Markets were dealt a surprise yesterday as the Consumer Price Index (CPI) rose in the UK to 3.5 percent up from 3.4 percent in February according to the Office for National Statistics.

The ONS blamed higher food prices specifically soft drinks, bread, cereal, meat, fruit and vegetables coupled with rises in clothing & footwear.

However, there was some good news as utility bills were lower than one year ago following energy companies reducing tariffs in February last year.

All eyes will know be on the Bank of England as this latest rise could reduce the likelihood of additional Quantitative Easing in next months MPC meeting but with stuttering growth the Bank of England may have no choice.

So far today in the UK we have seen the UK Jobless Claims figures fall for this first time since last spring.

Unemployment fell by 35,000 to 2.65m according to the ONS leaving the overall rate at 8.3 percent.

Furthermore we saw voting in the Bank of England for interest rates and QE voting come in at 9-0 and 8-1 to keep rates on hold and maintain the contribution at £3.25bn.

In online CFD trading, Sterling has rallied as a result of these figures and GBP/EUR currently sits at 1.2212, the highest reading since September 2010.

Cable has also risen and is fast approaching the key psychological level of 1.60 currently trading at 1.5979.

In other financial news Warren Buffet has announced he has stage one prostate Cancer which will create further hype around the successor to his Berkshire Hathaway business.

As for the rest of this week we are pretty light on data with inflation data in New Zealand, Canada and the Germany of any real significance.

Finally, on Friday watch out for any press releases from the G20 Finance Ministers Central bankers meeting in Washington.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

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European shares edged higher today, after a very choppy morning, as investors weighed up the uncertain outlook for Spain against the strong start to US earnings.

Shares CFD trading investors appeared to take advantage of the perceived value in stocks following last week’s plunge albeit that the defensive and utilities sectors garnered the most interest.

International Power led the way on the UK Blue chip index following news that it had agreed to the improved bid of $10bn from French energy giant GDF Suez.

The financial sector lagged with RBS and Lloyds Bank out of favour as investors awaited the delayed review from Moody’s in the run up to Spain’s bond auctions.

French Oil company Total saw a bounce following the announcement of a rise in first quarter refining margins from the previous quarter. Significant progress has also apparently been made in stem the gas leak on its Elgin field platform.

Further extension in gains was facilitated by mixed but for the most part stronger fundamentals from the US which helped to ease worries about Q1 growth.

The better than expected US Retail Sales data saw a rise of 0.8 percent against an expectation of 0.4 percent which initiated a fairly broad based rally in US futures prior to the opening bell.

The increased confidence saw US equity markets jump as investors chose to ignore the Empire State Manufacturing Index which came in well below expectations with general business conditions falling 14 points.

US Business Inventories also met with expectations increasing by 0.6 percent in February.

The ongoing challenges facing the housing market were still notable as Builder Confidence was seen to decline for the first time in seven months slipping back to 25 from the consensus 28.

The February TIC data showed much lower than the expected figure; coming in at $10.1bn on expectations of a $42.5bn increase.

With foreign investors making up the majority of buyers of long term US financial assets, what was notable is that while China remains the largest foreign holder of US treasuries, Japan is a very close second.

Citigroup was on the up as the company reported a $2.93bn Q1 profit, with EPS at $1.11 against an expectation of $1.01.

Apple dropped below the significant $600 level as profit taking finally took hold.

Currencies

The Canadian dollar was one of the strongest currencies today as traders await the outcome of the Bank of Canada interest rate decision tomorrow which is expected to remain at 1 percent.

As the single currency declined against most of its counterparts while the Japanese Yen was the best performer on the day as it benefitted from its safe haven status.

Sterling was fairly flat on the day although did print an intra-day 18 month high against the euro.

Commodities

Oil CFDs, specifically Brent Crude dipped below the strong support line of $120/bbl today as a boosted dollar and pullback in risk appetite shifted sentiment. The weekend talks with Iran also helped trim the risk premium in the price.

Copper, has retraced some of its recent fall, but remains below its recent range finding support at $3.60/lb which is the 50 percent retracement of the December/February upmove.

Gold has failed to sustain a move above the $1657 level which is the 50 percent retracement of the late December lows to February highs. Support at $1625 must be maintained to see further upside.

