7 May 2010

A hung parliament (UK) has been confirmed to the detriment of the pound. We are now awaiting to see if a majority coalition can be formed with the most likely scenario being a Conservative/Lib-Dem majority.

Conservative leader David Cameron said it was “clear that the Labour government has lost its mandate to govern this country”. Gordon Brown may also initiate coalition talks with the Lib Dems, who, Nick Clegg admitted, had a “disappointing night”.

For the financial markets and the pound, the UK needs a quick deal to be struck between the parties. The longer the indecision the more the pound will suffer. We are in no mans land at the moment and the markets do not like uncertainty. This is leading to a sell off in the pound. The pound should bounce if a majority coalition is formed, however horse-trading will only heap more pressure on the pound.

The financial markets and credit rating agencies will want to see action on the UK fiscal policy as a matter of priority regardless of the new government. Procrastination and disagreement will lead us towards the path of a sovereign downgrade.

In euro trading news is better. The euro has risen this morning after Japanese Finance Minister Naoto Kan said that the G-7 plans to hold a conference call today to discuss the Greek debt crisis, after global stocks fell dramatically yesterday. The comments sent the euro rising against the dollar after it hit a 14 month low yesterday. The G-7 has not intervened in the currency market since a coordinated effort to buy the euro in 2000.

The US sell off, triggered by Europe’s debt crisis, was sparked by signs that the Greek situation is spreading. The yields in Spanish and Greek debt rose to the highest level since the euros inauguration. In a flashback to 2008, the Dow Jones Industrial Average tumbled almost 1000 points during the US afternoon session. The SEC and Commodity Futures Trading Commission issued a joint statement after US markets closed that they will inspect ‘unusual trading’ or a bad case of “fat finger” that contributed to this fall.

The main data release today is the Non Farm Payroll numbers for April. Estimates put the net change at a 190k increase, which would be a modest improvement over the previous month’s reading and the best reading since March 2007. The jobless rate is seen holding at 9.7%.

Report by Philip Ryan

Currency Market Updates by Tom Nadir

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<Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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28, April 2010

S&P downgraded both Greek and Portuguese debt yesterday, as fears over a fiscal crisis in the Eurozone continued to spread. As the market turns it attention away from the Hellenic Republic towards Portugal, two year Greek bonds are now yielding over 13% as investors offload them and worries over how the downgrade will affect ECB collateral requirements (which were only changed a few weeks back to try to stop this happening) take hold.

The Euro fell to an 11 month low against the Dollar, the historical safe haven currency, and further falls seem likely and would be very welcome in dealing with the deepening sovereign problems throughout the Eurozone. Some commentators are speculating that the ECB could use its ‘nuclear option’ to help debt stricken countries fund themselves. This involves direct purchases by the Central Bank of Government bonds and is akin to printing money, which would put major downside pressure on the Euro.

Sterling has held on to recent gains against the Euro, trading above the key 1.15 level in spite of the continuing fears over a hung parliament. As more uncertainty grips the market over the Eurozone and risk appetite diminishes, Sterling has fallen against the Dollar towards 1.51 and looks likely to continue on this path in the near term.

Stock markets across the globe declined yesterday as the Senate heard Goldman Sachs testimony about the SEC charges levelled against them relating to a synthetic derivative deal they brokered, casuing large losses for several investors including IKB, a German bank. Traders tried to figure out how the case is likely to affect financial markets moving forward and whether more cases of this kind will be brought against financial firms and the deals they did in the lead up the financial crisis in 2007-2008.

Today, all eyes will be on the FOMC interest rate decision and if there is any change in tone from the current dovish stance towards a more hawkish tone. We also have German and Aussie CPI data along with Canadian house prices later this afternoon.

Report by Alistair Cotton

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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21 April, 2010

The results from Goldman Sachs shocked the markets as revenues for the 1st Quarter was $ 1 billion more than estimated. The Greek situation went from bad to worse yesterday with market talk of ever-upwardly spiraling bail-out costs leading to a rise in the country’s debt yields and CDS prices.

The 10-year bond yield broke above 8% for the first time since the Euro’s introduction yesterday and the 5-year CDS level has hit a new high of 476 this morning. With today’s belated start to the IMF/EU investigation likely to last anywhere from 10 – 14 days, there appears little likelihood of positive news over the next few days. True, Greece managed to get away a tranche of 3-month bills into the market but this positive was tempered by the rate that they needed to pay to ensure success – approximately 2 1/2% higher than an equivalent German issue would cost.

The euro has accordingly looked vulnerable, especially given that the US dollar no longer appears to react negatively to positive economic/earnings data from the US. Expect more Euro downside as we approach the end of the month.

Sterling has been the gainer amongst the ‘majors’, picking up against all the others. The ‘hung parliament’ issue is history (for now) and economic data has been buoyant. British consumer price inflation (CPI) rose more than expected yesterday to 3.4% in March from 3% in February against a forecast of 3.2% meaning Mervyn King has yet another letter to write to the treasury. The news of higher inflation raises UK rate rise speculation with the Central Bank acting sooner rather than later although I feel that this interpretation is still tenuous.

