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FX Day Trading - 02 February 2012
Surprise strength in UK manufacturing
Greek debt resolution rumour lifts the euro
EUR/CHF nears SNB floor
The Institute for Meteorology at the Free University in Berlin runs an "Adopt-a-Vortex" scheme whereby people can name a low - or high-pressure system for €299.
BMW's marketers thought it would be a neat way to advertise the Mini, so they stumped up €598 for "Cooper" and "Minnie".
Unfortunately for BMW's PR people the cold snap currently covering Eastern Europe, which has crippled utilities and killed dozens of people, was brought to you by Cooper.
BMW would have done better to sponsor the Greek debt restructuring talks, which have proved more persistent than any high-pressure weather system ever could.
There was a frisson yesterday when a Greek finance ministry official confirmed earlier rumours that a deal was "hours away" but by teatime that timescale had been downgraded to "this week" and later to "next week". So it is still days away then.
The false alarm from Greece roughly coincided with the release of manufacturing sector purchasing managers' indices from around Europe.
Switzerland's 47.3 reading was the first, the lowest and the only one to have weakened from the previous month.
In forex spread betting the strength of the franc has been blamed for the slowdown in manufacturing, which has covered four consecutive months.
Elsewhere in Europe the manufacturing PMIs were all higher, or at least steady on the month.
Germany was in the growth zone at 51.0. Italy, France and pan-Euroland, of which Euroland was the top scorer at 48.8, failed to make the cut.
The surprise star performer was Britain, with 52.1. Perversely, sterling fell against the euro after the announcement.
Half an hour later it was down by half a cent and the pound has still not recovered to Wednesday's opening level.
But it was a euro play, not a sterling play that affected GBP/EUR.
Compared with Wednesday's opening levels the pound is up by one yen and one US cent. It is fractionally higher against the Canadian dollar and a cent down against the antipodeans, which took heart from the rumour of a Greek debt deal.
The only other figures yesterday were a stronger 54.1 US manufacturing PMI and ADP's employment change number. ADP reported a 170k increase for US private sector jobs in January. Tomorrow's rise in non-farm payrolls is expected to be smaller than that at 150k.
Today's figures kicked off with more gloom from the Australian property market.
Following yesterday's news of a -4.8% house price fall in 2011, building permits were down by 24.5% over the same 12 months.
Switzerland's trade surplus shrank by nearly a third in December but at the same time scored a record SFr23.8bn surplus for the calendar year.
Also on the European list are Britain's construction sector PMI and Eurozone producer prices.
The United States reports on non-farm productivity, unit labour costs and weekly jobless claims. The Australian services sector PMI comes out tonight.
Apart from non-farm payrolls rumours and the obvious Greek debt negotiations the one to watch today is the euro/Swiss exchange rate, which came within a third of a cent of the Swiss National Bank's 1.20 floor yesterday.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 01 February 2012
Euro wobbles on Greek and Portuguese worries
Sterling wins by a neck
Manufacturing PMIs today
The coalition government has shattered the dreams and ambitions of millions of students by downgrading their hard-won qualifications.
Until now, school-leavers with a BTEC in fish husbandry and a City & Guilds in horse care would have been the proud possessors of the equivalent of six GCSEs.
So armed, they could have guaranteed a place at Billericay to read media studies. But no longer. Michael Gove confirmed yesterday what employers already suspected; a C&G in nail technology is not the same as GCSEs in maths and physics.
Nor is a Greek ten-year bond the same as a Greek ten-year bond. It depends who owns them. If they are held by the European Central Bank they are worth 100% of face value.
The ones held by commercial banks are worth less than 50% of that, the exact percentage yet to be decided. Those in the hands of the pejoratively-named "vulture funds" are worth nothing, or at least they will be if the funds get their way.
It would suit them to force a default, in which case they could claim on their credit default swap insurance and for full reimbursement. The situation is more complicated than that, of course, but it is why the restructure of Greek government debt is taking so long to negotiate.
The plan for private-sector bondholders to share the cost of Greece's bailout was first put forward at the EU summit meeting last July yet, after more than six months, there is still no agreement.
Spread betting investors' casual acceptance of Monday's reassurance that an agreement was "days away" had, by lunchtime yesterday, given way to "Yeah? How many?".
There is also nervousness about Portugal's decision to auction €1.5bn of 15- and 24-week treasury bills today. Because they are of short maturity they will probably get them away; a fortnight ago Portugal was able to sell similar stock at yields of less than 5%.
But the market has little appetite for longer maturities and financial spread betting investors are demanding 18.7% to lend to Portugal for two years; four and a half percentage points more than they wanted a month ago.
It was those concerns, together with a record 10.4% high for Euroland unemployment that sent the euro lower on Tuesday.
EUR/JPY, GBP/EUR and EUR/USD were all down by one yen, one cent and one US cent respectively. Sterling did reasonably well, scoring small gains almost across the board.
The only notable currency against which the pound lost ground was the rand, after a forecast South African trade deficit of R1.6bn was blown away by a R4.7bn surplus.
It's PMI day today, with manufacturing purchasing managers' indices from around the world.
