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

Trading Highlights:

• US markets closed flat last night, but stock market futures have dipped overnight
• The risk proxy forex pairs such as the EUR/JPY and AUD/JPY are also down this morning with the AUD/JPY the lead faller at 0.5%
• The Japanese yen has strengthened on renewed concerns over Spanish debt
• Spain has requested that the results of the stress tests on all European banks are made public. These are expected to show that Spanish banks are actually not as exposed as German and French to a blow out. Ironically this is bad news for the wider Eurozone
• Coming up today we have the Swiss Interest statement at 08.30, UK retail sales at 09.30. From the US we have CPI and unemployment claims at 13.30 with the Philly Fed manufacturing index at 3PM

Gold Trading

Gold has traditionally been seen as a safe haven in trouble times and a hedge for inflation, but recently, the metal has had a life of its own, with directional movements often independent of fears, inflation and even the US dollar.

Gold is trading $20 off its all time high of $1252. It has struggled to make significant progress beyond this barrier, but there is a rising support cushion beneath.

Gold could finally be set for a break out and the upside is the likely direction. However, the precious metal has been fickle at these levels so the prudent option may be to use a breakout trade which looks for a breakout in either direction.

A way to trade this might be a Financial Fixed Odds ‘Breakout’ Trade on Gold with the triggers set to $1,260 and $1,175 over the next 7 days. If either of these two levels are hit, the trade could return 117%.

Editors note: If these levels are not hit then you would lose 100% of your trade.

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 FTSE 100 traded flat-to-positive on Wednesday with investors turning cautious on increased uncertainty on Spain’s debt and as US Housing starts fell much more than expected in May, suggesting that the homebuyer tax credit may have only artificially topped up US construction in recent months.

We have seen investors look to consolidate some of their recent gains from the 5 consecutive winning days on the FTSE as murmurs of Spain’s debt problems convinced investors to recycle funds back into safe haven assets.

We have seen the Spanish IBEX index severely underperform the rest of Europe, falling over 1% on the day and this suggests that investors are becoming increasingly cautious that Spain’s debt problems could worsen.

You get the feeling that there are a lot of investors who are simply sitting on the sidelines. Are they simply watching the World Cup or are the concerned about how financial markets may play out over the rest of the month? My assumption is both.

We are in the summer months now where volumes tend to be low and allied with the World Cup, it is making market sentiment rather clouded.

We have had a few good gaining sessions over the last 5 days and so the lack of energy in today’s markets could simply be investors waiting to see whether these gains continue before adding to spread betting positions.

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Equity markets made fresh two week highs overnight, breaking above some key resistance levels, as risk appetite continued to return. The euro has continued its slowly pull away from its recent lows as demand for European government debt helped revive some risk appetite yesterday.

Spain’s 12 and 18 month bill auction raised €5.2bn, however the yield demanded for these Spanish bonds was still three times what it was in April, highlighting the heavy premium investors are demanding for Spanish paper. Chinese companies meanwhile signed a number of deals with Greek companies yesterday, as the Greece government appear to have successfully sought to attract some new investment into their beleaguered country.

The markets currently appear to be focussing on the positives for now, despite yesterday’s unexpected falls in German and Euro zone ZEW economic sentiment numbers. The German figures for June fell from 45.8 to 28.7 in June, while the Euro zone numbers tumbled by 50% from 37.6 to 18.8.

Commodity prices are rebounding strongly against the US dollar, pushing the Reuters CRB to its highest levels in a month.

Sterling has also slipped back slightly from its recent highs, against a basket of currencies after consumer prices came in slightly less than expected at 3.4%.

Today’s UK unemployment data is likely to show that claimant count unemployment fell by some 20k in May. This would be down from drops of 27k in April and 33k in March, while the ILO unemployment rate is expected to stay steady at 8%.

In the US today if yesterday’s import prices data is anything to go by then today’s Producer Price data is expected to be fairly benign, which could cause further slides in the US dollar, and make firmer US rates less likely this year. Month on month prices for May are expected to decline by 0.5% with a fall in the year on year figure to + 4.9%. Industrial production for May is expected to have increased by 0.9% for April.

EURUSD – the Euro has continued its slow squeeze higher as risk appetite returns pushing against this month’s high just short of 1.2360.

The 1.2135/45 level will remain a pivotal level in the near term but for now the risk remains of a squeeze higher which will delay the move towards the 2005 lows around 1.1650, which may now take a little longer.

The next resistance level if we break above 1.2360 lies at 1.2580, trend line resistance from the 14th April highs at 1.3690.

Nothing so far in this up move changes the overall longer term move towards the overall year end objective which remains at 1.1210 which is the 61.8% Fibonacci retracement of the up move from the 2000 lows at 0.8230 and the 2008 peaks at 1.6040.

