Binary Options News : December 11, 2013
Asian Stocks Decline on Fed Uncertainty
The US Federal Reserve stimulus programme took center stage again last as uncertainty over when the Fed will begin tapering its $85 billion a month asset purchasing scheme hit US shares which later spilled over into Asian markets.
Investors globally are mulling over the prospects for economic stimulus prior to the key Federal Reserve meeting next after a US budget compromise which would ease automatic spending cuts by approximately $60 billion over the next two years. This was announced by House Budget Committee Chair Republican Paul Ryan and Senate Budget Committee Chair Democrat Patty Murray. Currently, a stop-gap spending bill is in place which funds the federal government until the 15th January.
Overnight, Japan’s core machinery orders increased as expected last month, with the Economic and Social Research Institute reported that Japan’s Core Machinery Orders increased to 0.6%, in line with expectations, from -2.1% in the previous, month. Meanwhile, Japan’s corporate goods price index increased also in line with expectations last month, with Japan’s Corporate Goods Price Index rising to a seasonally adjusted 2.7% annual rate, up from 2.5% in the previous month.
Following on from declines in the US which saw the Dow Jones Industrial Average close 0.33%, lower, the S&P 500 index close 0.32% down, and the Nasdaq Composite index end the day 0.20% down, Asian markets also posted declines. In the Special Administration Region of China, Hong Kong’s Hang Seng index was 1.22% lower, the Shanghai Composite was 0.57% lower, whilst Japan’s Nikkei 225 was down 0.53% after the Yen strengthened. Australia’s S&P ASX 200 fell 0.11%, making it a fifth consecutive decline for the Australian index.
In mixed currency markets, the Australian dollar weakened, down 0.26% against the USD after a bank survey showed consumer sentiment dropped in December to its lowest level since July. The JPY gained 0.25% against the USD after machinery orders data and goods price index figures came in as expected. The EUR/USD was up 0.06% whilst the Greenback was up 0.08% against the GBP and 0.17% against the CAD.
Investors cashed in on recent gains in the precious metals market and sold ahead of the key Fed meeting on the 17 -18 December. Gold fell 0.31% and Silver declined 0.11% as investors look ahead to the outcome of the Fed Reserve meeting. Crude Oil declined 0.11%, pulling back from a 6 week high yesterday, whilst Natural Gas declined 0.04% primarily on profit taking, as cold weather and snow hits the US and Europe.
A quiet day on the economic calendar is ahead but markets are being driven by bouts of profit taking and investors taking up positions ahead of the Fed Reserve meeting, pushing volumes and volatility higher.
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