Market update by UWCFX
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  1. #21



    Weak EURO regains
    some of its losses

    The EURO regained some its early steep losses after dipping to 1.3550 in yesterday’s inter day trading. Euro/USD is trading at at 1.3678 this morning, recovering somewhat. Oil prices are up 1 % with Brent close to 113. Gold has recovered from it’s low on 1815 trading at 1834. Stock futures for Europe are pointing up after yesterday’s onslaught hitting banks and financial shares especially hard.

    After falling close to 20 % in 2011 European stocks continue to be highly volatile even more so than their American pairs. The sovereign debt in Greece and the fear for a default continue to create nervousness not only in Europe, but far beyond. Pessimism continues to rule the day. Amid rumors that China is buying Italian bonds, Italian Premier, Berlusconi, heads to Brussels to present his austerity package, keeping the fear for a Greek “development” in other Eurozone countries very much alive.

    The future fate of the Euro continues to be on everybody’s mind. Forecasts point to a further weakening of EURO with a next test on low levels at 1.19 – 1.20 within a foreseeable future. YEN/USD has recovered trading at 77,03. GBP/USD is still below 1.60.

    Expect currency volatility to continue during the week, giving traders new opportunities. Most observers seem to count on Greece’ willingness to follow up on austerity measures and troika demanded “reforms” to secure payment of September tranche. This should lead to a temporary strengthening of the Euro.

  2. #22



    Greece unnerves
    global markets

    After a short spell of relief and as a reaction to the latest steep decline of the EURO, fear and nervousness again dominated global markets with Euro/USD trading at 1.3625. An emergency meeting is called between the prime ministers from Germany, France and Greece after Merkel assuring that Germany would not allow Greece to default.

    It is expected that the two leading EU-countries, France and Germany, shall issue a strong warning to Greece to live up to its austerity and reform promises; simultaneously stressing willingness to take what it costs to bail Greece out and save the Euro. A strong political message seems absolutely necessary to calm global markets overreacting on unsubstantiated news and speculative rumors.

    After a mixed session in the US, Asian markets again dropped on fear of a banking collapse in Europe following a Greek default. In a key speech the Premier plaid down Chinese willingness to come to the support of striving European economies. He stressed that China with its huge reserves are ready to invest in Europe, only preconditioned that Europe got their finances in order.

    The major French banks rebounded strongly yesterday after an initial 10 % tumbling on fears that the French banks no longer had USD available. The panic sell stresses the contagion effects a possible Greek default shall have on banks and the banking system. US Finance Secretary,Timothy Geithner, is going to talk tough to its European counter-parties at a meeting at the end of the week. But is Geithner in a position to talk tough? He travels when a record high 62 % of US citizens have lost belief in President Obama’s and his own handling of the US economy.

    Oil prices are falling on expected slower growth. Gold is also down at 1820. US/Yen at 76,89.

  3. #23



    Greece to remain
    in the EURO-zone

    Markets bounced back in a sigh of relief when France and Germany yesterday night gave Greece firm assurances that the country shall remain in the Euro-zone despite its serious debt problems. US and Asian markets rallied and futures in Europe are up. Euro is strengthened across the board. Euro/US at 1.3723 in morning’s trade.

    The message from the Merkel, Sarkozy and Papandreou meeting is that regardless of a possible Greek default, Greece shall remain in the Euro. Papandreou gave his assurances that Greece shall stick to it’s austerity and reform promises, meaning that a green light has been given to payment of the critical September tranche.

    The immediate fear for a Lehman Brothers type of crisis in Europe is over at least for now. The ECB yesterday gave strongly hurt French bank possibilities for USD credit. Chief EU-Commissioner Barbarossa at the verge of the mini-summit of Merkel – nSarkozy created some confusion with reiterating the desire of issuing Euro-bonds to debt stricken EU-members. That was immediately strongly rejected as a feasible opportunity by Germany.

    While some optimism has been injected in global stock markets volatility continues with EURO and Yen somewhat stronger this morning. Oil prices are firm with NYMEX close to 89 and Brent at 112. Gold substantially down trading at 1808.

  4. #24



    Asia mainly in
    "a red zone"

    Following the results of the American session on Friday: Dow has raised on 75,91 points (+0,66 %) - to 11509,09 points, S&P has grown on 6,9 points (+0,57 %) - to 1,216,01 points, NASDAQ has risen on 15,24 points (+0,58 %) - to 2622,31 points.

