Today’s online spread betting summary:

• Five out of this morning’s six economic data points have come in lower than expected and its not even nine o clock.
• The main news is Japanese CPI (inflation) coming in at -1.3%, marginally worse than expected and preliminary industrial production coming in well below estimates at -1.5%.
• UK consumer confidence came in slightly lower than expected, Australian consumer credit disappointed and German retail sales kept up the morning’s negative trend.
• Also coming up today we have Canadian GDP and US GDP at 13.30 GMT. Canada is expected to show a slight rise with the US showing a slight dip.
• The Japanese data has negative implications for the global economy, discouraging risk taking, but as the ‘safe haven’ currency du jour, the news has actually strengthened the yen this morning.
• The USD/JPY has hit its lowest level since November 2009, down 0.75% so far today.
• The AUD/JPY and EUR/JPY are down 1%, with the GBP/JPY down 0.7%.
• The dollar is generally stronger against non yen currencies, with the EUR/USD down 0.25% and the AUD/USD down 0.3%.
• The main exception is the Swiss franc which is quickly regaining its status of safe haven currency #2. The USD/CHF is down, 0.35% (meaning the Swiss franc is stronger). The USD/CHF looks to have broken prior support around 1.0400.
• Gold is steady around $1169.
• The FTSE is trading down around 0.3% with US futures indicating the Dow Jones will open down by a similar amount.

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

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.

Traders will be heading into the weekend rather pleased with their lot. Financial markets such as the FTSE and Dow Jones have rebounded strongly after last Friday’s sell off after a slew of reassuring economic data and us company earnings reports.

Today should prove to be a stern test though – It is Friday after all.

What’s so special about Fridays?

On the face of it, nothing, it’s just another trading day right? Except that since the sovereign crisis kicked off in April, Friday has been unkind for anyone investing in US stock markets such as the benchmark S&P 500 (a wider and arguably more significant index than the Dow Jones).

Since April, Friday’s on the US S&P 500 have produced a loss of -10.81%, more than double the total market loss of 5% during that time.

It’s not just since April that Friday’s have been tricky either. Throughout 2010, Friday’s have produced an average loss of 0.5%. Although profitable over half the time, the average gain is small compared to the major sell offs like that seen on the 16th.

Is this just a quirk in the data?

Perhaps, or perhaps it’s simply the fact that weekends have brought news bombs from the likes of Greece which traders don’t want the exposure to.

A close today greater than 1.5% could be significant and a sign that traders are really ready to embrace risk again.

On the other hand, you could bet on traders following form and predict that the S&P 500 will fall after markets open around 14.30 GMT.

Forex Trading Today

There’s not much movement so far this morning but there are hints of strength in the pound and euro. However so far moves are nothing to write home about.

The main thing to be aware of today is the release of the hotly anticipated European bank stress test results. Some are expecting a whitewash, but the situation is hard to read.

Too many banks passing could be seen as a sign that the tests weren’t realistic. Too many banks failing and shock waves could be sent through the system. Personally I think the former is more likely, but the reaction to that scenario is almost impossible to predict.

Right now, no-one knows the exact time that the stress test results will be released. If it’s late Friday evening, it could certainly add weight to the Friday sell off trade idea.

Der Spiegel has a good piece previewing the tests which is well worth a read.

In addition, we have German IFO business climate at 09.00 GMT, Preliminary UK GDP at 09.30 and Canadian inflation at 12.00.

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

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.

Last night US markets were heading for a third consecutive (albeit slender) up day in a row. This was until Fed chairman Ben Bernanke spoke in front of the senate committee, issuing some very cautious projections on the US economy.

Most of what he said was already presented in the recent FOMC statement, nevertheless the markets sold off all the same. Bernanke says he sees “Subdued inflation and only a gradual employment recovery the next couple of years.”

The Dow Jones finished the day over 1% lower, with the wider S&P 500 finishing over 1.28% lower after Starbucks disappointed with its latest earnings.

Forex Trading

This morning, the yen is in demand as investors shun risk and seek relative safe harbours. The Dollar/Yen is down 0.53%, the Pound/Yen down 0.45% and the Australian Dollar/Yen down 0.70%.

Away from the yen, the US dollar is mixed with small gains against the Australian dollar and Canadian dollar, but losses against the euro and Swiss Franc.

Coming up today we have a slew of French, German and Europe wide manufacturing/ services data from 08.00 to 09.00 GMT. Following this we have UK retail sales at 09.30 with a slight drop on last month’s figure expected.