CFDs, spread trading and FX are leveraged products and carry a high level of risk to your capital as prices may move rapidly against you. It is possible to lose more than your initial investment and you may be required to make further payments. These products may not be suitable for all customers therefore ensure you understand the risks and seek independent advice.

CFDs trading update from Michael Hewson, Market Analyst, CMC Markets.

This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

Neither CFDs-Online.com nor any contributing company or individual accepts any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

CMC Markets UK Plc which is authorised and regulated in the UK by the Financial Services Authority.

Italian borrowing costs soared yesterday following new concerns about their ability to reduce its high levels of debt.

In the latest auction the Italian government paid an interest rate of 3.89 percent from 2.76 percent last month and this has been against the recent trends but FX CFD trading investors are becoming increasingly sceptical over Italy’s and Spain’s ability to reach deficit targets.

As a result, newly elected governments in both countries have announced austerity measures to reach strict debt reduction targets.

Coupled with these figures, Greece published its latest unemployment data yesterday indicating a further rise with the overall rate pushed to 21.8 percent up from 14.8 percent at the same point last year.

Despite the bad news the Euro remains towards to the higher of its recent trading range against the Greenback currently trading in the high 1.31s and Sterling trades just above 1.21 at 1.2104.

So far this morning China has published its latest growth figures revealing the world’s second largest economy has grown at its slowest pace for nearly three years.

GDP increased by 8.1 percent down from 8.9 percent in the previous quarter and below expectations of 8.3 percent. The numbers are being blamed on the fall in demand for exports from the Europe and the US and consequently we could see risk assets hit hard today.

We have a light day in terms of headline data but so far we have seen German inflationary data which came in exactly against forecast at 2.3 percent.

Later this afternoon we have CPI for the US who are expecting an annual figure of 2.7 percent.

Finally to end the week we have the Michigan confidence figure, which assesses consumer confidence on personal finances, business conditions and purchasing power based on telephone surveys and provides a real time assessment of US consumer sentiment.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

Content by CurrenciesDirect.com. This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

European markets have, not surprisingly, plunged today as the hangover effects of the last weeks disappointing Non-Farm Payrolls was the initial trigger for the risk off sentiment.

With the head of Spain’s central bank stating that the regions banks may require further capital should the economy deteriorate further, it begs the question whether the county can survive a recession while inhibited by severe austerity.

The residual effect of a weak bond auction last week is sending Spain’s 10 year bond yield to levels not seen since December.

A test of the 6 percent level is more than likely as the pressure is on the Spanish government to show it can ignite economic growth as well as control its budget deficit in an effort to avoid a bailout.

The Spanish IBEX-35 has now hit a 3 year low as the effect of the ECB’s LTRO and indeed the global stimulus measures fades.

The growing dissent against Monti’s labour market reform has also seen Italy’s bond yields march higher.

Given that the Italian Treasury will seek to auction €11bn of bills tomorrow followed by an additional auction for €5bn on Thursday; Monti may well be regretting his
recent statement that the euro crisis is ‘almost over’ as 10 year yields surpass the 5.62 percent level.

In stark contrast, Germany’s 10 year bund yield at levels last seen in August -1.65 percent; and the economic powerhouse has witnessed its 2 year note yield drop below that of Japan’s for the first time.

The country also showed a trade surplus for March, of €13.6bn exceeding conservative forecasts of €12bn.

The Sentix Investor Confidence data appeared to encapsulate the recent market action missing expectations by a wide margin, coming in at -14.7 against the consensus -8.2.

On the FTSE itself, the mining sector has had a torrid day with Vedanta Resources down the bottom of the UK index as the global growth fears and fear of contagion within the Eurozone re-emerged.

The stand out performer on the day is Randgold Resources rising by as much as 9 percent intra-day as the threat of international sanctions was removed following the signing of an agreement by coup leaders in Mali, home of the elusive Timbouctou.

US CFD trading markets saw a slight bounce in early trade as investors pondered whether QE would be forthcoming but have they have since slipped back in anticipation of Alcoa’s earnings result due after the closing bell.

With Fed member, Lockhart due to speak at an event this evening, one can only hope that he is a little more loose-lipped than Bernanke in respect of interest rate policy rhetoric.

