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Spanish Downgrade Keeps Markets In Check

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Binary Options News : October 11, 2012

binary options news caricature of Christine Lagarde with EuromanSpanish Downgrade Keeps Markets In Check

The downgrading of the Spanish credit rating by Standard and Poor’s helped keep the demand for the USD strong in overnight Asian trading as investors moved out of stocks and other high yielding currencies.

Standard and Poor’s reduced Spanish long term debt from BBB+ to BBB-, making it just one level higher than junk status whilst cutting its short term credit rating to ‘A-3′ from ‘A-2. Standard and Poor’s also posting warnings of possible additional downgrades in the future and warned of the record rising unemployment and spending constraints as being likely to fuel social discontent and add to already growing friction between Spain’s central and its debt laden regional governments.

The S&P downgrade highlights the deepening recession in Spain and the increasing pressure that Spain faces. Spain currently has the highest unemployment levels in the whole of the Eurozone with nearly 50% of all 16-24 years unemployed. Despite recent drastic spending cuts and tax rises implemented by the Spanish Government, where it unveiled its latest budget designed to make savings of around 13bn euros. The Government in Madrid has said that the country’s overall debt levels will increase in 2013 to more than 90% of total economic output. S & P stated that “The deepening economic recession is limiting the Spanish government’s policy options” and with borrowing costs have remaining high for months, many consider it only a matter of time until Spain is forced to request financial assistance in the form of a bailout from its Eurozone partners.

Currencies

The USD found support once again as a safe haven but not in high volumes and was up against just currencies, as investors await the figures released today in the US on initial jobless claims and its trade balance. The USD was up 0.06% against the EUR, up 0.02% against the CHF, but the greenback was down against the JPY, falling 0.22%

Stocks

Asian trading on Thursday saw stocks lower with Hong Kong’s Hang Seng Index down 0.08%, Australia’s S&P/ASX200 down 0.02%, whilst Japan’s Nikkei 225 Index fell by 0.76%.Japanese data released overnight helped push down stocks as Japan’s Economic and Social Research Institute reported that Japan’s core machinery orders contracted 3.3% in August after increasing 4.6% in July.

Today’s Outlook

Judging from the trading made in Asia overnight, traders can expect a strong day’s trading with swings already seen in the currency, commodity and stocks markets. Today is a busy day on the economic calendar which indicates a volatile days trading equating to increased profit opportunities for the binary trader. Today, the ECB is to publish its monthly bulletin, with analyzes current and future economic conditions from the perspective of the ECB. In the US, government data on the country’s trade balance, initial jobless claims, import prices and crude oil stockpiles are all released, set against the backdrop of the talks being held in Tokyo today by the G7 group of industrialized nations’ finance ministers and central bankers.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Bernanke Keeps Fed Poised

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Binary Options News : September 2, 2012

binary options news caricature the fed and badly restored jesusBernanke Keeps Fed Poised

US

The stocks and commodities markets received a boost on Friday when Fed Chairman Ben Bernanke said in his annual speech at Jackson Hole, Wyoming that he has not ruled out further action to help support the US economy. Even though his speech gave no specific details, Bernanke said “The Federal Reserve will provide additional policy accommodation as needed,” and his words were taken as that the Fed may pump more money into the economy via quantitative easing.

As interest rates in the US have been close to 0% for the last few years, there is little room for the Fed to use rates to stimulate the economy. Bernanke said in his speech that he “wouldn’t rule out further asset purchases” and promised to “boost accommodation as needed for growth,” which sent the USD down and stocks and commodities rising.

Ben Bernanke also lamented the fact that the unemployment figures remained high in the world’s largest economy, currently above 8%, even though the US economy is showing tentative signs of returning to growth. The US economy added 163,000 jobs in July, but the unemployment rates increased from 8.2% to 8.3% as more people rejoined the workforce but were unable to find a job.

USD

Monetary stimulus tools normally weaken the dollar whilst sending stock prices higher. Friday’s close saw the USD down against all major currencies. The USD was down 0.57% against the EUR, down 0.51% against the GBP, down 0.31% against the JPY, down 0.54% against the CHF down 0.63% against the CAD and down 0.34% against the AUD. The US Dollar index which measures the greenback against a basket of 6 weighted currencies was down 0.63%, valued at 81.20.

Commodities

The heavily weakened USD meant that there was a spike in the commodity markets with Silver jumping 4.34%, to be traded at 31.767. Gold also rose, climbing 2.23%, to be traded at 1691.65 a troy ounce. Gold is the traditional hedge to the Dollar and normally trades inversely to the greenback. Crude oil, which normally rises on hopes for a sustained caused by a jolted economy and a weaker dollar, increased 1.93%, to be traded at 96.44 a barrel.

Indices

As a result of the hints towards monetary measures, US stocks gained with the US 30 closing 0.69% higher, the Nasdaq 0.60% higher and the SPX 500 closing 0.51% higher.

