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  #1  
Old 24-01-2013, 15:48
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Default Daily Market Reviews by MAYZUS.com

MAYZUS Investment Company Ltd (formerly United World Capital Ltd) is proud to provide daily market reviews by the well-known financial expert – Mr. Arne Treholt, a former Political Secretary to the Minister of Shipping and Foreign Trade, then Deputy Minister of Law of the Sea of the Norwegian Royal Ministry of Foreign Affairs. He also held the position of Counselor for Economic Development and Social Affairs at the Ministry of Foreign Affairs, and was member of the Norwegian Mission to the United Nations, New York. At the moment Mr. Treholt is a Vice President and a Business Development Director of MAYZUS Investment Company Ltd.
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Old 24-01-2013, 15:50
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24 JANUARY 2013: USA INDEXES UPDATED 5-YEAR MAXIMA

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


On Wednesday, January 23, the stock market of the United States finished trading session by the moderate growth of the main indexes, S&P500 and Dow Jones appeared on fresh 5-year maxima. The positive information background on stock markets was provided by quarterly reports of representatives of hi-tech sector and favorable forecasts of a number of industrialists.

However the reporting of the Apple company which came after closing of the trading session disappointed investors. Within the additional session price of shares of Apple fell in price for 11%. Futures for the Nasdaq 100 index at the morning electronic trading are decreasing by 1,4%. Thus, the technological sector appeared under pressure today.

Asian stock indexes today "is in a fever", session began with decrease, subsequently the Chinese statistics allowed to resume purchases and helped indexes to reach profitable zone, but at a present moment sales again reign in the markets, and only Japanese Nikkei continues growth. Purchases in Japan are caused by the renewed decrease in yen, USD/JPY pair grew by 0,7% to level 89,2, after a release of data on trade balance. According to these data, in 2012 Japan recorded annual deficiency of foreign trade the second time in a row, thus the negative balance this year was maximum for all history and made 6,927 trillion yens.

Coming back to China, it should be noted that the production index PMI, from HSBC bank, increased the fifth month in a row, and according to preliminary data, it was in January at the level of 51,9, against December value 51,5. In the moment this news was apprehended by traders very positively, the Chinese continental SSE index came in plus of 2% and pulled for itself other Asian indexes, however so sharply growth was leveled.

Prices of oil between the Brent and WTI brands considerably differ. Brent raised to 112,83 dollars for barrel while the price of WTI fell almost by 1,5% and bargains at the level of 95,57. So essential distinction is caused with the advent of news about an operational malfunction on the key oil pipeline - Seaway. Through this branch oil is delivered from Cushing storage in Oklahoma to key oil processing regions on the coast of the Gulf of Mexico. Capacity is reduced from 400 thousand to 175 thousand barrels per day. Stocks are in Cushing at maximum levels, and at such technical failures they can only continue to increase. It also is at present the main factor of sales of a WTI contracts.

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Old 25-01-2013, 09:54
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25 JANUARY 2013: THE JAPANESE YEN UPDATES MINIMUM LEVELS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Asian stock markets again don't show uniform dynamics today, and again "independently" there is a Japanese Nikkei index with growth more than for 2%. The reason is still the same, decrease in national currency was resumed, and today USD/JPY pair already bargains around level 90,5. Statements of the deputy minister of economy of Japan, Yasutosi Nisimura, that decrease of currency isn't finished yet, and the level of 100 yens for dollar seems quite achievable, added interest to speculative sale of yen.

During the today's Asian session the British pound continued to decrease against US dollar and at the moment practically approached yesterday minimum. The British pound bargains at the level of 1,57884. Today gross domestic product of Great Britain for the 4th quarter is published: the forecast of -0,1% against 0,9% in the 3rd quarter. In case of a release of weak data, the price will continue to fall.

Thanks to signs of improvement of economic activity in the Euro zone, EUR/USD pair continued correctional movement and grew to level of 1,3393 euros against US dollar at the trading on Thursday, and positive data from a labor market of the USA only strengthened tendency of investors to risk, having added an impulse in growth of the European currency. This morning we see pair bargaining at the level of 1,3337.

Yesterday trading volumes of oil were 30% higher than the monthly average. This morning Brent bargains at level of $113,08, and WTI at $95,93. As for a technical picture, due to yesterday's growth the alignment of forces exchanged a little. Quotations on Brent rose above a key mark of $113, having updated thereby three-month maximum. In case of lack of a general negative in the market, growth continuation is expected for the purpose of achievement of level of $117 for barrel.

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Old 28-01-2013, 09:27
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28 JANUARY 2013: EURO/USD BOUNCES TO 11 MONTHS HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


EURO/USD bounced to its highest level in 11 months amidst mounting signs of recovering economic confidence in the Euro zone. Euro/USD is trading at 1.3459 after hitting 1.2480 on Friday. The Euro is also gaining ground against the Japanese Yen which continues to fall also against the USD on expectations on active monetary easing. The strength of the Euro is supported by a more positive business sentiment in Germany and by European banks actively paying back credits taken given by the European Central Bank (ECB) since 2011.

USD/Yen fell to 91,26 yen to a dollar on Friday which is the lowest level seen since June 2010. Since last November Yen has fallen 13% against the USD and a record 17% versus Euro. The Japanese Nikkei stock index reach new record levels while the South Korean Kospi is falling back mainly due to a stronger Won. Over the last days there has been growing dissatisfaction with the strong fall in the Yen both from South Korea and China and from the Russian and German central banks.

Historically speaking Yen is still relatively strong. During the early 1990’ies USD/Yen was trading at 158 and apart from a brief period in 1995 it has traded below 90 yen a dollar only since the middle of 2010. Stocks in Asia are except for South Korea still up on better US economic news on jobless rate, manufacturing, better housing and retail spending. Chinese data continue to confirm that the Chinese economy is turning around.

The British Pound (GPB) has fallen below the technical resistance level at 1,58 against the dollar trading at 1.5754. Data before the weekend showed that the UK economy shrank more severely than expected in the fourth quarter shrinking with 0,3% rising fear of a third dip recession. The market expectation was a decrease of 0,1% in the gross domestic product, GSDP. The number was particularly disappointing taken into consideration the robust 0,9% growth in the third quarter. It now seems that this strong growth was entirely down to the boost given by the London Olympics.

The short term prospect for GBP is negative.

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Old 29-01-2013, 07:10
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29 JANUARY 2013: EURO AND ASIA STEADY ON HIGHER RISK APPETITE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Asian shares rose on Tuesday amidst improved risk appetite and a rotation of funds from bonds and treasury bills into equities. Bargain hunters took advantage of recent selling, but generally investors were cautious ahead of new US economic data and a Federal Reserve policy decision later in the week. More solid US growth indicators as reduced numbers of job claims, better manufacturing and housing data, have fuelled speculation that FED might consider pulling back on aggressive easing stimulus.

The MSCI-index for Asia Pacific, Japan’s Nikkei and South Korean shares all posted healthy gains after falling back on Monday. Australian shares jumped 1,1% on gains in the financial sector. American and European shares hold on to earlier gains. A rise in a gauge of planned US business spending in December added to the positive market sentiment along with easing financial stress in the Euro zone. European blue chips reached a fresh 18 month peak on Monday.

The Euro/USD is helped by the increased risk appetite and stay firm at 1.3450. USD/JPY trades close to 91. The Japanese yen continue to be under pressure on monetary easing which have seen the yen depreciate 13% against USD and 17% versus Euro since mid-November. The British pound, GBP, fell on Monday to its lowest level since August at 1.5867 on comments from the incoming Bank of England Governor, Mark Carney. Carney indicated that there was still scope for monetary policy to do more in the developed world.

The prospect for a more activist British monetary policy came on the top of other negative financial and economic developments which threaten the British economy with a triple-dip recession. The UK government cost cutting measures have come under renewed criticism as the door for a possible British exit from the European Union is kept open. It is highly likely that these combined factors would mean increased downward pressure on the pound.

Oil prices continue to be strong. Brent crude reached USD 113,50 a barrel. Other commodities are rising on growth expectations. The bell water copper gained 0,2% and traded on USD 8 065 a tonne in London. Gold and silver which fell at the end of last week mostly on profit taking, are showing a firmer trend this morning. Gold trades at USD 1660 an ounce.

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Old 30-01-2013, 08:24
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30 JANUARY 2013: EURO/USD EYES 1.37 – 1.38 LEVEL

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The Euro/USD has strengthened further trading at 1.3493 close to the critical 1.35 level eyeing 1.37 – 1.38. The US dollar has except for Japanese Yen lost ground against most currencies. USD/JPY trades steady in the range between 90,50 – 91 yen a dollar near the peak of 91.32 reached on Monday. This is the lowest level seen for yen since June 2010. Euro also gained 0,3% to 122,78 against the Yen. The prospect of a weaker yen and increased risk appetite lifted the Australian dollar and the New Zealand kiwi to a four year high against yen. GBP/USD fell back to 1.5745.

