Binary Options News : December 5, 2013
Global Stocks Decline on Stimulus Bets
Stocks in Asia followed the decline in US stocks yesterday as investors took the stronger than expected ADP jobs data in the US as a sign that the Fed Reserve will begin tapering its $85 billion a month asset purchasing programme in the next couple of months. Many investors either cashed in on recent gains or stayed on the sidelines ahead of the key jobs report from the US on Friday which is expected to give the strongest indication yet of whether the Fed will begin tapering sooner rather than later.
The payroll processing firm ADP announced yesterday that non-farm private employment increased by a seasonally adjusted 215,000 for November, easily surpassing market expectations for 173,000 increase.
Also fueling speculation that the Fed will have enough confidence to begin tapering was the announcement that the U.S. trade deficit narrowed to a seasonally adjusted figure of $40.6 billion for October, down from the $43.0 billion deficit recorded in September.
However, it wasn’t all good news in the US, as the Institute of Supply Management reported that its non-manufacturing purchasing managers’ index fell to 53.9 last month from the 55.4 recorded in October, worse than the analysts expectations for a decline to 55.00 for November.
The prospect of monetary policy tapering sent stocks in the US mostly lower with the Dow Jones Industrial Average finishing 0.16% lower, the S&P 500 index ending the day 0.13% down, whilst the Nasdaq Composite index closed up 0.02%. In Asian trade, stocks there fell for a 2nd day running with the Nikkei 225 once again leading the way with a heavy fall of 1.63% as the JPY rebounded against the USD. Elsewhere, Australia’s S&P/ASX 200 declined 1.44% as Aussie Bonds hit a 2 year high and Hong Kong’s Hang Seng Index fell 0.32%.
The US Dollar was lower against most major currencies in Asian trade as investors cashed in on recent gains ahead of the key jobs report on Friday from the US. The greenback was down 0.08% against the EUR and the AUD, 0.02% lower against the GBP, 0.18% lower against the CHF, 0.28% against a rising JPY, and 0.05% lower against the oil-linked CAD, pulling back from a three and a half year high.
Gold and Silver continued to decline despite a weakened USD, with Gold falling 0.63%and Silver dropping 0.95%. This followed a brief gain yesterday as bottom feeders snapped up the precious metals on technical dips. Crude Oil made further gains, rising 0.14% after supply levels in the US showed a noticeable decline and an OPEC decision to leave output levels unchanged supported prices too. Supply forecasts and cold weather in the US and Europe helped push Natural Gas higher, rising 0.23% in Asian trade.
Today sees the GBP/USD and the EUR/USD expected to be in focus as a series of key data points are released from the UK, Europe and the US. The Bank of England and the ECB are to make its interest rate decisions with press conferences after, whilst GDP and jobless data from the US later in the day should be closely watched.
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