Those released overnight were from Australia, more than a point higher at 51.6, and China; 50.5 according to the China Federation of Logistics & Purchasing and 48.8 in the estimation of HSBC.
Switzerland, Germany and America are expected to deliver figures in the expansion zone above 50 while Euroland and Britain are forecast to fall short of the boom/bust divide.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 31 January 2012
Another great result from the EU summit
CZ joins GB on the sidelines
SNB intervention a possibility
A 25-year-old woman in Crawley was not allowed to buy teaspoons in Sainsbury's supermarket unless she could prove she was over 18.
The computer said "no" apparently because she might have intended to use the spoons to cook up heroin, a drug Sainsbury's felt should only be used by over-18s. Sainsbury's later apologised, admitting there is no legal age limit on heroin use.
A teaspoon shortage in Brussels left EU leaders unable to fortify themselves for the first summit meeting of the new season yesterday evening. They just had to grit their teeth and feign the euphoria. They did a decent job of it though.
A deal on the restructuring of Greek debt was said to be "days away" and everybody signed up for Chancellor Merkel's fiscal compact. Well, everybody except Britain and the Czech Republic.
There was a bit of a question mark over France too: President Sarkozy will not ratify the treaty until after the election in May because François Hollande would want to renegotiate it, were he to win.
The euro has strengthened slightly in the aftermath of the summit announcement but is still lower against the US dollar, the yen the pound and the franc than the levels at which it ended last week.
Sterling is higher against the US dollar, roughly unchanged against the yen and slightly softer against the commodity dollars. The euro/franc exchange rate continued to drift down towards the 1.20 level that the Swiss National Bank has sworn it will defend to the last cuckoo clock.
The price came within half a cent of the defensive line on Monday afternoon before backing off slightly. SNB action could happen sooner rather than later.
On the ecostat front all but two of the Euroland confidence measures improved in January. Industrial confidence was steady at -7.2 and consumer confidence deteriorated incrementally from -20.6 to -20.7.
In the United States, personal incomes rose by 0.5% in December while personal spending was up by just 0.1%.
Overnight Japan announced an increase in unemployment from 4.5% to 4.6% and a 4.0% monthly increase in industrial production. There is more catching up to do for Japanese industry though; production in 2011 was -4.1% down on the previous year.
Gfk's index of UK consumer confidence improved by four points this month but that still left it at a pessimistic -29.
A plentiful data harvest awaits financial spread betting investors today. UK figures cover consumer credit and mortgage approvals. From Europe come the national and pan-Eurozone unemployment numbers.
Canada announces November's gross domestic product and December's raw material and industrial product price indices.
The States' contributions are consumer confidence, the Chicago purchasing managers' index and the Case-Shiller house price index.
Tonight the monthly round of purchasing managers' indices begins with Australia's manufacturing PMI and two versions of China's equivalent measure.
Meanwhile back in Euroland, spread betting investors seems to have given up on Greece. Whether or not the restructuring deal is "days away", the odour of default is in the air.
The only question is how much of their investment bond-holders will lose. Attention is now swinging from Athens to Lisbon. This has got "contagion" written all over it.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 30 January 2012
EU politics eclipse economic news
US economy grew by 0.7% in Q4
EU summit today
"Welcome, Steve. Congratulations on joining us as a waiter at La Grosse Légume. As discussed, you will be on £25,000 a year. I know you were getting more from Gordon but here you'll also receive guaranteed tips of £35,000. Well, you will unless the media whip up a campaign against you. In that case you might decide it is in your better long-term interest to forego the tips, rather than having people spit at you in the street for the rest of your life."
It has never been easier to score political points by attacking banks and bankers. French President Nicolas Sarkozy is the latest to take a pot shot at they who must be pilloried.
At the weekend he announced a tax on French share transactions. It was a cheap shot in more ways than one. At 0.1% the president says his tax will bring in €1bn a year. That is hard to fathom when stamp duty in Britain at five times that rate, and on vastly higher turnover, only raises €4bn a year.
Further, the new French tax will not begin until August, by which time M. Sarkozy will quite probably no longer be in office.
Financial spread betting investors appear not to be overly impressed by the president's brilliant new wheeze. In the Far East this morning, the euro has fallen by half a cent against the US dollar, quarter of a cent against the pound and nearly one yen.
It has done so, moreover, despite the EU summit meeting that will take place in Brussels today. Almost invariably during the last couple of years the euro has strengthened in the days surrounding a summit, the market's assumption being that this meeting might be the one that produces a solution to the sovereign debt crisis.
That optimism is not evident today. There is a growing resignation among investors that Greece is not going to make it.
Germany did not improve matters with its suggestion that the EU – for which read Berlin – should have the power to override Greek budget policy.
There are no prizes for guessing how that idea went down in Athens and FX spread betting investors are bound to be asking themselves this morning whether the German chancellor is deliberately trying to push Greece over the edge, thereby getting rid of the problem.
Nevertheless, the euro is still in the uptrend that has taken it five cents higher against the US dollar in the last fortnight.
Likewise the pound is still heading higher against the dollar, despite the disparity between the economic performance of Britain and the States.
Figures on Friday - just about the only figures on Friday - showed the US economy growing by a provisional 0.7% (annualised 2.8%) in the fourth quarter of 2011.
