Forex Trading Software

 

 

 

 

 

 

You are closer than ever to a grand victory

eToro announces the first beginners – only championship.
The championship will be held between March 3rd 12:00pm GMT- March 5th 8:00pm GMT.
To make things more interesting, contestants will be divided into groups of 10.

In other words – your chances of winning are bigger than ever. Not only that you take on traders
with the same experience level, but there are only 9 other people that stand between
you and these prizes:

• 1st prize – $400
• 2nd prize – $100.
• 3rd prize – $50.

The winners will be the traders that profit the most at the end of the championship.

To join the championship, simply deposit a minimum of $200 in your account,
using the code mchamp and you are automatically in.

For further information please write us:
annamaria@etoro.com
joshadams@etoro.com

 

Good Luck!

 

 

About eToro:

At eToro, we offer our traders easy access to trade currencies and commodities, personal service from experts, a simple and intuitive platform and an online community that is the home for traders from all over the world. With offices worldwide and over a million traders, we truly believe no other platform delivers such a great experience.

“Trader chat rooms and interactive forums bring traders a sense of community and make them feel more at home at any trading platform. For novice traders this is yet another opportunity to learn in a fun and interactive way, this time from their own peers in the business” E-Forex.

Related posts:

1. New Championships at eToro New Championships at eToro- trade and win up to…
2. Nuovi Campionati trading eToro Nuovi Campionati trading eToro e vinci fino a $3,000!…
3. Try Out The New eToro Debit Card – A Fast and Easy Way to Get Paid! eToro invites you to try out a new method…

Popularity: unranked [?]

The markets continued to gyrate this week, as investors remained fearful of issues related to European debt, specifically the debt related to Greece and Spain.  The Euro after facing heaving selling pressure mid week was able to bounce and finish up the week with a slight gain.  The S&P 500 Index also faced a large push to the downside but managed to climb higher to finish the week with a small loss.  With all the gyration in the market, the S&P 500 Index is having a difficult time with strong resistance – the 50 day moving average.

 

 

 

 

 

 

 

 

 

 

 

The first bit of news the markets needed to digest on Monday was that the Dutch government collapsed over the weekend as the Labor Party withdrew from the government as it refused to agree to the NATO request to extend Dutch troops stay in Afghanistan.  The spread between Dutch and German 2-year and 10-year bonds was flat Monday, suggesting no real market impact. It is the fifth Dutch government to falter since 2002.

On Tuesday, the equity markets were on the defensive as investors sold riskier assets after the conference board released a much worse than expected confidence number in the United States.  The S&P 500 index fell 13 points below 1100 to 1094.  Gasoline dropped 5 cents per gallon or 2.4%, and the dollar strengthened against most major currencies.

The confidence number took the markets by surprise.  The Conference Board, a private research group, said its index of consumer confidence declined to 46.0 this month, from a revised 56.5 in January. The February reading was far below the 54.8 expected by economists. The present situation index, a gauge of consumers’ assessment of current economic conditions, fell to 19.4 this month from 25.2 in January. The February index was the lowest in 27 years.  Consumer expectations for economic activity over the next six months dropped to 63.8 from a revised 77.3, the original was 76.5.

In other economic news, according to the S&P Case-Shiller home-price indexes, U.S. home prices fell in December but were up when adjusted for seasonal factors, , as yearly declines continued to ease.  For the fourth quarter, the S&P Case-Shiller U.S. National Home Price Index posted a 2.5% decrease from a year earlier, a significant easing from the 19%, 15% and 8.7% declines in the rest of 2009. It fell 1.1% sequentially but rose 1.6% adjusting for seasonal factors.  The indexes showed prices in 10 major metropolitan areas fell 2.4% in December from a year earlier, while the index for 20 major metropolitan areas dropped 3.1%. Both indexes dropped 0.2% from the previous month, although adjusted for seasonal factors, they increased 0.3%. 