FX CFD trading markets have been rather range bound with the commodity currencies, in particular the Kiwi dollar displaying weakness while the Japanese Yen has advanced against the greenback on safe haven interest.

The single currency has continued to struggle anytime it has got anywhere close to the highs at 1.3380/90, once again sliding back as Spanish and Italian bond yields edge back up.

The revelation that Spanish debt to GDP ratio will increase to 79.8 percent of GDP from 68.5 percent has unnerved investors who fear that the new budget measures will choke back growth potential even more.

Oil prices have slipped back in conjunction with equity markets in part due to softening domestic demand in China.

Gains should be limited in the short term given that inventories continue to remain at elevated levels as a result of the warmer weather.

Both WTI and Brent should remain well supported by the $100/bbl and $120/bbl marks respectively.

The global slowdown has seen copper prices break towards the bottom of the 6 month price range falling below $3.68lb and is currently finding support at the 100 day MA. A break below this could well see $3.5lb in view.

Gold and silver prices have seen a bounce as investors speculate on the potential for additional QE.

The return of Indian jewellers following a 3 week strike is also supporting prices. The release of the Beige book and the CPI from the US later in the week should help decide direction for the shiny metal.

CFDs, spread trading and FX are leveraged products and carry a high level of risk to your capital as prices may move rapidly against you. It is possible to lose more than your initial investment and you may be required to make further payments. These products may not be suitable for all customers therefore ensure you understand the risks and seek independent advice.

CFDs trading update from Michael Hewson, Market Analyst, CMC Markets.

This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

Neither CFDs-Online.com nor any contributing company or individual accepts any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

CMC Markets UK Plc which is authorised and regulated in the UK by the Financial Services Authority.

Another expectation beating employment report from the US on Friday has the CFD trading markets in a buoyant mood this morning.

The headline number was 227K jobs created in February against a forecast of 210K, with strong upward revisions to both December and January numbers.

This marks the third straight month of strong jobs growth with gains spread across different sectors of the economy. One negative was that construction jobs showed flat growth for the first time in a couple of months.

Interestingly we have again seen the dollar strengthen on the back of positive US developments, which flies in the face of the risk-on, risk-off paradigm that has dominated FX CFD trading in the US Dollar over the last few years.

Commodity currencies initially surged on the news but have cooled off as we start the week.

Looking ahead this week we have several big ticket releases to look forward to. Tomorrow German economic sentiment is followed by US advanced retail sales and the Fed interest rate decision.

The market expects a strong increase in retail sales from last month and Friday’s employment report is fuelling further optimism of a stellar number. The risk therefore is to the downside in terms of the Dollar if we get a disappointing figure.

The Fed meeting should be a non-event, but talk about sterilized QE over recent days by the Fed Chairman will keep market interest high.

Eurozone inflation figures plus the ECB monthly report (useful for tracking ECB borrowing by the banks) are due later this week.

Also worth watching is the Swiss Interest rate decision, not for interest rates directly but for chatter over an increase in the Swiss Franc peg which, if undertaken, would cause significant movements across the FX markets.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

Content by CurrenciesDirect.com. This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

Today’s Greece bond swap outcome didn’t have a particularly negative or positive effect on the markets today.

With some uncertainty surrounding the CDS insurance question, investors have remained on the side-lines with expectations that a market pressure point could well have been put to one side in the short-term.

The one remaining uncertainty remains with respect to whether ISDA will declare a default event and trigger the CDS insurance. Ratings agency Fitch is in no doubt putting Greece into “selective default”.

The main catalyst sending CFD trading markets higher has been the US employment data that saw the number of jobs added, exceed expectations. February payrolls added 227k, while the January number was also revised higher from 243k to 284k.

Despite the better data, it is the more defensive minded sectors that have been the better performers today, with mining stocks lagging behind after Chinese data came in slightly below expectations.

Out-performers include temporary provider Aggreko continues to hit record highs after the company reported that profits for 2011 increased by 6% to £327m.

Silver miner Fresnillo has been the laggard of the day after the company was downgraded by Deutsche Bank from “buy” to “hold”.

US markets opened higher today after a strong February jobs report saw 227k jobs added while the unemployment rate stayed unchanged at 8.3%.

The U6 broader unemployment rate declined from 15.1% to 14.9%. Upside looks likely to be tempered near the recent highs despite these better numbers given that we’ve seen some impressive gains over the past few weeks.