Stock markets continue to see new highs not seen for years. The Asian indexes led by the South Pacific MSCI rose to the highest levels in 18 months. A strong US housing market and stabilization inside the Euro zone boosted investor confidence and the global economic outlook. Commodity prices continue to raise with copper adding another 0,6%. Oil prices reached its highest level seen in months. Brent crude trades above USD 114 and the New York, NYMEX, is steady in the range of USD 97 – 98 a barrel.

The US Federal Reserve (FED) ends its two days meeting on Wednesday. It is expected that FED will continue with its monetary easing policies. This amidst speculation that the better prospects for US economy might soon end FED’s aggressive asset buying program. Investors will focus on the final statement and look for any clues to a change in FED’s policies. A continuation of FED’s policies will strengthen the continued rotation of funds from the bond market into shares, boost emerging markets and weaken the attractiveness of safe-haven assets.

The US stock market was very strong yesterday. Dow Jones was close to reaching the 14 000 index level. European stocks delivered better than in months as US companies continue to beat earnings forecasts. The leading on line book store, Amazon, delivered upbeat results which lifted the share 10%. Car maker, FORD, saw excellent results in the US, but sales in Europe disappointed. Most European equities rose to fresh two-years high. Together with US and Asia these increases boost stock markets as the favorite place for investments in 2013.

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Old 31-01-2013, 07:42
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31 JANUARY 2013: EURO/USD STEADY AS FED STICKS TO STIMULUS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The US-Federal Reserve (FED) will continue its aggressive monetary easing stance. In the minutes from yesterday’s meeting FED pledged to stick to its ambitious 6,5% unemployment and 2% inflation targets as the US Gross Domestic Product (GDP) dropped by 0,1% in fourth quarter of 2012. The negative GDP number was somewhat of a cold shower for markets which dropped substantially both in the US, Europe and this morning in Asia. Asian markets fell off a 17 months high.

FED’s statement and the GDP numbers had little impact on the currency markets. Euro/USD reached 1.3588 upon FED’s announcement and keeps steady at 1.3569. Yen gained some ground trading at 90,80 yen against USD. Oil prices are up. Brent crude trades at USD 115 a barrel. Gold and silver prices regained ground and reached the highs for 2013 seen last week. Swedish and Norwegian krones trade at levels not seen against the dollar since before the financial crisis in the autumn of 2008.

The cautious FED statement which pledged to continue a monthly USD 85 billion bond-buying stimulus plan to encourage employment came few hours after the news that the US economy unexpectedly contracted in the fourth quarter. The weakness was mainly due to a plunge in defence spending, suggesting that the underlying fundamentals were better than the headline figures indicated.

European data showed an improved economic sentiment for a third straight month along with news that 100 billion Euros of private funds flowed back into the Eurozone periphery late last year. These capital flows have strengthened the Euro which broke through the 1,35 technical resistance level yesterday. 1,37 – 1,38 seems a reasonable short term target for the Euro/USD. Recent capital flows shall, however, not be read as an end of the Euro crisis. Economic fundamentals are still very weak with 25% unemployment levels in the European periphery threatening the delicate social balance. It is a question for how long the strong Euro policy will continue. Major international banks see a Euro/USD at 1,25 during the second half of 2013.

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Old 01-02-2013, 07:22
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01 FEBRUARY 2013: EURO/USD HITS NEW HIGH 1,3624

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


US nonfarm payroll has the top focus on investor’s agenda when presented later today. After a strong start on the new year with global share indexes gaining 8 – 10% in January, disappointing negative growth, GDP numbers, from US in the fourth quarter of 2012 and a tepid Chinese purchasing manager’s index (PMI) for January, have cooled the dominating positive sentiments. Nervousness again rides global in markets searching for directions. The US and Chinese numbers underscore the fragility of the global recovery. These concerns do not hamper some currencies. EURO/USD has brushed through 1,36 trading at 1.3624 while USD/JPY jumped to 92,14.

Both US and the China are presenting mixed and somewhat contradictory figures. The US housing and manufacturing sector seem to spring back to life as companies generally have presented quarterly results better than expected. Along with the disappointing PMI-figures a separate private Chinese study simultaneously showed that their giant manufacturing industry hit a two-year high on strengthened domestic demand. This indicates that while the export is declining, domestic demand is picking up due to strong infrastructure spending and other investments encouraging domestic growth.

The Euro reached a 14-month high at 1.362. The strength of the common currency pushed the dollar index to a one month low of 79,107. The revival of the Euro is set to continue for some time as investors return to euro zone bond markets encouraged by the European Bank’s (ECB) assurances to take whatever measures necessary to save the Euro. Absence of economic growth in the Euro zone further means that there is no risk for inflation. The Yen to Japanese exporters delight is continuing to fall. 100 yen a dollar seems to be within realistic medium term reach. After steep falls earlier in the week, British pound GDP, has stabilized against the dollar at 1,5871.

US crude futures, NYMEX, reached USD 97, 56 a barrel while Brent rose 0,3% to SD 115.90, the highest levels seen for months. Copper prices are up. Gold and silver fell steeply yesterday, but seems to consolidate on 1660 and 31,35 levels respectively. The strong oil and commodity prices have given a boost to currencies as Australian dollar, Norwegian krones (NOK) and Canadian dollar.

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Old 04-02-2013, 07:07
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04 FEBRUARY 2013: EURO REACHES 1,37; GBP AND YEN PLUNGE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The Dow Jones Industrial Average (DJ) rose to 14 000 for the first time since October 2007 on Friday. The Standard & Poor’s 500 Index also hit its highest level since December 2007. The Asian markets drew momentum from the jump in US indexes and data showing a credible recovery. The Federal Reserve’s (FED) last week resolve to continue monetary easing along with solid manufacturing data both from Europe and China, contributed to the positive market sentiment.

US payrolls statistics showed Friday an increase of 157 000 new jobs in January with numbers for November and December adjusted up. The MSCI index for Asia Pacific rose 0,6% after posting a 0,7% gain last week. Australian shares jumped 0,9% to a 21-month high. The Japanese Nikkei rose 0,5%.

There were big currency movements on Friday. Presented data showed that those euro zone factories in January had their best month in one year. This lifted the Euro to a 14-half-month peak at 1,3711. Euro/USD has corrected in early Monday trading and eased to 1.3624. The Japanese yen continues to fall. USD/JPY which traded at a peak of 92,97, has eased back to 92,72. The British pound, GBP, reached a bottom of 1.5670 towards the dollar on Friday and trades at 1.5700 in early Asian trading.

Risk appetite continues to grow. The dollar index measured against a basket of currencies fell to a for-and-a-half-month low to 78,918 on Friday while investors in January poured a record USD 77,4 billion into mutual and exchange traded funds. This is a huge increase from the previous record on USD 53.7 billion in February 2000. In the oil market Brent crude had its highest weekly gain since mid-November on tension in the Middle East and prospects for economic growth.

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Old 05-02-2013, 06:59
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05 FEBRUARY 2013: EURO PLUNGES ON SPANISH TURMOIL

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


After sniffing on 1,37 EURO/USD plunged below 1.35 yesterday and trades at present at 1.3493. The Euro has rallied against most currencies in January. At its peak Friday the EURO had since January 1st risen from 2 to 5% against all major currencies. The decline of the Euro came amidst market turmoil and volatility in the currency markets. Oil prices dropped. Brent crude fell two dollars a barrel to 115.

Political turmoil and renewed fear on the sovereign debt crisis in the euro zone hit global equity markets strongly. After weeks of impressing gains shares fell steeply in Europe, United States and Asia. The Standard & Poor 500 Index faced its worst fall since November, the technology index, Nasdaq, dropped 1,5% and the MSCI index for Asia Pacific fell 0,8% after reaching a 18-month high at the beginning of the week.

A grooming corruption scandal in Spain and the possibility for a return to power of Silvio Berlusconi in Italy had global markets to shiver. Prime Minister Mariano Rajoy and his party have rejected the corruption allegations, but the accusations come amidst harsh austerities and 25% unemployment furthering political instability. Spanish and Italian 10-year government bond yield rose to the highest levels in weeks and raised questions whether Spain and Italy would be able to fix their fiscal problems.

Markets have over the past few months been increasingly comfortable with European risks. Political turmoil has not been taken into consideration. The outcomes in Spain and Italy are far from certain and may pose a stumbling block for further risk appetite which. This might seriously hit the Euro which also would be in for profit taking. In the short term perspective the Euro might fall back to 1.32 – 1.33. USD/JPY has taken a short pause at 92,30, but seems set for 95 during the next coming weeks. The Australian central bank kept the interest rate at 3%. This has strengthened the Australian dollar. USD/GBP is stabile trading at 1,5751.

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Old 05-02-2013, 07:11
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05 FEBRUARY 2013: EURO PLUNGES ON SPANISH TURMOIL

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


After sniffing on 1,37 EURO/USD plunged below 1.35 yesterday and trades at present at 1.3493. The Euro has rallied against most currencies in January. At its peak Friday the EURO had since January 1st risen from 2 to 5% against all major currencies. The decline of the Euro came amidst market turmoil and volatility in the currency markets. Oil prices dropped. Brent crude fell two dollars a barrel to 115.

