Binary Options News : May 23, 2013
Asian Stocks Lower on Bernanke Testimony, Chinese Data.
Asian stocks found themselves under strong pressure in overnight trading as Fed Chairman Ben Bernanke confirmed yesterday that the central bank of the world’s largest economy could reduce its rate of asset purchases “in the next few meetings.”
Initially stocks made gains in Asia, after the USD enjoyed a roller coaster ride pre and post Bernanke speech, but the surprisingly weak flash reading for May of China’s Purchasing Managers Index, sent stocks tumbling whilst the USD firmed up. China’s Purchasing Managers’ Index for May dropped to 49.6. with the new orders index falling to 49.5, it’s worst reading since September last year. The disappointing May flash reading is the first time since October 2012 that China has fallen below the 50 level, which indicates an economy in contraction. Following on from the release of soft Chinese economic data points last month, many analysts are showing their concern for the world’s second largest economy and have questions the Chinese 2013 GDP growth forecasts.
The weak data from China, hit Asian stocks hard with Japan’s Nikkei 225 initially making gains before plummeting to 5.51% down. Australia saw its S&P/ASX 200 index fall 1.92% on the news, as China is Australia’s largest trading partner. this was also the case of New Zealand’s NZSE 50 which was also fell on the Chinese data, as China is also New Zealand’s largest trading partner. Hong Kong’s Hang Seng dropped 1.96% whilst the Chinese Shanghai Composite plummeted 1.32%.
The USD found itself as a safe haven asset for investors after US Federal Reserve chairman Ben Bernanke told Congress that it is too early to finish the central bank’s monetary stimulus program valued at 85 billion a month or indeed raise interest rates which have been between the record lows of 0 and 0.25% since December 2008. The EUR/USD was down 0.14% whilst the USD fell 1.09% against the JPY. There were also strong gains for the greenback against its commodity linked cousins – the Aussie – 0.86% higher and the CAD – 0.16% higher, whilst after disappointing data released from the UK yesterday, the GBP continued to slide, down 0.07% against the USD.
Bernanke’s comments yesterday saw Crude Oil and Gold both fall, however, bottom feeders have been snapping up nicely priced positions in the precious metal overnight and Gold has gained 0.45% whilst Crude Oil was down 1.15%. Chinese data helped send Copper down 1.96%, but Natural Gas increased 0.57% over supply issues and cold weather persisting in parts of the US.
European markets will not get much of a chance to digest to the Bernanke comments and Chinese data as a raft of key PMI data is released throughout Europe. increases are expected which should boost the Euro. Later in the day attention will turn to the speeches made by FOMC member Bullard and ECB President Draghi, whilst Jobless numbers in the US should be closely followed, making today another strong day of trading ahead.
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