The markets presented a positive session on Wednesday despite dovish comments from Ben Bernanke.   In his semi -annual testimony before congress, Federal Reserve Chairman Ben Bernanke said the U.S. economy still needs record-low interest rates for several months as the economic recovery is expected to be slow.  In his testimony to the House Financial Services Committee, the Fed chief said the U.S. central bank is actively looking at what tools to use once the economy needs higher rates.  Market participants celebrated the news that rates would continue to be low for an extended period of time. 

Also of note, The Securities and Exchange Commission voted 3-2 Wednesday in favor of a final rule that will curb short selling for individual securities that decline at least 10% in a single day.  The vote brings an end to almost a year of debate over the practice, in which investors attempt to profit by selling borrowed shares of a stock that is losing value.

Also on Wednesday, U.S. sales of new homes fell 11.2% in January, setting a record low and erasing all gains in the market for new homes during the past year. Demand for single-family homes fell 11.2% from the previous month to a seasonally adjusted annual rate of 309,000, according to the Commerce Department.  Economists surveyed had estimated sales would rise 3.8%, to 355,000. It was the third drop in a row. Sales in December fell 3.9%, revised from an originally reported 7.6% decline. The new-home sales report is volatile because it is based on a particularly small sample. The government said it was 90% confident that the true change in new-home sales in January was between minus 25.2% and plus 2.8%. The 11.2% decrease carried sales to their lowest level since records began in 1963.

On Thursday, European news came into the spot light Moody warned that it might lower its credit rating on Greece within a month, if the Greek government misses its March fiscal targets.  Moody’s credit rating, at A2, is already two notches above that of S&P (currently BBB+) which warned yesterday of a potential Greek downgrade within the month.  A Moody’s downgrade would put the credit rating at the lowest investment grade before speculative grade. Even though the Euro presented a volatile session it bounced back at the end of the trading session after testing recent lows at $1.3450.

Weekly jobless claims in the U.S were also disappointing adding to the view that the outlook remains uncertain.  Claims jumped unexpectedly to 496K (460K expected and vs. 474K in the prior week).  The Labor Dept said the jump was due in part to a backlog of claims in the Mid-Atlantic States and New England following the recent storms.  The four week average came out at 473K- a high number but still an improvement over the 513K averaged before the start of the holiday period in late November.

 

 

On Friday, Gross domestic product rose at a 5.9% annual rate October through December; the fastest rate since the third quarter of 2003. GDP expanded by 2.2% in the third quarter of 2009. A month ago, the department first estimated that GDP ,rose by an annual 5.7% in the fourth quarter.  For all of 2009, GDP declined an unrevised 2.4%, which was the largest full-year contraction since the 10.9% drop in 1946. The economy expanded 0.4% in 2008 and 2.1% in 2007.

Forex

The British pound was under pressure most of the week and was hurt by the largest drop in UK business investment on record and concerns about a double dip recession. Business investment fell -5.8% q/q in Q409 vs. a consensus forecast for a 0.1% increase and vs. a downwardly revised -1.8% drop in Q309 (from -0.6%.) Adding to concerns about recession, the London Chamber of Commerce survey showed that 47% of companies expect the economy to dip back into recession with only 29% predicting a lasting recovery. While UK Q409 GDP was revised higher to 0.3% q/q (vs +0.2% expected and from an initial estimate at +0.1%) there are several negatives for the pound: 

1) The upward revision in Q4 followed a downward revision in Q3 and growth throughout H209 was actually flat.

2) The upward revision in government spending boosted the overall figure and this is bad news for public finances prospects and is not sustainable.

3) Early indicators for Q110 have not been particularly promising, with the poor weather likely to bring an additional negative bias to the growth profile early this year.

The UK economy has contracted by nearly 5% in 2009, but the recovery will be very sluggish in 2010, with a 1.2% sub-trend growth rate. From a technical point of view the GBP/USD broke double support and headed lower. Friday’s session presented a doji candlestick, showing traders uncertainty going forward.

