Binary Options News : October 17, 2012
Asian stocks increased the most for over a month in overnight trading as speculation continued to mount over a bail out for troubled Spain whilst a report in the US showed better than forecast industrial output.
Optimism over a Spanish bailout sparked demand for stocks in a risk on trading session that saw equities and the euro rise in Asian trading. Spain has yet to officially request a bailout from its Eurozone counterparts but yesterday it emerged that two key German lawmakers indicated that they would support an application from Spain for a ‘precautionary credit line’ from the (ESM) European Stability Mechanism, the Eurozone’s permanent bailout fund. This would allow the European Central Bank to purchase sovereign debt from Spain and lower its borrowing costs.
The Federal Reserve in the US reported yesterday that industrial production increased 0.4% in September, surpassing expectations for a 0.2% increase. Industrial production for August was revised down to a 1.4% contraction from a previously reported fall of 1.2%. The news provided a boost to the Asian equities markets, raising hopes for the region’s exporters.
Also in the US yesterday, the Labor Department reported that its month on month consumer price index increased by 0.6% in September, beating expectations for a 0.5% increase primarily down to higher gasoline prices. Consumer prices increased at an annualized rate of 2.0% for September, up from 1.7% recorded in August. Core inflation rates, minus volatile food and energy prices, showed that the prices remain stable in the US.
The risk on session sparked by encouraging US Data and heightened Spanish bail out talk saw stocks rise in Asia. Hong Kong’s Hang Seng Index gained 0.90%, Australia’s S&P/ASX200 increased 0.82%, whilst Japan’s Nikkei 225 Index gained 1.16%.
The USD fell against most major currencies having enjoyed a few days of safe haven status. The EUR/USD was up 0.34%, trading at 1.3098 whilst the USD/JPY was down 0.30%, trading at 78.65. The USD declined the most against the commodity linked AUD, who gained 0.39% against its American cousin.
European stock futures indicate a higher opening when markets open there whilst in the US, the publication of government data on building permits and housing starts should drive the USD. Today also sees the publication of official data on crude oil stockpiles in the US too.
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