Carnival Cruise Lines shares are in the spotlight today as investors discover the initial costs associated with the Costa Concordia sinking in Italy. The company posted a loss of $139m and downgraded their outlook as a result.

The single currency has slid back sharply today despite the successful outcome of the PSI, probably a case of “buy the rumour sell the fact”.

To be fair the economic data we’ve seen out of Europe today hasn’t been that supportive with Italian, French and Greece economic data continuing to disappoint.

Missing industrial production data missing on both French and Italian measures added to this, while Greece’s growth numbers for 2011 were revised down again to -7.5%.

In FX CFD trading, the pound has also taken a bit of a hit after industrial production for January missed by some way coming in at -0.4%, well below expectations of a gain of 0.3%.

The poor numbers have certainly raised eyebrows given that PMI data across the same sector has been broadly positive for both January and February.

Gold prices have slid back sharply on the positive US jobs numbers. However, they have since bounced back after Fitch put Greece into restricted default.

US crude prices have risen quite sharply on the back of today’s positive jobs report, while Brent prices have found upside progress slightly more difficult likely weighed down by the disappointing European data.

Copper prices despite the disappointing Chinese data have remained fairly buoyant probably on an expectation that we could well see a cut in Chinese Reserve Requirements this weekend, given the sharp fall back in Chinese CPI.

CFDs, spread trading and FX are leveraged products and carry a high level of risk to your capital as prices may move rapidly against you. It is possible to lose more than your initial investment and you may be required to make further payments. These products may not be suitable for all customers therefore ensure you understand the risks and seek independent advice.

CFDs trading update from Michael Hewson, Market Analyst, CMC Markets.

This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

Neither CFDs-Online.com nor any contributing company or individual accepts any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

CMC Markets UK Plc which is authorised and regulated in the UK by the Financial Services Authority.

EU officials are desperately trying to convince private holders of Greek bonds to accept a crucial debt swap deal ahead of today’s deadline.

In order for Greece to receive a second bailout, it will need at least two thirds of bondholders to take a 53.5% cut in the value of their holdings and the deal is considered essential in Greece’s attempt to avoid a default.

According to the Institute of Finance yesterday, just under 40% of the bond holders had agreed to the new deal leading to a nervy countdown at 8pm GMT deadline later today.

If the total number of bond holders reach the required 66% (approx €150bn) agree to the swap, the government can force the other bond holders to take the haircut too.

Remarkably the Euro remains relatively resilient in the face a Greek default up slightly against the Greenback reaching 1.3217.

Back to the UK and Quantitative Easing has knocked £90bn off Pension Funds according to National Association of Pension Funds (NAPF).

The news came from two recent studies and blamed lower bond yields and consequently pushing final salary pensions further into the red. Joanne Segars, Head of the NAPF, said: “Businesses running final-salary pensions are being clouted by QE.”

“Deficits that were already big now look even bigger because of its artificial distortions.

“Firms are legally obliged to fill the deficits, and that diverts money away from jobs and investment, and will lead to further closures of final salary pensions in the private sector,” she explained.

Finally, today we have interest rate decisions in the UK and Europe both expecting no change and consequently little impact in the FX CFD trading markets.

Reduced revisions to ECB growth forecasts will however, could underpin a more negative tone in this afternoons press conference.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

Content by CurrenciesDirect.com. This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

Greece has a potentially difficult week ahead as a group of private investors consider the terms and conditions of an arrangement intended to cut €107bn from the Greek’s €340bn debt burden.

The whole deal hinges on whether the creditors are willing to take a hit of 75% on their holdings in return for a combination of long-term Greek bonds and debt issued from the bailout fund.

Due to terms of the second bailout, if over a third of the bond holders reject the deal the overall bailout could collapse as per terms put through Government last week.

The reaction from the rest of Europe specifically Austria is now sceptical about the overall viability of the package. Chancellor Werner Faymann said yesterday that the second bailout is not the end of the matter.

“I would not trust anyone who says that for Greece it’s enough,” Faymann told Austrian media.

“For Greece it depends on whether they can stick to these measures over several elections.” Greece will begin voting at the end of this month.

In the interim, Greek officials are required to gain the backing of a minimum of 2/3 of its private holders by Friday to employ the debt swap and comply with the requirement terms of its second bailout.

