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Spain’s budget triggers market optimism

The new Spanish budget which makes austerity rather than tax cuts a priority has been well received by markets. The MSCI-index for South East Asia Pacific rose with 0,7 percent. Brent crude registered its highest level in weeks and jumped above USD 112 a barrel.  The Euro and commodities drifted higher with USD on the defensive. Euro/USD is trading at 1.2935. Also smaller and more risky currencies opted up. The New Zealand KIWI and the Indian rupee are among the winners over the last weeks. The Japanese yen continues up. USD/JPY is at 77,55.

The Spanish government announced Thursday a detailed timetable for economic reform with sharp spending cuts and no tax hikes. Today president Francois Hollande will present his austerity budget for France, punishing the rich. Spain is simultaneously conducting negotiations with European Union authorities on the terms for a possible aid package. A successful conclusion of these talks shall pave the way for European Central Bank bond-buying and easing of Spain and Italy’s borrowing strains. 

The US Finance Secretary, Timothy Geithner, stated yesterday that Europe still was the weakest link in the global economy, but the last measures taken by the European Central Bank, ECB, had given ammunition which made Europe’s situation far better than it was three months ago.  Early Asian trade also saw a spike in Chinese shares triggered by speculation on further Chinese economic stimulus. Risk seemed primed for a comeback, and in such a scenario Australian dollar may be one of the biggest beneficiaries. 

As the Yen continues to strengthen numbers for Japan’s industrial output in August was very disappointing. Industrial production is down, and all the big Japanese car makers presented negative growth figures.  With central banks printing more money, gold is on the offensive and reached a week’s high yesterday with 1777. The big precious metals winner is, however, silver which traded close to months high on 34,70, jumping more than 30 % since early summer. 

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Wary of Spain and Greek debt

Demonstrations in Athens and Madrid ended in bloody clashes between protesters and riot police as uncertainty over a bailout for Spain and European leaders struggling to find a unified position to tackle the Euro debt crisis, continue to dominate news and market sentiments. EURO/USD stays at the same level at 1.2877 as Wednesday morning.  Dow Jones and Nasdaq fell on uncertainty over Europe while Asian stocks rebounded on Thursday. The MSCI-index for the South Asian Pacific state traded up 0,5 %. The Shanghai composite index fell to its lowest level since February on the possible negative impact of the economic slowdown on corporate earnings.

Oil prices are under pressure with Brent crude clinging to the 110 USD a barrel. In his speech to the UN General Assembly the Iranian president, Ahmadinejad, stroke a more conciliatory tone towards Israel dampening the war rhetoric.  Amadinejad called for a new world order not dominated by Western powers and stated that Iran was under constant threat of military action from what he called “uncivilized Zionists”. Precious metals are as commodity prices steady.  Gold is trading at 1755 and silver at 34.00 in early Asian trading.
As protesters against severe austerity measures took to the streets and clashed with police in Spain and Greece, 

European equities saw their worst day in two months.  Spanish 10-year bond yields rose to above 6 percent for the first since the European Central Bank, ECB, for two weeks ago introduced its scheme for buying bonds from exposed and struggling Euro-countries as Italy and Spain. This plan has trimmed borrowing costs for the last two weeks, but the effect of the monetary stimulus seems to be running out of steam faced with grim global economic fundamentals and realities.

The Japanese yen is keeping strong against both USD and Euro.  USD/JPY is trading at 77.66. The dollar index, DXY, measured against a basket of currencies eased 0,1 %, off a two week high on 80,012 reached yesterday.  A weaker dollar helped a modest recovery in dollar-denominated industrial commodities and helped copper, oil and gold from falling further. 

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Worries on Spain weakens EURO

Street fights and protests in Spain sent the Euro down below 1.29 in early Asian trading this morning.  Euro/USD recovered to 1.2950 during yesterday’s trade to fall down to 1.29 on protest news from Madrid in the evening. Euro/USD is at present trading at 1.2875. As has been the pattern in Greece, Spaniards took to the streets and surrounded Parliament. Violent clashes with riot police over austerity followed. The protests came in the wake of weeks of indecisive foot dragging by a Spanish government unable to decide whether to ask for an international bail-out.

Serious concerns over a slowing global growth are back on investor’s radars as equity rallies fed by major central banks monetary easing, are fading. Both Dow Jones (- 0,75 %) and Nasdaq (- 1,36 %) fell yesterday,  pushed down by Caterpillar and Apple. Caterpillar issued a profit warning and fell close to 5 %. Apple fell 2,5 % as the company sold out of its initial supply of iPhone 5, raising concerns whether Apple would be able to keep up with demand.  The South Asian Pacific Index (MSCI) and the Shanghai composite both fell on weariness on Spain.

