The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

In early trading this morning, the currency markets are generally quiet with the exception of the Aussie dollar which is pushing higher on the back of strong housing and credit data.

The AUD/ JPY held its ground well recently and looks set for another attack on the ¥87.50 level.

The latest bank of Japan rate statement is due at 07.00 so keep your eyes peeled for the reaction in the yen.

Other announcements of note today include the Swiss KOF economic barometer at 10.30, followed by Canadian and then US GDP figures at 13.30.

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The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

This morning’s main theme is a move against Sterling.

• Pound/Yen Spreads are down 0.58%
• Euro/Pound Spreads are up 0.56%
• Pound/Dollar Spreads are down 0.32%

Although perhaps not a sign of a dramatic sell off, the moves are more telling on a day morning when a relief rally sets in on the beleaguered euro.

Despite downgrades to Greece, Portugal and Spain, traders are preferring the euro to the pound, which is saying something.

The uncertainty surrounding the coming general election is now intertwined with the prospects for a downgrade to UK debt.

What would a downgrade to UK sovereign debt mean?

Like any individual going for a loan from the bank, those deemed at higher risk will be charged more. This will increase their borrowing costs and the time it takes the pay off those debts.

With the UK finances at post war highs, any increase in the cost of interest payments would make problems even worse.

To some extent, markets are already factoring some sort of downgrade, but a formal statement from ratings agencies would certainly amplify the problem, at least in the short term.

Coming Up Today

Coming up today we have the UK Halifax House Price Index at 07.00 and US unemployment claims at 13.30.

Spain Credit Rating Downgraded

For those who missed it, yesterday afternoon, Spain had its credit rating downgraded, renewing fears of the problems in Greece spreading like a virus across Europe.

Credit Default Swaps – Is Britain next?

Credit Derivatives traders certainly think it’s a good bet.

Credit Default Swaps allow traders to hedge their risks against a country defaulting on its debts (as well as pure unhedged speculation).

As unpopular as these markets are to sovereign governments, they have been very accurate in predicting where the next problem will be. CDS markets moved against Greece and Spain well before the major downgrades, now the CDS traders have Britain in their crosshairs.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

After yesterday’s blood letting, forex and financial markets have recovered some of their poise in early trading.

The Euro, which was at the epicenter of yesterday’s sell off, has recovered some lost ground against the US dollar (EUR/USD +0.38%) and yen (EUR/JPY +0.5%).

The biggest gainer this morning is the Aussie dollar with the AUD/ USD up 0.83% and AUD/ JPY 0.9% on the back of strong inflation (CPI) data.

Without doubt though, the day’s top announcement is the FOMC statement at 19.15. No one is expecting a rate hike at this meeting, but in recent weeks there have been some hints that the Fed may be to take some steps to prevent another credit bubble growing again.

If the Fed sends too strong a signal, it could further unnerve markets on the back of yesterday’s jitters. Alternatively, if the Fed hints that it will continue its accommodating position, it could help sooth markets.

Reasons to Be Fearful

Yesterday morning saw a sell-off which intensified after Standard & Poors downgraded Greek debt to junk status. Many are now speculating that Greek bond holders could lose as much as 30-50%.

To add to the general morass, S&P also downgraded Portugal’s sovereign debt, sparking further and wider selling.

The situation is still complex with many blaming Germany for its hardball stance. Some are even speculating that Germany’s game is to weed out the weaker members of the eurozone such as Greece and Portugal, resulting in a streamlined and potentially stronger Euro once the dust has settled.

Yesterday wasn’t specific to the Euro, the Pound also hit hard and the FTSE took a huge 2% hit on the day.

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A daily look at the Markets from Nick Serff, Market Analyst, City Index.

The Greek banking sector traded down over 9 percent on the news, pushing bank shares across Europe lower on contagion fears.

Pressure for a solution to the Greek crisis has increased since last Friday after it asked the IMF for emergency help. Markets are now becoming increasingly nervous that the problems Greece are experiencing could spread to other Euro zone states, pushing the price of government debt higher.

Shares on Wall Street did however manage to shake off some of Europe’s anxieties rallying back from earlier losses after a better than expected April Consumer Confidence report. Markets had been looking for 53.5 but actually got a reading of 57.9 sending shares on the major US indexes briefly higher.