Canadian retail sales follow at 13.30 with US unemployment claims released at the same time. Fed Chairman Bernanke continues his testimony at 14.30, though I suspect the market reaction has already happened with yesterday’s testimony.

Of most interest is US existing home sales at 15.00. Last month sales severely disappointed so all eyes will be on this announcement.

Finally we have the Canadian Monitory Policy Report at 15.30 GMT, followed by the press conference at 16.15.

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

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.

On a week when the results of the European bank stress tests are due, and on the back of the single currency’s best week in over a year, the last thing the politicians needed was something to puncture that mood, however Hungary provided it after the IMF and the European Union withdrew a €20bn financing deal over the weekend in response to concerns over the Hungarian governments budget plans.

If a warning were needed of the problems facing Europe this is a stark reminder and will do nothing to assuage investor concerns about the problems Europe has with respect to sovereign debt.

The recent shift in focus towards the problems in the US doesn’t change the fact that the recent optimism with respect to the results of Friday’s stress tests could well be misplaced, given concerns about the stringency of the criteria being adopted to assess the banks financial health.

Anyone who thinks that the euro’s problems are now over only needs to look at Hungary and the recent rally actually does nothing to resolve these problems in the peripheral countries, as it makes them all less competitive from an export point of view.

In the UK recent housing data released by Rightmove has shown that house prices appear to have peaked, as month on month house prices declined by 0.6% in July.

With no UK data of note until tomorrow when the latest public finance figures are released, the pound will in all likelihood remain somewhat sidelined until Friday where the first release of Q2 GDP should indicate that the economy grew by as much as 0.6%, while we will have to wait until tomorrow for the first data release of the week in the US where the latest housing data is expected to make grim reading.

Today’s events are likely to be dominated by the situation in Hungary with the focus very much on the single currency, and whether it can continue its recent good run.

EUR/USD – having touched 1.3000 at the end of last week the next price objective in the medium term lies at 1.3125 which is the 38.2% retracement of the down move from the highs at 1.5145 to the 1.1880 lows.

The single currency should find support around 1.2880, while a break below here would target a deeper correction back towards the 1.2750/60 area.

GBP/USD – the correction lower on Friday was not good news for the firmer sterling scenario, failing just short of the April highs above 1.5500 at 1.5475. It is however not completely ruled out as long as we stay above the 1.5230/40 level which acted as quite strong resistance on a number of occasions in the last 2 weeks.

A daily close above 1.5345 would signal a test toward 1.5610 which is the 61.8% retracement of the down move from the 2010 peaks at 1.6460 to the lows at 1.4230.

EUR/GBP – the unexpected break above the 0.8400 level throws into doubt our lower euro scenario and now targets the 0.8520 level.

The 0.8400/10 area should now act as significant support for this move higher. Any move below the 0.8400/10 re-targets the 0.8320/30 level.

USD/JPY – the yen continues to benefit from a double whammy of sliding dollar yields as well as diminished risk appetite after it broke below its June lows at 86.95 on Friday. This break below these lows now opens up the risk of a move to last year’s yen lows at 84.80, a break of which would open up levels last seen in 1995.

Any rallies would need to overcome the pivotal 88.00/10 area to stabilise and re-target 89.20, a break of which would re-target the 90.00 area.

Spread betting, FX and CFDs are leveraged products. They carry a high level of risk to your capital. It is possible to lose more than your initial investment. These products may not be suitable for all investors, therefore ensure you understand the risks involved. Seek independent advice if necessary. Note that CMC Markets provide an execution-only service. CMC Markets research and charting tools are indicative and provided for information purposes and must not be relied upon as investment advice.

Article by Michael Hewson, Analyst, CMC Markets.

The above content does not constitute investment advice. Neither CMC Markets nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the above.

CMC Markets is authorised and regulated in the UK by the Financial Services Authority, registration no. 173730.

The markets are finally succumbing to a meaningful pull back after the Dow Jones made six consecutive higher closes followed by yesterday’s indecision.

Now it gets interesting. Was the rally just a function of low summer liquidity, or was there real meat behind the move? A good test will be the severity of the selling today and especially tomorrow (Friday).

Today the Dow Jones is down 1%, with the FTSE finishing down 0.8%.

This morning started with bad economic data from China and has got worse as the day progresses. US PPI came in below estimates at -0.5%. The most worrying data point was the Empire State manufacturing index coming in at 5.1 vs the 18.3 expected. That’s the 2nd lowest level since July 2009.

There have also been some wobbles in the banking sector after JP Morgan Chase produced earnings that smashed estimates. However it didn’t take long for markets to spot that most of the upside came from a reduction in loan loss previsions. Either a sign that JP Morgan are taking on excessive risk or that credit conditions are improving.