Political turmoil and renewed fear on the sovereign debt crisis in the euro zone hit global equity markets strongly. After weeks of impressing gains shares fell steeply in Europe, United States and Asia. The Standard & Poor 500 Index faced its worst fall since November, the technology index, Nasdaq, dropped 1,5% and the MSCI index for Asia Pacific fell 0,8% after reaching a 18-month high at the beginning of the week.

A grooming corruption scandal in Spain and the possibility for a return to power of Silvio Berlusconi in Italy had global markets to shiver. Prime Minister Mariano Rajoy and his party have rejected the corruption allegations, but the accusations come amidst harsh austerities and 25% unemployment furthering political instability. Spanish and Italian 10-year government bond yield rose to the highest levels in weeks and raised questions whether Spain and Italy would be able to fix their fiscal problems.

Markets have over the past few months been increasingly comfortable with European risks. Political turmoil has not been taken into consideration. The outcomes in Spain and Italy are far from certain and may pose a stumbling block for further risk appetite which. This might seriously hit the Euro which also would be in for profit taking. In the short term perspective the Euro might fall back to 1.32 – 1.33. USD/JPY has taken a short pause at 92,30, but seems set for 95 during the next coming weeks. The Australian central bank kept the interest rate at 3%. This has strengthened the Australian dollar. USD/GBP is stabile trading at 1,5751.

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Old 06-02-2013, 08:58
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06 FEBRUARY 2013: ASIA RECOVERS ON EURO ZONE DATA

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Asian shares recovered on Wednesday as solid euro zone data calmed nerves stirred by potential political turmoil in Spain and Italy. Strong balance sheet numbers from the European Central Bank (ECB) and new signs of recovering inside the euro zone gave the Euro a new boost. The single currency rebounded strongly. EURO/USD trades at 1.3579. Stock markets in Europe and US also rebounded after dropping steeply on Monday. The Japanese Yen continues to be under pressure. USD/JPY touched 93,91, the highest seen since May 2010.

Investors’ optimism returned when the vast US services sector extended a three year expansion in January. Business activities in the euro zone, simultaneously, showed signs of recovery. US and European stocks rallied and recouped most of their losses after a sharp sell-off and profit taking the previous session sparked by renewed worries on the euro zone debt crisis. Oil- and commodity prices rebounded. Brent crude is trading close to USD 117 a barrel. Also copper prices are up.

The Japanese yen was further weakened by the prospect of a new appointment of Governor of Bank of Japan. The actual candidate is said be “dovish” and in favor of further active monetary easing steps. The present Governor would leave his post in mid-March. These news had Japan’s benchmark Nikkei index to soar 1,3% to a 33-month high. The Australian stock markets are also up accompanied by a strong Australian dollar. British Pound (GDP) is back on lowest levels seen against USD this year at 1.5661.

In the US president Barack Obama urged Congress to pass a small package of spending cuts and tax reforms to delay larger, automatic cuts from going into effect and damaging the economy on March 1. The proposal was quickly rebuffed from Republicans who saw it as a bid for new tax increases. The US Justice Department yesterday initiated legal proceedings against the rating agency, Standard and Poor, which it accuses for manipulating markets and actively contributing to the financial crisis in 2008.

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Old 07-02-2013, 09:25
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07 FEBRUARY 2013: MARKETS ATTENTION ON DRAGHI AND ECB

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Growth prospect for the euro zone is in the focus of investor’s interest when European Central Bank (RCB) President Mario Draghi meets with ECB colleagues in Brussels today. The policy meeting comes amidst optimism that the worst for the euro zone might be over. Public tiredness over harsh austerity measures and political turmoil in Spain and Italy, however, gloom in the background. Asian and American markets as well as EURO/USD took a pause waiting for ECB’s directions.

Growing optimism that the euro zone economy may be near a bottom has propelled the euro to a 14-half-month against the dollar and a 34 month peak against the Japanese Yen. Euro/USD is trading at 1.3520. Against British sterling, GBP, the Euro has also gained substantially and stands at a 15 month high. ECB is expected to keep interest rates at a record low 3,75%. Traders will focus on comments on the Euro’s strength and outlook for the euro zone economy.

Draghi’s strong verbal commitment to defend the Euro last autumn proved decisive for the Euro. The ECB’s bond buying scheme has further helped erase the funding strains on highly indebted euro zone members. The bond buying has strongly reduced the risks of the region’s crumbling debt. A corruption scandal in Spain and uncertainty over the outcome of the Italian elections has, however, brought focus back on the region’s political instability.

Crude oil and gold prices have been trading up the last hours. Brent is again sniffing at USD 117 a barrel. Gold is at 1680. USD/JPY trades at 93.45 after reaching 94,075 on Wednesday. In US the attention on budget cuts are back in the headlines. It is indicated that if automatic government spending cuts are kept in place only for a month or two, this may have a serious negative impact on the US economy and possibly trigger a brief recession.

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Old 08-02-2013, 08:21
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08 FEBRUARY 2013: DRAGHI TALKS DOWN THE EURO

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments



The Euro dropped to its lowest level in two weeks on Friday. The fall back came after the President of ECB (the European Central Bank), Mario Draghi, at a press conference yesterday warned against a strong Euro’s negative impact on the European economy. The French President had issued a similar warning prior to the ECB meeting, underlying the risk for a currency war spurred by monetary easing in US and Japan. Currency policies will be on the top of the agenda when the G-20 meets later in the month.

Draghi stressed that the exchange rate is important for growth and price stability. Draghi expected that economic activity in the euro area would gradually recover in 2013, but there are more negative than positive risks. Euro/USD traded at 1.3410 after falling close to one percent on Thursday. The Euro slipped to a two week low against the British pound which broadly strengthened on comments from the incoming Bank of England director, Mark Carney. Carney gave no hints that he favored immediate British monetary easing.

Despite the decline the Euro seems relatively strong. The common currency might be supported by the perception that ECB’s monetary easing is much weaker than US Federal Reserve and Bank of Japan. While the ECB is shrinking its balance sheet, FED and BOJ are expanding theirs. The Euro is probably going to stabilize in 1.33 – 1.35 area unless there is a major upset in the forthcoming Italian elections.

Shares were weaker yesterday prompted by Draghi’s comments on the Euro and Europe’s outlook. Wall Street fall and Growth sectors were especially hard hit. Asian shares, however, rose on solid Chinese trading data. China said that exports grew 25 % compared with January 2012. This confirms a solid recovery trend. Oil prices continue to rise. Brent crude is trading close to USD 118 a barrel. Copper prices are up 0,5%.

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Old 11-02-2013, 09:48
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11 FEBRUARY 2013: BRENT CRUDE JUMPS TO 119

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Most Asian markets were closed with the Lunar New holiday shutting financial centers in China, Japan, Hong Kong, Singapore and South Korea. Trading was light and volatile. Australian shares were flat after closing on 34-month high on Friday following positive export figures from China. Brent crude oil which touched its highest in nine months on Friday, remained unchanged just below USD 119 a barrel.

Foreign exchange trading was choppy with thin volumes. Traders interpreted this as a result of last week’s slightly dovish comments from the European Central Bank (ECB). The President of ECB, Mario Draghi, indirectly warning against that the raising strength of Euro may hurt economic development inside the euro zone. Euro/USD fell briefly to 1.3325 Monday morning and is now trading at 1.3375. The Japanese yen is also strengthened both against Euro and USD. USD/JPY trades at 92,25.

The Euro has also weakened on the cash payment scandal in Spain which engulfs the Prime Minister. Confidence in Italy is also shaken prior to the February 24-25 elections. The worries on the euro zone debt crisis and uncertainties in the southern periphery of Europe is back on the agenda. This probably means that the upside of the Euro is likely to be short-lived and limited.

European Economic and Monetary Affairs Commissioner Olli Rehn said in an interview during the weekend that EU wants closer coordination on currencies to avoid potential damaging disruptions to world trade. The remarks came amid a standoff between France and Germany over whether a strengthened Euro needs an official EU- response or should be left to the currency markets.

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Old 13-02-2013, 07:19
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13 FEBRUARY 2013: YEN TURBULENCE PRIOR TO G-20

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


There is big nervousness in the currency markets prior to the G-20 meeting in Moscow Thursday and Friday. Yesterday the Japanese Yen was in focus. Since December the Yen has fallen 13% against the USD and lost even more ground to the Euro. After two decades of stagnation there is, however, an understanding among the world’s 20 biggest developed and developing states that Japan ought to take firm steps to better its economy and secure economic growth.

The Yen swung dramatically on Wednesday. A statement from the G-7 (the group of the leading 7 industrialized nations) on Japan was differently interpreted. The Japanese Minister of Finance said that the statement recognizes that Japan’s monetary easing measures were not aimed at influencing and distort foreign exchange markets. Then a G-7 official stated the exact opposite. The statement was indeed meant to express such concerns. The yen thereafter fluctuated wildly. USD/JPY was jumping up and down between 92 and 94 yen to a dollar after falling 13% since December.

The incident illustrates the fear for a currency war looming in the background prior to the G-20 meeting. An effort to soothe market and avoid excessive moves in Yen had exactly the opposite effect. Other currency pairs were also affected. Euro/USD was fluctuating between 1.3325 and 1.3450. Oil prices rebounded after falling in the first part of Wednesday. New York Crude, NYMEX, is at 97 and Brent crude trades at USD 118,40 a barrel.