GBPUSD – the pound has finally managed to poke it’s ahead above the 1.4780 peaks of the last two weeks to push on towards 1.4835. We need to hold above the 1.4770/80 area to push on towards 1.4880 and while the recent strength continues we could well see a move towards 1.5000 while support around 1.4510 holds.

There is also the trend line support from the 1.4230 lows of the 20th May at 1.4395, which should continue to support in the event we break below 1.4500. The key support level remains down at 1.4230/50.

EURGBP – no real change here despite this week’s brief break above 0.8340, the euro should find the air a little thin anywhere near these levels and should remain under pressure against the buoyant pound.

The twin lows at 0.8210, remain a key support but the all important 0.8170 area remains the primary objective.

This level is the 50% retracement of the up move from the 2007 lows at 0.6537 to the 2008 highs at 0.9801.

While the 0.8400 break-out level remains key resistance, then upside still looks likely to remain limited.

USDJPY – the yen continues to trade in its broad range between the highs between 92.10/20 and the support lows around 90.70/80.

The dollar should still find resistance around the 92.20 area, a break of which would then target the 92.80/90 June highs.

A break back below 90.70/80 trend line support has the potential to re-target the 89.30 area.

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

US stock markets including the Dow Jones closed up over 2% yesterday.

The start of the show was the tech heavy Nasdaq composite which has piled on nearly 7% in the last four days. At the other end of the scale, the FTSE 100 rose just 0.3% yesterday as BP continues to weigh on the commodity heavy UK index.

Currencies generally followed suit, with the ‘risk on’ currencies such as the euro and Aussie dollar gaining against the ‘risk off’ currencies of the US dollar and the Japanese yen.

Despite yesterday’s big rally, there are still reasons to be fearful in the current market. As Zero Hedge reported yesterday, the head of the IMF is flying to Spain to “discuss global economy developments…the last time the IMF sent a delegation to a country was on April 15th when the IMF together with representatives from the EU and ECB took a jaunt over to Athens.

“A month later the country was insolvent. We cannot wait for the official denial that this visit has nothing to do with the frozen Spanish liquidity market, and that there is nothing to worry about, only to end up with a full blown IMF rescue package of the Pyrenean country (just like Greece).”

Food for thought as stock markets break higher.

Trading Today

Today we’ve already had UK consumer confidence figures which came in well below estimates, a move which might have some bearing on the UK claimant count change numbers due at 09.30 GMT. A drop in unemployment claims is predicted by will the come to fruition?

Next up at 13.30 GMT we have US building permits and PPI at 13.30.

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.

US markets took a turn for the worse in their afternoon session on the news that Moody’s investment services had cut the credit rating of Greek debt to junk status.

The Dow Jones surrendered gains of over 1% to finish the day down 0.2%. The news had less of an impact on forex markets, with the non Yen and Dollar currencies holding on to the bulk of their gains.

In some ways, the news should be no surprise. Greek Credit Default Swaps have been trading at levels implying junk status for weeks. Although significant, Moody’s announcement only served to formalise what the market already knew.

In any case, it seems stock market investors needed little encouragement to offload their exposure after back to back gains on Thursday and Friday.

Coming up today:

At the time of writing, it’s not even 06.30 and already there have been some heavy news items hitting the news wires.

The Bank of Japan surprised no-one by electing to keep rates on hold at 0.1%, but they did announce that they would be offering a $33bn credit program to boost the ailing economy. The Yen is slightly lower against a basket of currencies following the announcement.

Coming up to today, we have some big announcements for the UK economy with a potential knock on effect on the GBP/USD and GBP/JPY. At 09.30 we have UK inflation data with CPI expected to come in at 3.5% year on year. At 10.00 we get the inflation report hearings.

MPC member Sentance ruffled some feathers with recent comments which highlighted his concerns about high levels of inflation in the UK economy.

Sentance is effectively arguing that inflation is masking the loss of productivity in the UK economy. Some argue that the productivity was never there in the first place.

In either case, higher than expected inflation could put more pressure on the Bank of England to raise rates which could feed into higher GBP/USD prices. At least it normally would do, but here a rate rise could be perceived has hurting the UK economy in the short term.

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 forex markets are continuing the positive moves from the end of last week.

The Yen and US Dollar are weaker across the board as investors shun these perceived sage havens in favour of the Australian Dollar.

The AUD/JPY pair is the top gainer this morning as risk takers chance the carry trade on speculation the Australian economy will continue to benefit from the commodity demand in China.

The Euro is also continuing to build momentum with the recent down trend broken.

The Pound is trading higher, but is one of the weaker majors relatively due to the uncertainty surrounding the emergency budget on June 22nd.

Coming up today:

There are no top tier news announcements expected today.

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 markets threw caution out of the window with big moves for the Dow Jones and currency pairs such as the AUD/USD and GBP/JPY.

The Dow recorded its third best day of the year so far, gaining 2.76% on the day. However it’s worth noting that all three of those best days have come during the ‘correction’ since April.