Today’s MPC minutes will reveal nothing, the last meeting being too close to the election for anything meaningful not to be interpreted as being political by some faction or other. Tomorrow’s live debate between the 3 leaders will likely prove more interesting for markets with last week’s first offering seen as a bit of a practice run for the ‘Big 2′ and the Lib-Dems probably getting a less easy ride this time.

Yesterday saw the Bank of Canada leave rates steady but come out with a bullish assessment of the economy going forward and as clear a hint as a Central Bank is able to produce, of a rate rise on the 1st June. The CAD surged back below parity to the USD and the AUD reacted in a similar way, strengthening against the US Dollar and testing record highs against the Euro. Both still feature highly in ‘best currencies to be in’ portfolios for the rest of 2010.

A downside for markets was the call from the IMF for the world’s leading economies to impose new taxes on Bank’s balance sheets to pay for the financial clean-up as well as a fresh additional levy on Banks profits and pay.

Report by Tim Lewis

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

Currency Market Updates by Tom Nadir

The contents of this report are for information purposes only.

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14 April, 2010

The Greeks smashed their Bond issue sale yesterday and sold €1.6billion in one their most important Treasury bill auctions. The combination of six and twelve month loans surpassed expected demand by €360million. The attractive rates offered at nearly 4.9% gained much interest from short term traders and caused a short rally on the Euro against Sterling and the Dollar.  However, as the afternoon progressed, the markets returned to an unconvinced attitude as concerns crept in on Greece’s overall long term debt issue.

Back to UK and we had a brief Sterling rally yesterday as the ONS stated that Britain’s goods trade gap dropped to £6.179bn in February, an unexpected improvement of close to £1bn. Exports leapt by 9.5% in the same period, the largest rise since Jan ’03. Also, reports of house price rise outnumbered reports of house price decline according to the Royal Institution of Chartered Surveyors.

However, it must be noted the Pound has still given up almost all its gains during the past 24 trading hours with the election’s ubiquitous presence over the currency.

In other market news today we have major figures out in the US with Retail Sales expected to show 1% growth month on month against a 0.3% growth last month. Always considered a significant figure by the markets, as consumer spending equates to approximately 66% of the US’s overall economic activity.

In addition, we have CPI inflation data out, which is expected to be a monthly increase of 0.1% adding to the overall 2.4% annual figure. The Fed will have keen eyes of these figures to obtain a clear indication of any future fiscal policies despite recently saying any interest rate rise is a long way off.

Look for some market volatility around 13.30BST if figures are wider than these expected marks.

Report by Philip Ryan

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.
BlogCatalog – Finance

What seems to be a very common issue these days is scalping: (the act of entering and exiting the market VERY quickly and grabbing 15-40 pips on average). If you’re wondering why, the answer is simple. It’s because scalping, if done right, can be the fastest way to earn your entire day’s pay, before most people have got their shoes on!

It is a remarkable way to make money fast and therefore, there is a huge amount of interest in this kind of trading. The problem is the majority of traders really don’t know what they are doing. Sure it is exciting and very profitable but sadly too many get caught up in the excitement of it (anyone who’s day traded or scalped knows EXACTLY what I’m talking about) and will often suffer severe losses.

If you have ever wanted to know how to scalp, Jason Fielder just released a training video with the ridiculous title:

“The Anatomy of a High Probability Scalping System”

However, in it, he answers most (if not all) of the questions he’s received on scalping over the last few years.

I recommend you look at this complimentary multi-media training where you will learn:

* His 4 Rules for Developing a High Probability Scalping System
* How he Determines the Best Time-Frames for Scalping (including FREE ACCESS to his proprietary “HotTime” indicator)
* Why Technical Filters Alone Are Not Enough (and which Fundamental Indicators really matter)
* His Programming Rolodex for Getting Systems Coded And Tested

In short, you’ll learn how to spot a good scalping strategy from a bad one by seeing exactly how he goes about developing the systems he trades in his own account. Included with this training is a proprietary indicator that they use to find the highest probability trading time-frames.

It’s a really slick tool that they use every day when developing systems and I am sure you will enjoy using it as well as propfit from it.

Good Trading,

Tom

Currency Market Updates by Tom Nadir

The contents of this report are for information purposes only.

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Currency Market News on the UK’s Bulging Deficit, German ZEW Survey and the FOMC Minutes

16, March 2010

Following over two weeks of selling pressure the market seems to be running out of new reasons to sell the pound. Sterling selling is running out of steam. We have already heard lots about a hung parliament, the deficit, weak growth prospects, QE and negative M&A flows. The pound has undoubtedly struggled but it seems to have found a bottom for now at 1.50 against the USD and 1.10 on the euro.

Recent news that hit the pound was that the European Commission is concerned about the UK’s bulging deficit and the UK needs to dramatically enforce it’s fiscal programme. This did lead the pound lower but it has bounced back and this to me signals that we may have limited downside potential unless we see anything new to attack sterling. The key level against the USD is for a move back over 1.52.