Stocks on Wall Street closed modestly higher on Tuesday. Dow Jones was within striking distance of an all-time high as investors looked ahead to President Barack Obama’s State of the Union address. Obama challenged a divided Congress to back his proposals to create middle-class jobs and overhaul gun and immigration laws.

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Old 14-02-2013, 08:12
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14 FEBRUARY 2013: ASIAN SHARES RISE ON RISK SENTIMENT

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Asian shares rose on improving risk sentiment while Wall Street took a breather ahead of the G-20 meeting which starts in Moscow today. The Asia-Pacific MSCI-index and Australian shares were both up 0,6%. Dow Jones Industrial fell 0,26%. Investors remained cautious after the S&P index briefly hit its highest intraday level since November 2007. S&P is up 6,6% so far this year.

The Japanese Yen continues to be in focus prior to the G-20 meeting with finance and central bank officials from the 20 biggest and most influential countries in the world. Since November Yen has lost or depreciated 20% against the USD. The fall against the Euro is even higher. The leading Western powers are all using the printing press as their major tool to stimulate economic growth and obtain trading advantages. The steep fall of the yen illustrates the depth of the non-declared currency war.

At its press conference after the meeting of Bank of England (BOE) yesterday, BOE as well kept the door open for monetary easing indirectly meaning considering active use of the printing press. Taken into account that China for 10 – 15 years were under continued US pressure to appreciate their currency, power talks. An ugly currency war, might easily develop into a trading war with outright military confrontations looming in the background.

The British Pound (GDP) lost more than 100 points against the Euro and USD after the BOE meeting. USD/JPY which was down in the first part of yesterday, continues to lose ground. This morning USD/JPY is trading towards 94,65 seen on Monday. This is the lowest since 2010. Euro/USD trades at 1.3450 after factory statistics yesterday demonstrated that the euro zone might have reached bottom. Copper is up while oil prices have lost ground. Brent crude trades at USD 117, 98; down one dollar a barrel since Wednesday.

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Old 15-02-2013, 07:31
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15 FEBRUARY 2013: YEN FIRM WAITING G-20 SIGNALS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The Japanese Nikkei fell 1,5% as the Yen firmed against the USD and Euro prior to a crucial G-20 meeting today. The strong appreciation of Yen since last December has caught worldwide attention as government and bank officials from the 20 most influential countries meet in Moscow. USD/JPY dropped from its peak level of 94,65 on Monday and trades at 92,25. JPY has also gained ground against the Euro. Data published yesterday, show that the Euro zone at the end of 2012 was slipping ever deeper into recession.

The looming currency war and recessionary pressure seen most clearly in Western Europe, have focused investor’s attention back on concerns about Europe’s fundamentals. The optimism which created a strong stock market rally at the end of and the beginning of this year, seems most likely to fade away as attention turns back to the weak economic growth especially in the Euro zone. Nothing much is expected to come out of the G-20 meeting. The most likely result is that the leading powers agree to disagree on where to go from here.

The Euro fell to a two weeks low against the dollar trading at 1.3350. Economic output in the 17-country euro zone fell 0,6% in the last quarter of 2012, the steepest decline since 2009 and far higher than the forecast. These results would most likely trigger a new discussion on austerity. The possibility of negative deposit rates in the euro zone also weighed in on the Euro. The pullback in the Euro lifted the dollar index, DXY, to a one month high at 80,621.

Merger activity helped the Wall Street indexes higher yesterday. Heinz shares jumped 20 % when Warren Buffet’s Berkshire Hathaway declared its intention to buy the food company. A small fall in the number of Americans filing claims for unemployment benefits, also supported the market which has hovered at the same levels for the last two weeks. There is no clear upside trigger. The British pound is still struggling and trades close to 11,55 against the USD. Precious metals are falling. Oil prices are still high, but have lost ground over the last trading hours.

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Old 18-02-2013, 06:45
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18 FEBRUARY 2013: YEN PLUNGES WITH GBP UNDER PRESSURE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The yen continues to plunge after the G-20 meeting avoided direct criticism of Japan’s aggressive reflation plan which has seen a 20% depreciation in the relation between USD and JPY over the last couple of months. The G-20 opted not to single Tokyo out, but committed its members to refrain from competitive devaluations. Monetary policies should only be directed at price stability and growth. Japan saw the decision as a green light to pursue its expansionary policies.

The dollar soared 0,7 percent to 94,17 inching closer to 94,465 reached last Monday. This is the highest level seen on Yen since May 2010. Euro/JPY traded at 125,51 close to the peak on 127,71 touched on February 6. EURO/USD is at 1.3334, stabilizing on the same level before the end of last week. The British Pound (GBP) trades at 1,5489 against the dollar close to the bottom level from last week.

The weak yen had a positive influence on Japanese stocks. The Nikkei average 225 jumped 2,3% with exporters and banks being the big winners. Japan is waiting the appointment of a new Governor of Bank of Japan (BOJ). Prime Minister Shinzo Abe’s candidate, Toshiro Muto, is expected to intensify stimulus to energize the economy. The Asia Pacific, MSCI-index eased back 0,2% after reaching a 18-1/2-month high on Friday. Australian shares AXJO rose 0,5%. Markets in China and Taiwan have opened again after one week holiday.

Demand for commodities are expected to be in focus as China returns to market. Policymakers in Washington are discussing a package of budget cuts to kick in on March 1st. Such austerity measures will probably have a negative impact on US growth. Crude prices are marginally down. Brent trades at USD 117,82 a barrel. Gold has rebounded from a six month low and trades at 1612 on bargain hunting and Chinese buying of physical gold after the Lunar New Year.

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Old 19-02-2013, 07:25
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19 FEBRUARY 2013: NO CURRENCY WAR, DRAGHI CLAIMS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


In the aftermath of the G-20 meeting in Moscow leading central bankers along with the International Monetary Fund (IMF), have strongly dismissed that there is a currency war. European Central Bank President Mario Draghi tried his best to take the heat of the debate, talking to European lawmakers in Brussels yesterday; ECB is closely following the strength of the Euro, but here is no currency war, Draghi claimed.

He admitted, however, that Euro’s exchange rate is important for growth and inflation in the euro zone. He feared that inflation may be pulled down, too, far. The exchange rate’s impact on inflation is closely watched. In its statement Saturday G-20 stated that there are none competitive devaluations between leading economic powers. Japan escaped open criticism for its expansive policies. Along with the US Japan has been under fire for conducting loose monetary policies.

Draghi stressed that the exchange rate movements were not explicitly targeted against competitors. They are mainly results of macroeconomic policies to boost domestic economies. Japan is trying to create growth and turn decade’s stagnation around. Draghi demonstrated understanding for such moves, but urged on the other hand world partners to exercise a very, very strong verbal discipline.

Whether such verbal constraint would work is early to say. But over the last 24 hours at least currency fluctuations have been minimal. Euro/USD is trading at 1.3354. USD/JPY is hovering below 94 and USD/GDP, another big loser over the last days, stays flat at 1.5475. There are small changes in oil and commodity prices. Stock markets in US was closed yesterday due to George Washington ’s Birthday. Asian shares barely moved. The Japanese Nikkei fell 0,5% eyeing appointment of a new BOJ director and risks in the euro zone.

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Old 20-02-2013, 07:48
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20 FEBRUARY 2013: MERGERS KEEP US-STOCKS HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Both Dow Industrial and the Standard & Poor’s 500 index gained during yesterday’s session, and closed near all-time highs. Dow tipped over the 14 000 mark and ended at 14 035. The technology index, Nasdaq, was up 0,68%. A surge in mergers have stimulated market activity. There have lately been several acquisitions in a capital strong market. Fourth quarter earnings for S&P rose 5,6%. Tuesday it was rumored that the second biggest office retailer, Office Depot, was in merger talks with a smaller rival.

Asian stocks rose to its highest level since August 2011 on improved global economic outlook and increased risk appetite. The South East Asian MSCI-index added 0,7% and rose for a third day in row spurred by a strong technology sector. Corporate earnings have been generally positive. A shift from defensive to cyclical stocks have also helped stock markets. Australian stocks continue to rise on better commodity perspectives.

The Japanese yen regained some ground, but remained jittery. USD/JPY was swinging in a narrow range between 93,50 and 94 on concerns whether Japan may be able to pursue its strong advocated reflationary policies. The one week delay in the appointment of a new Governor for Bank of Japan, has also raised concerns. The Euro has gained ground both against yen and USD. Euro/USD trades again above 1.34.

British Sterling (GBP) is under continuous pressure. GBP lunged to a seven-month low at 1.5414 yesterday. USD/GDP trades at 1.5444. The records from the last meeting in Bank of England (BOE) are expected to be released later in the week. It is said that the records contain willingness to higher inflation and monetary easing. This comes among speculation that United Kingdom soon could lose its triple A-rating.