Worst case scenario, Greece could run out of funds in less than a fortnight and could prompt an unruly and possibly catastrophic default.

As you would expect, the news is weighing heavily on the euro right now and has seen EUR/USD slip to 1.3191 from 1.3440 at the same point last week. Sterling is approaching the key psychological figure of 1.20 at 1.1981 against the single European currency.

CFD trading markets will keep a close eye on developments in the med and this will provide the impetus for sentiment this week.

Elsewhere the week is largely dominated by Central Bank interest rate decisions with announcements in Australia, New Zealand UK, Europe and Canada all expecting no change in the overall rate.

Any variance from these expected figures, with any turbulence from Greece and Friday afternoons US Non-farm payroll data could lead to a volatile week for the markets.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

Content by CurrenciesDirect.com. This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.

On 13th January the GBP reached a low of 1.52321 against the USD. Since then it has strengthened significantly and the price right now, on the morning of 29th February, is 1.59291.

While this is marginally higher than the recent maximum of 1.59274 we saw on 8th February, it is still too early to predict that we will soon seen new highs. We will have to wait for additional confirmation before that can happen.

The Ichimoku Kinko Hyo clearly shows that we are experiencing a short-term bull run. The green Chinkou Span line is well above the price of 26 periods ago and the current price is far above the Ichimoku cloud.

Both the red Tenkan Sen and the blue Kijun Sen lines are also above the cloud, which is more evidence of a bull run.

If the price should rise significantly above the previous maximum of 1.59274 the earlier maximum of 1.61649 we saw on 31st October last year becomes the next target.

Looking at GBP/USD charts, we can clearly see that, from a longer-term perspective, the market is far from being in a bull phase. The price will have to move much closer to the 1.7000 level before we can start talking of a bullish long-term CFD trading market.

Day traders will have to wait for at least two solid closes below the Ichimoku cloud before risking a short trade.

CFD Trading, Margined Forex and Spread Trading carry a high level of risk, you can lose more than your initial deposit. Only trade with capital you can afford to lose and if necessary seek independent advice.

The information provided in the above article should not be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the time the information was produced.

Article by InterTrader which is a trading name of London Capital Group which is authorised and regulated by the Financial Services Authority.

Encouraging economic developments provided CFD trading investors with buoyant markets. Despite weaker than expected US durable goods orders, a rise in US consumer confidence to its highest level since February last year provided stock markets and risk assets with an overall a boost.

It was a similar story in Europe as Italy held a successful auction of 10-year debt at a lower than expected cost at the same time as Portugal approved a third review of its bailout agenda.

However, there was some negative news, with the ECB momentarily deferring the eligibility of Greek bonds as security for its backing and the Emerald Isle calling a referendum on the European fiscal compact.

Nevertheless, expectations of a strong take up at today’s ECB second 3-year Long term refinancing operation (LTRO) should keep markets on the straight and narrow for the rest of this week.

As for the USD, given the upbeat equity market mood overnight it is no shock that the Greenback was on the slide as the EUR appears determined before today’s 3-year LTRO by the ECB.

Bernanke’s Semi-Annual Monetary Policy Report later today will provide the Dollar some bearing but no major surprises are expected.

EUR/USD will continue to rally if we are correct about a strong €600-700 billion take up at the LTRO but it will be interesting to see if the 1.35 level can be breached.

Finally, attempts by SNB head Jordan repeating his standpoint of protecting the EUR/CHF bottom of 1.20 has been relatively ineffective.

EUR/CHF has benefited from a strong correlation with actions in interest rate differentials.

This suggests that it should rise in German yields against Swiss yields for EUR/CHF to move up. This has a strong case given the decline in Swiss economic data over recent months.

Ultimately EUR/CHF could move higher but over the short-term, it is doubtful to shift far from the 1.20 level.

 
CFDs, margined forex and financial spread trading are leveraged products. They carry a high level of risk to your fund. It is possible to lose more than your initial capital outlay with these products and they may not be suitable for all investors, do ensure that you fully understand the risks involved, seek independent financial advice if necessary.

Content by CurrenciesDirect.com. This content should not be construed in any circumstances as a recommendation or solicitation of any offer to buy or recommendation or offer to sell any security or other financial instrument.