FX Spread Betting: GBP / USD Falls on Speculation of Further BoE Easing
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 February 2012
UK Trading Review
UK markets finished mostly lower yesterday, with the FTSE 100 index ending its four-day winning streak, as Greek debt negotiations continued without resolution, increasing concerns about the Eurozone debt crisis.
French Connection Group plummeted 12.1%, after it reported disappointing Christmas sales data and announced that its full-year pretax profit would be lower than market expectations.
Miners, Glencore International and Xstrata dropped 4.5% and 1.7%, respectively, amid speculations that the merger between the two companies would face regulatory obstacles in Europe.
Vedanta Resources, Antofagasta, Rio Tinto and Fresnillo declined between 1.8% and 3.1%, tracking a drop in base metal prices.
Vodafone gained 1.6% after it abandoned plans to merge its Greek operations with Largo Ltd.
Randgold Resources climbed 2.2%, after the company reported a surge in its fourth-quarter earnings.
FTSE 100 shed 0.2%, to close at 5,892.2, while FTSE 250 rose marginally to 11,237.7.
European Trading Review
European markets closed in the negative territory yesterday, as investors remained concerned about Greece’s ability to reach an agreement with its international creditors on the details of a debt-swap agreement.
Financial stocks, Credit Agricole, Deutsche Bank and BNP Paribas fell between 0.6% and 2.7%, as risk aversion increased among investors.
Julius Baer Group slid 3.8%, after the company reported a 27% decline in its full- year profit.
Deutsche Post eased 2.4%, after Macquarie downgraded the stock to “Neutral” from “Outperform”.
Air France-KLM dropped 4.1%, after the company’s labour unions went on strike.
Vestas Wind Systems sank 7.7%, after ING Groep trimmed its price estimate on the stock.
FTSEurofirst 300 index declined 0.1% to 1,075.2. German DAX Xetra 30 closed marginally lower to end at 6,764.8. French CAC-40 dropped 0.7% to 3,405.3.
US Trading Review
US markets closed lower yesterday, as investors remained concerned, amid reports that Greek leaders had failed to reach an agreement over austerity measures demanded by the country’s international creditors to secure the second bailout.
Medco Health Solutions and Express Scripts plummeted 8.1% and 4.6%, respectively, amid speculation that the Federal Trade Commission would stop their merger.
Medicare provider, Humana, slid 5.4%, as it forecasted profits for 2012 below market expectations.
Lazard dropped 4.2%, as it reported a decline in its fourth-quarter profit on the back of a slump in its advisory business.
Home builders KB Home, Weyerhaeuser, Lennar and Toll Brothers declined between 2.4% and 3.5%, as a broker downgraded these stocks amid concerns over their valuation.
DJIA edged down 0.1%, to settle at 12,845.1. NASDAQ slid 0.1%, to close at 2,902.0. S&P 500 slipped marginally to settle at 1,344.3.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5807, 0.1% higher against the EUR at €1.2066, and 0.2% higher against the JPY at ¥121.25.
The EUR is trading 0.1% lower against the USD at $1.3101, ahead of the Greek Prime Minister Lucas Papademos’ discussion with the leaders of three political parties on measures to curb the country’s debt.
The GBP / USD is trading lower amid speculation that the Bank of England would keep its interest rates unchanged but expand its bond purchase program at its meeting this week.
The EUR is trading marginally higher against the JPY at ¥100.48, after data showed that Japan carried out stealth intervention in the markets five times in the final quarter of 2011 to shield exporters’ earnings from the impact of the JPY gains.
Yesterday, the EUR closed lower against the USD, amid concerns about the European sovereign debt crisis. This came as the leaders of Greece’s main political parties failed to reach an agreement on further austerity measures that would allow the country to receive a second bailout from international creditors.
The GBP ended higher against the EUR after the European leaders told the Greek Finance Minister Evangelos Venizelos on the weekend that an increase in the bailout package was not forthcoming.
Commodities Trading Review
In Asia, crude oil for March delivery is trading marginally lower at $96.87 per barrel.
Yesterday, crude oil for March delivery dropped 1.0% or 93 cents to end at $96.91 per barrel. This came as the dollar gained against the euro, decreasing the demand for commodities as an alternative investment.
Crude oil lost value after reports stated that supplies in the US has increased for the past three weeks at a key delivery point in the Midwest.
Gold for immediate delivery is trading marginally higher today at $1720.70 per ounce.
Gold for April delivery declined 0.9% or $15.40 to close at $1,724.90 per ounce yesterday. This came as the dollar strengthened against the major currencies, lowering the demand for the yellow metal as an alternative investment.
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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'FX Spread Betting: GBP / USD Falls on Speculation of Further BoE Easing' edited by ETX Capital, updated 07-Feb-12
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