Outlook

With tomorrow being a national holiday in both the US and Canada, there may well be subdued trading on Monday, however the active binary options trader should keep an eye on how European markets digest Bernanke’s comments from Friday. Spanish and Hungarian PMI data released tomorrow should have an effect upon the EUR and rising retail sales and PMI in Switzerland announced tomorrow could provide a boost to the Swissie.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Markets Cool on Euro

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binary options news caricature euroman sporting uefa guffaws
The recent optimism in the global markets sparked by the 100 bn Euro bailout given to Spain, hailed by the Spanish Prime Minister as a ‘triumph for the euro’ appears to have waned with the USD finding favour once more as the safe haven of choice for investors in these troubled times.

The USD enjoyed gains against nearly all major currencies in Asian trading this morning – up .011% against the USD, up 0.14% against the GBP, and up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 1.0272, AUD/USD down 0.17% at 0.9942 and NZD/USD down 0.15% at 0.7760. Despite Japan reporting that its core machinery orders increased more 5.7% in April, beating the expected 2.1% increase, the USD also made gains against the Yen, up 0.15%, trading at 79.64. The US dollar index, which measures the performance of the greenback against a basket of six other major weighted currencies, was up 0.11% at 82.95.

The news coming from Europe dampened much of the optimism that pushed markets up on Monday. The credit ratings agency Fitch downgraded 18 Spanish banks, following on from its decision to cut the ratings on the country’s two biggest banks, Santander and BBVA. Spain’s borrowing costs have risen to the highest rate since the launch of the euro in 1999 with the benchmark 10 year bond yield reaching 6.81%. Over in Italy, another major cause for worry for investors the 10 year bond yield increased to 6.28%, a rate not seen since January. Greece, which will have its elections on June 17th, raised about 1.62 bn euros in a sale of six month treasury bills. However it is to pay an interest rate of 4.73%, up from 4.69% at the previous sale on the 8th May.

This morning investor focus will once more be on Europe (for a change!) Italian and Spanish CPI are released with the afternoon seeing the U.S. releasing official data on retail sales producer price inflation, business inventories and then keep an eye on Oil as the crude oil stockpiles figures are released following on from last weeks surprise drop on crude oil stockpiles.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Asian Stocks Down As Greece Problems Continue

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binary options news cartoon euroman passed out on ouzo while goldman talksThe Asian markets provided no respite from the continuing fears that the failure of Greece to form a suitable government will do irreconcilable damage to the Euro. Eurozone leaders will get together in Brussels later today as the uncertainty in Europe, Greece and France, causing a massive fall in the global markets.

Although there was a little comfort for the Euro – up 0.08% against the USD at time of writing (4.06am GMT) after opening down in New York last night – stocks continued to fall in Asian trading. Japan’s Nikkei 225 index was down 1.2%, while South Korea’s Kospi was down 1.4%. The hardest hit were bank shares following on from Spain nationalizing one of their biggest banks, but the uncertainty over the Euro saw shares fall globally – The US benchmark Dow Jones index finished its session down 1%. London’s FTSE 100 share index and Germany’s Dax both dropped 2%.

Today (Tuesday) will be an important day for the markets with a raft of economic data being released, but investors will keep a keen eye on what is happening in Greece – failure to end the stalemate might force more elections in June, which might well increase the chances of Greece dumping austerity measures as set by the EU/ECB/IMF in exchange for bailout money and leave the currency zone altogether. There should be plenty of movement in the markets as preliminary gross domestic product growth figures are expected for the eurozone as a whole as well as for France, Germany and Italy. Also the ZEW Centre for Economic Research will release a report on German economic sentiment as well as for the entire eurozone.

Investors will look for signs of hope and signs of nails in coffins so with record lows in commodities and lows in riskier currencies and shares – the bottom feeders will be out in force if there is some positive data.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Stocks Higher On Liquidity Measures

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binary options news caricature dollar euro tradeDespite being a Japanese holiday today with the Nikkei closed for the day, early Asian trading saw stocks rise primarily on recently announced liquidity measures and speculation of forthcoming liquidity measures.

At the end of last week, Japan announced it has increased its stimulus programme for the 2nd time in just over two months, expanding its purchasing of Japanese government bonds by 10 trillion yen ($123bn). The Bank of Japan (BOJ) made the move as the Japanese economy continues to labour amidst a slowdown in the important export markets of the ailing eurozone and the stuttering US. Prompting the liquidity measures was the release of negative consumer price figures. Japan has seen consumer prices falling in recent years whilst prices have increased in the likes of China and India. The Bank of Japan has been trying to reverse this trend setting a target of 1% for consumer price growth. Data released on Friday showed that consumer prices in Japan increased by just 0.2% in March from the previous year .Not including the highly volatile food and energy costs, , consumer prices dropped 0.5% from the previous year.

Driving the stock markets – Hong Kong’s Hang Seng Index had increased by 1.19% whilst Australia’s S&P/ASX200 increased by 0.69%,.- was the Commerce Department reporting on Friday that the US’s gross domestic product increased 2.2% in the first quarter, less than the expected economic expansion of approx 2.5%.

The figures fuelled speculation that the Federal Reserve might introduce the rolling out of quantitative easing measures. Te U.S. central bank would buy bonds from financial institutions, flooding the economy with liquidity to support more hiring and investment.
Today, the binary trader should look at FOMC member Fisher speaking at 9.30am GMT, European and Italian CPI at 10am GMT and Candian GDP at 1.30pm GMT for increased volatility in the markets.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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