It will be the US that monopolises today's statistical agenda too, with personal income and spending figures for December. All Europe can offer is German inflation and Eurostat confidence measures. In Britain at midnight, Hometrack said house prices were down by -1.6% in the year to January; there are no other UK data to come.
So will the EU summit, belatedly, work its usual magic for the euro or is a mood of realism creeping in? The difference is an important one for the pound/euro exchange rate.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 27 January 2012
Slow news day on Thursday
Little net currency movement
US third quarter GDP today
Five years ago the government decided to increase police efficiency by giving officers smart phones with which they could send and receive emails.
At a cost of £80m the project handed out more than 50,000 phones. They must really have had to shop around to pick them up at £1,500 apiece.
The National Audit Office (NAO) reports that, on average, officers have spent 18 fewer minutes per shift at their desks since receiving the phones.
In one force, however, they have spent an extra 109 minutes per shift in the office. But all is not lost; the NAO press release concludes that "There is still the opportunity to achieve value for money".
David Cameron took a similar line on Euroland and the euro yesterday. Speaking at the World Economic Forum in Davos he said the political leadership still had the opportunity to save the single currency with "bold and decisive action".
The prime minister even jogged their memories with a reminder of what they need to tackle this year; "Greece, banks and firewall".
Meanwhile in Paris François Hollande, the pretender to President Sarkozy's throne, was setting out his manifesto for this summer's election. In a nutshell, his plan is to tax banks, hire more public sector workers and bring down the retirement age. M. Hollande did not exactly promise his unerring support for Chancellor Merkel's precious fiscal compact.
Over in Athens, where there is a fiscal compact in every handbag, the debt rescheduling negotiations have been elevated to prime ministerial level.
In the opinion of Josef Ackerman, CEO of Deutsche Bank, "I'm confident that we can get our act together in Greece and avoid a major contagion [hooray], but that is still a very open question [boo]".
Other than the latest episode of the euro saga, financial spread betting investors found little to interest them on Thursday.
A small improvement in German consumer confidence did nothing to help the euro and a sharp fall in the CBI's retail sales measure did no damage to the pound.
US durable goods orders were stronger than expected in December while new home sales were weaker. Overnight figures from Tokyo showed Japan's consumer price index falling more slowly at -0.2% in calendar 2011.
The net result was relatively modest ranges for exchange rates and minimal net movement. As London opened, GBP/USD, GBP/EUR and GBP/CHF were virtually unchanged on the day.
This morning's opening shot was an unemployment rate of 22.9% in Spain, a figure unlikely to increase spread betting investors' enthusiasm for today's Italian treasury bill auction.
The only other European statistics are Euroland's money supply and Switzerland's leading indicator.
The figures that matter this afternoon are for US fourth-quarter gross domestic product and the finalised Michigan consumer sentiment index.
The latter should be close to 74; the former is expected to show annualised growth of 3.0% (0.7% on a quarterly basis).
More difficult to forecast is how investors would react to a figure appreciably higher or lower than 3.0%.
The most recent experience is that good news from the US economy is bad news for the safe-haven US dollar and Japanese yen, but the forex spread betting market can be fickle and that might not be the case today. Have a good weekend.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 25 January 2012
Governor says 'don't despair'
Sterling listens
Q4 provisional GDP data today
Good morning. Whilst Vince Cable, the coalition government's Business Secretary, is scathing over top bankers' pay he evidently has a soft spot for footballers.
He thinks it is eminently reasonable that Frank Lampard should receive £784,000 every time he scores a goal for Chelsea.
And perhaps the good doctor is right: After all, Chelsea fans seem happy enough to chuck £47.17† into the kitty for every goal their team scores.
Bank of England Governor Sir Mervyn King may or may not side with Dr Cable on footballers' pay (he is a notorious Aston Villa supporter), but he certainly agrees that big-buck bonuses are bad for business.
In a speech last night in Brighton he said "the legitimacy of a market economy will inevitably be challenged if rewards go disproportionately to a small elite."
Closing with a comment on the economic outlook Sir Mervyn was unusually upbeat, saying that whilst "the path of recovery is likely to be arduous, long and uneven, there is no reason to despair".
Commentators were at a loss to remember when the governor had last made such an uplifting speech.
The governor's comments came at the end of what had been a good day for sterling, one in which it advanced against almost every currency except the South African rand.
Its boost came from December's UK public sector net borrowing figure which, at £10.8bn, was less than the £12.2bn analysts and the financial spread betting market had expected.
December is always a borrowing month for the government, with higher than normal spending and lower-than-usual tax receipts, and the reduced deficit was applauded by spread betting investors.
The news from Euroland was mixed. Provisional purchasing managers' indices for January were all improvements over the previous month and all but one of them - for the manufacturing sector - were above the boom/bust divide at 50.
On the other hand, industrial new orders were down by -1.3% in November and lower on the year by -2.7%.
Across the Atlantic, Canadian retail sales rose by a tolerable 0.3% in November and the Richmond Fed's manufacturing index quadrupled to 12.