 

 

 

 

 

 

 

 

 

 

In Japan negative CPI readings are not a thing of the past: the Tokyo February CPI y/y rate was reported at -1.8% y/y (not as bad as the -2% expected outcome and from -2.1%) while the nationwide January inflation rate ran at -1.3% y/y (from -1.4%), with core CPI unchanged, at -1.2%. Continued weakness in the consumer sector (hardly a surprise at a time of struggling labor market and depressed real disposable income) was highlighted by the January large retailers’ sales (reported at a worse than expected -5.6%), but retail trade was up by a larger than expected 2.9% on the month. The USD/JPY collapsed throughout the week but managed to find support around 88.90 points. The move lower disappointed investors, hoping for a change of trend. To date the bias is still negative for the USD/JPY and a break of support could lead this pair to its prior low.

 

 

 

 

 

 

 

 

 

 

The Week Ahead

 

 

 

 

 

 

If you want to discuss this article further, please visit us at  http://forum.etoro.com

Related posts:

1. Weekly Market Review Feb 1st, 10 Last week was a terrible week for riskier assets.  Fears…
2. Weekly Market Review Feb 8th, 10 Fear continued to grip the capital markets last week, even…
3. Weekly Market Review Jan 11, 10 The first week of the New Year was a positive…

Popularity: unranked [?]

Nervousness in the Forex market resumed as dented US home sales and the Fed’s exit scheme weighed on the Fed’s pledge to low rates. Yesterday the Fed Chairman Ben Bernanke gave his Semi-Annual testimony to Congress. The Fed chairman outlined the move last week to raise the discount rate to 0.75% was strictly a move towards normality and does not pose a preliminary move towards a hike of the benchmark rate. The Fed chairman reiterated the benchmark rate will be low for an extended period stressing that the US job market remains extremely fragile and acts as a lager on the US economy. The Fed chairman emphasized the importance of the housing market as US banks hold a substantial exposure to the market. However the chairman gently avoided reference to the weak housing figures as to prevent fears over the Feds intention to exit the Mortgage debt market.

Meanwhile data from the housing market painted a gloomy picture for US Real-Estate with home sales falling by 11.2% MoM to an annual pace of 306k houses a year, a low not seen since measurement started back in the 60s. The Fed’s intention to gradually exit more than 1 Trillion of mortgage debt it holds, clouded its pledge for low rates and spurred speculations the Fed is in a gradual move to squeeze excess liquidity out of the system. Forex players rather than placing Dollar bids on the low rate outlook crowded their bets on the Dollar and Yen to curb risk. Adding to the FX unrest was the circling rumors Greece will suffer further deterioration in its credit rating this morning. The Yen moved to a one year high against the euro trading under 120.5¥ per Euro and was able to breach the 90 support against the Dollar. The Dollar edged higher and traded around 1.34 and 1.53 against the Euro and the Sterling respectively.

Euro at one Year low against the Yen

Related posts:

1. Forex players eye Bernanke testimony Last week the Fed surprised markets by hiking the discount…
2. Euro is headed for biggest weekly gain against dollar we didn’t have much time to digest the fact EUR/USD…
3. US GDP Just Ahead               Not so…

Popularity: unranked [?]

After presenting a volatile first hour, the U.S indices plunged by over -1.5% as economic data showed that consumers are still doubtful about the economic situation.  Even though the housing market showed relative strength with the S&P/Case-Shiller index climbing by 0.3%, Consumer confidence dropped to a 10 month low of 46 points.

According to the data, investors are now more pessimistic about the economy than they were at the depths of the 2007-2009recession. The percentage of consumers anticipating an improvement in business conditions over the next six months decreased to 16.7% from 20.7%, while those anticipating conditions will worse increased from 15.3% from 12.7%.One must note that the Consumer Confidence Survey is based on a representative sample of 5000 U.S households.

 

Unlike Monday’s session, when financials pulled the market higher, the financial sector was the worst performing sector of the intraday session, shredding 1.8%. From a technical point of view, the S&P500 retraced after hitting its 50 day moving average. Yesterday’s session wiped out 4 previous bullish sessions, as investors preferred to cash in on recent gains. One must note; technical support lies ahead, at 1085 points.

Forex

The Dollar index managed to gain ground yesterday after the U.S equity market experienced a sell-off. The Index climbed higher and finished the session around 80.9 points. From a technical point of view the index is still pointing towards minor divergence, a signal which often leads to a minor correction. Even though the Dollar might not experience a major sell-off leading the index down to one of its Fibonacci retracement areas, the index could stumble around current levels.

