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effexx 19-10-2011 10:32

19.10.2011
 
Markets rally on
EU-solution rumors


After a dismal start on the trading week, rumors on a French-German agreement on increasing the emergency fund for sovereign debt and bank recapitalization to 2 Trillion Euros, spurred a strong world market rally initiated in US where Dow rose 1,58 and Nasdaq 1,63 %. Asian markets jump, and European futures are pointing up. US futures are down on disappointing quarterly results also from Apple. Finance and banking shares have recovered. Bank of America is up 7 %.

The rumors from Europe has led to a strong rebound in the EURO. Euro/USD trading at 1.3812. Oil prices are up; NYMEX at 88 and Brent on 111 levels. Greece is facing a Parliamentarian vote on continued austerity measures on Thursday. All Greece is on strike. Premier Papandreou is seeing the vote as decisive to avoid default. Moodys has downgraded Spain credit rating. This does not, however, place Spain on the same credit standing as Greece, Europe and Portugal.

In spite of some renewed market optimism, Angela Merkel yesterday repeated that the European credit crisis is deep rooted and shall be with the markets for a long time to come.

effexx 20-10-2011 06:33

20.10.2011
 
Markets down on
internal EU-quarrels


Last hours disagreements between France and Germany on the role of the proposed new emergency bail out fund, have created new fears and dispair in global markets. Markets are back in deep red in US and Asia and futures for Europe and opening in US are pointing down threatening to wipe out gains over the last weeks.

The Euro is falling along with oil (NYMEX 86 and Brent 108) and commodity prices. Copper prices, one of the best indicators of economic growth, are falling for the seventh consecutive day. Even safe haven gold, is falling 65 dollar from from 1675 at the start of the week to present 1610. The US Federal reserve, FED, indicated yesterday that the US economy is showing slow, but steady progress with no turn around in either employment or housing. This careful statement, however, boosted the strength of the dollar.

An emergency meeting in Frankfurt yesterday evening between Merkel and Sarkozy ended in no results or statements with mixed signals coming from the countries top officials prior to the crucial EU-summit on Sunday both to the functioning of the emergency fund and the “hair cut” for Greece. As a prelude demonstrators came out in great numbers and changed central Athens into somewhat of a war zone, while Parliament discussed new austerity measures. Inside the EU it still seems to be disagreements as to whether the “hair cut” shall be as big as 50 %.

effexx 21-10-2011 10:49

21.10.2011
 
Nervous markets wait
outcome of EU-summit



Global markets experienced big volatility with steep fall and rebound in currencies and commodities
during yesterday. No clear direction I the stock markets in sight. . Headlines and rumors continued to rule
the day. Dow turned around midways into the session. After seeing steep losses it ended up 0,32 %.
Euro/USD went between 1.36 and 1.38 reflecting more or less substantiated leaks from German –
French negotiations, at present trading higher at 1.3803.

Oil prices are stabilizing with NYMEX on 86,50 and Brent 111.69. News on Khadafi’s death have not
seriously influenced prices. Gold is up at 1629 after it saw bottom levels on 1605. USD/Yen is flat on
76,755. Forecasts see a strong Yen on Euro volatility and USD weakness over the next couple of weeks.

The Papandreou-government survived a critical vote in the Greek Parliament over the individual part of the
austerity measures while street demonstrations saw it’s first death toll. Negotiations on the final
package to be voted on EU-summit on Sunday continue. Last rumors tell about an emergency fund for
sovereign debt and recapitalization on banks of 1 Billion Euro. Whether the final “hair cut” for Greece
shall end on 50 or 60 % seems still left open.

effexx 24-10-2011 07:41

24.10.2011
 
Negotiations of the European leaders
keep investors in suspense


At EU summit in Brussels which first stage has passed on October, 23rd, leaders of the European countries have depicted an overall picture of the program of rescue of region. In particular potential measures on support of banks have been planned and questions of increase in a role of IMF in a question of rendering assistance to region were mentioned. Last decision will be taken on Wednesday, on October, 26th.

Indexes grew last week and today we also expect positive opening because all investors live in hope that the European regulators will take measures in the decision of debt crisis. Positive reporting of some companies also have supported purchasing moods. According to WSJ, quarter results about 70 % of the reported companies have surpassed expectations of analysts.

Following the results of the trading session the indicator of "blue chips" index Dow Jones Industrial Average has raised on 2,31 % and was closed on a level of 11808,79 points, an index of wide market S&P 500 has risen on 1,88 % to level 1238,25 points, and the index of hi-tech companies Nasdaq has raised on 1,49 % to a level 2637,46 points.

The prices for oil and gold also show an ascending trend. NYMEX is on 88,54 and Brent 110.76. Gold is up at 1652.28.

effexx 25-10-2011 07:41

25.10.2011
 
The fourth week of October:
European summit in focus

On Monday, on October, 24th, American indexes were closed with an increase. Corporate reporting and increasing oil prices have supported purchasing moods. At the same time, market growth limits the European factor. Despite some progress at the summit, regulators can't come to the consent on some questions, as for example, what share of losses will be incurred by private creditors on the Greek debt. Investors hope for a positive outcome of the second summit on Wednesday, but at the same time while some uncertainty remains, investors are careful, and we can see rather low volumes.

Following the results of the trading session the indicator of "blue chips" index Dow Jones Industrial Average has raised on 0,89 % and was closed on a level of 11913,62 points, an index of wide market S&P 500 has risen on 1,29 % to level 1254,19 points, and Nasdaq has reached on 2,35 % to a level 2699,44 points.

The price for futures for oil of mark Light has raised on $3,87 or 4,4 % to level of $91,27 for barrel. Oil reached its maximum since 3rd of August.

The price for futures for gold with delivery in December has raised on $16,20 or 1 % to value of $1652,30 for ounce. Gold has risen due to the fact that dollar is weakening towards all other reserve currencies.

Today trading session can be affected by the statistics from USA.

effexx 26-10-2011 07:45

26.10.2011
 
Nervous markets wait
outcome of EU-summit


Leading western indexes have decreased yesterday because of the published weak macroeconomic statistics. As well as the concern of investors that the anti-recessionary plan is not going to be accepted after it became known that the meeting of Ministers of Finance of the European Union countries, planned for October, 26th, is cancelled.