New worries about the development in the Euro zone and slowing economic growth, led to further fall in commodities. Oil prices, which were lifted on increased tensions in the Middle East over the weekend, fell back. Brent crude which traded at 111 yesterday dropped one dollar to 111 a barrel.  Gold which rose 20 dollars an ounce yesterday, has fallen back to 1760 in Asia.

Australia, which is very dependent upon growth in China, has seen both stock prices and the Aussie dollar falling. USD/JPY is stabile at 77,74.  As a positive sign in yesterday’s market, July numbers show that US home prices rose for a sixth straight month.  Together with a jump in consumer confidence in September, these are positive indications that Americans are ready to loosen their spending.

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Weekly winners of the Demo Championship

UWC is pleased to announce the following weekly winners of the Forex Demo Championship
for the week 17 - 21 September:

1st Prize - $1000 Bonus goes to: chester acc. 438754

2nd Prize - $800 Bonus goes to: Palanga acc. 432748

3rd Prize - $500 Bonus goes to: selim acc. 427050

Most Active Trader Award - $100 Bonus goes to: zilvis86571 acc. 436359

Congratulations to all winners!

We would like to take this opportunity to thank all participants and to warmly invite all of our clients to take part in our weekly Forex Demo Championship

Remember the Earlier You Join the Contest- the Bigger the Chance You Have of Winning!

http://www.uwcfx.com/en/forex-trading-championship.html

Watch our today’s market video review

New nervousness in global markets

The Euro recovered somewhat in early Asian trade this morning trading at 1.2928 against the US dollar.  This after the stock markets and the Euro slipped on Monday as investors looked past recently announced central bank stimulus to focus on economic fundamentals.

German business sentiment was weaker and Spain dragged its feet on asking for an international bailout causing a high ranking German official to ask Spain to make up its mind. Germany and France quarreled on when to implement a EU banking union, and in the US Caterpillar, the world largest maker of earth moving equipment, warned of slower demand for its products due to fears of weaker commodity prices. All factors contributing to a more negative market sentiment.

Japanese Yen which has surged over the last days gave up some ground against both dollar and Euro, trading at 77.77 against the USD. German business sentiment dropped to its lowest level since early 2010 created concerns about a slowdown in the euro zones largest economy. Spain remained in focus. Its government yield rose on concerns that the Rioja government is postponing a request for an international bailout. Greece is still a concern after a report indicates that its budget deficit is bigger than previously thought.

Oil prices recovered from yesterday lows. Brent crude is trading above USD 110 a barrel on renewed fears for a major conflict in the Middle East. After the Israeli Prime Minister, Benjamin Netanyahu, has been bellicose for weeks, the head of the Iranian revolutionary guard stated that Iran was ready for an attack and would hit back. In an interview with CNN yesterday night, the Iranian President, Ahmadinejad, took a more conciliatory tone before his speech the UN General Assembly tomorrow.  Gold prices has strengthened trading at 1765 which is still far below it Friday peak on 1787.


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24 September 2012 | UWCFX Daily Market Video Reviews

Growth concerns back on the agenda

Riskier assets fell broadly Monday morning, dragging down Asian shares, copper, precious metals and oil. The US dollar strengthened with EURO-USD at 1.2949. The Q3 party seems to come to an end as investors shift their focus to weak economic fundamentals and the euro zone debt bailout scheme.  There also seems to be serious disagreements between German chancellor, Angela Merkel, and French President, Francoise Holland, to the implementation of an EU banking union and the EU bail-out fund.

The south East Asian Pacific index, MSCI, fell 0,7 % with the Shanghai composite and the Japanese Nikkei also falling. Renewed fears for a hard landing in China saw both the Australian dollar and resource-reliant Australian shares falling.  The dollar index  measured against a basket of key currencies, is up 0,3 %. Investors are also increasingly nervous about the unintended consequences of last Q 3 decision of the US Federal Reserve. FED buying of state bonds means more  printing of money. Last week the Brazilian Finance Minister directed a blistering attack on the US, accusing FED for starting a currency war.

Markets have over the last days oscillated between euphoria of central bank’s monetary  stimulus measures and uncertainties over weak economic fundamentals. Investors are nervous over downside risks and wariness ahead of US corporate earnings reports next month. Euro zone fears are back on the agenda with disagreements on the banking union, whether Spain shall ask for a full bail out and Greece where the “troika” of representative from the International Monetary Fund, the European Central Bank and European Commission have postponed presentation of their last report strengthening rumors about a possible Greek Exit from the Euro.

