The storm clouds that loomed ominously over Europe and other Global economies appeared to be lifted in Asian trading as a raft of data taken to be positive enough by the markets to help the riskier investments such as stocks, reverse some of their declines.
Central to the return of the appetite for risk was Spain – a nation with a record 4.75 million people unemployed and the highest in the 17 member Eurozone for unemployment figures in the 16 – 25 age group, standing at 48%. It’s heavily dependant on ECB loans and ahead of Thursday’s 10 year bond auction, the yields of their existing bonds rose to 6.1%. Whilst it is edging towards the supposed ‘panic’ level of 7%, above 6% and this is considered ‘unaffordable’. Yesterday their 12 month and 18 month debt auctions received a solid turnout with investors happy to purchase nearly 3 times as many 1 Year bonds offered and nearly 4 times as many available 18 month bonds. The rate for the 1 Year bonds increased from 1.4% to 2.6% in March’s last auction in, whilst 18 month bonds increased to 3.1% from 1.7%. Although the costs of borrowing rose for Spain increased sharply, the demand was higher than expected and investors showed hope that this bodes well ahead of Thursdays 10 year auction.
Helping renew confidence in Europe, the ZEW Centre for Economic Research published its index of German economic sentiment yesterday, increasing to 23.4 for April from 22.3 for March. The reading was much better than analyst expectations who had forecast a decline to the 20.0 level.
Finally, boosting the appetite for risk was the International Monetary Fund revising 2012 world economic growth to 3.5%, up from its previous 3.3% forecast. Most indices saw an increase with Japans Nikkei 225 enjoying a 2.10% rise in Asian trading. Commodities also rallied before being pegged back a little by a steadying USD. Gold was up 0.2% at time of writing and Silver up 0.39%. Oil spurred on by European sentiment was up 0.25%.
Today, at 9.30am GMT, investor eyes should be on what is being released in the UK with unemployment rates, claimant counts and monetary policy meeting minutes all announced. However, expect generally good volatility today as there is plenty of trading happening across the board creating some good profit opportunities for Binary Options trader.
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