No clear direction in the stock markets in sight. As a result the American market has finished Tuesday’s trading session with fall of leading indexes on 1,7-2,3 %, due to the negative data of macroeconomic statistics and some weak reports of the companies. Dow reached level of 11706.62 with a decrease of 1.73%, S&P 500 was closed on a level of 1229.05 points with a decrease of more than 2%.

The extremely disturbing, yesterday has appeared the data on an index of consumer confidence to economy of the USA which in October has fallen to the minimum level for last 2,5 years, practically having reached crisis levels of 2008. From 10 indexes of sectors of the wide market of the USA yesterday have decreased all 10, and the financial sector which index has lost 3,1 % became the outsider.

Nevertheless, futures for share indexes of the USA this morning add 0,4-0,5 %, Brent continues movement below $112, increase above the given level assumes further growth.

Negotiations on the final plan seem still left open.

effexx 28-10-2011 06:46

28.10.2011
 
Strong relief rally
continues in Asia


Global markets skyrocketed in Europe and US yesterday and continued in Asia during the night with all exchanges
in positive territory. Yen is record strong against the USD which is falling against all major currencies. Dow Jones jumped 2,86 % while the technology exchange, Nasdaq added 3,2 % and made October the best stock exchange month in US this year.

Better GDP figures from the US contributed ton the market relief after the EU presented its its package for Greece Wednesday night. The package involves a 50 % “haircut” of 50 % for banks having invested in Greek bonds
preconditioned that Greece follows up with continued tough austerity measures.

The exposed banks are asked to recapitalize, and need to present their plans for such recapitalization by December 25th. The EU emergency fund (EFSF) for sovereign debts and bankruptcy threatened banks are increased
to one trillion Euros. Negotiations have started with countries as China and Norway to contribute to the fund which represents the double value of the present Norwegian sovereign oil fund.

The latest turn of events have most observers to think that the worst in the stock markets are over for now and that the low index numbers from early October represented the bottom of the market. As a consequence of the latest developments USD has fallen against most currencies; oil and commodities are recovering. Euro/USD i s at 1.4181.USD/Yen trading at 75,88. Brent reached 112,50 and is at present 111,85. Gold has climbed to 1745 and Silver has made a strong recovery reaching 35,50 up more than 5 %.

effexx 31-10-2011 08:26

31.10.2011
 
Asian stock markets basically
showed "the bear" dynamics


The September gain of consumer incomes in the USA has appeared a little below forecasts, expenses of the American consumers, on the contrary, have a little exceeded market expectations. On this background the American stock markets on Fridays basically showed positive dynamics.

On Saturday the European Fund of Stability EFSF has declared that all three leading world rating agencies, Standard & Poor’s, Moody’s and Fitch, have confirmed its rating at level "ААА".

Nevertheless, this morning the Asian stock markets basically showed "the bear" dynamics, the prices for oil and metals have gone down. Behavior of investors’ affects intensity in the market, remaining on the threshold of a number of important events - as appointed for Wednesday and Thursday meetings of European Central Bank and Federal Reserve.

effexx 02-11-2011 07:36

02.11.2011
 
Expectation of FR meeting in the USA
and summit G20 can support the markets


Yesterday we saw downfall on all the markets. Collapse on Tuesday has provoked desire of Greece to hold a national referendum, meaning that risks for financial stability and the existence of a euro zone have increased again. Another announcement about the bankruptcy of large American broker MF Global brought even more pessimism to the markets.

The European markets have fallen off yesterday on 2-7 %, thus have most worse proved to be French CAC-40 (-5,38 %) and German DAX (-5 %), Greek General Share has fallen on 6,92 %. The American stock markets have lost yesterday 2,5-2,9 %.

Today influence on the markets can have two factors: first, a lot of stocks are oversold, and secondly, expectations of a fundamental positive. Summit G20 in Cannes which begins today where, of course, the cores will be Greek questions. Leaders of Germany and France have already expressed the hope of performance of the arrangements reached at the summit of EU last week. Now the basic risk is the consent to carrying out of a referendum from the Greek government as in the country the most part of the population doesn't support the given program in this connection reached arrangements can be not executed.

Also from events of day it is necessary to allocate the data on employment in the USA: according to the forecast the data from ADP will support the share "bulls" who have remained in minority lately. Results of FR meeting which will be announced today - shall not bring any surprises and will not change market picture.

Oil prices are increasing. The future for oil of mark Brent has reacted to the data on stocks API: stocks of crude oil were unexpectedly reduced to 0,156 million barrels, gasoline stocks - on 1,129 million barrels, stocks of distillates were reduced to 3,435 million barrels. NYMEX is trading on 92,409 and Brent 109.632. Gold is up at 1726.45.

effexx 03-11-2011 12:39

03.11.2011
 
FR has refrained from
changes in a policy


This morning the external background looks mixed enough. The American indexes were closed in plus, having added on the average 1,2 %-1,6 %. The encouraging rhetoric of head of FR has supported transatlantic players. Though it has been noticed that the forecast of development of economy of the USA has worsened: growth of gross national product of the country in 2012 will make not 3,7 %, but only 3,3 %. Interest rate FR of the USA has left at former level.

In Asia we can observe different dynamics: KOSPI decreases on 1,4 %, Hang Seng falls on 0,98 %, Shanghai Composite in plus on 0,85 %. Japan doesn't trade today in connection with a national holiday.

The prices for oil are again trying to correct a little. The yesterday's data from the USA has shown that oil stocks, according to EIA, have risen for the past week on 1,826 million barrels while growth on 1,070 million barrels was expected. Nevertheless, the price for "oil" still is at high enough level: the barrel of mark Brent bargains today at level of $108,73, Light is estimated in $91,59.

Today statistical data from the euro zone and the USA can have affect on the dynamics of the day. Data on number of primary references for unemployment benefits in the USA, also data on labor productivity out of agricultural sector, and index of business activity in non-productive sector will be published today. Markets still do not have any concrete directions and volatility increases.

"It is a question whether we
want to remain in European
Zone"- G. Papaandreou.

effexx 04-11-2011 12:24

04.11.2011
 
Greek instability keeps
grip on global markets


After initially declaring a referendum on the EU crisis package, Premier Papandreou turned around and gave up the idea
after tough pressure both from EU and his own government. Markets don’t like unpredictability and shivered. Cancelling the referendum, however, created a relief rally in Asia with major exchanges increasing more than 3 %.