Investors were also closely monitoring shares in Goldman Sachs after CEO Lloyd Blankfein and Fabrice Tourre appeared on Capitol Hill before congress. Both men are expected to say that they did not place bets against their clients and that they still deny the SEC charges.

Contracts for differences (“CFD”) trading and spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

This material should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument by City Index Limited (“City Index”) or Online-Spread-Betting.com, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. The material is not a personal recommendation and you should seek independent advice as to your suitability to speculate in any related markets..

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The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

Forex traders appear to be keeping their powder dry this morning.

The US dollar pairs are quiet and virtually unmoved with the exception of the New Zealand Dollar/US Dollar spread which is the morning’s top faller. The yen is slightly stronger indicating a general lack of appetite for risk taking.

Unlike yesterday, there is some meaty economic news items to chew on though. The highlights include the UK CBI realised sales, an important barometer of the strength of the UK economy. Later on we have the US consumer confidence numbers.

At 14.00 we also have the release of the latest official house price date (Case-Schiller). Analysts are forecasting the first positive year on year figures since February 2007.

With the US housing market at the epicentre of credit crisis, a positive number could spark another wave of optimism across forex and stock markets

How Long will the Stock Market Rally Last?

Despite the ongoing problems in Greece, world stock markets have continued to push higher, or at the very least hold their ground.

This is best seen in the Nasdaq 100 – home of tech giants such as Apple.

The Nasdaq has managed an incredible 51 trading days above it’s 10 period moving average. As Rob Hannah points out, this is unprecedented with the 2nd longest period being 47 days back in 1989.

What happens when the rally finally sags?

Eventually the enthusiasm will wane and the Nasdaq 100 will close below its 10 period average, but that could just be a pause for breath.

According to research from Hanna, similar long winning runs often result in the market going on to push ever higher in the following weeks.

Also see spread betting on a stock market index.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

Last week ended in a surge of optimism with the Dow Jones & tech heavy Nasdaq breaching fresh new highs for the year.

Investors and traders were throwing caution to the wind across a wide variety of markets on Friday, especially forex.

Even further negative news surrounding the Greek bailout could not derail this rally.

This morning we are seeing some follow through with risk taking once again back in vogue.

The British pound is the morning’s top mover as analysts question the perceived wisdom that a hung parliament would be devastating for the UK economy.

Of most interest is the Pound – Yen, with the pair breaking out of a tight range with &yebn;145.00 forming the ceiling.

Without doubt though, the hottest news item this week is the US Federal reserve statement on Wednesday.

• Will the Fed take rising stock markets as an opportunity to raise interest rates?
• Will there be hints that a rate high will happen sooner rather than later?
• Are there other ways that the Fed might temper the rally without nipping the nascent growth in the bud?

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

This morning’s main move is an increasingly familiar one – that of the euro selling off. On top of yesterday’s already bad news, credit rating agency announced that it rates Greek bonds as being just above junk.

The Euro/Dollar spread is close to it’s May 2009 low of $1.3211, down 0.4% today while the Euro/Sterling spread is within 100 pips of the 2010 low, down 25% today.

Greece has been demanding softer terms for any loans/bailouts than Northern European countries have been prepared to provide. However, as time goes on, those counties (especially Germany) may have to accept that forcing market rates on Greece could trigger widespread defaults amongst other PIIGS economies (Portugal, Iceland, Ireland, Greece & Spain). That could ultimately do more damage than the feared moral hazard a soft bailout could create.

The pound is down this morning but holding up relatively well relative to other major currencies. There have been fears that a hung parliament would lead to a run on the pound, but as Goldman Sachs recently pointed out, currency markets appear to be increasingly comfortable with no majority result. Whether markets are comfortable or whether the hung parliament has just been priced in remains to be seen.

The day’s other main mover is the Aussie dollar sinking by around 0.6% against the yen and dollar (AUD/JPY and AUD/USD). This comes on the back of the Australian central bank dropping hints that it’s focus is protecting the recovery (i.e. not raising rates again) not necessarily cooling it.

Trading Today

Coming up today, highlights include German Ifo business climate estimations at 09.00 industrial new orders at 10.00. The pound will come under further scrutiny at 09.30 GMT with the release of preliminary UK GDP figures. Analysts are expecting a GDP rise of 0.4%, thus ensuring two quarters of consecutive growth.