The trend in the commodity markets is positive. Copper is up. US crude steadied at USD 96,70 a barrel. Brent eased 0,2% to 117,34. Precious metals are under strong downward pressure after one of the leading market makers, George Soros, last week sold substantial qualities of gold.

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Old 21-02-2013, 07:24
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21 FEBRUARY 2013: FED MINUTES SCARE MARKETS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Global markets turned upside down and brought the dollar back in the driver’s seat as a number of US Federal Reserve (FED) officials urged to slow down or stop buying of bonds (Q4). The minutes from last month’s meeting reveal that FED-members want to stop the buy bonding before the program’s effectiveness has been fully tested.

The prospect of a halt in bond buying sent stocks sharply lower. The S&P 500 index suffered its steepest decline since November. Investors were split and bewildered whether FED doves, eager to spur growth; or more cautious colleagues were in command. The ambitious 6,5% unemployment target originally set by FED seems at risk. The new development has turned markets extremely nervous and volatile. What Wall Street wants is an absolute sign that FED will continue with bond buying for the indefinite future.

The dollar skyrocketed after the minutes were published and gold and silver prices fell to its lowest level since July. Simultaneously it was rumored that a major hedge fund has liquidated large commodity positions. London copper fell to its lowest level in two months. Asian stock markets also tumbled as oil prices fell. Brent crude is down USD 2 a barrel. The MSCI index of Asia-Pacific stocks fell 1,3% after weeks shining.

One of the hardest hit currencies were once again Sterling Pound (GBP) which continues to slide. During the week USD/GBP is down from 1.5475 to close to 1.52. Euro/USD has dropped to 1.3250. USD/JPY, both currencies regarded as “safe havens” when markets are volatile, traded marginally higher at 93.55.

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Old 22-02-2013, 07:16
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22 FEBRUARY 2013: WEAK DATA SUPPORT CONTINUED EASING

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Global markets are still bewildered and confused as to further direction after the steep plunge Wednesday. Asia is marginally up in morning trade. Yesterday’s increase in jobless claims, weak factory activity and consumer data were a stark reminder on the real health of the US economy. It seems, however, overly optimistic to give up bond buying and monetary easing. Federal Reserve’s (FED) published January meeting records, turned markets upside down and raised questions whether these policies will be terminated earlier than planned.

The new data presented convincing arguments in favor of continued monetary easing. FED is currently buying USD 85 billion in bonds monthly. It has earlier stated that these purchases are going to continue until the labor market improves substantially. 6,5% unemployment has been set as a target. FED records demonstrates that its members are increasingly divided over the wisdom of these policies. The “Doves” want to go on with monetary easing. The traditionalist don’t. This division rattles global markets.

Jobless claims increased last week with 20 000 as consumer prices rose 1,6% and business activity index plunged. These numbers make it necessary for FED to think twice before giving up on the growth stimulus policies. Commodities and precious metals which along with stocks were big losers on Wednesday, have recovered as a result of technical corrections after the steep fall earlier in the week. Gold was especially strong hit and lost its shine as safe haven. Gold is trading 0,5% up at 1582. Oil prices have stabilized with technical graphs still pointing down.

USD continues to gain ground, but slower than yesterday. Euro/USD trades at 1.3216. USD/JPY is flat on 93,3075. The Scandinavian krones have lost substantially against the USD during the week. USD/NOK trades at 5,66 compared with a low on 5,43 earlier in February. The Danish krone (DK) is for the first time in weeks trading higher than the Norwegian krone (NOK).

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Old 25-02-2013, 08:16
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25 FEBRUARY 2013: MOODY’S REDUCED A RATING OF GREAT BRITAIN WITH AAA TO AA1

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The trading session on Friday has passed more positively at the stock exchanges of the USA and Europe comparing to the days before. Investors returned to purchases, without having paid attention to statements of European Commission which reduced the forecast on growth of world gross domestic product in 2013 from 3,3% to 3,2%. Thus figures across Spain (-1,4% at a budget deficit on 6,7% from GDP), Italy (-1% at 2,1%), Portugal (-1.9% at 4,9%) really depress. However, this news didn't confuse investors, and the European indexes FTSE (+0,7%), DAX (+1,03%), CAC (+2,25%), MIB (+1,4%) carried out all day in "a green zone" and finished the session of a steady growth.

The American indicators: Dow Jones +0,86%, S&P +0,88% and NASDAQ +0,97% also finished week with a rebound, without looking neither at inconsistent information from Europe, nor on rising to the USA "the fiscal cliff" to which there is only a week.

Statistics from China added a negative sentiment in the markets this morning, where the PMI index from HSBC, in February sharply decreased from the maximum reached in last month for 2 years, but remained above important level of 50 points. Thus Asian indexes began new week in "a green zone", and NIKKEI arranged the next rally for 2% on news about planned appointment to the post of the head of Bank of Japan H. Kuroda, the known supporter of active stimulation of economy.

The situation in world economy still does not show a lot of optimism. The news coming from Moody's published in the night from Friday to Saturday became a clear proof of it. The agency reduced a rating of Great Britain with AAA to AA1. The reason of this decision of Moody's called weakness of the British economy which, according to agency, will keep sluggish growth rates at least till 2016.

Oil, however, moderately becomes cheaper today under pressure of a negative. Brent drifts next to a level 114.24, adding 0.12% and WTI is stable on 93.209. EUR/USD pair is traded on a 1.3216 this morning.

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Old 26-02-2013, 07:55
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26 FEBRUARY 2013: ITALIAN ELECTIONS BECAME A REASON FOR CORRECTION IN THE MARKETS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Yesterday the world markets showed different dynamics. So, the European indexes finished Monday’s trading session moving upwards. Meanwhile, the American indexes began week with essential decrease. As a result of sales the Dow Jones and S&P 500 indexes could not keep the key levels - 14000 and 1500 points accordingly. Following the results of Monday the Dow Jones index lost 1,55%, the S&P 500 index lost 1,83%.

Markets were correcting due to the news coming from Italy. It became known that following the results of processing about 90% of bulletins two parties received identical result. The victory was won by Pierre Bersani's left-centrist coalition and Silvio Berlusconi's right-centrist coalition. Let's remind that Bersani already declared commitment to the economic reforms which are carried out by the old government led by Mario Monty. Berlusconi's victory is extremely undesirable for the Eurozone.

One of the most expected events for today is speech which will be given by the head of FRS B. Bernanke to bank committee. The head of FRS in his speech, most likely, will give an assessment to carried-out stimulating programs of FRS, namely repayment of assets as after announcement of protocols from the last meeting of FRS fears about early turning of programs increased.

USD/JPY pair yesterday has been decreasing from a level of 94.7 to a level 91, losing 4%, but at the current time is back to a level of 92.2. Most likely such movement was caused by strong weakening of euro and, respectively, a capital overflow in traditionally protective currencies - dollar and yen. EUR/USD is traded on a level 1.3062.

On Monday we have seen rather volatile session in the oil market where the positive news on oil import coming from China (+7% in January), have boosted price back to $115.8, but at closing price went again back and this morning Brent is losing 0.63% and traded on a level of $113.719.

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Old 27-02-2013, 08:48
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27 FEBRUARY 2013: BERLUSCONI “DERAILED” WORLD STOCK MARKETS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Yesterday we again could not see a uniform dynamics on the world stock markets. The European indexes fell off on news on outcome of the Italian elections, having lost on the average 2,5%. At the same time the American indexes could show ascending dynamics, having added about 0,7%.

There were a few reasons for activity of buyers in the American market. First, speech of the head of the Federal Reserve System (FRS) Ben Bernanke. The banker sounded the position concerning influence of a new round of the program of quantitative easing (QE3) on economy of the USA. Bernanke focused attention of investors on advantages of QE3, among which economic recovery against control of inflation at the level of 2%. According to the head of FRS, benefit from soft monetary policy outweigh the related risks so turning of stimulating measures is not necessary at the current stage.

Besides that, another source of a positive was data coming from the market of real estate of the USA. So, sales of new houses in the country unexpectedly grew by 15,6% in annual expression. Let's note that last year became the most successful in the housing market in the USA after 2009. In 2012 growth of sales of new buildings became maximum since 1983, having made 19,9%. It is necessary to note, that we can expect that real estate market will continue to develop this year as well, but definitely much slower.

Meanwhile, in Europe the main subject for discussion there are parliamentary elections in Italy. They caused a lot of noise and confusions in the financial markets. Profitability of the Italian bonds in the secondary market flew up to 4,8% that became a maximum level since the beginning of December, 2012. Besides, political risks in Italy led to euro exchange rate falling to a minimum level since the beginning of year. This morning, we can see EUR/USD pair traded on a level of 1.3076.

Risks of strengthening of debt crisis dragged off down world prices for oil. Brent is bargaining on a level 112.66$ and WTI on 92.78$ per barrel.

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Old 28-02-2013, 09:06
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28 FEBRUARY 2013: BERNANKE AND DATA LIFT WALL STREET

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Stocks rose on Wednesday with major indexes posting their best daily gains since early January, as Federal Reserve Chairman, Ben Bernanke, gave robust support for continued stimulus policy and data pointed to modest economic improvement. In his second day before a Congressional committee, Bernanke defended FED’s buying of bonds to keep interest rates low to boost growth. Bernanke’s comments helped market rebound from its worst decline since November. Dow Jones Industrial closed at a level not seen since 2007.