Today we had the German ZEW survey which came in slightly better than expected but lower than last months reading. Therefore this shows a six month consecutive decline in the ZEW survey reinforcing the weak sentiment for Germany. However the euro has held firm and is at the moment above 1.37 against the USD.

Later we have the FOMC minutes and once again the language from the Fed will be all important. Basically if the Fed turn more hawkish then this will allow the USD to rally….the language in recent statements has maintained the “extended period” for keeping interest rates at low levels. With better recent economic sentiment it will be interesting to see if this is reflective in the FOMC.

Report by Phil McHugh

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

BlogCatalog – Finance

Currency Market News on BOE Interest Rates, Germany and Greece and the US Non-Farm Payroll Data

5, March 2010

As the BoE  keep interest rates on hold at 0.5%, the asset purchase programme was held at £200 billion. The stronger PMI data this week and the improvement in the revision of Q4 2009 GDP has helped the MPC to be comfortable in their current wait and see policy.

An article in the Telegraph interestingly pointed out that if it was not for QE the UK would still be in recession. That could well be the case. The fact that there was no expansion helped to keep sterling supported just over 1.50 against the USD and 1.10 the euro. We really need to see a move beyond 1.52 before we can start to relax a little.

Over to the ECB and as expected they also kept rates on hold at 1%. They announced that it will continue to scale back their special lending measures as expected and equally as expected Trichet dodged the difficult bullets concerning Greece and gave little away. Yesterday’s Greek bond issue was a real success and this gave the markets a boost backing up the recent austerity measures introduced. The market is aware that we are not out of the woods but this certainly helps. Expect further wranglings with Greece but nice to get some good news for a change.

Today the German and Greek heads are meeting. Should be a spicy meeting after yesterdays comment from the German Economics Minister who said that the German government has no intention of offering Greece “even one cent” and that each country has to take care of its own affairs…..would be nice to be a fly on the wall for this meeting.

Later today we have the big US non-farm payrolls number but even this has lost some of its importance with the appalling weather expected to have considerably distorted the numbers. In a way this could prove to be Dollar positive with the whole community expecting a weak number therefore reaction should only materialise from a surprisingly better result.

Report by Phil McHugh

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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Currency Market News on UK and US Interest Rates and The Beleaguered Euro

18, February 2010

Yesterday the markets digested the minutes of the February interest rate meetings for both the UK and the US. Firstly looking at the UK the vote was a unanimous 9-0 to keep interest rates on hold and also to hold Quantitative Easing at £200 billion.

The feedback from the MPC was ambiguous in the sense that the decision was unanimous and yet the comments were that it was a “finely balanced” decision to keep QE on hold. The unanimous decision gave sterling a boost which was then tempered by weaker than expected employment numbers. Going forward this does not change the sentiment for sterling which will struggle to appreciate until the outlook for the UK warrants a more hawkish approach from the MPC.

Over to the US and the FOMC upgraded their forecasts for the US economy reflecting a more bullish tone from the Fed. They also discussed trying to shrink their reserves over time although no time frame was announced to do this. The positive tone from the Fed with improved economic sentiment in the US coupled with loitering fear in the markets helped to push the USD higher. Japan as expected voted to keep their key overnight rate at 0.1% – no real surprises in the accompanying statement.

The main focus for the currency markets still surrounds the beleaguered euro which is threatening to fall below 1.35 against the USD risking further selling pressure for the single currency. Today data from the UK’s public finances was not pretty and is a further reminder that the UK needs to get its act together…sterling fell on the news unsurprisingly.

Report by Phil McHugh

Currency Market Updates by Tom Nadir

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The contents of this report are for information purposes only.

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Currency Market News on The Greek Tragedy, Sterling’s Hangover and A Brighter Dollar

11, February 2010

EU leaders are meeting today in an attempt to lay the foundations for a deal to rescue Greece. Lots of speculation already touted this morning. There has been talk of IMF assistance and then IMF involvement without funding. Germany and France are widely expected to shoulder most of the responsibility in supporting Greece.

The most recent feedback is that aid for Greece will depend on Athens meeting its deficit reduction targets this year. This begs the question, “What if they do not?” Lots of fence sitting which is still leaning to reduced confidence in the markets and associated strength of the safe haven currencies such as the USD and the YEN. Expect more volatility as more news and feedback filters through.

Sterling is suffering from a hangover today after a little too much of Mervyn King yesterday. The Bank of England governor killed off the rally in sterling by leaving the door open for a further expansion of the QE programme. However it was not all doom and gloom from King who dismissed fears that the UK would lose their AAA credit status. Sterling still softer on market fear and Kings comments in early trade today.

The USD experienced further gains yesterday as Fed chairman Ben Bernanke indicated that discount rates could rise sooner than expected. This is the charge to banks for loans directly from the Fed. This tone was taken as hawkish even though Bernanke reaffirmed that interest rates would remain low for a prolonged period.

The Feds tone sharply contrasted that of the Bank of England as the US look towards a withdrawal of liquidity and a rise in cash rates with the potential higher discount rates. This reinforced USD strength especially against sterling.

Report by Phil McHugh

Currency Market Updates by Tom Nadir

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

The contents of this report are for information purposes only.

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