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

After yesterday’s bloodbath, the risk takers are dipping their toes back into the market in early trading this morning.

Forex markets are seeing a slight reversal of yesterday’s moves. The two currencies at the epicentre of the sell off; the Australian Dollar and Euro are bidding higher. However, so far the buying looks tentative in comparison to damage done yesterday.

Such caution is understandable given the number of market moving events due out today. In no particular order we have:

1. The ECB’s LTRO

We have the big question of what will happen with the expiration of the European Central Bank’s Long Term Refinancing Operation. It could cause major financial shockwaves, it may be a non-event. However it’s something to be aware of as the day unfolds.

2. German Presidential Elections

The powerhouse of the Eurozone, Germany is expected to elect Christian Wulff as its new president. If it were to happen, the result would be seen as adding stability to Chancellor Merkel’s shaky coalition. If not, it could create uncertainty in the Euro / Eurozone at the epicentre. If there is one thing markets don’t like it is uncertainty.

How will this impact forex markets? If Wulff does not get in, it could be negative for the euro as investors fret on the stability of Germany’s ruling coalition.

3. US Non Farm Employment Change

Released at 13.15, ADP jobs numbers are a reasonable primer for Friday’s all important Non Farm Payrolls. Analysts are expecting a slight rise to +59K. Recent US economic data has disappointed including yesterday’s consumer confidence, will today be more of the same?

4. AOB

On top of all this we have the Swiss Kof economic barometer at 10.30 and Canadian GDP at 13.30 GMT.

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 a limp rally yesterday, financial markets are starting Tuesday on the back foot. The main catalyst was the news that China’s leading economic index rose just 0.3% in April versus the expected +1.7%. This sent Asian stocks shooting lower with the yen in demand as investors seek out safe havens.

Despite the Swiss Franc regaining some of its previous allure, there can be no doubt that in situations like this, the Yen is the go to currency.

Right now, the safe haven league is looking a little like this:

The Safe Haven League

1. The Japanese Yen – was tied with the dollar
2. The Swiss Franc – surge in interest these past few weeks
3. The US Dollar – in third place right now and debt and stimulus plans worry investors

On a bad news day, these currencies tend to be stronger in the above order (at the moment at least).

So investors are buying yen, what are they selling?

Investors are offloading their Aussie dollar positions, with the Australian Dollar/Yen down 1.19% today in early trading. The Australian economy depends heavily on its commodity exports to china, so much so that the Aussie dollar is seen as a way to play China. Any weakness in China translates into weakness in the Aussie dollar.

The ¥77.00 level has become a sticky support line for the AUD/JPY on the weekly charts so it will be interesting to see how the pair trades this week.

Gold is also an Australian export and that has seen some volatile trading in the last few days. Yesterday the precious metal came within a few dollars of its all time high then plunged over $20. Watch the action around the rising support line.

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.

A quick look at the markets from Friday afternoon shows us that they traded lower after final revised US GDP came in below expectations at 2.7%. Both the Dow Jones and the FTSE 100 dropped. BP hit its lowest levels since 1996.

In the forex markets, there is continued strength of the Swiss franc, with the Euro/Swiss Franc pair making a fresh record low. Switzerland has been seen as a safe haven thanks to its political neutrality and conservative (and private) banking system. The latter has taken a knock in recent years after Swiss banks pushed their luck during the credit crunch, but there are signs that the safe haven trade is gathering momentum.

Pools of European money are flowing into Swiss banks from Greek and other PIIGS. The main sticking point for Swiss Franc’s strength has been the ongoing intervention by the Swiss National Bank (SNB), aiming to keep the currency from over inflating. Since the last SNB meeting, where an end to intervention was implied, the currency has been heading consistently higher.

The free floating Swissy’s 5 day average range has doubled in June, a sign perhaps that the currency is being allowed to trade without any central bank adjustments. This trading range increase is not down to euro volatility, as the EUR/USD’s 5 day range has actually dropped in June.