A relatively smooth auction of Italian government bonds further helped temper concerns about the country’s political deadlock. The Euro held its ground against both dollar and Japanese yen on Thursday. The common currency edged up 0,1% to USD 1.3147 after steep losses following the Italian elections. The Euro hit an eight-week low on 1.3018 on Tuesday. Solid sales of Italian government bonds yesterday helped soothe the jitters that the political deadlock could destabilize Europe’s second biggest sovereign debt market.

Strong US business spending data also boosted investors’ sentiment easing worries about looming US fiscal spending cuts and prompting the yen to resume its decent after a brief spell of sharp gains earlier in the week. In Washington positions between President Barack Obama and congressional leaders over the budget crisis hardened yesterday as last ditch talks to prevent harsh automatic spending cuts beginning March 1st, failed to make substantial progress.

British sterling (GBP) is still weak trading at 1.5169 against the dollar. The Australian dollar is stronger and oil has regained some ground. Brent crude is trading above USD 112 a barrel. Also gold is somewhat stronger trading close to the critical USD 1600 level an ounce.

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Old 01-03-2013, 11:12
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01 MARCH 2013: EURO FALL STEADIES IN ASIAN TRADE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The Euro steadied in Asian trade Friday morning after steep losses yesterday and after notching its biggest monthly fall – 4% - against the dollar in nine months. This as investors digested slightly disappointing Chinese data, political uncertainty in Italy and impending US government spending cuts. These combined factors sapped investor’s risk appetite and put the Euro under increased pressure.

China’s official purchasing managers’ index for February showed manufacturing activity at its slowest pace in four months at 50.1 against the predicted consensus poll of 50,2 slightly lower than expected. The data is not dramatic. Risk-off sentiment doesn't usually help the Euro, but the Chinese data is not a major factor. The unclear situation in Italy is the basic worry. Euro/USD is trading at 1.3073 well above the 1.3018 hit earlier in the week. The European Central Bank (ECB) will consider interest rates today. A further cut will put the Euro under new pressure.

The Japanese yen was relatively steady against both Euro and USD. USD/JPY trades at 92.64. The yen which usually is regarded as a safe haven in times of heightened market stress, continue to under perform after Prime Minister Shinzo Abe nominated an advocate of aggressive growth and stimulus policy to head the Bank of Japan.

The big worry in global markets is nevertheless how the sweeping US budget cuts worth USD 85 billion starting from this month, will hit growth in the world’s biggest and the global economy. The International Monetary Fund (IMF) has warned that the cuts would hit US biggest trading partners especially hard. In Washington the blame game between Republicans and Democrats are in full swing with both parties accusing each other for failure to prevent the fiscal crisis.

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Old 04-03-2013, 09:44
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04 MARCH 2013: ASIA TUMBLES ON CHINA WORRY

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments



Asian shares slipped on Monday as China tightened its grip on the property sector. Beijing increased Friday required down payments and loan rates for buyers for second homes in cities where prices have been quickly increasing in an effort to contain housing costs. This had immediately a negative effect on the Chinese markets and led to a tumble in Asia. The MSCI-index for SIA-Pacific shares are 1,3% down after Shanghai shares slipped 2,3%.

Slower growth in Chinese increasingly important services sector had also an impact. The growth in this sector was slower than in five months, reinforcing the view that the Chinese recovery remains modest. The slower Chinese growth had an immediate effect on Australia where the AXJO index fell 1.2%. Japan was the only positive spot. The Nikkei 225 rose 0,6% as the sole gainer in the region. Export companies were boosted by a weaker yen and surprisingly strong US manufacturing and consumer sentiment.

The new Governor of Bank of Japan (BOJ) stated that BOJ is ready to take whatever measures necessary to get Japan out of the vicious deflation circle. USD/JPY trades at 93,33. In spite of its budget problems USD is trading on a six months high against a basket of currencies. Currency speculators have over the last week increased their bets in favor of the US dollar.

Evidence of Europe’s problem with Spain at risk needing a state bailout is weighing in on the Euro. Data presented on Friday showed that Germany and Ireland are the only Euro zone members with factory output growth last month. Joblessness within the Euro zone rose to an all-time high. The Euro steadied at 1.3015 after slipping to a low of 1.2966 on Friday, the lowest level seen in 3 months.

Concerns about the negative impact from the S spending cuts also weighed in on US crude which is down to USD 90.59 a barrel. Brent is trading at 110,50. Gold and silver prices are hurt by the strong dollar.

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Old 05-03-2013, 07:39
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05 MARCH 2013: WALL STREET HIGHER IN CLOSING RALLY

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


In a late-day rally Wall Street pushed major stock indexes near all-time highs despite concerns about growth and China’s housing market. Any slowdown in China could affect US growth. Commodities and US-materials have a big exposure towards China. This goes especially for giants as Caterpillar and Alcoa which lost respectively 1,8% and 1,1% and were the big losers in yesterday’s trade.

Asian shares followed suit and rebounded strongly on Tuesday after a sharp sell-off triggered by slumping Chinese stocks the previous session. The MSCI-index for Asia-Pacific shares won back 1.1% of the 1.3% lost on Monday. In a prepared statement for the opening of China’s annual parliament meetings, outgoing Premier Wen Jiabao, stressed that China would boost fiscal spending in 2013 in a bid to deliver on the promised 7,5% economic growth for 2013.

This boosted the Australian stock market which rose 1,5% outperforming its Asian peers. Japan’s Nikkei stock average rose 0,8% to 53 month high. At least for now markets continue to be bullish in spite of spending cuts in the US, lack of any kind of political resolution in Italy and weaker data from China including an overheated property market. Markets are flush with capital due to monetary easing and continuous low interest rates. For the time being this seems to trump every other concern.

There are no big movements in the currencies. Euro/USD is steady on 1.3015. EU Finance Ministers met yesterday to discuss bail-out terms for Cyprus (see separate article). USD/JPY is at the same 93,50 levels as seen at the start of the week. British pound, GBP, has avoided to slump below 1.50 and trades above 1.51. Oil prices have recovered from yesterday’s low. New York crude, NYMEX, is above USD 90 a barrel. Brent crude trades at 110,25. Gold and silver are marginally higher than at the start of the week. Gold at USD 1580 an ounce.

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Old 05-03-2013, 12:34
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05 MARCH 2013: SPECIAL REPORT: CYPRUS STARTS BAILOUT TALKS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Michailis Sarris, the newly appointed Minister of finance in President Nikos Anastasiades’ government, met yesterday with his Western European colleagues in Brussels in an effort to hammer out a bailout agreement with international lenders. Cyprus needs about Euro 17 billion in aid of which 10 billion is needed to shore up the banking sector. That is fraction of what has been pledged to Greece. For Cyprus with a gross domestic product (GDP) on 18 billion it represents a colossal sum.

Speaking prior to the Ministerial meeting which is expected to focus on options to address the debt crisis in Cyprus and over renewed concerns over the future of the Euro following the Parliamentary elections in Italy. In the elections one week ago Italy rejected in large numbers reforms and austerity measures demanded by the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). Mario Monti, a former EU-commissioner which for the last year has headed a caretaker government, obtained only 10 % of the electoral votes.

Cyprus is following in the footsteps of Greece, Ireland and Portugal as the fourth country inside the Euro zone to ask for a bailout. Cyprus faces a bond repayment of Euro 1,4 billion in June. The European Union wants consequently that Nicosia reach a deal with the so-called troika of international lenders (EU-Commission, ECB and IMF) by end of March.

Troika-representatives have negotiated with the previous AKEL, a communist-led government for the last months. These talks stalled at disagreements on terms including the privatization of government assets. The Christofias-government sought aid from Russia before finally accepting a European bailout. Christofias succeeded two years ago in obtaining a Euro 4 Billion loan from Russia on favorable terms. There are now negotiations on prolonging this loan from 5 to 10 years.


Mr. Sarris stated that he did think it is necessary to make major changes to a draft bail-out agreement reached with the previous government. Sarris warned against taking an overly aggressive approach to combating money-laundering which he feared could only worsen the fragile economy of the island.

Worried by the threats for a “hair-cut” on investors deposits billions of Euros have over the last months left Cyprus for safer banks and locations as Latvia. Sarris stressed that these outflows already had been very damaging to the Cyprus banking system and worked against the common objective to stabilize the banking system. Sarris who served as a Minister of Finance between 2005 and 2008, is a former World Bank economist.

Cyprus has since the breakthrough of the Soviet Union been one of the preferred “safe havens” for Russian flight capital which have contributed heavily to Cyprus prosperity and made it possible for the three banks, Bank of Cyprus, Laiki and Hellenic bank, to take big exposures in Greek treasury bills and unsecured loans to Greek individuals. Totally the loans given to Greece over the last years are estimated to Euro 27 billion.

Prominent European politicians and especially Germans have lately stressed that Cyprus with its low taxes (10 5 flat taxation on company net profit) and lax banking regulation, have made the island a hub for money laundering.