There were mild shocks overnight after Japan declared a trade deficit for calendar 2011, its first annual shortfall since 1980, and Australia announced a zero-percent rise in CPI for the fourth quarter that slowed inflation from 3.5% to 3.1%.
A busy morning lies ahead. IFO's surveys of German business confidence are important pointers to future activity.
BBA mortgage approvals will probably have continued to bump along the bottom in December. Industrial orders, as reported by the CBI, could well have fallen again in January.
US pending home sales should have been flattish in December after November's 7.3% spurt.
For sterling the two big ones are January's Monetary Policy Committee minutes and the first stab at fourth-quarter gross domestic product.
In theory, neither should come as a shock. FX spread betting investors already know the MPC will consider a third round of asset purchases and the difference between 0.1% GDP growth and -0.1% shrinkage is immaterial to the price of cod.
However, that does not mean they will be able to resist the temptation to react to the announcements.
†As calculated last season by football magazine Four Four Two by dividing the cost of an average season ticket by the number of home goals scored. Chelsea was one of five London teams that topped the list: Accrington Stanley's supporters paid least, at £5.37 per goal.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 24 January 2012
Greek bond negotiations "going well"
But no result yet
Sterling mixed on the day
A 64-year-old grandfather from East London appeared in court yesterday charged with evading income tax. That would be unremarkable were it not for a further allegation; that the man's hidden income came from 10% commissions on the price of men he bought and sold.
The Slavery Abolition Act has been in force for 179 years. Is the Crown Prosecution Service perhaps missing a trick here?
The Greek public prosecutor doesn't seem to be. This morning's Guardian reports that in Athens "the finance ministry has revealed that 4,151 Greeks owe €14.9bn to the state - more than the €14.5bn bond repayment Athens has to make in March.
The list of tax-evaders includes a host of polysyllabic celebrities unknown north of Kulata, fifteen of whom owe more than €100m each.
Unfortunately there is little chance of the finance ministry collecting its €14.9bn in time for those bond repayments next month.
Greece will therefore have to satisfy the EU and the International Monetary Fund that its austerity measures are appropriately rigorous and that it has negotiated a restructuring of its existing debt.
If it fails on either count it will not receive the bailout cash it needs to cover the repayments.
As of last night the debt negotiations remained incomplete. There is still a standoff between the IMF/EU faction, who want to pay 3.5% or less interest on the rescheduled debt, and the private sector bondholders who want a higher reward for their concessions.
Spread betting investors who had been optimistic about a deal on Monday morning were less confident by the end of the day.
Having bought the euro earlier in the session they stopped doing so at teatime. It left the pound at almost the exact level at which it had started Friday and put the euro one yen and one US cent firmer on the day.
Elsewhere sterling edged higher against the US dollar, the yen and the Australian dollar while losing ground to the franc, the NZ and the Canadian dollar.
Elsewhere GBP/USD, GBP/JPY and GBP/AUD edged higher, while GBP/CHF, GBP/NZD and GBP/CAD lost ground.
The only economic statistics of any consequence in the last 24 hours were the Canadian leading indicator* (up 0.8% in December), Euroland consumer confidence (less negative at -20.6) and Australia's leading indicator (turning negative at -0.3%).
The Bank of Japan confirmed its benchmark interest rate would remain at 0.1%.
Things get slightly busier this morning with provisional Euroland purchasing managers' indices, Euroland industrial new orders and UK public sector net borrowing.
Canadian retail sales for November are announced after lunch and the Richmond Federal Reserve's manufacturing index appears at three o'clock.
Tonight brings Australian inflation and another Australian leading indicator. More than those it will be events that guide currencies; the Greek debt negotiations, Spanish and Dutch treasury bill and bond auctions and the EU finance ministers' meeting.
If they do manage to get their act together in Athens the pound could come under more pressure.
A leading indicator (or leading index) is a compilation of various individual indices that are supposed to show how a country's economy will perform in the future.
The exact composition of each leading indicator differs but could include share prices, telephone installations, employment, working hours, building permits and the relationship between short- and long-term interest rates.
The more positive the reading, the greater is the prospect of economic growth.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 23 January 2012
Still no deal on Greek debt
Banks will make no more concessions
EU finance ministers meet in Brussels
A referendum in Croatia yesterday asked "Do you support the Republic of Croatia's membership of the European Union?"
Fractionally more than 29% of the electorate voted "Yes" so, after ten years of negotiation, the country will join the EU next summer.
The 56% of voters who did not bother to cast their ballot will have the next 18 months to repent their sloth before their tax kuna begin to flow towards Greece.
Or maybe not. If Greece is unable to strike a deal with holders of its government bonds it is possible it will no longer be a recipient of EU largesse when the European flag rises over Zagreb.
Last week's discussions went on until after midnight on Friday, at which point Charles Dallara, the creditors' chief representative, said he could make no more concessions; it was now up to EU officials and the International Monetary Fund to accept the banks' offer.
When EU finance ministers meet today in Brussels they will doubtless consider the proposal before they move on to talk about the fiscal compact.
It was the possible failure of the Greek debt negotiations that held the euro back on Friday.
For a second week, four days of decline for pound/euro were corrected on the fifth.
Unusually, pound/dollar strengthened on Friday while the euro fell. The yen kept pace with sterling.