The Dollar/Swiss Franc has been steadily dropping back towards pre-May levels and this could present a trading opportunity.

The slow pace of decline makes a ‘One Touch’ trade unattractive. There may be some further shocks in the system so a ‘No Touch’ trade might be a little too risky. Therefore a ‘Bear Bet’ looks like the best option. This returns a profit if the USD/CHF is below a certain level in the future. It can do whatever it wants before the expiry date.

A Bear Bet predicting that the USD/ CHF will be below 1.087 in 60 days time could return 109%.

Editor’s note: if you lose this trade, you lose 100% of your stake.

Market Movers:

Aside from the strength in the Swiss Franc, today’s other themes include strength in the pound, weakness in the euro, with the yen top dog overall. Gold is also no the up.

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.

Fear is still trumping risk taking this morning as investors fret over sovereign debt problems and the very real possibility of double dip recessions in many Western economies.

Yesterday Greek Credit Default Swaps hit record levels, implying the country is close to bankruptcy. Indeed there were even reports yesterday of entire Greek islands being put up for sale or long term lease.

Currency markets are generally quiet this morning with the British pound retaking some of the ground lost yesterday against the euro. The EUR/GBP is down 0.24% and the GBP/USD spread betting market up 0.32%.

There’s not much movement between the US dollar and the yen other than a slight bias towards the Japanese currency.

However, the Aussie and Kiwi dollar are selling off, which is unusual considering that stock market futures are flat.

In recent weeks there has been a strong correlation between stock markets and the Aussie dollar so today’s drop in the AUD/JPY (-0.55%) and AUD/USD (-0.50%) is meaningful.

This doesn’t appear to be a fear driven trade, more a reaction to uncertainty surrounding the new Australian Prime Minister and her treatment of the controversial mining tax.

Perhaps markets were hoping the tax would oust Rudd’s Labor party from power, but Gillard’s promotion may make this less unlikely.

Trading Today

The G8 meeting starting today rolls over into the weekend, morphing into the G20 by Sunday.

Quite what impact these meetings will have is unclear. Regulation of the global system and fiscal budget plans will be hot on the agenda. The US is pushing for more stimulus while the Europe and Canada favour austerity measures.

It’s unknown if anything of substance will be produced and what impact any such tangible measures might have on financial markets, so today it would be wise to be vigilant to G8 news bombs.

Today’s main planned news announcement of note is US GDP at 13.30. This is expected to come in at 3% and unlikely to change from the initial GDP figures put out, but given the downside surprises recently in US economic data, it’s not one to ignore.

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 Dow Jones managed to limp over the line yesterday, keeping up its high strike rate on Fed days.

The FOMC statement sparked a wave of selling in the US dollar as it seemed to imply rates would be staying low for a long long time. The GBP/USD spreads rose to a five week high as investors bought on the stringent UK budget.

This morning there’s not much to shout about, with the dominant trend being further weakness in the US dollar with the British pound and euro being the main currencies of interest.

Trading Today

Coming up today the main announcements are US durable goods orders and unemployment claims at 13.30 GMT. The latter is expected to drop, to 461K, but could the state of the US housing market be a symptom of individuals finding it hard to gain employment?

US Interest Rates

Yesterday, the US Federal Reserve FOMC announced that they voted to keep rates on hold. That was not a surprise.

However, markets appear encouraged by the comments released along side the rate announcement.

The Fed said: “the economic recovery is proceeding and…the labor(sic) market is improving gradually”.

Hardly a full blown bullish battle cry, but markets appear to be thankful for small mercies after being beaten in the morning.

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.

Forex markets are quiet this morning after yesterday’s monster moves. The pound is still strong on a relative basis, but other than this, there are no significant moves to speak of so far this morning.

A quiet Asian session is probably a relief for traders after yesterday’s tumultuous session which saw the Euro/Swiss Franc spread drop to a new record low of 1.3586 and the Dow Jones (Wall Street) drop 150 points in a sell off that accelerated throughout the day.

