Stocks found support in Asian trading ahead of today’s liquidity boosting operation conducted by the European Central Bank. Investors appear to have adopted a wait and see policy, on the ECB’s second 3 yr long-term refinancing operation. This was after a comparable liquidity injection in December eased pressure on peripheral euro zone bond markets. Investors are expecting the liquidity operation to amount to almost 500 bn Euros, following on from banks borrowing 489bn Euros in the December operation. The operation makes 3 yr loans accessible and available to banks at interest rates deemed attractive and with much more manageable collateral necessities. As a result the EUR/USD was largely unmoved, rising just 0.01% and the USD/JPY, USD/CHF, EUR/CHF all posted increases or declines less than 0.02% as investors stayed relatively clear of the currency markets and instead finding favour in the riskier stocks and in the safe haven commodities.
The Nikkei in Japan increased to a 7 month high, breaking the 9800 mark for the1st time since August 2011 before being pulled back by profit takers. The gains made in the month of February are nearing nearly 11% for the Nikkei as investors have shown their bullish sentiment since the Bank of Japans monetary easing policy over two weeks ago. At time of writing (8.09amGMT) the Nikkei was trading at 9723.24, an increase of just 0.01%.
The commodity markets saw some intraday volatility in Asian trading as earlier support for the precious metals markets made way for profit taking ahead of European markets opening. Gold was marginally down, -0.05%, trading at 1787.35, whilst Silver was down 0.28%, trading at 37.100. Gold futures seem to be likely to test the support level at Tuesday’s low of 1,767.25, and find resistance at Tuesdays high of 1,791.65
Crude oil continued to increase in value after yesterdays profits taking as tensions in Iran have failed to dissipate and small glimmers of hope in global economic recoveries suggested demand for oil might increase. Crude Oil as up 0.36%, trading at 106.94 a barrel
Today, investors should keep an eye on the ECB liquidity operation as well as the U.S. publishing its preliminary report on Q4 GDP. Federal Reserve Chairman Ben Bernanke is also testifying on the semi-annual monetary policy report to the House Financial Services Committee later in the day.
* * * * * * * * * *
Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.