Weekly Trading Report 21 March 2011 - Last Week's Trading Highlights
The ongoing repercussions of the earthquake and tsunami in Japan heaped further pressure on the spread betting markets last week, as Japan battled to prevent radiation leaking from the Fukushima nuclear plant. The Nikkei 225 fell 6.2% as markets reopened on Monday, prompting the Bank of Japan to pump $183 billion into the banking system to support the economy.
The situation intensified on Tuesday as radiation fears increased, the Nikkei plunged a further 10.6%, while the BoJ injected another $98 billion into the system. Japan’s leading index had plunged to its largest two-day fall in 23 years.
On Thursday the Japanese yen reached ¥76.25 against the US dollar, its highest level since the end of World War II. The BoJ continued to pour in further funds to stabilise markets up until Friday’s joint agreement among G7 nations to intervene in the currency markets to help control the yen’s volatility.
The decision had an immediate effect, as the yen weakened sharply, providing a boost to the country’s exporters, and the Nikkei closed up 2.7% on Friday. Despite the scale of the disaster and ongoing disruption, Nomura analysts believe that the Japanese economy will return to growth in the third quarter.
Financial markets at home and in Europe also fell last week, with the FTSE sliding almost 4% through to Wednesday’s close before recovering on Thursday and Friday. European markets in particular were also hit by the latest downgrade of a eurozone member, after Moody’s lowered Portugal’s sovereign debt rating by two notches on Wednesday.
Domestic data similarly failed to provide much cheer, after official figures midweek showed that the UK’s unemployment level reached a 17-year high. The jobless total climbed to 2.53 million between November and January, taking the overall rate to 8%. Meanwhile oil prices eased back on Friday after the UN authorised a no-fly zone over Libya, and the country announced an immediate ceasefire.
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Weekly Trading Report 21 March 2011 - The Week Ahead
Indicators
In a week where geopolitical concerns are likely to dominate sentiment, investors will be scrutinising events in Japan, the Middle East and North Africa for clues as to market direction.
In the UK, Wednesday’s Budget is likely to be the focus of attention, while on the same day Bank of England minutes will provide insight into the MPC’s latest rate-setting meeting.
In a busy week, the latest inflation figures on Tuesday will also be closely watched. US fourth-quarter GDP brings the week to a close on Friday.
Company Results and Reports
Jewellers Tiffany & Co are expected to report on their exposure to Japan in their fourth-quarter update on Monday.
In the UK, oil explorers Cairn Energy release full-year results on Tuesday, followed by peer Premier Oil on Thursday. Those with an eye on retail will be looking to full-year figures on Thursday from Kingfisher and Next.
The above content does not constitute investment advice. Neither Online-Spread-Betting.com nor IG Index accepts any responsibility for any use that may be made of the above.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
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For previous weeks see below.
Note - Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.
'Financial Spread Betting 21 March 2011', Review by D. Jones, last update: 21-Mar-11
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