Hopes of Greek Resolution Boosts Crude Oil Spread Betting Market
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The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 4 Novemeber 2011
As the Greek Prime Minister digs his own political grave, the Eurozone saga continues to overshadow the G20 meeting in France.
As the story continues it becomes more and more interesting with the prospect of the drama intensifying with crucial votes ahead, one of the major ones being Italy.
Berlusconi is hanging onto power by the skin of his teeth, after defection after defection from his coalition, and he faces his own critical vote next Tuesday when he tries to ratify his latest budget proposals.
That will be interesting when it comes to it and all eyes will be on the Italian politicians. This is why the drama has only just begun, with an unwritten script that no single person could ever have dreamt up.
If the vote does go against Berlusconi then there’s no guarantee he’ll step down, judging by the way he’s managed to stay in office up to now.
As the meetings go on at the G20, the market continues to focus on what’s happening in Europe. However, today at least gives us the chance to look at something different, with the US Non Farm Payroll being released at lunchtime today.
It’s an hour earlier than normal this week due to changing clocks and the bottom line figure is expected to come in at around 100k.
This still isn’t enough to put a dent in the US unemployment rate but is job creation nonetheless.
The NFP figure has been almost as volatile as the indices spread betting markets themselves coming in at 0 one month, way below expectations and then way above expectations the next month.
So far this week we have seen a better than expected ADP employment number and yesterday’s initial jobless claims also saw an improvement, so there’s a chance that today’s figure might come out above three figures.
The unemployment rate meanwhile is expected to remain at 9.1%, a thorn in the side of President Obama.
Financial spread betting markets are sanguine this morning from a trading range point of view but in the black as investors have weathered the political unravelling of the past few days remarkably well.
The FTSE 100 is up by 10 or so points at the time of writing, around 5560 and for now that important support area around 5400 remains in tact.
The euro climbed against the dollar back up to $1.3855 on the back of this, but has been trading in a very tight range since yesterday evening.
NFP figures today are almost certainly the factor that is keeping traders cautious about showing their hand until the release later this afternoon.
The euro - dollar forex pair is trading at $1.3803 inside a bullish channel that could signal further gains but as we all know, on NFP day anything can happen.
Yesterday’s trading session for gold saw it reach highs that haven’t been seen since late September, as investors relaxed their concerns that Greece may default, bringing carnage to the European banks.
As an alternative investment, the precious metal is increasingly becoming more appealing, with the ECB reporting an unexpected cut in interest rates.
Further support was provided by speculation over the Fed pumping out another bout of quantitative easing so, amid a weakening dollar, gold gained $25 to end the session at $1762.8.
This morning a little bit of profit taking has crept in as the precious metal is at $1757 at the time of writing.
The crude oil spread betting was given a leg up yesterday as hopes for a resolution on the Greek crisis were hitting headlines, increasing demand for the black stuff.
Additionally, the good news from the US in the form of initial jobless claims dropping more than anticipated gave support to oil, as did the weaker US dollar.
Let’s just see if the NFP data later today can keep the market optimism high but as of right now, Brent crude is currently trading at $111.09.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
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'Hopes of Greek Resolution Boosts Crude Oil Spread Betting Market' edited by SD, updated 04-Nov-11
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