Judging by the markets reaction, it seems to be the former.

On the bright side, US unemployment claims came in slightly lower than expected.

Forex Trading Moves

The soft US economic data and general return of the fear trade has put the Japanese yen in the driving seat. The USD/JPY is down 1.10%, approaching support at ¥87.00.

Forex markets are a little disjointed at the moment though, at least in comparison to the recent dominant trends and relationships.

For example, the yen is strong against the US dollar, and very strong against the Aussie dollar which is suffering because of weak Chinese data (AUD/JPY is down nearly 1.6%).

However, the yen is virtually unchanged against the euro, which is surging after new Eurozone entrant, Slovakia approved the European Financial Stability Facility.

The EUR/JPY is unchanged while the EUR/USD is up 1.10%. The closely linked Swiss Franc is also bidding higher, with the USD/CHF coming close to support around 1.0400.

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

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.

Summary of the key overnight headlines:

• Last night’s release of the minutes from the last FOMC meeting showed that the Fed was concerned with the way the US economy is going. The standout quote was “The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside”. The Fed also noted that they expected higher unemployment and slower growth for some time.
• Hardly grounds for the continuation of the rally! While US markets certainly gave up earlier gains they still managed to close slightly higher (the Dow Jones) or only slightly lower (the S+P 500 Spreads).
• It does make you wonder if there really is nothing fundamental about this rally.
• Overnight, Chinese GDP and inflation (CPI) both came in below estimates.
• This is bad news for the Australian and New Zealand dollar which are heavily dependent on China for exports. The AUD/JPY is down 0.8% and the NZD/USD is off by 0.44%.
• The Bank of Japan added to the kept rates on hold and predicted stagnant growth for 2011.
• The Yen is in command this morning as fear creeps through markets. The USD/JPY is down 0.38%.
• Still to come we have US PPI and unemployment claims at 13.30 GMT.

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

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.

• FTSE 100 makes it 6 winning days from six, closing up 2% yesterday on the back of positive BP news.
• US markets including the Dow Jones are also six from six as of last night’s close.
• After the closing bell, Intel’s latest earnings came in above estimates, pushing Nasdaq futures 1% higher. The rally may not be over yet.
• US dollar showing strength against the yen this morning with the EUR/USD and AUD/USD also down mildly.
• The pound is on the rise after yesterday’s inflation figures. The GBP/USD is up 0.25% while the GBP/JPY is 0.6% higher.
• Coming up today we have UK jobless claims at 09.30 and US retail sales at 13.30 as the day’s standout announcements.

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

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.

Last night the Dow Jones managed to close higher for 5th day in a row, the rally has legs it seems.

However there is still some way to go before we can safely say we’re out of the woods. The Dow Jones spreads recoveries have got shallower. The last rally lasted 200 points more before faltering.

Today presents a stern test for both the stock markets and currency markets with a big slug of heavy economic data due along with the start of earnings season.

We’ve already had UK RICS house price balance disappoint – it came in much lower than expected. More bad news for the faltering UK house price recovery. Next up is UK CPI & Core CPI due at 09.30, with both inflation measures expected to drop by 0.2% on last month’s numbers.

Also keep your eye out for any reaction to MPC member Sentance’s speech at 13.30 PM. Andrew Sentance is the lone voice urging rate hikes to stem UK inflation before it gets out of control. If the above Consumer Price Inflation numbers comes in significantly above estimates, his words could have even greater impact.

From Europe we have the hotly followed German ZEW economic sentiment at 10.00. The German economy has been recovering well so a strong number is hoped for.

Then at 13.30 we have US and Canadian Trade balance numbers. Can Canada trump the US again as it did with last week’s jobs numbers?

After the closing bell we have the latest earnings numbers from chip giant Intel.

Forex Trading

It’s pretty quiet out there so far this morning. The exception is the Aussie dollar which is selling off at reasonable pace against both the yen and the US dollar.

The Australian Dollar/Yen spread has been rangebound for the last few day with &yen78.00 acting as resistance. $0.8800 has been acting as resistance on the Australian Dollar/US Dollar spread.

The GBP/USD recently broken below its upwards trend channel after last week’s sting of disappointing economic data points.

The EUR/CHF has been rangebound for the last week or so after the Swiss Bank re-started its direction interventions in the market. The range can’t last forever though.

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

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 pound will be in the spotlight today and this week with a number of economic announcements starting with the release of the delayed UK final Q1 GDP data, and current account figures.

After Friday’s poor PPI and trade data any disappointment here could well heap further pressure on the pound and exacerbate the losses seen on Friday.