December's UK retail sales figures were helpful to the pound, rising by 0.6% in December and by 2.6% on the year.
There was some concern that the increase had been achieved only at the cost of savage discounting but sales were up and that was the most important thing to spread betting investors.
The Canadian inflation data came as a bit of a shock, with the consumer price index down by -0.6% in December and the annual inflation rate dropping from 2.9% to 2.3%.
The news did surprisingly little damage to the Loonie at the time but seems to have had more of an impact when Far East trading got under way this morning.
A -0.4% monthly decline in Canadian wholesale sales and a 5% increase in US existing home sales had more effect, taking the Canadian dollar lower and the US dollar slightly higher.
Whilst today's agenda is not exactly bereft of data, there is nothing particularly interesting on the list for anyone who does not care about French business confidence or Swiss money supply.
What will be coming up, however, are auctions of French and German government debt as well as the EU finance ministers' meeting. Add to that the finalisation (or not) of the Greek restructuring and it could be an interesting day after all.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 20 January 2012
Everything will be fine
EU fiscal compact draft revealed
But still no agreement on Greek default
Ratings agencies Fitch and Moody's have dismissed Standard & Poor's panic downgrade of Euroland government debt, saying everything will be fine, nothing to see here, move along now, move along.
And spread betting investors have been doing just that. Government bond auctions across the zone have gone swimmingly. They have enabled Italy, for example, to borrow ten-year money half a percentage point more cheaply than it could a month ago.
For the moment, the market has accepted the reassurance that everything will be fine.
In the engine room, however, a Greek crew is labouring furiously to prevent hedge funds from sinking the stricken euro.
The Independent reports that some funds are insisting their credit default swap insurance policies be honoured, and that they make good the difference between the face value of the Greek bonds they hold and any written-down value after the "voluntary haircut".
If not, they apparently intend to sue the Greek government at the European Court of Human Rights with the aim of enforcing the contracts.
The Greek prime minister, meanwhile, is threatening to pass a law that would impose its own restructuring terms on investors. But never mind, says the EU, this is just a little local difficulty; everything will be fine.
At the same time Brussels has released a draft of the fiscal compact that will compel EU member states to run budget deficits of less than 0.5% of gross domestic product.
Failure to do so, according to Bloomberg, will result in "a lump sum penalty of up to* 0.1% of a country's gross domestic product."
The proposal begs the question of why a rescue fund would be necessary in a zone of such exceptional fiscal probity.
There will also be doubts about the logic of fining a country with a budget shortfall of, say, 0.7% of GDP such as to make that deficit 0.8%. For now, though, financial spread betting investors are reassured that the deal will be a good one in the long run and that everything will be fine.
Accordingly, EUR/USD had another positive day on Thursday, adding a further cent to bring the week's tally to more than three.
Sterling was higher against the dollar too, but drifted lower against the euro, where it is weaker by a cent and a half on the week.
Lower inflation in the US, down from 3.4% to 3.0% had minimal impact, as did a 2.0% monthly increase in Canadian manufacturing shipments.
Today's highlights will be UK retail sales, Canadian inflation and wholesale sales and US existing home sales, none of which is guaranteed to get currencies moving. So don't panic; everything will be fine.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 19 January 2012
IMF fund boost proposal helps euro
NZ inflation negative in Q4
Unexpected job losses in Australia
Spending cuts imposed on Britain's police forces are, quite properly, subject to local interpretation and application. But there seems to be unanimous reluctance to economise on premium phone numbers.
London's Metropolitan Police made more than 100,000 calls to the speaking clock, spending £250k of taxpayers' money.
With 32,500 on the force that is £7.70 per officer, enough to buy each one of them a digital watch on eBay and still have enough left over for a clock in every police station.
Back in the 20th century, if you wanted to know the time you asked a policeman. You still can, but now you get the bill.
And a considerably bigger bill will be coming Britain's way if the International Monetary Fund's latest plan goes ahead.
The IMF announced yesterday its intention to increase the size of its kitty from $400bn to $1tn, presumably with at least one eye on the EU's failure to boost its own stability fund.
The proportional nature of the IMF's funding would mean a contribution from Britain of between £15bn and £17.5bn, depending on which newspaper you happen to read.
When the announcement came out yesterday morning it gave an immediate boost to confidence across financial spread betting markets. Among currencies, the euro was the main beneficiary and the yen the biggest loser, with the US dollar close on its heels.
Sterling was all over the place before eventually settling close to its earlier position, just a dozen ticks softer against the euro on the day.
The UK employment figures had little impact on the pound, principally because they pointed in no single direction.
The rate of unemployment unexpectedly rose in November, from 8.3% to 8.4%, while the number of people on jobseeker's allowance increased by 8k less than expected (including downward revisions to the previous month's number).
The employment data were in no way good but they were less uncomfortable than investors had bargained for.
US figures for factory gate prices and international investment flows were uncontroversial and there was vaguely good news from the National Association of Home Builders, whose housing market index went up from 21 to 25.
The most surprising - and effective - statistics came last night from the antipodes. New Zealand's consumer price index fell by -0.3% in the fourth quarter, scuppering any chance of an early interest rate increase and sending the GBP/NZD an instant one cent higher.