 

 

 

 

 

 

 

 

 

On individual pairs the EUR/USD and the GBP/USD both dropped to lower levels, pulled lower by a rising Dollar and worse than expected fundamental data. The German IFO report fell from 95.8 to 95.2 in the month of February, pulled down by services. Germany’s demand hasn’t been at its fullest, something that can be blamed on sentiment. In addition, a recent cut-back by the government, reducing its incentives for car purchases, had a negative effect on demand.

Over in the U.K the Pound felt some pressure after BOE governor Mervyn King released his comments. King stated that the economic recovery is still fragile, as the economy is still dealing with the aftershocks of one its worst recessions. Furthermore he stated that the recent decline in consumption from Europe is having a major effect on British exports. Europe is one of the U.K’s largest consumers. Governor King hinted that quantitative easing could be used to prevent any further economic damage.

From a technical point of view the GBP/USD is now trading on a fine-line, above double support. Even though indicators are pointing towards a minor bounce, a break of the current level could lead this pair to much lower ground.

 

 

 

 

 

 

 

 

 

 

 

The Day Ahead

The day ahead should be an interesting one, as Germany is scheduled to release its GDP figure and the U.S will follow with its New Home Sales. Germany is expected to show that the economy contracted by -1.7%. New Home sales are expected to jump and come out at 355k, compared to a previous 342k.

Related posts:

1. Daily Market Review Nov 25, 09 Market Movers of the Day Europe Germany’s ifo Business Climate…
2. Daily Market Review Dec 30, 09 Europe Germany’s CPI came out better than expected at 0.9%…
3. Daily Market Review Feb 3rd, 10 The U.S markets raced forward yesterday after a mixed start,…

Popularity: unranked [?]

Last week the Fed surprised markets by hiking the discount lending rate to banks by 25 Basis points to 0.75%.The Fed went out of its way to emphasize this is solely a move towards normality and does not reflect on the highly watched benchmark rate which affects lending costs directly. Nevertheless Forex players perceived this move as a preliminary step towards eventual hike of the key benchmark rate and moved into Dollar buying across the board. The Euro Dollar dipped the 1.34 level the Sterling Dollar traded at the 1.535$ zone and the Yen hovered around 92.Althogh Dollar buying eased a bit with most currencies bouncing back, Forex sentiment remains rather sensitive to the probability of Fed tightening.

The Fed chairman Ben Bernanke is expected to give his semi-annual testimony on Wednesday evening (GMT Time) and investors will be keen to figure where exactly the Fed is aiming with this change in discount rate.

Buy signal- If indeed the Fed will confirm it is aiming for an eventual tightening in rate policy or mention this is part of a grand scheme towards exiting emergency measures this will be considered a bullish Dollar signal. Moreover with the US annual GDP due (due in Friday) in sight investors will assume positive numbers.

Sell Signal-With the Dollar currently stabilizing and failing to close at new highs any statement from the Fed that this is an isolated decision (raising the discount rate last week) and add cautious comments on the economy it will be perceived as a bearish signal and could trigger a Dollar selling.

Sterling sentiment recovering in recent hours

Related posts:

1. Federal Reserve raises discount rate eToro News Friday, February 19, 2010 The Federal reserve surprised…
2. Yen and Dollar gain as Forex unrest dominates Nervousness in the Forex market resumed as dented US home…
3. Will Ben Bernanke accelerate quantitative easing? At a time when interest rates are very close to…

Popularity: unranked [?]