However, despite the slow start, today is unlikely to be quiet with a number of medium and upper tier economic announcements due.

Trading Today

Coming up today between 08.00 GMT and 09.00 we have a raft of European, French and German PMI data. This inflation/growth measure could have some impact if the numbers consistently drop below expectations.

Of greater potential impact is the release of the minutes from the last UK Monitory Policy meeting. These minutes usually provide subtle clues and hints as to the forward looking perspectives of the Bank of England and could impact the Euro/Pound and GBP/USD.

We then step up the tension one notch with the release of US new home sales data 15.00 GMT. A drop is expected, but if the numbers come in even below these deflated expectations there could be some significant follow on selling in the Dow Jones.

Finally today’s top announcement is the US Federal Reserve interest rate statement.

US Federal Reserve Days are Bullish

No rate change is expected, but as ever, the markets will pore over every sentence for clues about what the Fed might do 6-12 months down the line.

When the Federal Reserve meets, these so called ‘Fed days’ have been traditionally been positive for world stock markets such as the Dow Jones.

According to the market stats website MarketSci, 61.8% of Fed days are positive for markets compared to the average day having a 53.3% chance of being positive.

The UK Emergency Budget

The GBP/USD was up 0.34%, but the GBP/JPY was down 0.16% yesterday. These moves need to be taken in the context of the general flight away from risk taking, a move which has pushed the euro lower. The pound’s relative strength is best seen on the EUR/GBP which was down 0.75% (euro lower).

George Osborne’s budget was been well received in the city with some analysts speculating that it is now very unlikely that the UK will receive a credit rating downgrade.

The UK 100 spread didn’t fare so well, slumping 1% as resource stocks react to yesterday’s late session slump in US markets (while UK markets were closed).

BP still maintains a heavy influence on the FTSE so its continued sell off is a dead weight on the UK index.

US Housing Double Dip Recession

The other main news of note yesterday was US existing new home sales which came in at 5.66 million, well below estimates. There are fears that US houses will undergo a double dip recession, a move that will certainly impact on the wider economy, not to mention the banks which are still exposed to a major US housing slump.

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.

UK equity markets retraced recent gains as Osborne’s emergency budget took centre stage on Tuesday afternoon.

After trading lower in the morning and despite a brief rally off its low FTSE traded back towards session lows as investors digested a much anticipated Budget from Chancellor Osborne.

Commodity stocks initially led the index lower as the excitement that Chinese action on the Yuan would boost it imports waned and stocks such as Rio Tinto, Xstrata and Fresnillo saw yesterday’s gains eroded. Volumes were low as attention shifted to the UK Parliament.

The budget contents were much expected and contained few real surprises.

As the country faces higher taxes and drastic spending cuts, investors sought to extract positives from a salutary economic programme.

Investors dipped their toes into retailers which responded best, rallying after the anticipated increase in VAT was proposed for later than expected. Clients hoped that high street spending could see an uplift in the short term, and perhaps even a run on beer should England win tomorrow.

UK retail banks, such as Lloyds, also rallied after the headline grabbing bank levy came in lighter than perhaps anticipated.

Clients looking longer term saw gilts rally, and clients edged back into sterling as the market seemed broadly satisfied that this coalition government is serious about tackling the country’s economic problems head on.

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 big announcement today is the UK’s emergency budget at 12.30pm.

This is a news item that is likely to have a huge impact on the pound today, especially the Pound/Dollar spreads .

Some expected measures such as the VAT hike have been leaked, but what the markets want to see is a hard hitting budget that will make serious inroads into the UK’s fiscal deficit. The UK’s credit rating is at risk should George Osborne be perceived to have not gone far enough.

The WSJ sums up the situation as: “…And the new UK government may wish to reduce the size of the state dramatically, but too much of the UK economy now is the state. It’s going to take a very long time to cut it back, as it will across Europe, where austerity now rules”.