    Trading session in Asia, excluding Japan, passing mainly in "a red zone": Hang Seng-2,1 %, Nikkei 225 +2,25 %, Shanghai Composite-1,41 %. Chinese stocks decrease to 14-month's minimum in connection with statements of the prime minister of the country Ven Tszjabao that the country government intends to take all necessary measures for control of inflation. Additional pressure is rendered by fears of investors as regards coming IPO will lead to reduction of demand for securities already being in circulation.

    Precious metals mainly up in New York: gold - 1825,82 dollars/un. (+0,61 %), silver - 40,68 dollars/un. (-0,36 %), platinum – 1821.62 dollars/un. (+0,42 %). The prices for industrial metals are: copper - 8504,75 dollars/t (-1,87 %), nickel - 21168 dollars/t (-1,5 %), aluminium - 2358 dollars/t (-0,92 %).

    Oil futures, bargain with descending dynamics: Brent - 111,32 dollars/barr. (-0,8 %), Light Sweet - 86,86 dollars/barr. (-1,4 %).

    The future fate of the Euro continues to be on everybody’s mind. Decrease in currency pair promotes negative dynamics in the oil market.

    From events it is necessary to allocate performance of the US president of B.Obama before the Congress with the offer on increase of the tax for citizens, whose revenue exceeds $1 million it is necessary to notice that this point in question is one of the main stumbling-blocks between democrats and republicans that doesn't add optimism on the markets.

  5. #25



    Threat of a default of Greece
    keeps the market in suspense

    On Monday, on September, 19th, the basic American indexes were closed with fall, winning back threat of the Greek default. Players were focused on a situation in Europe, and all attention has been chained to conference regarding Greek debt. Investors tend to opinion that Greece declares itself insolvent, and the possibility of a default for the next 5 years exceeds 90 %.

    Following the results of the trading session the indicator of "blue chips" index Dow Jones Industrial Average has gone down on 0, 94 % and was closed on a level of 11401,01 points, the index S&P 500 has fallen on 0,98 % to the level of 1204,09 points, and the index of hi-tech companies Nasdaq has reddened on 0,36 % to a level of 2612,83 points.

    "Blue chips" were closed mainly in red territory. The greatest losses have caused a stir Bank of America (-3,32 %), JPMorgan (-2,81 %), American Express (-2,87 %), Alcoa (-3,26 %).

    The price for futures for oil of LIGHT has decreased on $2,26 or 2,6 % to level of $85,70 for barrel. Oil has gone down in price to minimum for 3 last week’s marks in connection with fears of delay of global economy and reduction of demand for energy carriers in case of default approach in Greece. Price for BRENT is on level of 109.06 for barrel.

    The price for futures for gold has decreased on $35,80 or 2 % to value of $1778,90 for ounce. Gold has fallen to its minimum price since August, 25th of final level owing to essential strengthening of dollar concerning the majority of competing reserve currencies.

    Results of session of FRS which will begin today, in many respects will define the future of the world financial markets on mid-range term prospect. We will remind that investors would prefer to hear the announcement of a new round of quantitative softening QE3 from B.Bernanke.

  6. #26



    the intrigue remains!

    That fact, that negotiations between Greece and EU, ECB, IMF are tightened for a week, means that we are not going to see sharp growth of EUR/USD within next few days. Some encouraging moment for euro also can be that recently the financial markets, in particular currency, have ceased to react to a stream of negative news from Europe that besides assumes some improvement of a situation with appetite to risk (positively for EUR/USD).

    From good news it is necessary to notice messages that Fitch has confirmed a credit rating of Germany at level ААА on September, 21st.

    Situation in USA seems not to be better then in Euro zone. Yesterday the IMF has lowered forecasts on world economy growth on 2011 and 2012 years on 0,3 % and 0,5 % accordingly to 4 % for both years.

    Following the results of session - Dow Jones Industrial Average has raised on 7,65 points or 0,07 % to level in 11408,66, Standard and Poor's 500 has decreased for 2,00 points or 0,17 % to a level 1202,09, and Nasdaq Composite has left in a minus on 22,59 points or 0,86 % and has reached a point 2590,24.

    Gold company Newmont Mining has jumped up on 5,5 % on the basis of comments of Richard O’Briens’ - he has declared that gold till the end of 2012 can go up in price to $2000 for ounce. The world markets recently brought to us so many surprises that it can quite appear a reality much earlier, isn't it?

