Binary Options News : November 20, 2013
OECD Downgrade and Fed Talk Dominates Trade
Asian stocks were mixed to lower overnight as investors reacted to the OECD revising down its global growth forecasts, whilst focusing on the imminent release of the minutes from the latest meeting of the Federal Reserve and the probable resulting prospects for continued stimulus in the world’s largest economy.
The Organisation for Economic Cooperation and Development (OECD) has been downgraded global growth for 2013 and 2014 “significantly” after weaker prospects in the emerging markets. Global GDP for this year is now expected to grow by 2.7%, down from the 3.1% forecast earlier in May. The OECD also revised its global growth forecast for 2014 lower, estimating 3.6% for the year and not the 4% it had forecast in May.
On a brighter note, the OECD did say that global economic growth would increase by 2015, predicting growth of 3.9% for the year.
Comments by Federal Reserve Chairman Ben Bernanke in the Asian trading session heightened speculation over whether or not the Fed will taper the $85 billion a month bond purchasing programme after he suggested a robust economic recovery is needed before the stimulus will end. The minutes due for release in the US later today should provide a more detailed view and will be closely watched.
The OECD downgrade and the latest Bernanke comments drove a lacklustre trading session in Asia overnight. Japan’s Nikkei 225 was down 0.26% as the Yen gained some momentum against the USD at the start of a 2 day meeting for the BoJ. The Chinese Shanghai Composite index reversed early losses to be up 0.11% whilst the Hang Seng Index increased 0.36%. Australia’s S&P/ASX 200 was down 0.84%, after the Reserve Bank of Australia Assistant Governor Guy Debelle stated that the central bank would prefer a lower exchange rate.
The US Dollar was mixed in overnight trade as investors looked ahead to the release of the Fed Reserve minutes later today. The yen strengthened against the dollar with the USD/JPY down 0.11% after the Bernanke comments. The AUD/USD dropped 0.40% on the back of RBA Assistant Governor Guy Debelle’s comments. The EUR/USD was up 0.10% as hawkish comments yesterday from a ECB official regarding negative interest rates boosted the Euro. The GBP/USD was down 0.04% ahead of the BoE minutes release this week, whilst the USD/CAD was unchanged.
Bottom feeders pushed the price of Silver 0.51% higher in overnight Asian trading with the other precious metal – Gola making a tentative 0.02% gain. After a small dip yesterday caused by profit takers, Natural Gas rose 0.32% as cold weather forecasts dominated trading in the commodity. Crude Oil rose 0.33% despite the global growth revisions by the OECD as talks to begin today between Western delegates and Iran, the world’s 4th largest oil producer over the Iranian nuclear program and ways to close it, which would resume oil production.
A very busy day is ahead with much volatility expected. In the eurozone, Germany is to publish producer price inflation data. The Bank of England is to release minutes of its latest policy setting meeting. Canada will publish wholesale sales data, a leading indicator of consumer spending. Meanwhile, in the US, there are a series of key data releases including a report on retail sales, the government measure of consumer spending, and data for consumer inflation, existing home sales and business inventories. Later in the day the Federal Reserve is to release the highly anticipated minutes of its latest policy meeting. Certainly a day to be trading for binary options traders.
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