The G-20 summit of the biggest industrialized countries in the world,meeting in Cannes have watched events intently without being able to contribute to a solution to the nightmare riding the Euro-zone. Greece is constituting 3 % of total EU-economy. The real worry is contagion and Italy and Spain being next in line, being, too, important countries to default.

The Euro has recovered from lower levels earlier in the week Euro/USD trading at 1.3815. Central Bank interventions in Japan buying dollar to weaken the Yen have worked for now; USD/JPY at 78.1028. Oil prices has recovered; NYMEX at 94,25 and Brent 110,75. Gold rallied to 1775 yesterday and is at 1762 in today’s morning trading.

The Greek Parliament is having a confidence vote during the evening probably resulting in a positive outcome after the last days
maneuvers. Rumors from Athens says that Georg Papandreou has agreed to resign, preparing the ground for a broad national unity government.

effexx 07-11-2011 10:41

07.11.2011
 
Coalition government
stabilizes Greece for now



The Greek government won the confidence vote I Parliament last Friday. This opens for a coalition between PASOK and the conservative opposition probably with former Vice President in ECB, Lukas Papademos as new Premier in an interim period before new elections scheduled for early 2-012.

This has led to a temporary relief after Premier Papandreou’s proposal on a referendum on the austerity measures, created havoc in global markets at the end of last week. The referendum was seen as a major threat to the EURO, and the markets reacted accordingly.

The Euopean Central Bank (ECB) simultaneously lowered the interest rate with 0,25 %. Pressure on Italy continues with bond rates increasing. EURO/USD is trading at 1.3703 and USD/JPY at 78.075. Oil prices stabilize with Brent at 111.96. Gold saw an increase in morning’s trade in Asia, but is now at 1765. Asian markets were mainly flat. European exchanges have opened down with Frankfurt falling 1.95 and Paris exchange with 1,41.

The market volatility is expected to continue during the week. Unemployment figures in the US were slightly down without creating any impact on the US indices. Futures for the US-markets indicate a flat to downward trend. Some analysts, however, predicting stabilization in the nearest weeks with opportunities for a Christmas rally.

effexx 08-11-2011 07:43

08.11.2011
 
Gold at seven
week high


Gold reached a seven week high at 1799 yesterday and is at 1791 in morning trade. Oil prices are at highest
levels seen in 4 weeks with NYMEX at 94,75 and Brent reaching 114,44. Asian exchanges are down following
the scandal with Olympus which for years have manipulated books and sales figures.

A new crisis is brewing inside the EURO-area with the Italian government next in line after Greece for a
confidence test in Parliament today. Premier Berlusconi seems increasingly isolated, and even within his own ranks
questions are asked whether he is the man to handle Italy’s debt challenges.

Greece is still struggling to agree on a new Premier and composition of a national unity government. Spain is
facing national elections. Japan has agreed to buy 10 % of the treasury bills the European Emergency Fund yesterday
presented for sales amounting to 300 Billion Euros. Russia has indicated a similar willingness based on less
amounts.

The US exchanges ended in blue last night after a nervous and volatile sessions. Futures point to
similar volatility in European exchanges today. Euro and Yen keep stabile towards the US. Israeli threats
to attack Iran was met by a strong warning by Russia stating that such move shall seriously jeopardize
the stability of the whole region.

effexx 09-11-2011 10:48

09.11.2011
 
Berlusconi’s retreat
make markets rally



Volatile stock exchanges reacted with relief and sent markets up when disputed Italian Premier Berlusconi yesterday announced his retreatment. Dow Jones rose 0,84 % and Nasdaq 1.20 %. Asian markets followed suit also inspired by news on lower Chinese inflation. Oil prices continued to raise; NYMEX at 79 and Brent 115,50. The EURO got a boost on the news from Italy and reached 1.3850 falling back this morning to 1.3802. The Yen is stronger against USD 77,6635. This might trigger new Central Bank intervention.

Interest rates on Italian bonds are under pressure, but still trading below the critical 7 % mark. Rumors tell that France is under similar pressure indicating that the last round of Euro-zone problems don’t stop with Greece and Italy. The new IMF president, Christine Lagard, stated yesterday that the sovereign debt problems in Europe threatened to make this decade a lost one.

There is generally a more positive sentiment in today’s markets. China’s lower inflation figures indicate opportunities for more economic growth orientated policies. Copper prices, a good indicator on market sentiments, are at its highest for one week.

The Berlusconi effect is probably going to have a positive on European stock exchanges today.


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effexx 10-11-2011 10:42

10.11.2011
 
Italian debt makes
global markets shiver


Berlusconi had barely announced his departure as Premier followed by a relief rally, before global markets crashed back to realities as a stark reminder of fundamental realities. Interest rates on Italian bonds smashed through the critical 7 % level which has been seen as pain threshold earlier in relation to debt stricken Greece, Portugal and Ireland, and raised new serious questions as to the sovereign debt crisis in Europe and the future of the Euro. Short term Italian debt which has to be refinanced next year is especially bothersome.

Markets saw steep falls in Europe and in the United States where Dow fall 3,20 and Nasdaq 3,88 % followed by a blood red numbers from Asia where exchanges experienced one of their worst days in a long time with Hong Kong leading the pack with a fall of 4,5 %. The Asia Pacific Index is down 3,2 %.


USD again seems to regarded as somewhat of a safe haven. EURO/USD is down to 1.3533, and USD is strengthened against most currencies except Yen; USD/JPY trading at 77.72. Gold and precious metals which were back in favor among investors at the beginning of the week trades at 1757. Oil prices are down. Brent at 114,50 yesterday morning, is two dollar down and stands at 112,28.

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effexx 15-11-2011 09:47

15.11.2011
 
European debt fears
sink Asian markets


Global markets have awoken to new fear of spreading debt contagion in Europe. After a dumpy session in New York, Asian markets were gripped with fear that the sovereign crisis shall hit more European countries. After a couple of days relief, old aged bankers turned Premiers and politicians in Greece and Italy, proved to have no magic to offer except for continued austerity and clinging to a Euro which more and more observers see as unfit to get Europe out of its deep crisis.