After being sold heavily since November Gold might finally be in place for a wave of buying. In our last review on Gold we proclaimed that for long term bets on the metal it is best to wait for the tightening threat to pass. Well what has changed? In the Last two weeks two important occasions occurred the Fed announced a hike in the discount rate for banks and China raised it reserve ratio for banks. Both are clear tightening moves and both are known to have critical effects on Gold. China as one of the World’s biggest Gold buyers and since Gold is traded in Dollars any change in US policy affects Gold as well. The classic response for such a tightening scenario is a downgrade in inflation expectations and another round of Gold selling. But what happened instead was interesting; Gold actually posted its second weekly gain. True that the instability in the Forex market and the expected robust growth from India and china (the largest Gold buyers) is a good reason to buy Gold but eventually Gold is mostly affected by interest rates. The fact that Gold was able to climb after the tightening move from china and the Fed signals above all that Gold players are presuming the tightening threat has been realized for know. And when tightening takes a halt and rates are still at record low then Gold might just gear in for a nice rebound.

Gold in recent days

Related posts:

1. Gold Review Feb 10, 2010 Wednesday, February 10, 2010 Gold edged higher and settled above…
2. Gold continues to glitter  –Nov 4  Gold bulls seem ever more determined to…
3. Gold Review Jan 29, 10   Gold prices continue to be under pressure as the…

Popularity: unranked [?]

The equity markets were able to build up momentum last week, allowing the S&P 500 Index to rally 33 points or 3.3% for the week.  The commodity market also joined the party, as the dollar traded mixed due to global uncertainty.

The week started off on a positive note for riskier assets due to positive news out of Japan.  The gloom is lifting slightly from the Japanese economy, as sharp growth from China and other Asian neighbors is lifting exports and spurring more capital spending by the nation’s manufacturers.  The Japanese economy grew at a faster pace than expected, expanding at a rate of 4.6% for the three months ended Dec. 31.  The economic figures also showed that the slight increase in domestic demand also helped lift Japan out of its worst recession. Private consumer spending, which accounted for about 58% of real gross domestic product, rose 0.7%, supported by government measures to encourage purchases of energy-efficient electrical appliances and cars. That was the third straight quarter of gains. The GDP deflator-an indicator that gives a broad reading of price trends-worsened to a record low of a 3% decline in October-December from the previous year, compared with a 0.6% decrease in the previous quarter. A fall in domestic prices pushed down the deflator, showing that the gap between supply and demand is still increasing. 

On Tuesday the US equity markets rallied significantly and were greeted with robust news out of Australia.  RBA minutes from February showed that the central bank kept interest rates unchanged this month in a “finely balanced” decision, due to concerns that the European debt crisis could weaken the global economic recovery.  RBA noted, however, that “Members expected that if economic conditions continued to improve as expected, further increases in the cash rate were likely to be necessary.  But they did not regard that outlook as ring an increase at every meeting.”  In addition, “Members noted that many market participants expected a further increase in the cash rate at this meeting. They concluded that, on balance, the stronger case was to leave the cash rate unchanged for the time being.”  According to our market analysis, the markets are likely to take the RBA statement as more hawkish. 

Over in Greece, the debt crisis remains a market focus with euro zone Finance Ministers still trying to decide which strategy to use.  The market has been left uncertain about how the EU would support Greece in its endeavors to shrink its budget deficit.  To date, it is still unclear whether the finance ministers will provide some form of aid to Greece.  Instead, the ministers, at the conclusion of last week’s meeting, urged Greece to be prepared to undertake additional steps at the March 16th review if insufficient progress has been made.  The impact has been felt in the bond markets where Greek bonds have been sold off further with the German/Greek 10-year spread widening by the most in three weeks.  The comparable German/Portuguese spread has also widened slightly, by 6 basis points.

 Additionally, Manufacturing in the New York region expanded in February at the fastest pace in four months as company’s boosted payrolls in anticipation of accelerating orders and sales. The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month, higher than anticipated, from 15.9 in January. Readings above zero in the so-called Empire State Index signal growth in the area covering New York and parts of New Jersey and Connecticut. 

