Binary Options News : August 6, 2012
The risk-on trading sentiment continues in Asian trading overnight as Asian stocks followed US stocks on Friday, by increasing for the first time in 4 days. The gains were made on the back of encouraging US jobs data and renewed optimism that the ECB is trying to tackle the debt crisis.
Asian trading overnight saw Hong Kong’s Hang Seng Index gain 2.01%, Australia’s S&P/ASX200 rise 1.32%, whilst Japan’s Nikkei 225 Index advanced today the most since June, increasing 2.02% as Asian stocks played catch up with their U.S. counterparts.
The Bank of Japan starts a monetary policy meeting over the next few days, and talk has already started to increase that the Japanese central bank will take steps to weaken the yen. The EUR/JPY reached 97.30 in Asian trading, up 0.10% and increased from an earlier low of 97.24 and off an earlier high of 97.70. The pair was likely to find support at 97.15 and test resistance at 97.80.
The rise in global stocks was sparked by the news that the U.S. economy added a net 163,000 net nonfarm payrolls in July, above market expectations for a gain of 100,000 higher than June’s revised figure of 64,000.
Strong U.S. service-sector data bolstered the pair as well with a report by the Institute for Supply Management saying that its non-manufacturing purchasing managers’ index increased to a seasonally adjusted annual rate of 52.6 in July, up from 52.1 in June. The service sector employs the majority of the U.S. labor market and analysts had expected the index to rise 52.0.
Over the weekend, much maligned Greece pledged to meet austerity demands in exchange for funding from a 130 billion EUR bailout facility arranged earlier this year. Expectations are increasing that the European Central Bank reactivates its policy of buying sovereign debt in order to push yields down in Spain and Italy. ECB President Mario Draghi indicated last week that such a move was possible which resulted in European stocks joining US and Asian stocks by posting considerable gains.
Binary traders should look for increased volatility when the eurozone releases a report on investor confidence today, a key indicator of economic health. In the US, Federal Reserve Chairman Ben Bernanke is due to speak, with his comments closely watched for any signs of the future possible direction of monetary policy.
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