn’t helped sentiment, with the likelihood that the forced implementation of collective actions clauses (CAC’s) likely to become ever more likely, if there continues to be no agreement.
This would then trigger CDS insurance on all Greek bonds making a disorderly default more likely.
Gold has slid sharply dropping back below its 200 day MA, despite the grim sentiment coming out of Europe as the US dollar gains across the board, sending commodities sliding across the board.
Oil prices have also slid back with Brent prices dropping back to its 55 day MA as equities slid back across the board.
Copper prices have also dropped sharply on the negative news coming from Europe.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Positive Week Should See FTSE 100 Spread Betting Market Retain Bullish Trend
Posted on | January 12, 2012 | No Comments
Markets looking to reach next upside target levels…
A mixed week previously has seen the indices hold steady at resistance levels. There could now be a Continuation Pattern in play suggesting that the spread betting markets could be heading towards its next upside objective soon.
As long as this week remains positive, the bullish trend remains firmly in place. The first five day indicator now suggests that the year ahead could end in positive territory but one should not negate sharp corrections along the way.
Gold also stands a chance to recover some lost ground but remains bearish until we see a reversal take place in terms of an ABC pattern completion.
FTSE 100 holding looking strong…
After a small degree pullback in last week’s trading session, the FTSE 100 has proved itself by holding onto 5445 and also above 5600. If we see this level hold firm this week then the doors to 5820 could open up sooner rather than later.
But traders should watch for expansion bars to prove the case for a trend continuation to develop. If we fail here and see a close below 5600 then the index may retire here short term and decide to fall back down to the 5445 level.
But as the trend remains bullish the argument supports an upside move rather than a bearish play for now.
Dow Jones holds firm at 11350…
The Dow Jones managed to hold above 12140 which now indicates that the index is still strong. Once the Dow sails past its recent minor highs formed last week the move to the 12545 should commence with a higher probability of reaching this fairly quickly.
This all depends on how much the index hovers around at the 11350 zone. If at any point the Dow Jones retreats and fails to hold above 11350 we would need to monitor price action closely as a swift move to the downside could take the Dow down towards the 11345 level.
Gold may have completed 5 waves down…
Having held $1575 as support gold prices still remain fragile. It would require for this commodity to thrust above $1645 - $1680 quickly to ensure that the recent bearish move has completed its bearish play for now.
Once we see the gold spread betting market clear through $1680 this would confirm that a short term low has been completed at $1500 and that the commodity could be looking to retest the $1780 high.
Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.
Spread Betting and CFD comments by Sandy Jadeja, Chief Technical Analyst, City Index.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither City Index nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Forex Spread Betting: EU Debt Crisis Expected to Lower German GDP
Posted on | January 11, 2012 | No Comments
Comments by ratings agency Fitch that it didn’t expect to cut France’s credit rating this year saw forex spread betting markets push higher, however this was tempered by comments about the likelihood of an Italian downgrade by the end of the month.
The agency stated that “the future of the euro will be decided at the gates of Rome” suggesting that any further action on ratings could well be determined by the end of January.
Yesterday’s comments by Fitch of course don’t exclude the possibility that ratings agency peer Standard & Poors will deliver on its threat, prior to last months EU summit to downgrade France anyway, as it did with the US last year.
Today we see more meetings of European leaders; this time German Chancellor Merkel meets Italian PM Mario Monti in Berlin. President Sarkozy is to meet IMF Chief Lagarde after Merkel’s meeting last night, where the two discussed a range of subjects pertaining to Greece, growth and employment.
The subject of haircuts for Greek bondholders remains a contentious topic with EU officials warning that private bond holders would be forced to take haircuts in the event no agreement is reached. Time remains pressing with a bond rollover of €14.5bn due by March 20th.
These bondholders, aside from resenting the fact that the IMF, governments and the ECB are excluded from taking haircuts, such an action by EU officials would trigger the CDS insurance and initiate a default, the consequences of which would be difficult to assess.
As such there is a fear that the private bondholders may hold out against taking haircuts in the hope that they can trigger the insurance and get paid out rather than take the losses.
In economic data due out today German real GDP growth for 2011 is expected to slip back from 3.6% to 3%, highlighting the damage done by the debt crisis on German economic growth.
In a week that has seen Germany sell short term bills at negative yields, and longer term paper has under whelmed somewhat recently, we will get to see how the demand is for 5 year notes, with the auction of €4bn worth today.
In the UK the latest trade balance numbers for November are expected to rise slightly after October’s surprise improvement. The November deficit is expected to come in at -£8.35bn, up from October’s -£7.6bn. This would still keep the numbers within the Chancellor’s fiscal targets for 2011.
EURUSD
The 1.2850/70 barrier remains the key obstacle to further upside after this week’s 16 month low at 1.2665.
The risk remains for the move towards the August 2010 lows at 1.2590 which also equates to a 76.4% retracement of the up move from the 2010 lows at 1.1880 to last years highs at 1.4940.