In early trading, currency markets are relatively quiet with Yen weakness the key trend so far this morning.

Coming up today:

Today’s top economic announcements include UK manufacturing production and PPI input at 09.30. Both announcements are expected to put out numbers lower than last month.

With the new government claiming that the economy is worse than expected, the question is just how much lower these two data points will be. The GBP/USD and GBP/JPY will be the pairs to watch.

US retail sales at 13.30 are also expected to come in lower than last month, but US consumer sentiment at 14.55 are expected to show some improvement.

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, markets made a failed attempt at rallying out of the morning’s weakness, with the DOW Jones slumping over 130 points in the last two hours of trading.

However, this morning it looks as though the bulls have licked their wounds and are building up for a positive session. Stock market futures are indicating a positive open with a number of positive news releases already in the bag.

New Zealand increased interest rates by 0.25% and perhaps more importantly, set a bullish tone in their accompanying statement. Across the water, Australian employment change and unemployment rates came in better than initial estimates while Japanese GDP also surprised to the upside.

The Antipodeans are leading the pack this morning with the Australian Dollar/US Dollar spreads up around 1.1% and the New Zealand Dollar/US Dollar spreads up by 0.76%.

The pound and euro are also stronger this morning, but are trading in a relatively muted fashion ahead of today’s big news items.

The Markets Today

At 12.00 today we have the latest rate statement from the Bank of England along with news of their asset purchase activities. Nothing is expected to change this month, but as with most meetings since the credit crunch, the tone, inflection and individual choice of words in the accompanying press statement can be enough to move the GBP/ USD.

The bank is stuck between a rock and a hard place at the moment with new Prime Minister David Cameron stating that inflation needs to be controlled, but at the same time, the UK economy is in a precarious state, especially if the expected deep fiscal cuts go ahead.

Then at 12.45 we have the official rate statement from the European Central Bank with the press conference due at 13.30. As with UK rates, no change is largely expected but with problems in Europe still on the boil, the press conference itself could spring some surprise reactions.

On top of this we have US & Canadian trade balance along with US unemployment claims at 13.30 PM.

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.

At 22.00 this evening, New Zealand is set to follow Australia and Canada’s lead in raising interest rates. New Zealand’s rates slumped from a high of 8.25% in 2008 to 2.5% in April 2009, with a hike back up to 2.75% expected today.

Along with the Australian dollar, the New Zealand Dollar/US Dollar and New Zealand Dollar/Yen were the vehicle of choice for people wishing to exploit the carry trade which involves borrowing in one low interest currency (usually the yen), investing in a high yield currency and pocketing the resulting interest rate difference.

Free money! Of course that is until the two currencies diverge and interest rates change. Although it is a rather dangerous play. With a small army of leveraged carry traders, highly exposed to unexpected moves, the NZD/USD and NZD/JPY can be prone to over sized moves.

While most people expect the Royal Bank of New Zealand to raise rates today, it is not guaranteed to do so. Even if, as expected, rates are put up by 0.25%, this alone will not be enough to push the NZD/USD higher.

Traders will be looking for hints that today’s decision won’t be a one hike wonder. Any interpretation that it will be ‘one and done’ could see the NZD/USD take a hit.

Although like Australia and Canada, the New Zealand economy is largely isolated from the problems in Europe, if this morning’s general risk aversion were to spread, the Kiwi will not be immune from a sell off. In fact, so far in June, the NZD/USD has lost the same amount as the EUR/USD at minus 2.9%.

Fixed Odds Trading Idea

A way to play the New Zealand rate announcement could be to place a Fixed Odds ‘One Touch’ Trade with the trigger set below the recent low at around 0.6550. Over 1 day (expiry of June 10th), this could return 103%.

Editors note: If you lose this trade, you lose 100% of your stake.

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.

US stock markets including the Dow Jones managed a healthy bounce yesterday, but will it be enough to spark a meaningful rebound?

There’s certainly enough fears to drag markets lower again with banks such as Canada’s BOM issuing a stark note to clients advising them boldly to sell their stock market investments and go to cash.

RBS also issued a note advising their clients to steady themselves for a major sell off.

So far this morning, stock market futures are indicating a lower open. The Australian Dollar – Yen spread has been strongly correlated with the performance of the stock market since March and is in itself and excellent barometer of risk appetite.

So its now surprise that the AUD/JPY and AUD/USD are struggling this morning.

FX Trading Today

Coming up today we have a double dose of Ben Bernanke. The US federal reserve chairman starts by testifying before congress at 15.00 GMT and speech the Federal reserve bank in Richmond at 21.00 GMT.

These Speeches offer up opportunities for questions and answers on the economy and future policy. Sometimes a positive or negative line can be enough to tip the market’s hand.

UK trade balance comes at 09.30 and the US beige book at 19.00 GMT.

Late this evening we have the New Zealand rate decision.

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.