Australia's employment data were also a disappointment, with the surprise loss of 29k jobs in December. That news cost the Aussie half a cent. Nationwide's index of UK consumer confidence fell by two points to 38 but sterling was unaffected.
On today's agenda are US inflation, housing starts, building permits and weekly jobless claims, the Philadelphia Fed's manufacturing index and Canadian manufacturing shipments.
There are no important European data, although the European Central Bank's monthly report might be examined more closely than usual.
Spread betting investors will also be paying attention to the negotiations surrounding the "voluntary" rescheduling of Greek debt. A successful deal would be good for the euro; failure would be horrible not just for the euro but for the pound too.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 18 January 2012
UK inflation down again
Euroland investor confidence up
UK employment numbers today
Austerity is not limited to the benighted citizens of Greece and Italy. It has spread to Hollywood. Producers of "The Artist" decided to save money on the dialogue and make it a silent film.
Whilst the movie has already won Golden Globes and been nominated for Bafta awards, its makers are resigned to having no hope of winning anything for the screenplay. There have also been complaints about the subtitles, which go "Dah di dah dah dah di dah..." for 100 minutes.
Almost as repetitive is the steady stream of downward revisions by economic forecasters. The World Bank is the latest to lower its outlook.
In June it predicted 3.6% growth for the global economy this year; yesterday that was revised to 2.5%. For the United States the expectation of 2.9% growth has been shaded to 2.2%, while for Euroland the forecast has been slashed from +1.8% to -0.3%.
There could even be more downward revisions to come; the report says that "even achieving these much weaker outturns is very uncertain".
But there was little sign of financial spread betting investors signing up for that gloomy viewpoint. Even a standoff about the rescheduling of Greek government debt was not enough to dent the optimism.
The day's most strikingly upbeat assessment came in ZEW's survey of economic sentiment, which showed a dramatic improvement in investor confidence (or, more accurately, investor uncertainty).
In Euroland the score improved from -54.1 to -32.5 while in Germany it soared from -53.8 to -21.6. Although the news gave no particular boost to the euro it will have helped to ward off any potential attack.
Coming out at the same time as the ZEW data were the inflation figures for Euroland. The consumer price index went up by 2.7% in the year to December, higher than the European Central Bank's "at or just below 2%" target but an appreciable improvement on November's 3.0%.
The UK inflation data had come out half an hour earlier, with a 4.2% CPI increase for the year, well down from the previous month's 4.8% and nearly a fifth down from its 5.2% peak just three months earlier.
The figures were a reminder that the latest word from the Bank of England governor is that inflation could tumble below its 1%-3% target range this year. Whilst the falling rate of inflation does not guarantee an increase in the Bank's Asset Purchase programme next month, it will ensure lively discussion of the topic by the Monetary Policy Committee.
In forex spread betting, the possibility of further quantitative easing weighed on sterling, holding it back on most fronts and sending it lower on some. By close of play, GBP/EUR and GBP/USD were down 20 and 30 ticks respectively.
Early trade this morning has seen sterling recover to Tuesday's opening level against the dollar but it is still not looking so clever against the euro.
Sterling's main hurdle today will be the employment data for November/December. Analysts expect unemployment to be steady at 8.3% with an increase of around 7k in the number of jobless claims.
Weak figures would be likely to heighten concern for the economy and could send the pound lower.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 17 January 2012
Euro shrugs off credit rating downgrades
EFSF downgrade ignored too
UK inflation data today
If you buy shares in BP and sell them at a higher price, nobody cares. Paintings, houses, frozen orange juice, copper, classic cars, baseball cards, vintage wine, Krugerrands and virtually every commodity and good on earth enjoy an uncontroversial secondary market.
People buy apartments and rent them out at a profit without the least risk of opprobrium. So why all the angst surrounding the similar disposition of cup final tickets or, most recently, seats at the Royal Albert Hall?
If somebody wants to pay £20k for a seat at the Last Night of the Proms or £5k to watch 22 blokes kick a ball, is it somehow morally reprehensible to sell them the tickets?
Or could it perhaps be jealousy on the part of those who mis-priced the tickets when they were originally issued?
A similar sour-grapes attitude currently permeates Euroland - and especially that part of it around Paris - concerning credit ratings. Scarcely a week ago President Sarkozy was bragging that France's AAA credit rating was undoubted.
If anyone deserves to be downgraded, he crowed, it is Britain. Since Friday night's downgrade, he and his supporters have changed their tune.
Now it's Gallic shrugs all round. He could not care less that Standard & Poor's no longer rates France as triple-A.
He has a valid point. Financial spread betting investors gave every impression yesterday that they don't care either. The euro went up and French government borrowing costs went down. No sign there, then, of any morbid obsession with credit ratings.
As NAB's Head of Research put it yesterday, credit ratings are relative; AA is the new AAA. Nor does anyone seem particularly exercised by S&P's downgrade, from AAA to AA+, of the European Financial Stability Fund.
First, the move was inevitable after the fund's shareholders' ratings went down; second, the EFSF was never going to do anything worthwhile anyway.
