Indices Spread Betting Markets Fall Sharply on Weak Global PMI Data
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Indices Spread Betting Markets Fall Sharply on Weak Global PMI Data

Indices Spread Betting Markets Fall Sharply on Weak Global PMI Data


Worry is creeping in amongst the ranks of investors as the raft of economic data set alarms bells over the state of the global economy ringing across the indices spread betting markets.

Not only did the realisation that the global economy is starting to slow contribute to the sell off, as proved by PMI readings that all came in lower than expected, but a further downgrade to Greece compounded the situation.

The real worry though is that banks exposed to Greek debt are starting to write off their assets. Also, going forward, there could be further write downs, as well as complete write offs, pummelling banking revenues in the process.

The ultimate disaster will be that the vicious circle simply starts again and that banks lock up by freezing lending and we spiral back into recession.

If that does happen then this recession will be a great deal deeper than the last one as growth is so anaemic at the moment.

Sorry for the doom and gloom this morning, at least the weather’s improved and we can enjoy a mini heat wave this weekend. Although that in itself is causing problems of its own; with this year’s harvest in the UK in serious danger of failing, this could compound the spike in commodity prices, further fuelling inflation. It seems there’s little going right at the moment.

Yesterday’s sharp correction in the shares spread betting markets did not lead to the usual sell off in commodities that you’d expect from such risk aversion, with some of the softs even rising.

Slowing growth and rising inflation have been the theme of the year even if the headlines have been mostly filled with the Eurozone debt crisis. We are perilously close to a period of stagflation.

As a result of all this the FTSE 100 is adding to its losses from yesterday with further declines today.

Rather like in a game of cricket when one wicket can be quickly followed by another, when financial spread betting markets start to sell off there’s usually a couple of days of weakness in succession.

The FTSE 100 is currently at 5865 so near term levels to watch are 5850 and 5825 to the downside and as high as 5970-6000 to the upside.

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'Indices Spread Betting Markets Fall Sharply on Weak Global PMI Data' by DB, updated 02-Jun-11

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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading 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.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.


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