On Wednesday the FOMC minutes were released.  The Jan 27 FOMC minutes were largely superseded by Bernanke’s testimony last week, although the notes made clear that policy makers had differing views.  Hoenig, a voting member, was the only policy maker to dissent on use of the phrase “extended period.” The minutes showed he favored adopting a “modestly higher rate soon.”  Several members argued for shrinking assets sooner ,rather than later.  While all members agreed assets should be shrunk “over time”, several members did advocate shrinking assets in the “near future.”  Plosser, currently a non-voting FOMC member and speaking as the minutes were released, expressed this view.  This underscores a point.  Not all voting members are hawks.  Other FOMC members including Evans, who is currently a voting member, have advocated a more dovish approach in recent speeches arguing for expanding purchases if necessary.  Diverging views become a focus as policy begins to shift but in this case, the minutes have been superseded by Bernanke’s testimony where the Chairman laid out an exit strategy that included a discount rate hike to move the spread between the discount and Fed funds target toward a more normal spread (100 bp prior to the crisis). Furthermore, the Fed has hinted that Fed funds might become a less reliable indicator of the Fed’s policy stance “for a time” with the Fed instead using rates on reserve requirements to reflect policy.

On Thursday, the dollar continued to strengthen against the Euro and Pound, and the US equity markets continued to push higher.   US Producer Prices grew at a greater than expected 1.4% month on month for January 2010.  Ex-food and energy PPI grew at a 0.3% month over month rate.  Economists had expected a 0.8% and 0.1% increase, respectively.  Additionally, jobless claims increased by 31,000 in the past week.

Consumer prices in Canada were 1.9% above year ago levels last month, the highest since Nov 2008, representing a 0.3% increase on the month.  More importantly from a policy making point of view, the core rate rose to 2.0% from 1.5%.  The Bank of Canada has promised no rate hikes before mid-year.  The stickiness of core inflation warns of a risk of a BOC hike in Q3.              

On Friday, the market needed to absorb a differing inflation data point.   U.S. consumer prices barely rose in January from the previous month and core inflation fell for the first time since 1982.  The seasonally-adjusted consumer price index rose 0.2% last month on the back of higher energy prices, according to the Labor Department.  Core consumer prices, which strip out volatile energy and food items and are more closely watched by the Fed, fell by a monthly 0.1% in January. The last time core consumer prices fell was in December 1982. In December 2009, the core CPI had risen by a monthly 0.1%.  Wall Street economists surveyed by Dow Jones Newswires were expecting an increase of 0.3% in the headline consumer price figure and of 0.1% in the core consumer price index number.

 

Forex

The pound traded weaker after disappointing economic data and reports, including jobs data that hit the board.  Given last week’s definitely dovish BoE Quarterly Inflation Report, one could have expected a couple of members to vote for an extension of the asset purchase program.  The majority of policy members argued that adding to the size of the Q/E program now might increase the chance of unwarranted increases in asset prices, which could have a negative effect on the economy. On the employment front, jobless claims figures rose 23.5k on the month vs. -10K expected and more than offsetting a -9.6k decline previously.  Additionally, December average earnings are running at just 0.8% 3mths y/y, vs. 0.9% expected and unchanged from November which should support the BoE’s view that gains in CPI are temporary. From a technical point of view the GBP/USD Crashed on Friday and dropped to support, one must note that horizontal support coincides with trend line support. A break of that level could lead to lower ground.

 

 

 

 

 

 

 

 

 

 

 

 

 The euro cannot seem to get out of its own way.  After a brief period of calm, euro zone credibility issues have come back to haunt the euro.  Greek bonds are under pressure after Greece was ordered by EU Economic and Monetary Affairs Commissioner Rehn to hand over information on the swaps by Friday making the market nervous about the possibility of still concealed debt.  In addition, Greece will reportedly issue a new EUR 3 to 10 bln of bonds next week as part of its plans to raise a total of EUR54 bln in 2010 (of which about three-quarters still needs to be raised) putting additional pressure on bonds.    With the 50 day moving average recently crossing below the 200 day moving average, the technical pressure for the Euro is to the downside. Even though a bounce could be experienced around current levels, the trend is definitely bearish.