These developments  has led to increased downward pressure on the Euro and weaker oil prices. Both NYMEX and Brent crude is falling. Brent is trading one dollar down to 110,40 pr. Barrel.  Copper has fallen 0,9 percent.  Gold is weaker at 1761 down from its peak on 1787 on Friday.  The optimism over the strong measures taken by central banks in the US and Europe are fading on realization that the monetary measures are not backed by economic fundamentals. Spain has displaced Greece as the center of the euro debt crisis.  Markets worry that Spain eventually might need external aid to help solve its debt problems.

These factors combined mean that the markets are off to a rather gloomy start on the week.

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21 September 2012 | UWCFX Daily Market Review

The IMF can lower forecasts on growth of world economy

Representatives of the International Monetary Fund reported that they can lower a forecast on growth of world economy. It is necessary to note that in July growth of world gross domestic product by 3,5 % in the current year and for 3,9 % in 2013 was expected.

Yesterday the main American indexes finished trading session in different directions - Dow Jones in moderate plus, and S&P 500 and Nasdaq - in a small minus against deterioration of economic statistics on China, Japan and the USA. Statistical data from Europe also didn't give a special optimism. The block of yesterday's data reminded investors that world demand continues to weaken, as well as on the American labor market it is not visible appreciable improvements. Despite all accepted measures - fundamental indicators remain former and we still don't see special changes in economy. So, it became known that the industry of China showed reduction in September, export and an import of Japan fell in August, and in the USA, in turn, the number of primary requests for unemployment benefits surpassed forecasts of economists, having made 382 thousand.

However, it didn't lead to aggressive sales. Superfluous liquidity supports stock markets, and besides other statistics was not so bad, as economists predicted. At the end of the trading session market were supported by the message in Financial Times that, according to information from the informed sources, the European politicians work over the program of economic reforms for Spain.

The prices for oil went up after falling in New York. Now Light ads in price 55 cents - quotations came nearer to 93 dollars. Brent bargains on a level of 110,46 dollars for barrel.

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20 September2012 | UWCFX Daily Market Video Reviews

USA: the market in thoughts

On Wednesday, 19 September, the stock market of the United States finished trading session with moderate growth of the main indexes on a basis of quite good data on the housing market for August. Let's remind that 3 main indicators were published yesterday: the number of the new constructions of houses increased from the reconsidered 0,733 million to 0,750 million - this is the strongest growth for 2 years ; the number of licenses for construction of houses was reduced from 0,811 million to 0,803 million though more serious reduction was expected; sales of houses in the secondary market increased from 4,47 million to a two-year maximum - 4,82 million though the increase only to 4,55 million was expected. Despite visible improvement in comparison with July, these data didn't cause full-scale rally - FRS meeting already behind, and the central bank already declared start of the new program of monetary stimulation. Let's note that originally indexes showed more considerable growth, but subsequently retreat of oil and gas sector in addition to falling prices for "black gold" moderated appetites of bulls.
The external background for the American session was rather favorable, Asian and European indexes grew against unanimity of the central banks in respect to start additional measures of quantitative mitigation - the Bank of Japan declared impressive extension of the program of purchase of assets, having followed the lead of European Central Bank and FRS which recently have also laid out all the trumps on a table. The central bank of Japan increased the program of purchase of assets more considerably, than assumed the majority of economists, and determination of the monetary authorities caused lifting of purchasing enthusiasm.
More briskly recently the situation changes in the raw materials market that makes the muffled impact on behavior of stock market. The world prices for oil on Wednesday again sharply decreased against messages that Saudi Arabia offered the major customers additional supply of oil until the end of the year, having expressed intention to bring down a speculative rise in prices for a “black gold".
Confirmation of increase in oil deliveries to the world markets was sudden and strong growth of commercial stocks of oil in the USA which accordingly to the data published yesterday grew in a week at once by 8,5 million barrels while the market waited growth of this indicator by 1 million barrels.
After three days of falling oil prices in aggregate more than for 7 % - that became maximum for the last three months, it is possible to expect some rebound. Nevertheless, it is impossible to exclude that on the threshold of November presidential election in the USA actions of market’s "invisible hand" will provoke further sag of the prices for "black gold".
Futures for share indexes of the USA this morning lose 0,2-0,3 %. At stock markets in Asia mainly negative dynamics is noted.