Far more interesting than the minutiae of credit ratings is the interview with Italian Prime Minister Mario Monti in this morning's Financial Times.
He called on Germany to help lower borrowing costs for Italy and for other nations who are forcing austerity on citizens that see no upside for their pain.
Sig. Monti said he would "push the German government to realise it was in 'its own enlightened self-interest' to lend more of its fiscal weight to lowering borrowing costs of Italy and other highly indebted governments."
If not, said the premier, "there will be a powerful backlash".
The euro's lack of reaction on Monday was mirrored in the forex spread betting market by most other currencies.
Sterling moved by less than a cent against the US, Canadian, Australian and New Zealand dollars.
Compared with Monday's opening levels, GBP/JPY starts today half a yen firmer and GBP/CHF is unchanged.
In contrast to yesterday's dearth of data, today brings UK and Euroland inflation, German and Eurozone economic sentiment, the New York Fed's manufacturing index and the Bank of Canada's monetary policy decision.
They are all potentially market-moving figures. What will really matter, though, is the developing attitude to the euro in the wake of the downgrades. As London prepared for action the euro was looking perky.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 16 January 2012
Whoops!
Italy, France and seven others downgraded
But Germany still triple-A
The danger should been obvious yet it was ignored, apparently because of a serious error of judgment. Only days earlier the man in charge of plotting the course had offered reassurance that nothing on the horizon could sink.
France's AAA credit rating is no more, at least from Standard & Poor's point of view. Like America, France retains AAA ratings from Fitch and Moody's and, in President Sarkozy's opinion, two out of three ain't bad. But he would say that, wouldn't he?
Confirmation of the French downgrade, and those of eight other Euroland countries, came after London had closed for the weekend but European markets had already had ample opportunity to react.
S&P had leaked the news earlier in the day and it was more than a month ago that the rating firm gave notice that a downgrade was on the cards. The advance notice probably muted the impact of the downgrade but in FX spread betting it still cost the euro a cent and a half against the US dollar and a cent against the pound. Against the yen, the euro is close to its lowest level since November 2000.
While S&P trained its fire on Euroland, Fitch had South Africa in its sights. On Friday afternoon it announced that it had lowered its outlook for the country's BBB+ rating from stable to negative. Moody's made a similar decision last year while S&P maintains a stable outlook for its own BBB+ rating. In the GBP/ZAR spread betting market, the rand fell by 20 cents against the pound following Fitch's announcement.
As the whispers about the Euroland downgrades reached deafening levels, they drowned out any discussion of Friday's economic data.
The UK producer price index data were really quite positive from an economic perspective. Manufacturers' costs and factory gate prices both rose more slowly in the year to December and were negative for the month.
There is still a squeeze on manufacturers, whose costs went up by 8.7% on the year while selling prices only rose by 4.8%, but that roughly four percentage point gap has halved from a month earlier.
Trade figures from Euroland (€6.9bn surplus), the United States (US$47.8bn deficit) and Canada (C$1.1bn surplus) were all adrift from analysts' forecasts but had minimal effect on their respective currencies.
The provisional University of Michigan index of consumer sentiment was three points better than expected at 74.0 but it, too, had little bearing on the proceedings. Data released overnight put Australian inflation at 2.4% (TD Securities) and UK house asking prices 0.4% higher than a year ago (Rightmove).
There is nothing any more inspiring on the agenda for the rest of the day, just Swiss producer and import prices, Italian CPI inflation and Canadian new motor vehicle sales.
As the London market gets going financial spread betting investors will be less interested in the ecostats than in trying to work out whether Friday's reaction to the Euroland rating downgrades was over-done or under-cooked. It will almost certainly turn out to be one or the other.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 13 January 2012
We all love the euro
Successful bond auctions in Rome and Madrid
Upbeat ECB press conference
Stockbrokers took to the streets yesterday. About 1000 of them turned out in a mass protest, not about smaller bonuses but about the curtailment of their lunch break.
They were already unhappy that it had gone down, a year ago, from two hours to 90 minutes. They are gutted at a new proposal that will reduce it further, to just one hour. The poor wee lambs will have to slave away from 09:30 until 16:00 with only an hour for lunch.
Ah, you are thinking, this must have been in Paris. But no, it was in Hong Kong. There is no way the French financial sector would settle for a two-hour lunch break, let alone 90 minutes. That is why President Sarkozy is so keen on the financial transaction tax; it would level the playing field by handicapping other centres too.
It is tempting to wonder if the proposed tax will apply to government bonds bought at auction. Let's guess that it will not. After all, there is no reason to put obstacles in the way of investors who want to lend to the Spanish or Italian treasuries.
And, contrary to expectations, such investors do exist.
They were queuing up yesterday to buy Spanish and Italian paper. If you are spread betting on Italian Bonds note that Rome shifted €12bn in short-term bills . Spain's treasury responded opportunistically to strong demand for €5bn of two- and three-year bonds by doubling the amount it sold.
The successful auctions were positive for the euro spread betting market, as was a press conference held by the European Central Bank president following the Bank's decision to keep monetary policy on hold.
Mario Draghi made a point of telling his audience that last month's half-billion-euro Long Term Refinancing Operation (LTRO) had prevented a credit crunch. The implication was that the ECB would repeat the operation as and when necessary, so keeping credit crunches off the agenda.
