Binary Options News : October 14, 2012
The news that Spain is getting closer to officially requesting financial bailout sparked a risk on trading session that saw investors move into high yield currencies and move out of safe haven positions in the USD and Commodities.
Market talk that Spain is nearing a bailout was heightened by the credit ratings agency Standard & Poor’s lowering Spain’s long term credit rating to ‘BBB-’ from ‘BBB+’ and reducing its short term credit rating from ‘A-2′ to ‘A-3′, citing Spain’s deepening economic recession as limiting the Spanish government’s policy options whilst stating that rising unemployment and spending constraints will probably add to the social discontent and friction between Spain’s central and heavily indebted regional governments. A bailout would give the European Central Bank the ability to intervene and purchase Spanish sovereign debt thus lowering the borrowing costs for the troubled country.
The University of Michigan/Reuters consumer sentiment index for October released on Friday provided a surprise piece of positive data with the index climbing to a seasonally adjusted 83.1 from 78.3 in September after analysts had predicted a fall down to 78.0.Also producer price inflation in the US increased more than expected in September, with the Department of Labor in the US reporting that its producer price index increased by a seasonally adjusted 1.1% from the 1.7% reported in August. This surpassed the analyst predicted increase of 0.7% for the previous month.
US stocks finished mixed to lower on Friday, experiencing its biggest weakly retreat since June, with solid consumer sentiment data and JPMorgan Chase earnings being shrugged off by investors who sold on worries that overall earnings will disappoint as the global economy continues to cool. The close of US trading saw the Dow Jones Industrial Average increase marginally by 0.02%, whilst the S&P 500 index fell 0.30% and the Nasdaq Composite index dropped by 0.17%.
The USD was mixed to lower against most of the major currencies, meanwhile, down, 0.20% at 1.6078 against the GBP, down 0.32% against the AUD and down 0.25% against the CHF. The dollar was up however against the JPY, up 0.09% at 78.41 and up 0.10% at 0.9796 against the CAD whilst up 0.03% at 0.8176 against the NZD. The US dollar index, which measures the greenback against a basket of six weighted currencies, was down 0.17% at 79.74.
The Week Ahead
In what promises to be a busy trading week ahead these are The 5 most important event risks next week that look likely to cause market volatility in chronological order:
1. US Retail Sales
2. Minutes from Reserve Bank of Australia’s Monetary Policy Meeting
3. Minutes from Bank of England Monetary Policy Meeting
4. Chinese GDP
5. EU Leaders Summit
* * * * * * * * * *
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.