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Weekly winners of the Demo Championship

UWC is pleased to announce the following weekly winners of the Forex Demo Championship
for the week 10 - 14 September:
1st Prize - $1000 Bonus
goes to: Bond 007 acc. 437717
2nd Prize - $800 Bonus
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goes to: WAIDATTHAZIM acc. 427009
Most Active Trader Award - $100 Bonus
goes to: luck4trade acc. 437325

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We would like to take this opportunity to thank all participants and to warmly invite all of our clients to take part in our weekly Forex Demo Championship
Remember the Earlier You Join the Contest- the Bigger the Chance You Have of Winning!

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19 September 2012| UWCFX Daily Market Video Reviews

Saudi intervention causes oil prices tumble

Brent crude fell below USD 112 a barrel on Wednesday, five dollar down from its peak last Friday. Concerns over the capacity of a fragile global economy to support demand and indications that the world’s top exporter, Saudi Arabia, is pumping more oil to bring down prices, have weighed in on oil markets. Prices hit a 2012 low at 88,49 in June and have since increased 27 percent. Automatic trading executions where one big sell order was followed by thousands of small, also contributed to the tumble.
The trading week is off to a weak start after the market bonanza experienced by the resolute actions from the European Central Bank, ECB, and the US Federal Reserve, FED, seem to fade. Both central banks undertook last week resolute economic stimulus actions. The last days worries about the debt crisis in Europe focused on Spain and a possible Greek Euro exit have along with fears for a hard landing in China kept investors funds on the sidelines.
Equity investors seem confused to which direction markets shall take. Europe fell yesterday on profit taking and question marks regarding whether the stimulus injections are enough to turn global markets around. These concerns were highlighted by a small, but vocal minority of FED officials opposing fresh stimulus and asking if the monetary measures have been taken, too, early; if a car is stuck in the mud, you continue to push till the wheels start turning; one official stated. The US stock markets were flat yesterday. Asia is also negative.
Representatives for the organization of oil producing countries, OPEC, stated on Tuesday that Saudi Arabia, a close ally of the United States, wanted to give the markets a clear signal for lower prices. Saudi has increased its daily production to 10 million barrels a day. Metal and precious metal prices were also influenced by the downward trend in oil. Gold fell to 1750 from its 1779 peak and trades between 1750 and 1770. Euro/USD is gaining Wednesday morning at 1.3071 trading in a new interval; 1.30 – 1.31. The Japanese Yen is falling as a result of the expected intervention from the Bank of Japan, highlighted in the Daily Report yesterday. USD/JPY is falling close to one percent trading at 79,18.

18 September 2012 | UWCFX Daily Market Review

Profit taking follows rallies

Oil prices dropped sharply yesterday as Asian shares fall back from a four week-high last this morning.  Also the US stock markets, gold, copper and other commodities retreated from last week’s high. As markets digested the growth impact from the Federal Reserve’s aggressive stimulus. Eyes were again on the debt crisis in Europe. The big question is whether Spain will request a bailout to ease its fiscal strains.  Concerns about growth slowdown in China also weighed in on investors sentiment as investors took profit from last week’s rallies.

Brent crude fell more than 5 dollar a barrel in late trade in US on Monday. The high volume selling seemed to stem from an automated computer trading program. The oil prices recovered this morning and are at present trading at 114. Euro/USD is continuing down from its peak on 1.3169 on Friday and consolidating around 1.31.  USD/JPY is at 78,50. The MSCI-index for South East Asia outside Japan retreated 0,4 percent after five winning days in row. In the United States Apple again saved the day posting orders for USD 700 million for its iPhone 5 models. Also European stocks slipped from a 14 months high on Monday mainly on profit taking.  Gold has fallen close to 20 dollar an ounce trading at 1759.

The Japanese Nikkei bucked the trend in the stock markets this morning up 0,2 % helped by a weaker yen. This offset concerns over Japanese firms having large exposure to China where anti-Japanese sentiments have been running wild on escalating tensions over territorial disputes between Asia’s two biggest economies. There are increasing fears that the conflict between the Asian giants might run out of control and lead to a bigger confrontation.

In Asia there are furthermore strong rumors that Japan will follow FED and undertake its own stimulus measures to stem the Yen’s appreciation after FED’s move. The Bank of Japan ends its two day meeting tomorrow.  FED’s move undermined the dollar and lifted the Yen to a seven month high to 77.13 last Thursday. The development of the Yen in relation to both Euro, USD and other currencies is to be closely followed during the next days.



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