The European markets will start the week with a big decision to make today. Traders will have decide whether the recent run of strong performances is overdone or whether the strong end to the week was more than just a flash in the pan.

However with US markets taking their long weekend we may well find that thin volumes lead to a sever lack of direction for the major equity markets.

Friday’s non farm payroll number managed to keep the positive feeling flowing through equity markets. Many have started to believe that the weaker economic data that lead the Fed to extend their QE program is now done, and economic recovery can now resume.

This does however seem rather premature, so after today’s holiday economic data out of the US will be as closely watched as ever.

It’s not just in the US where data will be closely watched. With the BoE rate decision as well as industrial and manufacturing production numbers, the UK itself will be a hive of activity.

The rate decision on Thursday will undoubtedly take centre stage however anything away from expectations earlier than then will no doubt see interest in equity markets increase.

Notwithstanding the current hike in wheat prices there is evidence that inflationary pressures are receding while recent surveys covering construction, manufacturing and services activity in August have not painted a picture of an economy enjoying a robust recovery. Consequently, most economists think the interest rate will remain unchanged for the rest of the year.

Elsewhere in the spread betting markets, the recent flotation of loss-making grocery delivery firm Ocado has been described as one of the least successful in recent memory, but shares have perked up in the last week ahead of next Tuesday’s interim results.

Elsewhere in the grocery sector Wm. Morrison releases interim figures on Thursday, the first results to be released since Dalton Philips first sat down in the chief executive’s chair back in late March.

Ahead of the open we expect to see the FTSE open up 13 at 5,441, the DAX up 12 at 6,147, and the CAC up 9 at 3,681.

By James Hughes, Market Analyst, CMC Markets.

CFDs, FX and Spread Trading are leveraged products and 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 and seek independent advice if necessary.

Please remember CMC Markets provide an execution-only service. Any of the above comments above, our research and charting tools are indicative and provided for information purpose and must not be relied upon as investment advice.

As expected we have seen minimal trading activity this morning ahead of the all important US labour data.

We have seen the markets edge higher and clearly the resilience shown in the FTSE over the last week or so, where the market has rallied for 6 straight days, has restored some elements of confidence in investors after a poor months trading in August.

That said, all traders have their eyes on today’s nonfarm payroll data and there is a sense that with the FTSE spreads market near resistance levels where we have seen sellers come in before since May, we could head significantly lower should a bad figure come out. The worry is that with September historically a bad month for equities, if we get a really bad number it could lock in a bearish month ahead.

On the flip side to that argument is the fact that this week has so far proved to be a much more positive for economic data and with expectations already very low after recent comments from Ben Bernanke indicated that the US recovery was slowing quicker than expected, there is every chance that investors could view any in line numbers as a positive.

The market is expecting a loss of 100,000 nonfarm payrolls whilst there will also be a large focus on private payrolls which some consider being a better health check of the US labour market.

A strengthening labour market will be key to driving recovery efforts in the US and globally which is why today’s jobs data, particularly in light of fears of a double dip, is so important for traders. I would expect that the numbers could add a degree of volatility to trading as we approach the close.

The banks and miners are leading the charge higher for European Indices yet again today with Barclays the top bank performer.

Autonomy Corporation maintains its place near the top of the FTSE 100 leader board on continued bid speculation from Microsoft or Oracle. Its shares have now rallied 15% this week alone.

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.

Market Commentary by Joshua Raymond, Market Strategist, City Index.

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 news last night that China’s trade surplus hit 18 month highs in July would normally have been cause for cheer, however the markets chose to focus on the imports figure which slipped by a third coming in at around 22.7% instead of the expected 30% figure, and down from 34.1% in June.

This unexpected slowing in import growth put the skids under the mining and commodity sectors as profit-taking on the gains of the last few days started to kick in.

The desire to book some profits ahead of today’s FOMC meeting will also have weighed on sentiment as well but the figures out of China will have definitely given traders a further nudge in that direction.

The travel sector was also hit after TUI Travel warned profits this year will be at the low end of forecasts after UK bookings faltered. Bookings by Britons are down by 2% over the past 12 weeks with the Netherlands down by 3%. This later booking trend, blamed on good weather in UK and the impact of the emergency Budget, has adversely affected profitability. These worries also hit shares in InterContinental Hotels even though it said the hotel trade is recovering from the effects of the recession and posted a 22% rise in profits.