Around midday there’s a raft of Canadian data with inflation (CPI) at 12.00 and retail sales at 13.30. As for the US, at 13.30 we have durable goods orders and new home sales at 15.00.

The biggest unknown will be the outcome of the G20 meeting starting today.

Forex Update: 10.00am

As the morning has progressed, the euro has show some real fight, with the British pound heading in the opposite direction. Recent economic data has been the driver of this with German business climate coming in ahead of expectations and UK GDP limping in at +0.2% vs the +0.4% expected.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

The Pound is continuing its strong run this morning with the Pound – Dollar the strongest mover on the day.

However there are some hefty economic bullets for it to dodge with a string of important economic announcements due out for the UK today.

The main data point of concern is public sector net borrowing due at 09.30 GMT. With the election looming, public sector debt has been a central issue for the major parties with the financial markets ready to attack the pound if this deficit looks like it is getting (even more) out of control.

Analysts expect the figure to be a headline grabbing £24.1bn, the highest level yet since the credit crunch. Any number significantly above or below this will cause even more volatility in the pound.

At the same time we have UK retail sales and mortgage approvals.

Aside from the UK’s big announcements today, there it is a busy day for most major currencies.

Between 08.00 and 09.00 we have a raft of European, French and German services and Manufacturing data.

At 13.30 we have US inflation (PPI) and Unemployment claims. At 15.00 we get the latest data on the area at the core of the credit crisis – US housing with Existing home sales at 15.00

Finally Canada blasts back into the spotlight at 15.30 with the latest Bank of Canada policy report followed by a press conference.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

Go-Canada-Go was chant at the Winter Olympics and judging by trader’s reaction this morning, forex markets are of the same sentiment.

Forex markets are quiet this morning with the exception of the US Dollar/Canadian Dollar spread which stands out as the morning’s biggest mover.

Yesterday, the Bank of Canada gave its strongest hint yet that it would soon be diverging its rate policy from the US and start to hike rates above the record low 0.25%.

The USD/CAD pair was pushed below parity on the news yesterday and that sentiment is still strong this morning.

Note that with BetOnMarkets you can make bets that the USD/CAD will continue to drop with a Double Down bet over the next 7 days.

Elsewhere, forex markets are quiet, with the main move being against the Japanese yen, with the Aussie dollar and British pound performing strongly against that currency.

Later Today

Coming up today we have the latest UK claimant count change numbers (Unemployment benefit claims) at 09.30. Unemployment claims are expected to drop, but by a much smaller margin than last month.

Following this we have the release of the minutes from the last Bank of England MPC meeting. With inflation proving sticky, analysts will be keen to see what the central bank had to say about it at its last meeting.

Fed Chairman Ben Bernanke is speaking at 15.15.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

Yesterday afternoon saw a reasonable rebound in stock markets and that enthusiasm spilled over into forex with the Aussie dollar, euro and British pound all rallying nicely throughout the late afternoon session.

So far this morning, forex markets have been relatively quiet with some of yesterday’s enthusiasm managing to spill over into today’s session.

The biggest beneficiary has been the Aussie dollar after the minutes of the last Australian Central Bank meeting indicated that Australian interest rates may have further to go.

The New Zealand dollar continues to deteriorate with the Aussie and Kiwi economies seemingly moving apart quicker than previously expected. The Australian Dollar/New Zealand Dollar remains at multi year highs.

The New Zealand Dollar/US Dollar pair is the top mover at -0.6%, with the Australian Dollar/Yen up 0.44%.

Markets were also emboldened by the news that the US SEC voted only by 3-2 to take action against Goldman, indicating perhaps that the feared draconian regulation is not as much of a good thing as previously thought.

Later Today

We have a busy economic calendar today with German PPI due in at 07.00. A slight rise is expected.

Following this we have UK inflation data at 09.30 with the latest CPI and RPI figures both expected to rise. If CPI rises above 3%, the Bank of England is obliged to write a letter to the chancellor to explain what is happening. With CPI expected in at 3.2%, we could see this happening today.

At 10.00 we have ZEW German economic Sentiment. At 14.00 we have the latest rate statement from the Bank of Canada and US Fed chairman testifying at 16.00.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.