Stocks Continue Ascent on Stimulus Talk

Posted on July 31, 2012 by Matt Green

Binary Options News : July 31, 2012

Asia

Asian stocks continued to increase for the 4th consecutive day as speculation increased that the ECB and Fed Reserve in the US may stimulate their respective economies, weakening the Euro and the USD and pushing up the prices of stocks globally.

During Asian trading overnight, Hong Kong’s Hang Seng Index was up 1.06%, Australia’s S&P/ASX200 was up 0.81%, whilst Japan’s Nikkei 225 Index was up 0.84% as yesterdays meeting between US Treasury Secretary Tim Geithner and the German finance minister Wolfgang Schaeuble ended with a joint statement saying that they “emphasised the need for ongoing international co-operation and coordination to achieve sustainable public finances, reduce global macroeconomic imbalances, and restore growth,”

Europe

Yesterday also saw the release of Spanish GDP which showed that its economy contracted 0.4% on year in the second quarter, meaning the country remains firmly entrenched in recession. Also released in Europe was the European Commission’s index of economic sentiment across the Eurozone which fell to 87.9 in July compared with 89.9 in June after analysts were expecting a reading of 88.7. All of which heaping more pressure on Mario Draghi ahead of Thursday’s interest rates decision. Speculation has increased that the ECB will restart its bond buying programme, known as the Securities Markets Programme (SMP.) This was suspended in January but enables the ECB to purchase government debt from banks helping to reduce the cost of borrowing for governments. Such measures which would hopefully be able to tackle Italy and Spain’s high borrowing costs.

The heightened talk of stimulus measures sent stocks up in Europe with Spain’s Ibex finishing 2.8% higher, the FTSE 100 increasing 1.2% and Germany’s Dax closing 1.3% higher.

International

Although markets are awaiting the Fed’s interest rate decision on Wednesday and the ECB interest rate decision on Thursday; there is a wealth of important data released today which should cause volatility in the markets and create some good profit opportunities for the Binary Options trader. German and Spanish retail sales figures are released as well as German and European unemployment and Italian and French PPI.

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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.

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Stocks Advance on European Stimulus Talk

Posted on July 30, 2012 by Matt Green

Binary Options News : July 30, 2012

Asia

Asian trading on Monday saw Hong Kong’s Hang Seng Index gain 1.49%, South Korea’s Kospi Index rise 0.6% Australia’s S&P/ASX200 increase 0.82%, whilst Japan’s Nikkei 225 Index gained 0.54% as speculation mounted that the ECB will implement a bond buying scheme to bolster Spanish banks and prevent the debt crisis worsening.

Europe

Prompting the purchase for stocks was German Chancellor Angela Merkel and Italian Prime Minister Mario Monti issuing a joint statement in which they stated they will do “everything possible to protect the eurozone” This echoed remarks from French President Francois Hollande and European Central Bank (ECB) President Mario Draghi and increased speculation that the ECB could resume its programme of buying up Spanish bonds, causing Asian stocks to advance for a third consecutive day.

In Japan, industrial production in fell surprisingly last month with the Ministry of Economy, Trade and Industry reporting that industrial production dropped to a seasonally adjusted -0.1% in June from -3.4% in May. Analysts had expected industrial production to rise 1.5% last month but the news was mostly shrugged off by investors whose focus is on the possible stimulation measures to be implemented by both the US and EU.

US

Last week, The US reported that its economy grew 1.5% in the second quarter of this year, and while in line with expectations, the figure did suggest the economy may need a jolt from the Fed, possibly via quantitative easing.

International

Today, US Treasury Secretary Timothy Geithner will meet German Finance Minister Wolfgang Schaeuble before flying to Frankfurt to meet Mario Draghi with interest rates and monetary policy hot topics for discussion. Today is an important day for Europe and binary traders should watch the Euro for increased volatility with Italian auctions of three, five and ten year bonds. Also there is the release of the first estimate of whether Spain’s economy grew or contracted in the three months from April to June.

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Dollar Down on US and EU Monetary Speculation

Posted on July 29, 2012 by Matt Green

The USD closed down on Friday and stocks globally rose as speculation mounted that the Federal Reserve and the European Central Bank are preparing are set to introduce monetary easing tools into their ailing economies.