Markets seem therefore slowly to realize that there is no quick fixes to fundamental flaws in the global economic system. Fear is therefore most likely going to dominate markets , except for short moments of optimism when some good figures are reported. We are in for a continued period of volatility both in currencies and stock exchanges.

Most focus is still on Europe where Germany and Angela Merkel along with the European Commission are pushing for closer integration as the best medicine to save the Euro and get out of the crisis. Premier Cameron in England has refused this path. Along with other Euro skeptics he is stressing that the Euro is a major cause for the present imbalances

In Italy Monti is striving to compose a government in an environment of renewed high bond interests. Euro is falling against the USD trading at 1.3593. Oil and gold prices are down while YEN is gaining ground. USD/JPY is at 76,99.

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effexx 16-11-2011 09:15

16.11.2011
 
Asia lower on
fear for Italy



Asian exchanges continued down this morning with Nikkei falling 0,92 % on fear that the sovereign debt crisis in
Europe is running out of control. In the US both the latest manufacturing and consumption indexes were slightly
up, creating hopes that the US economy shall avoid a double dip recession. Technology stocks were strong with Nasdaq up 1,09 %.

USD is strengthened, and Euro/USD fall to its lowest level in 5 weeks trading at 1.3437. USD/JPY stabile at 77.04. Oil prices
which climbed in US trade are falling back; NYMEX at 98,75 and Brent 111,60. Gold has dipped back to 1767 after reaching 1787
on Tuesday.

The Premier designate in Italy has so far not been able to compose his final government. There are rumors that ex-commissioner Monti shall take responsibility also for the Ministry of Finance. Greece is expecting a confidence vote on its new
government to day. Facing new elections in the nearest days, Spanish bonds raise and are now close to facing the critical 7 % level.



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effexx 16-11-2011 09:18

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effexx 25-11-2011 14:00

25.11.2011
 
EU-quarrel
sinks Asia

The Asian exchanges ended in red for the fourth consecutive day effected by Angela Merkel’s
resistance against issuance of EURO-bonds and, unwillingness to let ECB (European Central
Bank) be a lender of last resort.

At the German-France-Italian summit Merkel stressed that Eurobond establishment shall level out
national differences in the interest rates on bonds. An immediate result would be higher German
interest rates. Instead of letting ECB act as lender of last resort, Germany wants changes in the EU-treaty
which can force highly indebted national states to exercise budget discipline.

The continued internal quarrel in EU had a negative effect on Asian market. Europe is expected down for the
ninth day in row. Euro is at at a 8 week low. EURO/USD 1.3332, up from bottom levels on 1.33 in Asia
trading. Oil is flat; NYMEX 96,50 and Brent 107. Gold struggles at 1685 down 10 dollar since
start of morning trade. USD is strengthened against JPY at 77.32.

effexx 28-11-2011 11:29

28.11.2011
 
Asia turns up
after red week



Asian stock exchanges were off for a good start of the week after rumors that IMF, the International Monetary Fund, seems prepared to give Italy an emergency credit on 700 Billion Euros. This created along with better sales during the American Thanksgiving at end of last week, a better market sentiment. Nikkei in Japan was up with 1,47 % and Hang Seng raised 2,02 %. The Euro is also strengthened. Euro/USD is up from Fridays lows, trading at 1.3306.

The possible IMF credit shall give the new Italian premier, Maro Monti, more time to refinance Italy’s huge debt. With increasing talk about a break up of the Euro, these news has injected some optimism in markets which have fallen up to ten consecutive days.

Oil prices and metals are up during morning’s trade in Asia. Gold trading at 1706 and up 30 dollars since Friday. NYMEX is at 98,40 and Brent 107,50. USD is considerably stronger against yen at 77,7643.

effexx 06-12-2011 12:20

06.12.2011
 
S&P plays politics prior to EU-summit;

EURO countries
downgraded

On the eve of the EU summit Thursday and Friday the US rating agency Standard and Poor has created new panic in
the markets by downgrading all members of the EURO including Germany and France. Germany is loosing its triple
A rating and France is degraded to AA. All EURO-countries are set under immediate economic surveillance. The S&P
decision would put increased pressure on banks and bigger companies also threatened by downgrading.

The news came just hours after Sarkozy and Merkel in a joint press conference announced agreement on how to
tackle the Euro-zone crisis. France and Germany are proposing a revision of the European Treaty to be ratified by
member states by March 2012. A part of the package is introduction of stronger budget discipline whereby immediate
sanctions are going to be taken against member countries not following its obligations. Monthly EU- meetings at top level
is also included and a more effective mechanism for the rescue of troubled sovereign economies.

The package was well received by the market. Europe and the US rose till S&P spoiled the party in late US-trading. After
listing impressing gains over the last weeks the Asian exchanges are steeply down. Oil prices are falling as precious
metals. Gold is falling 40 dollar from inter day high on yesterday.

The downgrading has put the Euro under increased pressure. Euro/USD is 1.3377. Speculators are watching the
EURO drama, and it is expected that the EURO shall be under constant attacks for weeks and months to come.
Japanese Yen is strengthened and trading at 77,76 against the dollar.

effexx 07-12-2011 14:34

07.12.2011
 
EURO remains firm
before key summit

EURO remained firm against the dollar (1.3426) in Wednesday’s morning trade in Asia as investors trimmed
their holding of positions considering whether to bet on a further decline in the common currency ahead of
crucial EU-summit on Thursday and Wednesday and European Central Bank (ECB) meeting on Thursday.

Market participants are closely watching any developments and new moves with eyes mainly on the
compromise package worked out between Merkel and Sarkozy indicating a rewriting of the European
Treaty. The rating agency Standard and Poor shocked markets yesterday with news that it intends to
downgrade all members of the EURO-zone.

While most concentration so far has been on Germany and France, Premier Cameron yesterday stated that
he shall veto any revision of the EU-treaty not in accordance with British interest. This tells
that the indicated Merkel/Sarkozy proposal by far is a foregone conclusion. Any transfer of power and
authority to Brussels shall most likely be met with fierce resistance from more nationalistic member
states.

Australian GDP grew 1,0 % from previous quarter and climbed 2,5 % from a year earlier. 0,8 was expected.
The better than expected figures supported risk sentiment and benefited higher yield currencies as the Euro.