 

 

 

 

 

 

 

 

 

 

The Week Ahead

Related posts:

1. Weekly Market Review Nov 30, 09 Volatility jumped higher at the end of the week, after…
2. Weekly Market Review Dec 21, 09 The equity market ended in consolidation mode last week, as…
3. Weekly Market Review Dec 28, 09 The Christmas rally began a little early with the markets…

Popularity: unranked [?]

eToro News

Friday, February 19, 2010

The Federal reserve surprised the market by raising its discount lending rate to banks from 0.5% to 0.75% thus effectively raising the spread on Fed funding to 0.5%(Discount rate less Benchmark rate).The Fed chairman already announced in his statement earlier this week that the Fed will move very soon to tighten the discount rate as part of a grander scheme to move out of emergency measures and in to normalization. However markets have not been expecting the move to be so quick and were caught by surprise. Although the Fed in its decision went out of its way to outline this is only a move towards normalization rather than a tightening move investors thought differently. The fact that the fed has raised its discount rate for the first time in 3 years was preserved by the Foreign exchange players as a preliminary step towards an eventual tightening by the Fed. The reaction in the Forex arena was rather strong with the Dollar pushed to its highest point in more than 3 quarters against the Euro trading under the 1.35 mark just 20 pips shy of the 1.34 mark. The Dollar appreciated against other currencies as well trading above 1.08 against the Swiss Franc and teasing the 92 level against the Yen in what that could be best described as a broad Dollar rally.

Euro Dollar after the Fed statement

EUR/USD fell close to 200 pips in 3 hours

To discuss more about this article GoTo-http://forum.etoro.com

Related posts:

1. Forex players eye Bernanke testimony Last week the Fed surprised markets by hiking the discount…
2. Trading the Breaks Ahead of Reserve Bank of Australia’s Rate Decision 10:30 PM EDT —- AUD/USD

   aud/usd setup

   [/caption] Looking at an hourly…
3. Yen and Dollar gain as Forex unrest dominates Nervousness in the Forex market resumed as dented US home…

Popularity: unranked [?]

After Tuesday’s massive rally the major U.S indices presented some choppy action during yesterday session, but managed to close in positive territory. Investors continued to pour back into riskier assets, backed by a better than expected GDP forecast from the Fed and improving housing data.

President Obama took the stand yesterday, commenting on his recent stimulus package. Already a year has passed since the President began to inject funds into the financial system to reduce the recession’s impact. According to his statement, even though unemployment is at high levels, the stimulus helped to prevent over 2 million job losses. President Obama claimed that the stimulus plan is on target to create or save a total of 3.5 million jobs.

It was a Fed day yesterday, as the FOMC released its closely watched minutes. According to the minutes from last month’s policy meeting, the FED now sees some light at the end of the tunnel, but is cautious about making any sudden moves to rattle the markets. Even though some policy members expressed their opinions about moving into a more tightening stance, no formal statement was given. All the members agreed that the balance sheet is extraordinary high and that measures need to be taken to reduce the high figure. Some are now calling for asset sales which could provide an income and reduce the high balance. Despite the high number, the Fed did upgrade their GDP forecast from 3.0% to 3.2% and commented that they do see the economy slowly creeping out of its dire situation.

Economic data also had an impact on the intraday session after housing starts increased 2.8 percent in January, making up for the 0.7% slip in December. Building Permits came out lower than the prior result but hit expectations at 0.62M. Industrial production also helped to boost confidence after the 12 month growth rate was up 0.9%, the first positive reading after nearly two years of declines.

Stocks climbed at the start of the U.S open and managed to stay afloat for most of the session. The S&P500 finished within an intraday range, up by 0.42%, while the Nasdaq closed higher by 0.55%. The leading sector of the day was industrials, partially backed by the improving data.

 

 

 

 

 

 

 

 

 

 

 

Forex

On the Forex market the Dollar bounced back, despite a positive equity market. As mentioned numerous times on the site, this year we could witness a higher U.S Dollar along with higher equities, especially as Federal Reserve members are now hinting towards the end of their monetary easing. Furthermore, fundamental data in the U.S is slowly improving while other countries are still dealing with a major recession. This could attract foreign capital into the U.S Dollar, while investors head into riskier assets.

The USD/JPY posted its largest gains yesterday, after the services index dropped at the largest rate in nine months. Over night the Bank of Japan kept its key interest rate on hold at 0.1% stating that the bank doesn’t intend to issue any new policy initiatives. Even though Japan’s economy is picking up, it is still being driven by foreign consumption. From a technical point of view, the USD/JPY confirmed its higher-low, a technical sign for the possible start of a new trend. Even though it is still too early to determine whether this new pattern will lead to consolidation or an uptrend, major stability can be seen around ¥88.10.

