Indices Spread Betting Markets Fall on S&P EU Downgrades
|
|
 |
The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 16 January 2012
After a nervy end to trading last week investors remain cautious following the S&P’s downgrades of the likes of France and other European countries.
It acts as a stark reminder that all is not well within the Eurozone and the main threat now is not that other ratings agencies might follow suit, but that the EFSF bailout fund might be next.
With talks for dealing with Greece’s debts breaking down last Friday there was a double whammy for the markets as fears over an eventual default increased, most likely in March when their next bout of refinancing is due.
Without the full backing from Germany to back Greek debt and turn it into an attractive investment, the Greeks have pretty much no hope of staying in the Eurozone.
The money presses are standing by to be restarted and dish out Drachmas after they were put on hold just over ten years ago.
The indices spread betting markets suffered decent losses on Friday as the rumours of the downgrades spread, but not quite as much as you might expect since investors knew that France and others were on the S&P’s downgrade watch list. Once it became apparent that the rumours were true, the market recovered from its lows.
This morning a bit of weakness has greeted the early session, but at the time of writing a few bids are pushing the market higher.
The FTSE had consistently been called to open some 10 to 20 points lower than it did and since then it’s been drifting higher, however caution seems to remain the order of the day so far.
With US shares closed for Martin Luther King day, trading will probably be thin and there’s no economic data due for release.
The FTSE may have had a decent start to the year, albeit slightly spoilt by Friday’s decline, but it remains rather range bound, capped by strong resistance up at the 5700/20 area and support seen around 5350.
If we cast our memories back to the first half of 2011, the FTSE spent months trading within the same range before finally breaking out to the downside.
With so much uncertainty surrounding the Eurozone it’s hard to see the market rallying to new heights, but at the same time there just seems to be enough optimism there to prevent a major crash.
The euro is facing a real uphill struggle at the moment and FX spread betting investors are going to find it tough to find any kind of reason to buy into the single currency.
It hit an 11 year low against the yen and is approaching a 17 month low against the dollar, which is really carving the trend for safe haven currencies at the moment.
Whilst Greece is on the brink of default, France and Austria lost their AAA rating and Italy, Spain, Portugal and Cyprus had their ratings cut by two notches.
The EUR/USD pair is trading around $1.2670 this morning and the trend could remain bearish as it continues to be capped by a downward trend line.
Commodities spread betting investors may have looked at gold’s performance last week as though it was attempting to make a comeback, with news of possible further monetary stimulus in China and Europe helping spur on the bulls.
But in fashion with Friday 13th, negative news from S&P about their downgrade on 9 European members’ credit ratings sent investors fleeing from gold and into the latest safe haven, the US Dollar.
All in all, the precious metal lost $10.4 to close at $1639.3, which at time of writing is slightly changed, with the yellow brick trading up at $1643.7.
For some, S&P’s downgrade on the 9 Eurozone members wasn’t a shock, after many a warning from the credit rating agency.
Spread betting account holders will still be waiting to see any follow up on the matter though as attention has been swung back to Europe.
On the other side, the possibility of a strike in Nigeria could disrupt oil productions, along with the unfinished sanctions against Iranian crude exports, meaning energy traders are staying on red alert, hence the limited decline on Friday.
This morning Brent is higher at $111.36 on the back of renewed tensions in Iran as they are seen to be threatening their neighbours if they replace Iran's reduced output imposed due to sanctions.
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.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It 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.
Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.
'Indices Spread Betting Markets Fall on S&P EU Downgrades' edited by SD, updated 16-Jan-12
Related Articles:
Financial Markets, updated 23-May-12
Financial Markets - your daily update on the markets with views and opinions from the insiders, plus a look at...read article: Financial Markets.
Online Spread Trading, updated 16-May-12
A look at the latest spread betting markets plus company reviews, compare prices and details on where to free charts and free live prices....read article: Online Spread Trading.
Bargain Hunters Boost Gold Futures as Greece Secures Bailout Tranche, updated 11-May-12
Buyers returned into the gold futures market yesterday, albeit at a cautious pace. They pushed the price of the precious metal higher and...read article: Bargain Hunters Boost Gold Futures as Greece Secures Bailout Tranche.
Dow Jones Futures Sink as Greek Politicians Fail to Form Coalition, updated 10-May-12
Amid growing concern about the turmoil in Greece, and the failure to put together a coalition government, the Dow Jones extended its losses for...read article: Dow Jones Futures Sink as Greek Politicians Fail to Form Coalition.
French Banks Weigh on CAC 40 Spread Trading Index Over Greek Exit Concerns, updated 09-May-12
The losses for the French banks would be considerable if Greece exited the euro. The CAC 40 index dropped 2.8% yesterday, one of the worst...read article: French Banks Weigh on CAC 40 Spread Trading Index Over Greek Exit Concerns.
Sterling/Euro Financial Spread Betting Market Hits 3 Year Highs on Euro Woes, updated 08-May-12
Sterling is currently gaining from the euros woes. The sterling/euro financial spread betting market is now trading at a three year high. However,...read article: Sterling/Euro Financial Spread Betting Market Hits 3 Year Highs on Euro Woes.
Nymex Crude Oil Futures Fall as US Recovery Remains Weak, updated 04-May-12
The price of Nymex crude oil futures posted a steep fall of $2.68, yesterday. Discouraged by the anaemic US recovery, buyers did not...read article: Nymex Crude Oil Futures Fall as US Recovery Remains Weak.
First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page
Daily Spread Trading Index
Index of spread trading articles - the regular Spread Trading Update from Financial Spreads...see Index.
|
|
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
|
|