  7. #27



    Markets negative to
    Bernankes’ “twist”

    FED’s chief Bernanke’s financial “Operation Twist” combined with a bleak assessment of the global economy had an immediate negative effect on markets. The US exchanges fall steeply, followed by ASIA with Shanghai as the biggest looser plunging 4,1 %. Futures for Europe and US are down. Markets are expecting to see the lowest numbers since July 2010.

    In his speech yesterday Bernanke painted a bleak picture of a stagnating global economy which runs a great risk of a double dip recession. FED introduced simultaneously “Operation Twist” to invest 400 billion USD into buying short term treasury bills and reinvest into longer term treasuries and bonds with between 6 and 30 years maturity.

    The market answered by selling securities and commodities. Even gold plunged to 1775 and oil prices (NYMEX 85 and Brent 108) under strong pressure on the prospect of lower economic growth. USD is stronger against all currencies EURO/USD trading at 1.3450. The fall in banking shares are continuing world wide with downgrading of major European banks. New Greek austerity measures are met with a new wave of strikes and social unrest.

  8. #28



    Full panic grips
    global markets

    Global markets experienced its worst falls since the Lehman Brothers bankruptcy in 2008.
    Dow Jones fall 3,51 % to 10 733 after a miserable session in Europe. Statements from the World Bank
    and IMF (International Monetary Fund) renewed fears for a double dip recession.

    The steep falls continued in Asia. Oil and banking shares were hardest hit, and commodities followed
    suit. Gold reached its lowest levels in week tumbling to 1736. Silver fell with 10%. Oil continued its slide. NYMEX
    tipped below 80, but recovered to 81 in late Asia trading. Brent is 106.

    USD normally regarded as a safe haven in crisis, gained against all currencies Wednesday, but corrected
    somewhat during Asian trading. Euro/USD trading at 1.3525; 1 % up from bottom levels the day before in
    expectation that the week-end G-20 meeting shall bring some relief for the Euro-zone and especially Greece.

    Several commentators yesterday took a double dip recessions as a forgone conclusion and predicted the start
    of a prolonged bear market. The market met slightly better US-unemployment figures with no movement and a sigh.

  9. #29



    Orderly Greek default
    rumors rally markets

    Rumors on an orderly Greek default rallied market’s yesterday and through the night’s trading in Asia. Dow Jones jumped 2,53 % and Nasdaq 1,35 %. Asian exchanges likewise rallied. Commodities are up with Gold trading at 1648 up from Monday’s low on 1525. Silver which reached a bottom on 26.00 in early intra trade makes a daily jump on 20 % trading at 31,25. EURO/USD is at 1.3548 and USD/JPY 76,34. Australian dollar is up and regarded one of traders favorites in forthcoming weeks.

    Greek Premier George Papandreou is heeding to Berlin this morning to convince reluctant German politicians and public that Greece is worthwhile supporting. This while the Greek Parliament is discussing the new proposed property tax. Leaked information from talks between European finance ministers injected some optimism in the markets yesterday. According to rumors foreign banks with credit exposure to Greece shall have to accept a back payment of only 50 %. To avoid a collapse in the banking system the European Central Bank’s emergency fund is to be strengthened to facilitate interbank credits.

    Both stock, commodity and currency markets continue to be extremely volatile. Stock prices even in solid companies are jumping 10 – 15 % intra day. The same goes for commodities and currencies. This opens up for tremendous trading opportunities with big gains – and – losses within a short period of time. In such an environment fortunes could be created and – lost – within few hours. Traders need to bear this in mind. The volatility is expected to continue for the foreseeable future.

  10. #30



    Short rally ends
    in new volatility

    After two days optimistic rally the markets in Asia were last night back to normal. Futures for Europe and US
    are pointing down. Commodity prices are lower, and the EURO which got a boost following rumors on an
    orderly Greek default, dropped back to Euro/USD 1.3559. USD/Yen is trading on 76,58. Oil is down 1,5 %
    (NYMEX 93,50 and Brent 106,35)

    September has been one of the worst months ever for commodities. Copper, zink and nickel have fallen steeply on
    assumptions on lower economic growth, and even precious metals as gold, silver and palladium saw falls
    between 10 and 20 %. There is no comfort for the metals that October traditionally is one of the worst
    performing months for metals.

    The rally over the last two days have been based on expectations and hope rather than fundamentals. the Merkel/
    Papandreou meeting was marked by positive rhetoric, but Greece seems to heed closer to a default for each
    passing day. New consumption and production figures coming from the US later today is not expected to
    give the market any relief.

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