Forex Spread Betting: EUR / USD Falls Amid Debt Crisis Resolution Concerns
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 - 21 October 2011
UK Trading Review
UK markets declined yesterday, as investors remained apprehensive about the outcome of the forthcoming EU summit, amid reports of a rift between France and Germany over the how to boost the eurozone rescue fund.
Among, engineering stocks, IMI, the top laggard on the FTSE 100 index, slumped 5.6%, while Weir Group fell 1.5%, dragged down on demand concerns.
Mining stocks, Anglo American and Kazakhmys slid 4.0% and 5.0%, respectively, as base metal prices fell.
Rio Tinto lost 3.9%, as Natixis downgraded the stock to “Neutral” from “Buy”.
Antofagasta slipped 3.4%, after Tethyan Copper, its joint venture with Barrick Gold, failed to get an extension for extraction in Baluchistan region.
Energy stocks, BP, BG Group and Tullow Oil retreated between 1.6% and 3.6%, as oil prices lost ground.
FTSE 100 fell 1.2% to 5,384.7, while FTSE 250 shed 1.2% to 10,111.1.
European Trading Review
European stocks closed lower yesterday, as disagreement between Germany and France over how to boost the European Financial Stability Fund hampered market sentiments, increasing concerns that a resolution to the European debt crisis might get delayed.
Banks, Intesa Sanpaolo and UniCredit, fell 9.8% and 12.0%, respectively, after Fitch Ratings stated that prospects for Italy’s five largest banks “have significantly deteriorated”.
Deutsche bank dropped 5.5%, after it lost a bid to reclassify $2.4 billion in claims on Lehman Brothers Holdings.
Utilities, RWE and EON, dropped 5.2% and 5.8%, respectively, after Kepler Equities downgraded both the stocks to “Reduce” from “Buy”.
Schneider Electric slumped 7.6%, after the company lowered its 2011 profit target for the second time in four months. FTSEurofirst 300 index slipped 1.4% to 954.3.
German DAX Xetra 30 fell 2.5% to 5,766.5. French CAC-40 dropped 2.3% to close at 3,084.1.
US Trading Review
US markets finished mostly higher yesterday, recovering from earlier session losses, as German and French leaders agreed to provide a “comprehensive” solution to the European debt crisis, ahead of the EU summit.
Fifth Third Bancorp, the top gainer on the S&P 500 index, surged 9.1%, after its net income jumped more than doubled and profitability of loans improved in the third quarter.
Nokia jumped 6.2%, after it reported a smaller-than-expected drop in its third-quarter profits.
Philip Morris jumped 3.3%, after it raised prices in Japan.
Voice communications solutions provider, Polycom, the top laggard on the NASDAQ, slumped 25.2%, as its third-quarter earnings fell short of market expectations.
Dell fell 5.4%, amid concerns that flooding in Thailand could disrupt some electronic parts production for several quarters ahead.
DJIA edged up 0.3% to 11,541.8. NASDAQ fell 0.2% to 2,598.6. S&P 500 gained 0.5% to 1,215.4.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5806, 0.1% higher against the EUR at €1.1471 and 0.1% lower against the JPY at ¥121.35.
The EUR / USD is trading 0.1% lower at $1.3779, amid concerns that European leaders would struggle to resolve the eurozone debt crisis. The EUR also fell, amid speculation that German business confidence fell in October to the lowest level in more than a year.
The EUR is trading 0.2% lower against the JPY at ¥105.80.
The JPY is trading higher against the major currencies, as investors speculated over European leaders’ ability to resolve the eurozone debt crisis, increasing demand for safer assets.
The AUD and NZD are trading lower against the USD, as ongoing worries over the Eurozone debt crisis dampened the demand for high yielding assets.
Yesterday, the GBP ended higher against the USD, after the UK Office for National Statistics reported that retail sales rose much more than expected in September. The GBP also rose as a draft document showed the bailout fund might be authorized to provide additional funds to nations such as Italy and Spain.
The EUR ended higher against the USD, amid optimism that European leaders would be able to solve the eurozone debt crisis next week. This came as Germany and France jointly stated that they would discuss a comprehensive solution to the euro zone crisis at their weekend summit, though no decisions would be adopted before a second meeting next week.
Commodities Trading Review
In Asia, crude oil for December delivery is trading 40 cents higher at $86.47 per barrel.
Yesterday, crude oil for December delivery closed 0.25% or 22 cents lower at $86.07 per barrel. This came amid worries that disagreement between Germany and France over the bailout strategy could derail the pace of the economic recovery, dampening the outlook for oil consumption.
Gold for immediate delivery is trading 0.5% lower today, at $1,625.93 per ounce.
Gold prices for December delivery declined 2.1% or $34.10 to $1,612.90 per ounce yesterday, extending its losing streak to a fourth session, as some encouraging US economic data dimmed the demand for gold as a safe haven.
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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'Forex Spread Betting: EUR / USD Falls Amid Debt Crisis Resolution Concerns' edited by ETX Capital, updated 21-Oct-11
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