On the plus side defensive pharmaceutical shares are doing well with Glaxo, Shire and AstraZeneca all higher.

The US markets also opened lower on the back of lower European markets and they were given a helping hand on their way by poor non-farm productivity data for Q2 which showed a decline of 0.9% against an expectation of a gain of 0.1%

UK data out today has been a bit of a mixed bag with the UK trade deficit for June showing an improvement to £3.3bn with exports outstripping imports by 1.7%.

However, weaker housing data from the Royal Institute for Chartered Surveyors (RICS) and British Retail Consortium (BRC) retail sales data for July has prompted some profit-taking across the board as the pound pulls away from its 11 month highs and 82.54 double resistance level against a basket of currencies.

In the online spread betting markets, the US dollar looks set to post its second consecutive daily gain since mid July against a basket of currencies, heading into this evenings meeting as traders adjust their positions.

The recent falls in the US dollar and rises in equity markets have fuelled speculation that the Fed will increase quantitative easing at their meeting tonight, amid concerns that a failure to do so could send markets spinning lower. This fear seems overblown and to an extent some form of action appears to be priced in to the recent market moves.

A policy of “wait and see” by the Fed tonight could well see a continuation of this sharp correction in the US dollar from its recent lows, and prompt further declines in equity markets.

By James Hughes, Market Analyst, CMC Markets.

CFDs, FX and Spread Trading are leveraged products and 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 and seek independent advice if necessary.

Please remember CMC Markets provide an execution-only service. Any of the above comments above, our research and charting tools are indicative and provided for information purpose and must not be relied upon as investment advice.

Today, the European markets will have another chance to react to the weak non farm payroll figure from Friday. Although this week will also have its own fair share of high profile data to get the major indices moving.

The major talking point will be the FOMC meeting on Tuesday. However the big talking point will be the possible added QE by the Federal Reserve rather than a movement in the base rate.

It seems the heat wave in the US is taking its toll on the economic recovery as it starts to feel the heat and run out of steam.

Disappointing growth and stubbornly high unemployment is likely to leave officials with the important task of deciding whether to further pump the economy with a debt buying program.

Whether this happens is still very much up in the air, but the reaction by the major markets could well be an aggressive one.

Markets could see the move as a good sign of officials seeing the problem and acting before its too late. On the other hand, a further sign of a stuttering economy could well spook the markets in to a bigger fall for equity markets and hence a fall across the Index Spreads.

It’s not only the US that has some big economic announcements coming out this week.

In the UK this week, numbers on employment, trade balance and the overall inflation report are all released and all have the potential to give markets and aggressive move either way.

However Monday is looking like the quietest day of the week with only a handful of corporate and economic announcements.

It is likely to be the case that the major story will still be Friday’s non farm payroll data.

Ahead of the open we expect to see the FTSE 100 up 48 points at 5,380, the DAX up 54 points at 6,314, and the CAC up by 42 points at 3,758.

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).

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.

AstraZeneca and Reed Elsevier were the stand out performers in a stronger trading session on Thursday, helping the FTSE 100 to erase yesterday’s losses and rally 0.6%.

The FTSE 100 seems primed for another attack at the 5400 level, where it has found resistance previously. In truth however, as we head deeper into the summer months and traders vacate their desks for holidays, there is every chance the FTSE could be range trading until September.

Company earnings are coming in thick and fast and the general theme so far has been one of outperformance as opposed to disappointment, and this has invigorated appetite for risk.

Much of today’s advances are being dictated by gains in the Pharmaceuticals and mining sectors, whilst the banks have recovered from a late sell off in yesterday’s trading session.

AstraZeneca leads on buyback and FDA Brilinta approval

AstraZeneca shareholders cheered the company today after the pharmaceutical firm raised its EPS guidance for the year to $6.65, doubled its share buyback scheme and received approval from the FDA for its heart drug Brilinta. It’s been a day of good news and more good news for AstraZeneca share holders and as a result its shares, despite having rallied 3% this week already, are in high demand and lead the FTSE 100 winners list.