A senior dealer at Barclays Bank in Tokyo claimed many investors seem to cover Euro/USD short positions
and that the ground appears to be firm in the 1,33 segment. In short term there is an upward bias versus
dollar. Euro/USD will likely continue to be volatile driven by any headlines prior to the EU-summit.

Oil prices have stabilized over the last 24 hours. Trend towards a stronger Yen continues; USD/JPY at 77,72.
Gold is trading at 1729 up from yesterday’s low at 1703.

effexx 08-12-2011 13:46

08.12.2011
 
Short term EURO fate
hangs on the summit


The short term fate of the EURO rests to a considerable degree on the outcome of the highly anticipated end of the week meetings
in the European Central Bank (ECB) and the two days summit of European leaders Thursday and Friday.

There are strong rumors this morning that ECB shall cut it’s interest rate with at least 50 basic points from today’s
1.75 % level. This shall allow banks to pledge a wider range of collateral to borrow funds from the central bank and
to extend the duration of the long term lending facility to two or thee years.

These eventual measures might be seen as a prelude to the summit and as an effort to avoid a new global banking
crisis. Normally a cut in the interest rate is seen as negative to a currency, but this is not normal times. Markets
have factored a 25 bps cut. No action might therefore be seen as negative and lead to a steep fall in the Euro presently
trading at at 1.3407 versus USD.

In addition to ECB actions, Markets are expecting that the often fractious EU-group shall come up with a viable
program necessary to ensure progress in tackling the Euro-zone debt crisis. Merkel and Sarkozy seem to agree on
stricter budget discipline by transferring national sovereignty to Brussels.

The overriding challenge, however, remains to find a balance between harsh austerity measures and economic growth. Critics are
claiming that the proposals deal with the consequences and not the reasons for the crisis giving banks
closely connected with the political elites a free ride leaving the taxpayers once again to pay for their excesses.

Stock markets ended flat or in the negative zone yesterday. Futures are down as are markets in Asia. Oil prices striving to keep above the USD 100 level (NYMEX 100,55). Gold is stabile on 138.

effexx 09-12-2011 07:36

Market update – 09.12.2011
 

England blocks
EU-treaty revision


After a marathon session running into the early morning hours England blocked Sarkozy-Merkel’s proposal for a new and revised EU-treaty giving the European Commission more decision power on the cost of member states.
Premier Cameron made it clear the proposed revisions did not give England the necessary guarantees and especially not for its financial services industry.

Cameron stressed that England is not a part of the Euro-zone, and he sees the inflexibility of the EURO as mainly responsible for the financial crisis. He offers England’s support, but obviously see the EURO-crisis as primarily a problem for continental Europe.

An intergovernmental agreement between the 17 EURO-members seem in this situation to be the most likely outcome. To avoid the impression that ECB (European Central Bank) is acting as a lender of last resort, 200 Billion Euros is going to be transferred to the International Monetary Fund (IMF) to create an extra firewall to bail out EURO-zone countries like Spain and Italy fighting with big budget deficits.

European leaders tried after the meeting to give this outcome towards a two-tier Europe a positive spin.
Markets have reacted cautiously. The steep falls in futures seen through the night seem to have stopped for now.
Euro/USD is flat at 1.3325 while YEN continues to be strengthened versus USD at 77,59.

Oil prices have fallen more than two dollars on the prospects of increased uncertainty and slower economic growth. Last quarter result for industrial output in China shows that the dramatic growth seen for many years have come to a halt.
Gold prices which reached 1750 inter day yesterday, have been in free fall at present trading at 1708.

effexx 12-12-2011 12:33

Market update – 12.12.2011
 
Markets calm down:
Asia opens in blue


The Asian stock exchanges opened the week up on positive US macro numbers and some
optimism after last weeks EU summit. “The Michigan Consumer confidence” shows
growing consumer confidence to future development of US economy.

MSCI Asia Pacific Index is up 1,2 % with five shares up against one in red. In Japan is the
Nikkei up 1,2 %. Kospi in South Korea increases 1,48 %. The exception in Asia is Shanghai
Composites in China down 0,57 %.

The European Union summit which ended last Friday did not solve any fundamental
problems connected to the sovereign debt and looming bank crisis, but gave some
temporary relief which markets seem to have reacted positively to.

National budgets shall be subject to review by the EU Commission in an effort to
introduce stricter budgetary discipline. Membership countries which are not behaving
in accordance with strict rules might be subject to strict sanctions.

The British Prime Minister David Cameron rejected to support the final agreement
which might have opened for a revision of the EU-treaty. Any revision of the treaty
demands unanimous decisions. The proposed drafts are supported by the 17 Euro-members
and 9 of the other EU-members.

The EURO/USD is still under pressure this morning at 1.3356. USD/JPY is stabile at
77,62. Oil prices are stabile; NYMEX close to 99 and Brent trading in the interval
108 – 109. Gold prices are steeply down trading at 1691.

effexx 13-12-2011 12:06

Market update - 13.12.2011
 
Global markets drop
on EURO concern


After a couple of days of digesting the result of end of last week’s EU summit meeting, global markets are back in deep red. Instead of the summit leading to a relief Christmas rally, dark skies are back on the horizon. The sovereign debt crisis, a strong need for recapitalization of major European banks, a looming recession and the future of the Euro are back on the top of the agenda.

The EURO continues to be under strong pressure and reached a 10-week low versus dollar at 1.3198. EURO is also loosing ground versus yen, JPY dipping to 102,60. The markets are expecting that S&P rating agency already this week is going to follow up it’s threat to downgrade all countries within the EURO-zone.

Eight Spanish banks were yesterday placed under review for a possible downgrade by another rating agency, Moody’s Investors Services, adding strongly to the question marks and uncertainties in the whole banking sector.

Support at the 1.3150 mark for Euro/USD is vital. A clear breach of the mark can technically open the Euros downside to 1.2860 reached in January 2011. As long as the European Central Bank gives up it’s reluctance to purchase more euro-zone sovereign debt, the Euro seemed in for further dips.

In many financial circles there are increased concern about the austerity course chosen by European leaders. Strict austerity measures can according to many economists only lead to a repetition of similar mistakes European leaders made between the two world wars leading to mass unemployment and economic recession.