Rising yields in Spanish government debt markets meant that ECB President Mario Draghi had to publicly declare European monetary policy authorities will do their utmost to save the Eurozone. His comments, backed by both Merkel and Hollande was seen as a sign by markets that the ECB may start implementing bond purchases from banks at some point in the near future. The ECB has not partaken in serious sovereign bonds purchases since the Eurozone’s rescue facility; the EFSF, gained the legal right at the end of 2011 to buy bonds itself, The talk of monetary easing policies being actioned caused a spike in Euro stocks with Germany’s Dax finishing 1.60% higher, France’s CAC 40 finishing 2.28% higher, whilst the The EUR/USD ended 0.31% higher, trading at 1.2321.

Over in the US – the world’s largest economy saw the US economic growth slow in the second quarter to an annualized rate of 1.5%, as a softening job market prompted Americans to curb spending with consumer confidence in July dropping to the lowest this year. The US economy is still growing (the equivalent to 0.4% quarter on quarter) but only marginally and at nowhere near the mark required to make a significant impact in the high levels of American unemployment.

Separately, in its twice-yearly review, the White House revised down its forecast for growth in 2012 to 2.3% from 2.7%, and in 2013 to 2.7% from 3%. This prompted speculation that the Federal Reserve will stimulate the U.S. economy also through buying bonds from banks pumping liquidity into the economy, weakening paper currencies while sending stock prices higher. The Dow Jones Industrial Average ended up 1.46%, the S&P 500 index was up 1.91% while the Nasdaq Composite index was up 2.24%. The US Dollar index which measures the greenback against a basket of 6 weighted currencies ended Friday, down 0.27%, trading at 82.67.

This week, the highlight for traders is the release July’s jobs report in the US, with Fed Intervention only weeks away if particularly negative.

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Asian Stocks Break Downward Trend

Posted on July 26, 2012 by Matt Green

Asian stocks moved towards their first advance in 5 days after a drop in U.S. new home sales fueled speculation the Fed Reserve may take fresh steps to stimulate growth, boosting demand for growth sensitive shares.

Hong Kong’s Hang Seng Index was up 0.05%, Australia’s S&P/ASX200 was up 0.41%, whilst Japan’s Nikkei 225 Index was up 0.50%. The greenback also enjoyed gains in Asian trading as investors brushed off increasing speculation that the Federal Reserve is edging towards stimulating the U.S. economy after a drop in U.S. new home sales. The Census Bureau reported yesterday that new home sales fell by 8.4% to a seasonally adjusted 350,000 units in June, lower than the expected decline of 2.6% to 372,000 and the steepest slide since February 2011. New home sales for May were revised up to 382,000 units from a previously reported 369,000, whilst the average price fell 1.5%

With the Federal Reserve’s monetary policy body meeting on July 31 for a 2 day conference, consensus is growing that the Fed will implement a fresh round of easing measures. This would normally be bullish for stocks, but concerns over the global economy kept the stock gains in check.

In Europe, the yield on Spanish 10 year bonds increased to a euro era high of 7.71%, well above the 7% threshold considered unsustainable by the markets. Whilst in Germany, the Ifo research institute reported its Business Climate Index fell to 103.3 in July, the lowest level since June 2010, from a reading of 105.2 in June after markets were expecting a 104.7 reading. The Euro was down against most major currencies as was 0.09% down against the USD.

Also falling was the British Pound after it was reported yesterday that the UK recession has deepened. The economic output fell by 0.7% between April and June, much larger than expected and follows a 0.3% drop in the first 3 months of the year.

Binary Traders will keep a sharp focus on the USD today as the U.S. is set to release official data on durable goods orders, a leading indicator of production, as well as data on pending home sales and initial jobless claims – all key indicators in the health of the US economy.

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Monthly Archives: July 2012

Stocks Continue Ascent on Stimulus Talk

Binary Options News : July 31, 2012

Asia

Europe

International

Stocks Advance on European Stimulus Talk

Binary Options News : July 30, 2012

Asia

Europe

US

International

Dollar Down on US and EU Monetary Speculation

Asian Stocks Break Downward Trend