This has been strongly rejected by the previous government. The new government also rejects these accusations. In a token that Cypriots want to maintain some level of banking secrecy to lure investors and financial services (the FX industry in Cyprus has boomed over the last years), Mr. Sarris said that there was great skepticism in Cyprus about money-laundering investigations. That would mean that anybody who has any money in the banking system has to have their name analysed and reported when they have nothing to hide.

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Old 06-03-2013, 07:39
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06 MARCH 2013: INCREASED RISK APPETITE ON DOW’S RECORD-HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Asian shares extended gains on Wednesday following Wall Street’s record close. The Industrial average index, Dow Jones, ended at an all-time high as the pan-European Euro first 300 index closed at its highest level in 4-and-a-half year. The MSCI-index for Asia-Pacific added 0,9% while the Japanese Nikkei surged 1,3%. Copper, crude oil and commodity related currencies are all up. The USD DXY-index eased 0,2% against a basket of currencies.

The markets were spurred by fast February growth in the huge US services sector and bolstered by China’s announcement of record government spending in 2013. These factors boosted investors’ sentiment and hopes of economic growth and increased demand for gods. EURO, British sterling, GBP, and JPY which have been the big losers over the last weeks, have consolidated and gained some ground. Euro/USD trades at 1.3065. USD/JPY is at 93.22.

The strong rally in the stock markets is partially a product of the monetary easing policies conducted by the US Federal Reserve since last summer and followed intentionally and in practice by several other Western central banks. There have been a lot a spare capital on the side lines waiting to strike. Over the last weeks and months we have witnessed a recirculation of capital into the more risk prone equity market. The new records are a result of this recirculation. Major investors are gambling on a turnaround in the global economy and pushed their free cash into stocks in spite of the problems in the Eurozone and an overheated Chinese property market.

Oil prices are also up this morning. Venezuela’s President Hugo Chavez lost his two years long fight with cancer and passed away this morning 58 years old. Venezuela is one of the biggest oil producing countries in the world, and Chavez has led a policy where a substantial part of the country’s oil riches have been transferred to the poor and have-nots. Chavez has also been a guarantor for domestic political stability and encouraged other Latin American countries to follow his suit. It remains to be seen whether the power vacuum created by his death is filled in such a way that political unrest and renewed pressure on oil prices are avoided.

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Old 07-03-2013, 08:00
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07 MARCH 2013: GBP AND EURO FACE STRONG PRESSURE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


A solid job report showing that US private employers added a larger-than-expected 198 000 jobs in February, gave the dollar a strong boost yesterday, trading at its highest level against a basket of currencies in 6-1/2 months. Both the Euro and Pound sterling (GBP) are under strong downward pressure. Euro/USD dipped below 1.30 and trades at 1.2990 prior to meeting in the ECB, European Central Bank, later today. USD/GBP traded below the critical 1.50 level on rumors on monetary easing.

While the job data fueled hopes that the US economy is improving, the British pound fell to its lowest level in 2-1/2-year as market players positioned for more stimulus from the Bank of England (BOE). The strict austerity measures introduced by the British government over the last two years have not been working, and the UK economy is facing the threat of triple-dip recession. While BOE and other central banks are considering the same monetary easing policies as the US FED has practiced, US is debating whether to exit their bond buying program.

After the dollar index, DXY, hit, a bottom level of 78,918, in the beginning of February it has rallied 4% since. The stronger employment data along with better housing figures are likely to fuel speculation that fed will end its bond buying program sooner than expected in spite of FED Chairman, Ben Bernanke’s strong statement to the contrary only weeks ago.

Of the three major Western central banks; ECB, BOE and FED, BOE is the most likely to act in favor of more easing. Three of BOE’s members voted in favor of quantitative easing last month. It is expected that a majority this week will opt for a moderate 25-billion-pound balance sheet expansion. That would put sterling under further strong pressure. ECB meets in Frankfurt today on the backdrop of a political deadlock in Italy and prospects for a further fall in the Euro. It is, however, expected that ECB will keep its policies unchanged.

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Old 08-03-2013, 08:08
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08 MARCH 2013: USD/JPY RALLIES BEFORE US JOBS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The dollar surged to its highest level against Japanese yen in 3-1/2-year before US job numbers for February are going to be presented later today. USD stands at 95,43 yen up 0,6% since yesterday. It is expected that that the US economy last month created net 160 000 new jobs. The unemployment rate still stands at 7,9% far from the 6,5% which the Federal Reserve (FED) has set as target for ending monetary easing.

Investors waiting for more dovish signals from the European Central Bank (ECB) at its press conference yesterday was disappointed. The single currency posted its biggest rally this year and jumped more than 100 points against the dollar and stands at 1.3092 after flirting with 1.29 figures earlier in the week. ECB President Mario Draghi plaid down the threat of contagion to other euro members following the Italian political stalemate. Draghi stressed growing market confidence in the Euro which had EURO bears quickly to cover short positions.

The Euro skyrocketed 2% to 124,57 against the JPY. It stood at 118,74 last week. The 34 month peak of 127,71 set last month is thereby brought back in play. The rally might, however, be short played with investor’s attention back on Chinese trade data and whether the US unemployment rate will stay at 7.9%.

Bank of England (BOE) kept its guns yesterday and held fire on the expected more economic stimulus. The downward pressure on British sterling (GBP) continues, however. USD/GBP trades again below 1.50 after seeing some recovery yesterday. There is no change in the choppy trading pattern in commodity related currencies. Oil prices are steady. Gold fell back from USD 1583 an ounce reached yesterday to 1567 this morning.

The stock rally in the United States continue. Dow Jones ended at record high for the third straight day boosted by expectations of a pick-up in the payrolls report. Growth oriented sectors led the gains with strong jumps in Bank of America (up 2,9%) and JP Morgan Chase (1,2%). Worries about the path of US fiscal policy and the Euro zone crisis loom, however, in the background. For the moment the Bulls are in advance.

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Old 11-03-2013, 07:19
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11 MARCH 2013: US-DOLLAR KEEPS THE UPPER HAND

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


The USD keeps the upper hand in the currencies markets and continue to gain both against a currency basket and major currencies as Euro, GBP and JPY. USD/JPY traded at 96,10 – a 3-and-a-half year high following surprisingly strong USD labor data on Friday. US employers added a more-than-expected 236 000 workers to their payrolls in February. The jobless rate fell to a four year low of 7,7%.

There is still a way to go before the unemployment numbers reach the 6,5% target set by the Federal Reserve (FED) and monetary easing is reconsidered. Before this target is obtained the US economy must produce more than 200 000 monthly jobs for the next three consecutive months. The strong February data has, however, created a momentum and new optimism that the US economy finally is turning and lying the financial crisis from the autumn 2008 behind.

Risk appetite was, however, curbed by a mixed bag of economic data from China painting a patchy recovery in the world’s second-largest economy. The data signaled a looming dilemma for policymakers, as inflation stood at a 10 month high in February. Factory output and consumer spending were weaker than forecast. The data caught commodity prices between growing optimism of increased consumption and a stronger dollar. Non-dollar holders are buying dollar-denominated commodities.

In Asia the MSCI-index for Asia-Pacific was up 0,1% while Shanghai fell 0,3%. The Dow Jones industrial average posted its fourth consecutive record high on Friday. European shares also jumped on the strong US labor data. The strength of the dollar is also a reflection of more fundamental money flows out of the yen and euro. These developments nudge the dollar higher. Currency speculators are boosting their bets in favor of USD and raised their short positions in most other currencies as yen, pound sterling GBP and Euro. Oil and precious metal prices keep steady.

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Old 11-03-2013, 17:05
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11 MARCH 2013: SPECIAL REPORT ON CYPRUS: CRITICAL TROIKA TALKS CONTINUE IN CYPRUS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Cyprus will this week continue to fight for the terms and conditions of the bail-out principally agreed in Brussels. While the new president, Nikos Anastasiades, during the election campaign stressed that semi-governmental organizations (SGOs) would be left untouched this is now coming to a crucial test.

It also seems that the international lenders have turned up the heat, asking Cyprus to raise its corporate tax and introduce a tax (levy) on capital gains and a financial transaction tax to ensure it can repay a bailout.

No final decisions are taken, but Eurozone officials stress that these options are on the table. In his former interviews Anastasiades has stressed that privatizations of CYTA telecommunications, the Electricity authority, Port Authority and Cyprus Tourist Organization might be postponed for might be three years depending on recovery and progress on other reforms.

A privatization of CYTA is said to give approximately Euro 2 billion in state coffers, but has created an outcry among unions which fear loss of working places.

Eurozone officials have also indicated that Cyprus would have to give up its favorable 10 % tax on net profit which corporations are enjoying today. An increase to 12,5 % has been indicated. The low corporate tax rate is one of the few competitive advantages that Cyprus enjoy compared with other EU destinations. The low corporate tax is one of the major reasons why especially companies from Northern Europe over the last years since Cyprus entered the EU has settled daughter companies here.