He also refused to rule out a programme of quantitative easing (although if the LTRO and the Bank's steady buying of government bonds are not QE measures it is difficult to know how to categorise them).
The successful auctions and the upbeat ECB press conference combined to make UK spread betting investors feel much more fluffy about the euro, which was Thursday's best-performing currency.
It went up by one yen and one and a half US cents, all of those gains coming after the ECB press conference.
The US dollar and the yen were the laggards, appetite for them dented by the new-found confidence in the euro. Sterling gave up more than half a cent against the euro but elsewhere was mostly ahead on the day. The Swiss franc tagged along with the euro.
Weak industrial production data from Britain and Euroland did no damage to their respective currencies and a tiny increase in US retail sales did no good for the dollar. Most of today's figures could be similarly ineffective; producer prices from the UK and trade figures from Euroland, Canada and the States.
The provisional Michigan index of consumer sentiment this afternoon is the only one with any real potential.
Italy goes to the market again today to sell €4.75bn of three-year bonds. If it successful, and there is no reason to suppose it will not be, look for further retracement from sterling/euro.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 12 January 2012
UK trade deficit triggers sterling sell-off
Record low yield for 10-year US T-bonds
Spain and Italy to auction bonds today
UK bookseller Waterstone's is going to ditch its apostrophe to reflect "an altogether truer picture of our business today" and to offer, "in a digital world of URLs and email addresses, a more versatile and practical spelling".
Texter's and greengrocer's are delighted at the simplification. The Apostrophe Protection Society is livid, describing the change as "slapdash".
Etymologists are keeping quiet; they want to see how the renamed firm deals with the possessive apostrophe on official communications now the name is apparently plural.
Will Waterstones' policy be to use it correctly?
The pound's possessive apostrophe was littering the street on Wednesday as FX spread betting investors dispossessed themselves of sterling.
GBP/JPY fell by one yen and GBP/USD also fell by one and a half cents to three-month lows.
The pound is weaker on all fronts, even against the euro, where it is down by three quarters of a cent.
Unusually, it was the UK trade figures that precipitated the sell-off. Although investors tend not to pay too much attention to the balance of trade, after two days of data-starvation it looks as though they focused on the only game in town. And it was not as if the figures were blameless.
The seasonally-adjusted deficit in goods was £8.6 billion in November compared with a deficit of £7.9 billion in October. Worse, exports were down by -1.7% and imports were up by 1.1% on the month.
The euro was lower against the dollar and the yen too, but not to the same extent. Sentiment still favours the US currency for its perceived safety.
An auction by the US Treasury of three-year notes attracted record demand with bids for 3.73 times the amount on offer. Ten-year notes offered at the same time achieved a different record, this time with their ultra-low 1.90% yield.
There are more government bond auctions today, in Italy and Spain. They are likely to be more testing than America's carefree issue. At half past nine Spain will sell ten-year bonds and Italy will offer a similar maturity half an hour later.
Financial spread trading investors will be particularly keen to see how the Italian auction goes and whether the result has anything to do with European Central Bank activity. The ECB may not bid directly at the auction but it is allowed to buy from the banks that do.
The Bank of England and the ECB both announce their latest monetary policy decisions at lunchtime; the BoE at midday and the ECB at 12:45. No changes are expected but surprises are always possible in this climate.
The best bit will be at half past one when ECB President Mario Draghi has to defend the euro at his press conference.
Ecostats will be relatively plentiful with UK and Euroland industrial production, US retail sales and weekly jobless claims and the NIESR's estimate of UK fourth quarter gross domestic product.
Having seen the ease with which sterling fell off its perch yesterday it is possible that investors will be looking for an excuse to send it lower still, not because the pound deserves punishment but because they can.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
FX Day Trading - 11 January 2012
FX market lacks inspiration
Little net movement on Tuesday
And little potential for today
A bloke walked into the HBOS branch in Cheapside, London, with a bag and a gun. He demanded that the cashier fill the bag with money. Then his carefully-rehearsed strategy fell apart.
Instead of handing the cashier the bag, he gave him the gun. As the security shutters crashed down the crook realised his mistake and made off through the City on a bicycle.
The incident took place nearly three months ago and was captured on dozens of CCTV cameras, yet the villain has still not been identified.
And that's about it, really. Tuesday's FX spread betting market was deathly dull.
Sterling, the US dollar, the euro, the Japanese yen, the Australian dollar and the Swiss franc are all within a dozen ticks of Tuesday's opening levels while the Canadian and New Zealand dollars are a scant half-cent firmer on the day.
Try as they might, financial spread betting investors were unable to find inspiration in a higher pace of Canadian building permit issuance or a tiny increase in US wholesale inventories.
The British Retail Consortium's shop price index, a point-of-sale inflation measure, came out overnight showing prices 1.7% higher on the year but nobody cared.
Perhaps they will care more about the latest revision to third quarter Euroland gross domestic product, due at nine o'clock this morning, or Britain's November trade deficit half an hour later.
Or not.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'FX Day Trader', Article by Moneycorp, last update: 2-Feb-12
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