It would need a break below 1.2480 and the July 2010 lows to open up the 1.2000 level.
If the 1.2850/70 area were to break any overspill should be contained by the 1.3080 area.
GBPUSD
The December lows at 1.5360 and trend line support at 1.5375 from the 2011 lows at 1.5270 remain the key support areas. While above these lows the risk remains for a move back towards the 1.5570 area.
Only below the 1.5270 lows in October targets the 1.5190 61.8% retracement of the 1.4230/1.6745 up move.
The pound needs to get back above the 1.5570 area to retarget the 55 day MA at 1.5740.
EURGBP
The 0.8300/10 area has contained the rally in the single currency thus far, with a only a break above re-targeting 0.8370.
The September 2010 lows at 0.8200/05 remain the key obstacle to further declines towards the 2010 lows at 0.8065.
This should continue to provide support initially, and we could well see range trading between these levels for the next few days.
USDJPY
In dollar/yen trading, the pair is still in the range here with support around the 76.50 area and resistance at the 55 day MA at 77.50. A move back above the 55 day MA targets the trend line resistance at 77.80 from the 2007 highs at 124.15.
The key support remains around the November 2011 lows at 76.50 which prompted last week’s pullback. Only a move and close below 76.50 opens up the all-time lows at 75.30.
Equity market calls
FTSE100 is expected to open 12 points lower at 5,685.
DAX 30 is expected to open at 25 points lower 6,138.
CAC40 is expected to open 10 points lower at 3,201.
FTSEMib is expected to open 94 points lower at 14,751.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Euro-Dollar Spread Betting Market Falls to 16 Month Low on Threat of French Downgrade
Posted on | January 10, 2012 | No Comments
Unsurprisingly yesterday’s meeting between German Chancellor Merkel and French President Sarkozy failed to come up with anything tangible or new to deal with the crisis in Europe.
This remains especially important given the concerns over France’s triple “A” credit rating with the spread betting markets continuing to await the latest verdict from Standard and Poors with expectations of a likely cut to double “A”.
The release of the latest manufacturing and industrial production data for November this morning is likely to reinforce those concerns, with expectations for manufacturing to decline 0.4%, and industrial production to decline 0.1%.
The two leaders did reiterate their commitment to the fiscal compact agreed last month, and also restated their determination that no country should leave the euro. The pair urged Greece to come to an accommodation with its lenders so that the next bailout tranche can be agreed as soon as possible.
President Sarkozy also outlined his determination to unilaterally implement a financial transaction tax next month.
Elsewhere in Europe, Ireland is due to receive the latest inspection of its books from the troika inspection team to ensure it remains on course to meet its fiscal targets.
There is a worry given that Q3 showed a 1.9% contraction that further austerity measures may be needed.
In China the latest trade balance data showed a widening in the trade surplus for December, despite concerns about the continuing slowdown in one of its biggest export markets in Europe.
In December the surplus rose from $14.53bn in November to $16.8bn, nearly double expectations of $8.8bn, though this might be explained by the fact that Chinese New Year is in late January this year and as such could have brought forward the rise.
This rise was helped by a sharp drop in imports which dropped from 22.1% to 11.8%, while despite the problems in Europe exports remained steady at 13.4%.
This sharp drop reinforces concerns of a fall-off in demand internally and may prompt the PBOC to look at easing monetary policy again after last month’s bank reserve requirements cut.
On an annualised basis the surplus came in at a three year low of $155bn.
In the UK concerns about the state of the UK economy remain despite the latest British Retail Consortium retail sales numbers for December saw a rebound in sales of 2.2%.
This comparative does have to be taken into context against last December’s snow which saw a drop in footfall, though the improvement since November’s sharp 1.6% fall, is welcome.
Despite the Christmas induced rebound, concern remains about the fragile nature of the high street in the UK. These numbers don’t hide the fact that trading conditions remain tough with recent trading statements from high street retailers like Morrison’s and Next showing that business remains tough and trading conditions remain challenging.
EURUSD
Yesterday’s new 16 month low for the euro-dollar currency pair at 1.2665 has provoked some form of rebound and the first positive day in the last four for the single currency.
We could well see a test back towards last years low and twin lows at the 1.2850/70 level in the short term, but the risk remains for the move towards the August 2010 lows at 1.2590.
This level also equates to a 76.4% retracement of the up move from the 2010 lows at 1.1880 to last years highs at 1.4940. It would need a break below 1.2480 and the July 2010 lows to open up the 1.2000 level.
The 1.2850/70 area should now act as resistance, though any overspill should be contained by the 1.3080 area.
GBPUSD
Having held above the December lows at 1.5360 and trend line support from the 2011 lows at 1.5270, the risk for a move back towards the 1.5570 area remains a real one.
Only below the 1.5270 lows in October targets the 1.5190 61.8% retracement of the 1.4230/1.6745 up move.
The pound needs to get back above the 1.5570 area to retarget the 55 day MA at 1.5740.