During a meeting between the Governor of the Cyprus Central Bank and the International Monetary Fund (IMF) at the end of last week, IMF reportedly rejected the figure needed for a recapitalization of the Cypriot banks. While the government has stressed that the international financial company, PIMCO’s figure were too, high, IMF is of the opposite opinion. IMNF claims that PIMCO’s figures are far, too, optimistic.

The capital gain tax which the Governor of CBC indicated last week shall be applied to domestic and foreign depositors alike, and is expected to provide the government with an extra revenue of 200 – 3000 million Euro. The tax is said to be set at 0,01 % of the value of trades for derivatives and 0,1 % for stock and bonds.

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Old 12-03-2013, 08:28
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12 MARCH 2013: ASIAN STOCKS HIGHER ON RECORD WALL STREET

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Wall Street’s record close overnight bolstered most Asian shares on Tuesday. Growing confidence in the US economy underpinned investors risk appetite. The Japanese yen slipped to fresh lows on speculation over imminent monetary easing. USD/JPY stands at a new low of 96,51. JPY is losing ground also against Euro and Australian dollar. Euro/USD is trading at 1.3027.

The US stock indexes extended its winning streak to seven sessions and touched its highest intraday level since October 2007. Dow Jones closed at a record high 14 447. The MSCI-index for Asia-Pacific also continued up led by financials echoing US trading where finance were the best performing sector. Also Australia, Hong Kong and Shanghai were up as the Japanese Nikkei. The weaker yen is giving exporters a welcomed boost and Nikkei was up for the eight day in row.

The dollar index, DXY, has benefited from last week’s strong labor data, and continues to jump against the yen. Analysts stress that dollar/yen may take a pause in the second quarter when seasonal weaknesses typically slow US economic indicators. They see a possible USD/JPY downside on 92 yen to a dollar with strong technical support around the 90 level. For now the trend is clearly towards a continued weaker yen.

Euro/USD is steady at 1.3030 level. The Euro is under pressure from Italy’s inconclusive last month elections which are weighing in and delaying the country’s fiscal reform efforts. Gold has edged to 1883 marginally up from yesterday. In new York US crude, NYMEX, traded up 0,2% at USD 92,21 a barrel. Brent crude trades up from below 110 to USD 110,20 a barrel.

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Old 13-03-2013, 07:37
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13 MARCH 2013: FEAR OF TRIPLE DIP RECESSION PUTS GBP UNDER PRESSURE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Fears of a triple-dip recession put new downward pressure on British Sterling (GBP) yesterday. January data showed a surprise fall in British industrial output. This pushed GBP down to a low level of $1.482. USD/GBP has since recovered and trades 0,2% to 1.4933. The state of the British economy is highly questionable. Some analysts are waiting an even weaker British sterling, and expect to see that USD/GBP can fall as low as 1.35.

Asian shares fell on Wednesday as the recent stock rally run seems to run out of steam. The MSCI index for Asia-Pacific outside Japan fell 0,6%. Stocks in Australia, Hong Kong and mainland China also fell from 0,6 to 1%. The Dow Jones Industrial, however, posted a new record high rising for the eight straight day on Tuesday. European shares retreated just short of fresh 4-and-a-half year high. Some investors fear that stocks have risen, too, quickly without fundamental support. Investors might be more risk willing, but are still scared by past events as the financial crisis in 2008 where fingers were burnt.

USD/JPY which fell to a low of 96,71 yesterday, trades today at 95,87 reflecting fears that the yen has fallen, too, steeply. The Nikkei stock index retreated 0,5% on profit taking after the last days strong rally; boosting exporters taking advantage of a weaker yen.

Euro/USD is steady in the interval between 1,3030 and 1.3040. It was weighed down on Tuesday by a warning from the Chairman of the Bundesbank, Jens Weidmann, who is also on the board of ECB, the European Central Bank. Weidmann stated that euro crisis in no way is over. In other developments drought has put the New Zealand agricultural dependent currency under pressure.

NYMEX crude is up to USD 92,71 a barrel while Brent crude is weaker at 109,64. Gold, silver and copper are all up 0,2% clinging to gains earlier in the week. Gold trades at USD 1592. In yesterday’s daily report, March 12th, gold prices due to a printing error were said to be marginally up USD 1883. The real price was 1583. Regular readers of the Daily Report would have observed that gold prices lately has been in the interval between USD 1550 and 1585.

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Old 14-03-2013, 08:11
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14 MARCH 2013: RETAIL REPORT BOOSTS DOW TO NEW HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments


Surprisingly strong retail sales helped the Dow Jones Industrial to rise for the ninth straight session in a stock rally not seen since 1996. The new record high posted for DOW is 14 455. Also Nasdaq edged higher to 3 245. Trading volume was light with investors consolidating positions after a strong run up in the three first months of the year. Sign of strength in the economy and the Federal Reserve’s (FED) monetary easing have accelerated the advance of US equities, but many investors are asking whether we are in for a technical correction. The retail sales report helped underscore the impression that the economy is gaining momentum.

Asian shares fell for the second day in row with regional factors outweighing the positive sentiments from another Wall Street record close. The MSCI-index for Asia-Pacific was down 0,6%. Australia plunged 1% in spite of positive employment numbers. The Australian dollar reacted positive to the employment news and hit a five-week high. The Japanese Nikkei bucked the negative trend and added 0,4%. Net inflows in Japanese mutual funds reached USD 11 billion in February. A domestic stock rally for the last four months have increased investor’s appetite for Japanese stocks.

Monetary policy direction remains diverse in Asia as countries also watch development in Chinese economy and North Korea closely. Japan wants powerful monetary easing to get out of a vicious deflation spiral harming its economy for two decades. Other central bankers are fearful of inflation. South Korea has been holding the interest rate steady at 2,75% for the last half year.

The Australian dollar jumped to USD 1,0383 after employment soared by 71 000 in February. JPY continues to gain strengthen against USD trading at 96,03 down from its 96,71 peak on Tuesday. Euro/JPY has also retreated from its record high on Tuesday. The brighter forecast for the US economy has negatively affected the Euro trading down to 1,2947. The yield on Italian short and long term bonds increased during yesterday’s auction, the first after the rating agency Fitch downgraded Italy’s credit rating in February. Investor’s attention will today turn to the Spanish bond auction.

Oil prices, gold and silver have dropped since yesterday. NYMEX crude trades at USD 92,28 a barrel. Brent crude is down to 108,40. Gold trades at USD 1586 an ounce.

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Old 15-03-2013, 09:40
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15 MARCH 2013: STOCK MARKET GROWTH SMILE ON US DOLLAR

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments



The Dow Jones Industrial rose for a 10th straight day in a stock rally not seen since 1996, and ended up 0,6% at 14 539. This followed a strong session in Europe. In Asia stocks rose again this morning after two loss making sessions. The rally was spurred by new US- labor market data showing a fall in the weekly numbers applying for. The data reflects that the American economy is steadily improving. A raft of recent data from retail sales and manufacturing to employment and housing have shown that the US economy is gathering steam.

In contradiction to former historical stock rallies where the green buck was used as some kind of a life jacket, the USD has this time benefited greatly on the stock market’s surge to new highs and improved economic data. Against a basket of currency, DXY, the dollar has reached a seven month high. Since January USD/JPY has jumped from 86,67 to over 96. Pound Sterling, GBP, has fallen from 1.62 to a bottom of 1.4832 earlier this week. The moves suggest that the dollar has entered a multi-year bull cycle where the dollar has outperformed nine of the major G-10 currencies.

Political uncertainty in Italy has re-ignited fear about the euro zone’s debt crisis and put new pressure on the Euro. Weak economic growth and prospects of aggressive monetary easing in Japan and Britain have driven the yen and GBP to multi-year lows. Spending cuts in Washington could for sure damper US economic growth and the FED has further pledged to keep interest rates low for the foreseeable future. But capital flows continue to rotate in the favor of US-assets and strengthen both the US economy and the dollar.

The dollar strength against JPY and Euro took a little breather on Friday. USD/JPY trades at 96,03 down from the peak of 96,71 on Tuesday. If the Bank of Japan (BOJ) follows up on its declared strong monetary easing policies, USD/JPY is likely to trade in a future range between 95 – 105. If BOJ disappoints the trading range is expected to be 86 – 96. Euro/USD was in the short term strengthened by a positive Spanish bond auction on Thursday. It trades at 1.3010. Pound sterling and Australian dollar were yesterday’s winners. The Aussie added another 0,8% after another one percentage jump on good employment numbers on Wednesday.

British pound surged yesterday as investors scrambled to cover short positions made on expectations of more quantitative easing by the Bank of England. The Bank’s Governor stated that GDP according to his opinion is properly valued and not seeking further depreciation. GDP was helped by rumors that Qatar is planning to invest billions of GBP into British infrastructure projects. The GDP yesterday’s 1% gain is the biggest seen in seven months.

These short term gains are nevertheless not expected to have any major medium or long term impact. The long medium and long term outlook point towards a stronger USD both in relation to Euro, JPY, GDP and most other currencies. These forecasts for Euro/USD point to a new test on former bottom levels 1.19 – 1.20. It is also predicted that USD/GBP can drop as low as 1.35. The corridor range 95 – 105 is the most likely medium term scenario for USD/JPY.

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