Reed Elsevier earnings beat expectations

Reed Elsevier shares traded strongly on Thursday after the company reported underlying revenue of £2.99bn, beating market expectations. The news prompted Numis to upgrade its price target on the stock to 550p, from 525p. The upgrade from Numis and the fact that Reed believe they have seen some encouraging sales signs which have helped it to return to revenues growth, has triggered strong demand in its shares, which have rallied 5% in the process.

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).

Last night saw the latest rally in US equity markets run out of steam and briefly show signs that there could be some downside to come.

The major indices had been range trading until recently hitting a run of strong sentiment that has seen some aggressive gains. The rally had been criticised by many for having no substance and last nights move will only fuel the fire that a pullback is on the cards.

The European session again looks a little light of any key data, especially on the economic calendar. So we could well be looking to earnings yet again tomorrow to give us some direction. As the session moves on US durable goods orders will likely be a focus as will the oil inventory data. With a tropical storm heading for the Gulf of Mexico the oil spreads are likely to see some volatility.

It’s another busy day for results on Wednesday with FTSE stalwarts BG Group, BAT, Compass, Invensys, Rexam, Rolls-Royce, Sage and Centrica all fighting for attention.

Centrica, which trades under the British Gas and Scottish Gas brands, is expected to have benefited from a chilly winter in the UK. The residential business will have done well from what Citigroup called “a benign pricing environment”.

The broker is predicting operating profits from British Gas of £583m at the interim stage, up from £299m last year, while the business division is tipped to double profits to £132m.

Catering giant Compass Group will release sales details for the third quarter of its financial year. Nomura predicts third quarter organic revenue growth of +4.3% year on year (you) versus -1.7% in the first quarter and +2.5% in the second quarter.

Tobacco firm BAT should report an increase in interim pre-tax profits, with Charles Stanley pencilling in a figure of £2,460m, up from £2,176m in the first half of 2009. The broker is hoping for a boost to the dividend from 27.9p last year to 33.1p at the interim stage this time.

Ahead of the open we expect to the FTSE to open up 3 points at 5,369, the DAX up 7 at 6,214, and the CAC up 1 at 3,667.

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 James Hughes, 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.

European markets are set to get their chance to react to Friday’s stress test results as the market opens this morning, and after strong gains on Wall Street on Friday it could be that we get set for a stronger open.

The stress test results offered up no real surprises on Friday as only 7 of the 91 banks failed the test. The inevitable feeling that the tests were too lenient will be the dominating force today as the unpicking of the results can begin. Despite the cynicism the stress tests results are likely to help European indices add to gains this morning and start the week off on a positive footing.

There is other news circulating around this morning, the most notable of which is the unsurprising news that BP CEO Tony Hayward is in the process of negotiating an exit package. Ever since Mr Hayward told the media he wanted his life back it seems that he had been a dead man walking, and the task now begins of not only cleaning up the affected area in the gulf but also the much more arduous task of cleaning up the company’s reputation.

More than one-fifth of the constituents of the FTSE 100 are set to make trading statements in the last week of July so there is heavy competition for attention, but there is little doubt that the second quarter update from oil giant BP is the one the market and the press are most eagerly anticipating.

The company has not spent much time out of the spotlight since the oil leak in the Gulf of Mexico occurred on 20 April, but the results announcement will give the company the opportunity to demonstrate that other parts of the business have not been neglected while senior management has been fire-fighting the Gulf of Mexico crisis.

Today sees another company recently in the news, Reckitt Benckiser, releasing its interim results. The company announced an agreed £2.5bn bid for foot care and condom firm SSL on Wednesday, raising fears that the company may be finding it harder to achieve organic growth.

The acquisition of SSL has long been rumoured and some investment analysts are asking why it is taking place now, though the answer may simply be that the decline in the value of sterling has made SSL very attractive to US companies such as Johnson & Johnson and Colgate-Palmolive.

Chip designer ARM will have been among the more enthusiastic of cheerleaders when Apple announced record results earlier this week. The company’s intellectual property is used in most of Apple’s hot products and this has not gone unnoticed by the market, which has chased the shares 10% higher this week.

Ahead of the open we expect to the FTSE to open up 30 points at 5,343, the DAX up 25 at 6,191, and the CAC up27 at 3,634.

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 James Hughes, 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.

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.