In these volatile times, investors tend to cheer signs that we are “getting back to normal” after an extraordinary last couple of years. This is odd because they really don’t want that. A return to “normal” would just be the trailer for Credit Crunch 2.

They should, rather, cheer efforts at rebalancing, and hope that World economies can wait for the snail’s pace politics will be imposed on them. There’s really is no Plan B.

One way to play the budget would be with a Financial Fixed Odds Breakout Trade on the Euro/Pound to isolate the pound movements away from general risk on/risk aversion in the market.

You can currently get a return of 149% on a Breakout Trade predicting that the EUR/GBP will touch either £0.82 or £0.84 before the close on the 23 June. Note that you will lose 100% of your trade if that does not happen.

An alternative strategy would be to wait for the initial reaction then trade in the opposite direction as the dust settles. Often there is a knee jerk reaction to the budget then a secondary reaction as the fine print is revealed. At least that was the case with the previous government’s budgets.

Today’s Market Trends

This morning there’s a general weakening in the euro, especially against the Swiss Franc with the Euro/Swiss Franc spreads making a fresh record low today, trading down 0.35%.

The Swiss Franc has accumulated steadily since the Swiss National Bank announced it was scaling back its currency interventions, allowing the Franc to push to the higher levels.

Without the central bank interventions, we could see more dislocation between the Euro and the Swissy.

Gold is also trading higher after being hit for six yesterday, trading well below its record high of $1,265.

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, financial markets are heading higher after the weekend news that China will be loosening its currency peg to the US dollar.

World stock markets are expected to open higher by at least 1%.

The move has been as a positive for the global economy, as many speculate that China would not have done this if it still feared for the general health of the global economy.

The move has sent the Yuan higher against the US dollar with most non-dollar/yen pairs following suit.

The news has been especially good for the Aussie dollar (Australian Dollar/US Dollar and Australian Dollar/Yen which would benefit as its exports to China become cheaper.

On the other hand, there are many who point the to consequences of the move and whether it would last beyond this ‘gesture’ ahead of the forthcoming G8/G20 meeting in Toronto.

In any case, traders are taking the glass half full perspective at the start of the new trading week.

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.

It’s a quiet news day today with no real top tier announcements for the market to chew on.

The one item which might have some impact is UK public sector net borrowing at 09.30. Public sector borrowing is expected to balloon to £18.2bn, but this has largely been priced in already. If there are any significant deviations away from this number in either direction, there could be some good moves on offer for the GBP/USD.

Other than this, in theory it should be a relatively quiet day, but in the last few months the ‘quiet’ news days have been hit by tape bombs such as major ratings down grades for countries such as Greece or Spain.

So far forex markets are quiet with no real notable moves to speak of other than a general leaning towards the ‘risk on’ trade of the Australian Dollar and Euro etc rising against the US dollar.

Swiss Franc Looking Stronger

Switzerland took centre stage again yesterday after the Swiss National Bank dropped references to intervention in its latest policy note.

The SNB had been propping up the Swiss Franc with direct interventions in an attempt to stop it appreciating so rapidly. It appears that they have given up the ghost (for now) not least because the whole operating is incredibly expensive.

The Swiss Franc is seen as a safe haven, especially compared to the rest of Europe, so money has been pouring into the country from the likes of Germany, Spain and Greece.

The Swissy has gained a massive 1.6% against the US dollar today and shifted 1% against the euro. Also see Euro/Swiss Franc spreads and Dollar/Swiss Franc spreads.

The last major meetings with policy shifts resulted in major sell offs and a new record low of 1.3500 could be in the offing. A BetOnMarkets One Touch trader with a target of 1.3500, a new record low is a reasonable bet idea, but the EUR/CHF can be a tricky beast to predict.

Gold Trading Near Record Highs

In other news, Gold is tradingat near record high levels at $1245. It’s worth noting that although the record highs stand at over $1250, the metal has only closed above $1240 twice.

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.