 

 

 

 

 

 

 

 

 

The Day Ahead

Looking forward the U.S and Canada will both grab the center of attraction today. Canada is scheduled to release its inflation numbers and foreign securities purchases. CPI is expected to come out at a positive 0.3%, compared to last month’s negative figure. The core figure which excludes food and energy should rise by a mere 0.1%.

Over in the U.S, the Phili index is scheduled to be release along with the leading index. Both numbers are expected to increase, 17 points and a 0.6% increase, respectively. Furthermore Initial jobless claims will be released and is currently expected by analysts to show a lower figure of 435.00k compared to the prior 440.00k.

Related posts:

1. Daily Market Review: 7.5.09 Stress Tests Saved the Day Yesterday, Will it Continue? Wall…
2. Daily Market Review Nov 25, 09 Market Movers of the Day Europe Germany’s ifo Business Climate…
3. Daily Market Review Dec 16, 09 Europe U.k’s CPI showed higher prices at 1.9% U.k’s RPI…

Popularity: unranked [?]

eToro News

Wednesday, February 17, 2010

Sterling traded rather stable in recent days as upbeat UK inflation figures and EU credit woes shifted selling pressure to the Euro. The cable bottomed around 1.553 against the Dollar and settled around 0.87 against the Euro. Although the Sterling has been rather exposed to selling pressures not so long ago the recent elevated figures spurred investors bets that UK inflation could crawl in faster than anticipated and bring tightening closer. The CPI figures published this week stud at 3.5% YoY a 1.5% above the BoE target and higher than investors’ consensus. In fact this is the second CPI figure in a row that majorly outpaces the expectations of both policy makers and investors alike. The BoE governor Marvin King in his letter to the government laid inflation prospects as subdued stressing that UK industrial over capacity will curb inflation towards the mid of 2010.The Governor reiterated that risk for the UK economy remains to the downside and did not rule out additional quantitative easing to support the economy in case of another deterioration but most importantly sealed his reference to  inflation by stressing that in case mid-long term inflation prospect will rise above the BoE target of 2% the committee will move to tighten monetary conditions.

Opposite dynamics, perfect for range bound- The Cable is currently affected by two coinciding dynamics the fear from inflation and on the contrary the fear from another economic deterioration. Since the UK holds a massive sovereign debt investors are extra-sensitive to both factors. Surging deficits can push inflation upwards and push rates higher and the currency higher however surging deficits can also raise fear over the embedded risk of the currency thus pushing it lower. The result of this bipolar dynamic in sterling sentiment is a classical case of range bound trade where arguments for both sides are strong enough to hold the currency inside the range. Only a rapid acceleration in inflation expectations or deterioration in the growth outlook will eventually lead to a break to one of the side.

The Unemployment  as expected-Consensus bets were pricing a fall of -10K in the claimant report and unemployment to hold around 7.8% rather close to its peak. Although the sterling slightly retreated after the data was published the unemployment figures were in line with expectations and with the context of the CPI figures published earlier this week the Sterling should at least be able stay afloat. In the future however an unexpected fall in unemployment or in the claimant report could signal unemployment has bottomed thus raise bets on UK inflation and will clear the path for a major upward correction in the sterling. Because if unemployment is stabilizing than wages could hold steady rather than fall and the downside over capacity risk will be reduced. However if unemployment will surprise for the worse or even jump to the 8% figure, it will raise bets supporting the BoE assessments of downside risk and will ease inflation expectations. That will be Sterling bearish as rates hikes will seem more remote and QE could take place once again.

Related posts:

1. Unemployment in the US News update from eToro In a very short time…
2. Unemployment Rate of various countries (Jan 2009) I always feel unemployment rate is a good indication of…
3. It’s Going to Be a Tug Of War between inflation and Unemployment Prices could be on the rise This week the U.K…

Popularity: unranked [?]