Markets all over the world are strongly down along with deep plunges in the gold and precious metal prices. Gold trading at 1651 with analysts forecasting steeper falls.

effexx 14-12-2011 08:39

Market update - 14.12.2011
 
EURO set to
dip further


The Euro was mostly flat in static Asian trading after tumbling over night to its lowest level in
nearly a year. EURO/USD at present trading at 1.3038. Traders see a further slide in the single
currency when no silver bullet is in sight for the Euro zone debt woes.

It seems to be only a question of time before the EURO falls through the 1.3000 mark and will
test the technical support level on 1.2860 seen in January 20011.

The negative EURO sentiment is likely to persist unless Germany and the European Central
Bank (ECB) step up their efforts to put an end to Eurozone crisis. Such changes are, however,
unlikely to occur within soon.

Under the present circumstances the EURO is expected to come under increased
pressure also from the yen. In October the Euro fell to a ten years low against the Yen at 100,77.

Japanese analysts predict that the EURO may fall as deep as to Yen 96. They predict Euro/USD
down to I,20; testing earlier low levels seen after the financial crisis in 2008.

Traders will today keep a sharp eye on the Italian bond auction and EU production data numbers
for October which shall be published as well.

Meanwhile stock markets are extremely volatile. Dow Jones went yesterday from plus 100 to minus 100
during the same session. Financials are under strong pressure.

MF Global’s chief executives could offer no reasonable explanation on where USD 1,2 Billion of client’s
money had disappeared. Possible major banks involvement were not conducive for a more positive sentiment.

OIL prices are still high (NYMEX 100 and Brent 109,75) waiting for outcome of OPEC meeting.
Gold and precious metals have retrieved somewhat after last days steep falls. Gold at 1638
up from yesterday’s bottom on 1622.

effexx 19-12-2011 07:55

Market update - 19.12.2011
 
Fitch and Moody’s have
fired a volley across Europe...


On Friday, on December, 16th, after abundance before the various American macroeconomic data published during a week, the statistics of the USA has given out only one significant result. The consumer price index in November hasn't undergone changes at expected increase on 0.1 % and after decrease on 0.1 % in October. Thus without foodstuff and energy carriers the increase in consumer prices has made 0.2 % against 0.1 % last month. In aggregate these indicators confirm FR'S statements that there is no serious inflationary pressure that allows it to continue to keep interest rates at exclusively low levels.

In the middle of day stock markets have painfully reacted and in the moment have fallen on negative territory after it became known that the international rating agency Fitch though has kept the higher credit rating of France ААА, but has changed the forecast on it with stable on negative and in addition has placed ratings of Italy, Spain, Belgium, Ireland, Slovenia and Cyprus on revision towards deterioration. Fitch motivated the actions by that the summit which has taken place on last week of EU in Brussels hasn't promoted to the main task permission, despite acceptance of some positive steps on struggle against debt crisis in the Euro area countries. In turn, rating agency Moody's, being guided by similar preconditions, has lowered a sovereign credit rating of Belgium on 2 points with АА1 to АА3 at the negative forecast of development of a situation.

The price for gold with has risen for 21.00 dollar or 1.3 % to value of 1595.60 dollars. Gold has risen in price owing to certain easing of dollar and as the price for a precious metal became again attractive to investors after decrease almost for 140 dollars following the results of 4 previous trading sessions. As a whole for a week loss has made 6.8 %.

Oil has gone down in price to the minimum mark since November, 2nd against concern in prospects of global demand for the energy carriers, burdened by the European debt crisis. In comparison with final level of last Friday oil has had loss in 5.9 %.

Today Ministers of Finance of the European Union countries will have a teleconference on which will discuss the further steps on overcoming of debt crisis of a Euro area. Representatives of 27 EU countries will discuss a question on bilateral credits of IMF and the EU countries, and also some points of the new tax agreement.

It is difficult to foretell a direction of the markets, undoubtedly that Christmas rally to which investors got used – this year won't take a place.

effexx 20-12-2011 08:22

Market update - 20.12.2011
 
Pessimism still is present
in the market


On Monday, on December 19th, the basic American indexes were closed with a fall. After short trade in plus the market has rolled down against comments of Mario Dragi that economic prospects in the European region remain very uncertain, and laws don't allow to increase purchase of bonds.

Article in Wall Street Journal about FR's possibility to make to banks more rigid requirements to the capital, in turn, "has added fuel to the fire", and the bank sector has appeared in leaders to decrease.

It seems that in Asia threats also accrue and situation every day becomes more and more heated. The basic indexes in Asia have shown negative dynamics yesterday. The death of the head of the North Korea Kim Jong II became one of the latest news, which has provided prompt falling at stock exchanges. According to investors, younger son of the dictator appointed as its successor, could be not strong enough to settle the unstable political situation observed in the country.

We will notice that problems of Europe remain significant news, which put pressure upon investors. Yesterday came news that additional 150 milliards are going to be released in order to help Europe to overcome debt crisis. Germany and France should make the greatest payments. The countries not entering into an Euro area, but being thus members of EU, are going to allocate funds to IMF too.

Prices of oil will be also considered as a significant fact. Oil prices has gone up and recovered a bit from the bottom levels and reached 104,02 dollars per barrel in price. Gold is picking up a little bit and is traded on a level 1600,19.

There are expected statistics from Germany and statistics on house building in USA – we will see if these numbers will have any positive or negative effect in the market.

effexx 21-12-2011 10:02

Market update - 21.12.2011
 

The positive on the American, Asian and
European markets can last not for long


After quite long time of corrections and large falling, yesterday has brought positive sentiments and growth on stock exchanges all over the world.

The European indexes have finished trading session in a green zone: British FTSE100 - +1,02 %, German DAX - +3,11 %, French CAC40 - +2,73 %.

The American stock exchanges have opened in plus. Moreover, in first half of day growth of the basic indexes has proceeded. Following the results of day, the American stock exchanges were closed positively. Yesterday, we have been mentioning upcoming statistics from USA - on Tuesday the following data has been published: the number of the given out building licenses of new houses in November has made 685 thousand, it was expected 628 thousand; the number of bookmarks of new houses in November has made 681 thousand while it was predicted 653 thousand. As a result: Dow Jones - +2,87 %, SnP500 - +2,98 %, NASDAQ - +3,19 %.