EURGBP
So far the single currency has been unable to break below the September 2010 lows at 0.8200/05, rebounding from the 0.8220 area yesterday.
This should provide support initially, given how oversold the 4 hour charts still remain, so we could well be see further upside towards the 0.8305/10 area and old December lows, while above here re-targets 0.8370.
The next target in the downtrend remains the 2010 lows at 0.8065. Though they remain some way off they are by no means out of the question at this stage.
USDJPY
The US dollar seems to be settling into a range here with support around the 76.50 area and resistance at the 55 day MA at 77.50. A move back above the 55 day MA targets the trend line resistance at 77.90 from the 2007 highs at 124.15.
The key support remains around the November 2011 lows at 76.50 which prompted last week’s pullback. Only a move and close below 76.50 opens up the all-time lows at 75.30.
Equity market calls
FTSE100 is expected to open 43 points higher at 5,655
DAX is expected to open 76 points higher at 6,093
CAC 40 is expected to open 28 points higher at 3,156
FTSEMib is expected to open 134 points higher at 14,536
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.
Spread Betting: Hungary Downgraded After Failed Bond Auction
Posted on | January 9, 2012 | No Comments
The Spread Betting Markets - Last Week:
The first trading week of the New Year displayed a quiet, flat trend across the main spread betting markets ahead of last weeks US non-farm figure.
Economic news had been dominated once again by the Eurozone with focus being on the multiple bond auctions, some being more successful than others, happening across the zone.
Germany and France were successful in their debt auctions with the German selling 4bn of the intended 5bn euros 10 year bonds at a retreated rate of 1.93%.
France hit their target selling off 7.93bn at a slightly higher than previous rate of 3.29%.
Hungary was less successful only managing to sell 110M euros of one-years at a rate which hit 9.96%, far outweighing the 7% ‘danger’ level. Consequently Hungary has been demoted to junk by Moody’s.
Aside from the bond auctions, the plot thickened for two other Eurozone members in their individual battles to avoid being sucked into the mire.
The Turkish Central Bank sold US dollars for a fourth consecutive day in a bid to sustain the Lira which weakened nearly 22% over the course of 2011 to a level above 1.85.
However, analysis states that the Central Bank is playing a risky game as their Forex reserves are just about adequate in a case of a European Credit Crunch.
Spain is also feeling the heat entering 2012 with their new government stating that their deficit could be higher than the previous upward revision. It was disclosed that the deficit for last year could be two full percentage points higher than the 6% target.
The Euro continued to succumb to the dollar after holding firm for most of 2011. Analysts expect it to be around a price of 1.28 going into the second half of 2012, a level it sits at currently.
Away from Europe, Japan announced that the continually strengthening Yen is eroding its competitiveness and making it difficult to make capital investments because of the on-going European issues. USD/JPY fell 5% in 2011.
Saudi Arabia said that they are ready to fill the gap left if tension from Iran continues; Nymex Oil steadily rose above the $102 a barrel mark.
Commodity prices overall were buy orientated with Gold and Silver seeing bullish sentiment after the bear market was avoided and Copper prices rising due to demand out of China for the metal.
Figures from the US proved to be positive, including non-farms payrolls at 200k, 50k above expectations. The ADP non-farm increase of 325K over a forecast 176K lead to hope that the increase in jobs would be greater than last month’s 120K increase.
Unemployment claims once again remained below the 400K mark coming in at 372K. All other data came out in line with what was forecast.
News regarding the performance of consumer retail outlets headed the equities.
Next, one of the largest high street retailers announced a 3.1% rise in total sales in the second half of 2011. However, this figure was skewed by the fact that online sales went up 16.9% with store sales dropping.
This figure displays a worrying overall picture of the decline of the general health of retailers and the state of the UK high street. Next share price was down 6.5% overall last week.
Blacks Leisure the outdoor leisure retailer, announced on Friday that it had received a number of final offers for the company. However, any sale will be effective through an administration process and that the offers it had received attributed no value to its ordinary shares which have been suspended from trading.
JJB announced a 5% rise in sales which saw the stock price jump 73% last week. However, this can only be seen as a small glimmer of light on the overall picture which has seen the stock diminish 77% last year.
The Spread Betting Markets - The Coming Week:
The first full trading week of 2012 saw a high abundance of figures coming out. However most of these are perceived as low impact.
Thursday sees Manufacturing data, the official Bank Rate and Industrial Production from the UK.
Unemployment Claims from the US and an ECB press conference.
Data on Friday concerns the Trade Balance from the US and Canada.
PLCs reporting next week include Marks and Spencer’s, Debenhams, Balfour Beatty, Sainsbury’s, Tesco, SIG, Mothercare, Barratt Developments and Home Retail Group. No companies from the Dow Jones are reporting.
Spread betting is a leveraged product. It carries a high level of risk to your capital and, as it is possible to lose more than your initial investment, it may not be suitable for all investors. Therefore, ensure you understand the risks involved and seek independent advice if necessary. The tax treatment of spread bets may be subject to change in the future.
Article by Spreadex
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.