European Online Spread Betting Markets Rise as ECB Holds Rates
The regular trading review of the main UK, US and European markets, plus a quick look at the commodities and forex markets.
For today's report see Financial Trading Review.
Financial Trading Review - 07 June 2012
UK Trading Review
UK financial spread betting markets advanced sharply yesterday, after the ECB maintained its benchmark interest rate at a record low and extended its unlimited short-term cash offering to maintain liquidity in the banking system.
Miners, Anglo American, Randgold Resources, Fresnillo, Kazakhmys and Vedanta Resources rallied between 6.9% and 9.1%, on the back of stronger base metal prices.
Man Group rose 7.1%, after Citigroup lifted its rating to “Buy” from “Neutral”.
Barclays advanced 8.2%, after its Absa Bank unit agreed to acquire the store card portfolio of South African clothing and shoe retailer Edcon for approximately £0.8billion.
Lloyds Banking Group added 5.2%, as it mulled to sell its Australian corporate real estate loan portfolio to AET SPV Management.
BG Group gained 3.4%, tracking a rise in crude oil prices. FTSE 100 surged 2.4% to close at 5,384.1, while FTSE 250 soared 2.3% to settle at 10,583.8.
European Trading Review
European markets closed sharply higher yesterday, as the ECB held its benchmark interest rate at a record low and on expectation of additional stimulus from the US Federal Reserve.
However, markets trimmed some of the early gains as the ECB offered no new monetary stimulus and after data showed a higher-than-expected decline in German and Spanish industrial output.
BNP Paribas, BBVA and Deutsche Bank rose between 3.2% and 4.2%, as risk appetite increased among investors.
Energy sector stocks, Total and Eni climbed 1.4% and 2.8%, respectively, in line with a rise in crude oil prices.
Industrial sector stock, Rheinmetall surged 7.1%, after a broker upgraded the stock to “Buy” from “Hold”.
Insurer, Axa rallied 7.0%, after Merrill Lynch included the stock in its “Most Preferred List”.
LVMH gained 4.2%, after HSBC raised its recommendation on the stock to “Overweight” from “Neutral”.
FTSEurofirst 300 index rose 2.2% to 974.2. German DAX Xetra 30 climbed 2.1% to 6,094.0. French CAC-40 closed 2.4% higher at 3,058.4.
US Trading Review
US markets rallied yesterday, on speculation that global central banks would implement further measures to address the Eurozone debt crisis and support the global economy.
Commercial services provider, Iron Mountain surged 13.8%, as it approved a plan to convert to a REIT and raised its quarterly dividend.
Chesapeake Energy rallied 7.1%, amid speculation that the company might sell some of its pipeline assets to Global Infrastructure Partners.
Home Depot rose 3.4%, as it augmented its stock buy-back plan for fiscal 2012, while Monsanto gained 3.0%, as it announced its share repurchase plan.
JPMorgan Chase, Citigroup, Bank of America and Morgan Stanley rallied between 3.4% and 8.4%, after Atlanta Fed President Dennis Lockhart stated that the central bank might consider further monetary stimulus if the US economy falters.
DJIA surged 2.4% to close at 12,414.8. NASDAQ soared 2.4% to settle at 2,844.7. S&P 500 jumped 2.3% to 1,315.1.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5476, 0.1% higher against the EUR at €1.2319, marginally higher against the JPY at ¥122.81.
The EUR is trading 0.1% lower against the USD at $1.2563. Earlier, the USD was trading lower against the EUR, amid speculation that the US Federal Reserve Chairman, Ben S. Bernanke today might signal additional stimulus is needed to boost the country’s economic recovery. The EUR is trading marginally lower against the JPY at ¥99.69.
The JPY is trading lower against most of its major counterparts as Asian equity markets extended a global rally, damping demand for lower-yielding currencies.
The AUD is trading higher against the USD, after Australian Bureau of Statistics reported that the number of people employed in the country rose by 38,900 in May.
Yesterday, the USD closed lower against the EUR, after the US Federal Reserve stated that more bond purchases remains an option and as the ECB kept its benchmark interest rate at record low, decreasing the demand for safe haven currencies.
The GBP/USD spread betting pair closed higher, as concerns eased that the European sovereign debt crisis would harm the UK economy, after the ECB, President, Mario Draghi stated that officials are ready to act to stem the region’s debt crisis.
The currency also rose on speculation the Bank of England would keep its program for bond purchases, on hold at a policy meeting this week.
The CAD ended higher against the USD, as base metal and crude oil prices rose on hopes that global policy makers would take measures to stimulate economic growth, increasing the demand for commodity linked currency.
Commodities Trading Review
In Asia, crude oil for July delivery is trading 0.5% or $0.41 higher at $85.43 per barrel.
Yesterday, Crude for July delivery rose 0.9% 0r 73 cents to settle at $85.02 per barrel. This came as the dollar weakened against the euro amid speculation of further monetary easing by the US Federal Reserve and as Iran raised the possibility of delaying or cancelling the next round of nuclear talks with the Western powers.
However, a smaller-than-expected decline in the US crude oil inventories kept gains under check.
Gold for immediate delivery is trading 0.1% lower today, at $1,620.53 per ounce.
Gold for August delivery rose 1.1% or $17.30 to end at $1,634.20 per ounce yesterday. This was in line with the rise in euro, amid hopes that the recent decline in prices and potential for more monetary easing measures from the global central banks would increase the demand for the precious metal.
Financial Trading News
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The above comments do not constitute investment advice and neither ETX Capital nor Clean Financial accept any responsibility for any use that may be made of them. Any prices or data are indicative and subject to change without notice; its accuracy is not guaranteed and should not be relied on.
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'European Online Spread Betting Markets Rise as ECB Holds Rates' edited by ETX Capital, updated 07-Jun-12
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