Oil of mark Brent 107,32 dollars/barr. The EUR/USD pair bargains close 1,312. Oil is strengthening and returning from the low levels of last week. Definitely, it is also giving positive support to the markets.

On the other hand, there is another set of the statistics to be issued: data regarding import from Germany and consumer trust index in Euro zone, data on oil and oil products in USA.

We shall admit that the positive on the American, Asian and European platforms, connected with optimistic macro statistics from the USA and Germany, can last not for long time. Moreover, investors could prefer to fix some profit already today.

effexx 22-12-2011 09:56

Market update - 22.12.2011
 
Daily review – Thursday, December 22, 2011

Today's statistics on world economy
can become a push to growth of the markets


Yesterday pessimistic moods prevailed in the world markets, due to the results of granting of liquidity to commercial banks from ECB. Cost of loans is quite low - in this connection, demand has considerably exceeded the offer. The excessive demand, which has exceeded the forecast, has been regarded by investors as a signal about weakness of the European bank system. However, the American indexes managed to be closed in plus as the trading session was affected also by statistics on economy of the USA. Sales of the properties in November have grown on 4,0 % though the increase only on 1,9 % was predicted.

Signals from the raw market are more positive: Brent has tested $108 for barrel. Increase was promoted by announcement of the data on stocks of oil and oil products in the USA: stocks of crude oil were reduced to 10,57 million barrels, gasoline stocks - on 0,412 million barrels. The pair of EURO/DOLLAR was consolidated at levels a little above of 1,30, so signals from the currency market were neutral and didn't render pressure upon raw platforms.

The potential growth on world indexes remains, the statistics on world economy, which will be issued today, can become a push to growth. There will be issued data about GDP of Great Britain in the afternoon and closer to trading session end - the traditional week data on unemployment from the USA and gross national product of the USA for III quarter according to the third, final estimation.

We shall not to forget that volatility in the markets is very high also movement can be in any direction, therefore it is necessary do not to make any hasty decisions.

effexx 30-12-2011 08:33

Daily Market Review Friday, December 30, 2011
 
Better home sales
sent exchanges up


The number of pending home sales in US increased more than expected and created better sentiments in the markets yesterday. Dow Jones jumped 1, 12 % and reached 12 278 far above the psychologically important 12 000 level. NASDAQ was also up with 1 % to 2 613.

On a year basis Dow Jones is up 6 %; NASDAQ has tumbled 1, 5 %. Banks had a good day in yesterday. After earlier steep falls Bank of America was up 3, 3 %. Citi Group, JP Morgan and Wells Fargo increased likewise more than 2%.

Iranian threats to close the Hormuz straits are keeping oil prices high: NYMEX is stabile just below 100 pr.
Barrel and Brent is 108, 16.

Gold and silver prices have recovered after Wednesday and yesterday’s falls. Gold, which reached 1522 on the bottom in early US-trading, has recovered 35 USD trading at 1558. Silver is likewise up from yesterday’s bottom on 26, 10 trading at 27, 57.

In the currency markets continues to be under pressure. EURO/USD is 1.2942, a recovery, however from yesterday’s low on 1.2850. Japanese Yen reached a three weeks high versus USD at 77, 5065.

Yen also climbed against the EURO. Market expectations are indicate that traders will try to push JPY below the psychologically important Y100.

United World Capital wishes all its traders a HAPPY and successful new year. It has been a difficult year with great challenges for traders. UWC hopes that our daily comments in that respect have been to some help and assistance.

effexx 14-02-2012 12:03

Daily Update 14.02.2012
 
Moody’s includes England
on credit “watch” list

British pounds are falling



The international credit rating agencies have busy times. Yesterday it was Moody’s turn to downgrade the creditworthiness of Italy, Spain and Portugal simultaneously putting France, England and Austria under “active watch”. Moody characterizes their credit perspective as “negative”.

This has led to a substantial fall in the British Pound vs. USD. The USD world index shows a general strengthening in the short and medium term for the USD. USD/JPY is trading at 77,9725 up 0,65 % basically due to last quarter’s report on a 2 % fall in Japanese GNP.

Moody’s downgrading of central EURO-members comes as no surprise, more or less in line with similar credit ratings done by other agencies. The most interesting is that England for the first time appear on thir credit watch list. Minister of Finance Osborne sees this as an active encouragement to continue the country’s drive towards ambitious austerity measures.

It is also likely that Moody’s downgrading would set the stage for a renewed debate on the very role of international rating agencies; are they really the neutral and objective observers as they would like market participants to believe; or do they have their own agendas as earlier strongly stressed by France and Germany, taking handsome profits for not even trying to play even handed?

Wrangling is continuing before EU Finance Ministers are meeting in Brussels tomorrow to decide whether the promised Greek government austerities are seen as binding enough. This comes among increased concerns on the effects of dramatic austerity measures: are they worth the price? All the Euro countries which have swallowed the medicine and as Greece have introduced harsh measures as Spain, Portugal, Ireland and Italy, have seen severe recession, fast climbing unemployment along with increased social unrest.

Monday’s securities markets were positive. Both Europe and US reacted favorably on Greece. The Apple share for the first time reached the USD 500 level; making the capitalization of Apple even bigger than the oil giant EXXON. The US market has risen for weeks. Analysts are voicing concerns, and stressing that Technical signals are pointing towards a correction.

Oil prices are flat this morning, while Gold is loosing ground dipping below 1720.

effexx 16-02-2012 12:23

Daily Market Review - Thursday, February 16, 2012
 
EURO falls on
Greek wrangling


Assurances from the leader of the Euro-group, Jean Claude-Juncker that all necessary decisions regarding Greece shall be taken on Monday 20th, did not calm markets in today’s morning trading. The Euro is in free fall trading at 1.3017, down from high 1.3250 on continued uncertainties on Greece. This trend seems doomed to continue.

Written confirmations from the leaders of the the two big Greek parties assuring that they would continue to support the agreed austerities also after the parliamentarian elections in April, seem now to be in place. This along with agreements on how to cut an extra 310 M Euros in budgetary expenditures. This has, however, not been been sufficient to stop rumors that the leading EURO-countries now see Greece leaving the Euro as a foregone conclusion.

