Euro, FTSE 100 and Nikkei Futures Trading - Monthly Review March 2011
The regular monthly spread trading review from IG Index.
The Month Ahead
European Debt and Rates Set to Dominate as Markets Recover From Japanese Tragedy
Trading in March was overshadowed by one thing: the tragic events in Japan and the ongoing concerns regarding the nuclear reactors.
Unsurprisingly, spread betting market volatility went through the roof; at its worst point Japan’s own Nikkei index had dropped by 23% from its early March high, and other global indices fell sharply.
Although investor concern in relation to Japan has calmed in recent days, this and the situation in Libya is likely to remain on the radar in the weeks ahead.
In Europe, the results of the latest stress tests on the Irish banks are likely to raise the spectre of sovereign debt once again. It would not be out of the ordinary if developments in Ireland and other countries such as Portugal inject some volatility into markets during April.
The European Central Bank has also given broad hints that it will raise rates this month; 7 April at 12.45pm (London time) is the all-important date for your diary.
Closer to home, the third and final revision to GDP data showed that growth contracted at 0.5% in the latest quarter.
The latest growth figures for the first quarter of 2011 are expected on 27 April, and these numbers will be closely scrutinised by investors hoping for a strong bounce-back from the recent downbeat figures.
FTSE 100 Spread Betting News
FTSE Spreads Rebound
Reacting to the earthquake in Japan, the FTSE 100 dropped back to its worst levels since the Irish debt crisis of last November.
However, the second half of March saw shares recover strongly, regaining much of the lost ground. For the chartists out there, it does look as if the two-year recovery for the FTSE 100 is still intact.
Going into April, the question is whether the index can surpass earlier 2011 highs around the 6100 level.
A move through here could well help soothe some of the concerns we have had over recent months and may even suggest the next leg higher in the recovery is underway.
Forex Spread Betting Update
Euro Spread Betting Market Defies Critics
It was less than six months ago that Ireland had to be bailed out and there were plenty of commentators suggesting that the ‘grand experiment’ of the Euro would be drawing to a close.
Since then, EUR/USD has rallied by 10% and the currency pair is back up to the pre-bailout levels (around $1.4300).
With expectations of a rate rise in April from the European Central Bank and the familiar concerns of Ireland and Portugal back on the agenda, it should make for an interesting few weeks ahead.
For now at least the rally from the 2011 lows is intact but it remains to be seen if the Euro can break the $1.4300 highs and push on ever further.
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
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'Euro, FTSE 100 and Nikkei Futures Trading - Monthly Review March 2011' edited by IG Index, updated 07-Apr-11
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Please note that spread betting and CFD trading carry a high level of risk to your capital. You can lose more than your initial deposit. These products may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
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