The final revision of GDP is expected to come in unchanged from the previous reading around 0.3% despite speculation about the reasons for the delay from June 29th, and possible problems with the quality of the data.

Political instability in Japan has hurt the yen over the weekend after weekend elections made it less likely that the new Prime Minister will be able to take steps to reduce the size of the Japanese public deficit, and also put his own position under some threat after his party lose their majority in the upper house.

In Europe the focus remains on the impending bank stress tests with all manner of speculation as to the size of “haircuts” that will be levied against various sovereign state assets.

Despite the recent recovery in the Euro concern remains about the viability of certain European countries to raise money independently in the bond markets after Greece scrapped a one year bill auction due to high borrowing costs, but intends to go ahead in an attempt to sell 6 month bills this week.

This rally in the euro is more a symptom of US dollar weakness than any change in perception about the single currencies fortunes, as concerns remain about the recovery in the US, after two weeks of economic data that have given rise to fears of an extended period of low rates in an attempt to stave off the risk of a double-dip recession.

EUR/USD – the single currency continues to find support and make new highs but has as yet been unable to break above the key down trend line from the $1.5142 highs in December, which now comes in at the $1.2720 level. A break of 1.2750 would target a move towards $1.3000. However with momentum starting to look a little stretched we could well see a move back towards support around 41.2550, a break of which would re-target last weeks lows around $1.2480.

GBP/USD – Friday’s poor PPI data has undermined the pound in the short term and the failure to break above resistance around the $1.5230/50 area, has seen the pound slip below its support at $1.5080. This area should now act as resistance in the short term.

This break has seen the pound head towards the next support around $1.4980, a break of which could target a test towards the 41.4850/80 area.

EUR/GBP – the single currency continues to grind relentlessly higher but has as yet failed to get above the old June 2009 lows around £0.8400. This was the long term support, the break of which targeted the move below £0.8170 last month and this level needs to hold to re-target the recent lows. A break and close above here could well target a sharp move higher towards £0.8460. The euro should find support around the £0.8320/30 area.

USD/JPY – twin lows around ¥87.00 have so far supported the dollar and the fact that it has managed to remain above ¥88.00 combined with some political instability won’t help the yens cause. The risk remains for yen weakness and a test towards ¥89.20, s break of which would re-target the ¥90.00 area. A drop back below the ¥88.00 level would re-target the downside risk of a move back towards ¥86.80.

Spread betting, FX and CFDs are leveraged products. They carry a high level of risk to your capital. It is possible to lose more than your initial investment. These products may not be suitable for all investors, therefore ensure you understand the risks involved. Seek independent advice if necessary. Note that CMC Markets provide an execution-only service. CMC Markets research and charting tools are indicative and provided for information purposes and must not be relied upon as investment advice.

Article by Michael Hewson, Analyst, CMC Markets.

The above content does not constitute investment advice. Neither CMC Markets nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the above.

CMC Markets is authorised and regulated in the UK by the Financial Services Authority, registration no. 173730.

Yesterday we noted how the Nasdaq 100 had gone southwards for a record 11 days. This couldn’t last forever and a bounce of some sort was due eventually.

However the size of yesterday’s rally took many by surprise. The Benchmark S+P 500 Spreads rose by 3.13%. Surprisingly that’s only its third largest gain this year. There wasn’t really a single news item responsible for buying, it appears to have been primarily a relief rally setting in from deep over sold levels.

What Can We Expect Today?

Since 1994 there have been 72 days with a gain of more than 3% on the S+P 500 (Using the ETF SPY for data). The next day is positive 50% of the time, but the average gain is a paltry -0.16%. This isn’t to say that Stock Market Indices won’t rally again today, just that historically after big 3% days, the next day is unlikely to follow through with as much force.

Forex Trading

This morning the yen is on the back foot as the risk takers gain control. The USD/JPY is putting further distance from support at ¥87.00 and the GBP/JPY is heading towards the upper part of the range mentioned yesterday.

King of the hill today is the Aussie dollar, with the AUD/JPY climbing 1.6% and the AUD/USD up 1%. The AUD is rallying after Australian employment data came in much higher than expected. The unemployment rate was also slightly lower than expected.

Trading Today

We have a busy economic calendar today, with the main items being the UK House Price Index at 09.00 and UK manufacturing production at 09.30.

Then from midday we enter central bank prime time with rate decisions and statements due from the UK’s MPC and Europe’s ECB from midday.

We don’t expect anything actionable or market moving from these announcements, but in the context of the current excitable environment, you never know.

Following this we have US unemployment at 13.30.

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

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.