Remarks from the German Minister of Finance to his Portugal colleague has been seen as an assurance that the line goes with Greece. A Greek retreat shall not lead to further contagion inside the Euro-zone, and Portugal shall have the necessary backing. The general feeling is that especially the strong Northern European countries feel exasperated and more than willing to see Greece leave the Euro. Markets have consequently started to gamble on a Greek retreat.

The nervousness surrounding Greece is influencing markets. After heavy gains yesterday Asian exchanges lost ground in morning trading after both Dow Jones (- 0,76 %) and Nasdaq ( – 0,55 %) fall yesterday evening. Futures for Europe are down indicating that the promising New Years rally which have seen many exchanges jump 10 % , are running out of steam. Technical signals are pointing towards a correction.

Gold and metal prices which increased substantially yesterday have lost its gains. Gold is trading at 1720. Oil prices are going against the stream. Nymex is clinging on to the 101 – 108 level and Brent reached 118. The war of words going on around Iran still the main driving factor.

effexx 20-02-2012 09:49

Daily Market Review - Monday, February 20, 2012
 
Greek debt deal
expected today


Global markets have over the last days calculated into prices that a solution is going to be reached when the EU Ministers of finance meet in Brussels today. Asia was no exception. Markets were in a positive mood and added new increases to former gains. The composite Asian Stock-index is up one %.

The US Finance secretary, Timothy Geithner, added his voice in support for Greece bail-out when he during the weekend strongly encouraged The International Monetary Fund, IMF, to extend credit to Greece. He characterized the “bail-out” package on 139 Billion Euros as “strong and solid” deserving the support of the international community.

The proposed “bail-out” package is though offering little comfort to ordinary Greeks who again took the streets yesterday protesting against austerities which have driven their country deep into recession and mass unemployment. Many see the “bail out” rather as a support for European banks bringing no relief to a struggling nation. During the week end Spain also saw huge demonstrations against austerities organized by the trade unions.

In the wake of the minister’s meeting EURO/USD is trading on on 1.3214. Expect a relief rally and a stronger Euro when the package is eventually adopted. The Yen is considerably weakened after a huge deficit on their balance of trade figures were presented last week. USD/JPY is at 79,515. Of the smaller currencies Norwegian krones (NOK) continue to climb gaining both versus EURO (7,4886 and USD (5,6691) helped by increasing oil prices and and strong reserves.

Oil prices continue to climb. NYMEX is up 3 dollars from Friday trading at 105. Brent is consolidating above the 120 and trades at 121. Metals are up with Gold posting a 0,75 % jump to 1735. The tensions around the Persian Gulf continue. As a reaction to renewed sanctions, Iran has cut oil deliveries to France and Germany. If Iran follows up its threat to close the Hormuz straits, oil experts foresee dramatic jumps in crude prices possibly to above 200 barrel levels.

effexx 27-02-2012 13:28

Daily Market Review - Monday, February 27, 2012
 
The Summit has Come to the End,
but Questions Remained the Same


High appetite to risks remains in the markets, which helps indexes to be kept near yearly maximums. During weekends there were no any significant events, which could be capable to change an alignment of forces in the beginning of this week. At summit G20 the arrangement on possibility of allocation of additional funds of IMF has been reached, however it will be possible only if Europe will realize additional anti-crisis measures. According to the head of IMF, K. Lagard, it is a question of additional 500 billion dollars.

On Friday Government of Greece has directed the offer to private creditors on an exchange of bonds with reduction of their nominal value, now creditors have 10 days to consider this offer. The following provision has been included in the offer of an exchange: In case if 66% from total number of creditors will agree on "voluntary" restructuring - the remained bonds will be restructured compulsorily. In our opinion, it will have bad influence of the markets and fall of ratings.

Positive spirit remains in the commodity markets due to the upcoming LTRO: copper has returned to a level of 8.5 thousand dollars per ton; the oil of mark Light came nearer to a level of 110 dollars/barr., and Brent has finished week above a price of 126 dollars/barr., having updated a historical maximum. However, already today we can see some cooling in the commodity markets: the euro already is under symbolical pressure as expected in the middle of the week huge input of liquidity from ECB (on Wednesday), will break balance between dollar and euro. It is not excluded that probable correction on euro will have influence also on growth of raw actives.

From important events today, we are expecting news from Germany where the package of the help to Greeks should be discussed. However, it is improbable that the German parliament will refuse granting of additional funds to Greece. Therefore today, quite possibly, the markets will lie down in a side trend in expectation of events in the American stock market.

effexx 01-03-2012 11:40

Daily Market Review - Thursday, March 01, 2012
 
FED’s Bernanke turned
markets upside down


The quantitative easing markets had hoped for were not included in FED’s Ben Bernanke statement to the Financial Committee in Congress yesterday. This had an immediate effect. Shares, bonds, oil prices and gold dropped dramatically in minutes. The gold prices fall 100 dollar to recover to 1721 during trading in Asia. Dow Jones had to give up its flirt with the 13 000 level and ended on 12 952. The dollar was strongly strengthened. The Euro fall back, but has recovered from bottom levels. Euro/USD is in the morning trade at 1.3345. USD/JPY at 81,01 with Yen falling further.

Bullish global markets which had been looking forward to Bernanke giving signals for a possible third round of quantitative easing with the Federal Reserve letting more funds into the money market, were disappointed. Bernanke repeated his sober message of moderate economic growth. BNP in the US increased in fourth quarter to 3 %. 2,8 % was expected. Quantitative easing would have given global markets fighting its way out if recession, an extra impetus.

The effects of Bernanke disappointing markets are probably not, however, going to be long lasting. News from Japan reveals stronger investments and Chinese manufacturing numbers for the last three months indicate that the growth problems in Europe and US are going to be temporary. The new strongly emerging markets keep their appetite for oil and metals. Oil prices have recovered and NYMEX is back at 107. Brent trading at 122,25.

After several bullish weeks Asian markets were marginally down this morning pointing towards a possible correction in world equity markets after big gains. It is Also worth noticing that China has reduced their US treasury bill holdings to proportionally its lowest level in years. This has been a gradual process. China has for a long time been aware of the vulnerability its big exposure in US treasury bills And bonds have created. It has therefore obviously been a deliberate policy to scale down this exposure to more balanced and controllable level.


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