Posted on | July 11, 2012 | No Comments
European Spread Betting Markets
It’s been a pretty lacklustre, downbeat session today in Europe ahead of this evenings release of the latest Fed minutes from the 19th/20th June meeting that heralded an extension of the “operation twist” program.
The shares spread betting markets main focus, Europe aside, has been on the latest earnings figures from around the globe as concerns rise about a global slowdown, hitting company margins and prompting guidance downgrades.
The best performing market has been the Spanish market reacting positively to austerity measures announced by the Spanish PM this morning. On the other hand, progress across the rest of Europe has been pretty benign.
In the retail sector, luxury retailer Burberry has taken a beating after reporting revenue numbers that came in below analyst expectations to languish at the bottom of the FTSE.
Other shares also languishing include Aggreko and Johnson Matthey which have slid on a negative sector read across from the US.
Another big faller is precious metals miner Polymetal after the company announced it had lost a multi-million dollar court battle with the Russian authorities, receiving a fine of $27m.
On the plus side interdealer broker, ICAP, is higher after announcing that it was looking at bringing forward some of its cost cutting plans, as well as revamping its product offerings.
Chipmaker, ARM Holdings, is also experiencing a better day after getting a favourable recommendation from Bank of America.
US Spread Betting Markets
US markets opened higher after last night’s late sell-off with the main focus being the publication later today of the most recent Fed minutes.
The publication of the latest trade numbers for May didn’t really prompt any degree of market interest given that they came pretty much in line with expectations.
Expectations for May were for a deficit of $48.7bn which is exactly what we got.
Broker recommendations on the following stocks could precipitate some movement in the following including Apple after UBS initiated a “buy” recommendation on the company.
UBS also announced a “buy” recommendation on EMC and a “neutral” recommendation on IBM.
FX Spread Betting Markets
In FX spread betting, the US dollar has come under pressure across the board today ahead of the release of the latest Fed minutes.
Expectations of a dovish outlook have prompted a degree of US dollar selling as the greenback retreats from close to three month highs against a basket of currencies.
The Australian dollar has jumped sharply after consumer confidence data showed a sharp rise in July to a five month high, hitting new record highs against the single currency.
Despite a sharp slide in Spanish bond yields today the single currency has found it difficult to maintain positive momentum.
The slide in yields has been largely a result of this morning’s Spanish budget measures announced by PM Rajoy. The Spanish PM announced a raft of swingeing budget cuts as well as tax rises amounting to a total of €65bn over two years.
These measures are largely as a result of pressure from Brussels in exchange for bank aid, however, on an economy in recession, they look likely to make the country’s debt situation even worse.
German CPI came in pretty much as expected, at 2% year on year, which suggests that further easing could well be due in the coming months.
The pound has continued to benefit as a result of the fears surrounding Europe, hitting a new three and a half year high.
The yen has weakened ahead of the latest Bank of Japan rate decision due later this evening.
Commodities Spread Betting Markets
Agricultural commodities spread betting markets have surged today after the US Department of Agriculture cut its latest forecast data for corn supplies by 12%.
USDA also downgraded its expectations for a lower crop in soybean due to the hot weather.
Wheat prices have also risen after the US organisation announced that global wheat production would be lower than forecast last month, as similarly dry weather threatened yields in Russia and Ukraine.
Brent and WTI oil prices have enjoyed a bit of a bounce today, but only as a result of a weaker US dollar ahead of this afternoon’s Fed minutes, while expectations of a decline in inventories has also helped underpin prices.
Gold prices have recovered from their sell-off yesterday ahead of this afternoon’s Fed minutes release.
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Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
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