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

Shares across Europe traded lower on Wednesday after weakness in commodities convinced investors to take some profits out of the miners.

That profit taking dragged the main European Indices lower on the day.

It has been a rather uneventful session with trading ranges very tight and Indices lacking direction.

Investors seem to still be in a positive mood but with UK PMI missing targets and Euro zone GDP revisions signalling that growth stalled in the last quarter, investors have been a little hesitant to build on positions today.

The Greece situation has by no means been resolved and the unconfirmed speculation over the last few days concerning a renegotiation of the Greece bail out package is giving investors further excuses to short the Euro, which is weaker again against the US dollar. Also see Euro-Dollar Spreads.

Much of the UK is now likely to have one eye on any fresh polling data that may provide an insight into the likely result of the forthcoming UK general election.

Whilst the run up to the election is unlikely to have a significant impact on the FTSE 100 equities, the sterling is likely to remain particularly sensitive to party manifestos and polling data.”

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..

City Index is a spread betting and CFD provider and is authorised and regulated by the Financial Services Authority (no. 113942) whose head and registered office is Park House, 16 Finsbury Circus, London EC2M 7EB (Registered in England and Wales, no. 1761813).

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

The yen is a little weaker this morning after the latest Bank of Japan rate meeting ended with a no change verdict again.

The general theme so far is of US dollar strength and yen weakness.

Sell Off of European Currencies

Yesterday there was quite a sell off of European currencies. The EUR/JPY and GBP/JPY were down over 1% with the USD/CHF, EUR/USD and GBP/USD down over 0.75%.

It did appear to be a (mostly) European sell off with the Aussie dollar up against the US dollar and the Canadian dollar reaching parity with the US dollar (USD/CAD) for the first time in nearly two years.

It seems these commodity rich countries are continuing to bounce back stronger than continental currencies, especially with Australia raising rates to 4.25% and Canada expected to raise rates sooner rather than later.

Despite last week’s strength in the euro, if we take a step back and look at the weekly chart, we can see that the EUR/USD is still within a strong down trend that started when the crisis in Greece began.

The latest jitters come as Germany is calling for Greece to pay a ‘market rate’ on its debt obligations rather than the discount it is afforded due to its Eurozone membership. This could mean Greece paying 6.5% on its debt vs 4% paid by Ireland and Portugal.

In other words, if Greece were an individual seeking a loan for a house, the mortgage manager would realistically want to charge higher rates because of a) the higher risk of them defaulting and b) to penalize previous over spending.

Pound Looking Weaker

The pound was rocked yesterday due to its close ties to the euro and more opinion polls providing conflicting predictions for the next elections.

An FT Alphaville comment came up with some interesting analysis comparing the FTSE reactions after each of the last few elections. The last hung parliament resulted in a huge sell off in 1974, but the economy was not exactly a bed of roses then either.

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 the relatively thin trading volumes yesterday, currency markets are certainly wasting no time today.

In the first major forex trading session after Easter Monday, there are already some interesting moves afoot.

Beware of Greeks Rejecting Gifts?

The euro has trended lower overnight on rumours that Greece is seeking to renegotiate some of the terms in its IMF bailout, almost before the ink is dry on the recent agreement.

After numerous clashes with protesters, the government is worried that the stringent terms could have far reaching social consequences.

Traders are also unnerved by the news that wealthy Greeks are moving money offshore. The move adds further pressure on Greek retail banks as they run out of other options to fund their short term obligations.

The British pound is also down on general fears that the Greek crisis isn’t over after all and the debt crisis may still spread to other so called ‘peripherals’ such as Portugal.

As you might expect on a day of jitters, the Yen is strong, along with the US dollar.

Of these two, the yen is the top currency today with the Dollar-Yen down 0.35%, the Pound-Yen down 0.76% and the Euro-Yen down 0.82%.

Royal Bank of Australia Raises Interest Rates

Just in is the news that the Royal Bank of Australia elected to raise rates to 4.25%.

The Australian Dollar has risen slightly on the news.

It was expected to be a tight call between holding and raising so the mixed reaction seen so far is perhaps to be 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.