Indices Spread Betting Markets Sink on Eurozone Debt Crisis Fears
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The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 10 November 2011
Fear is gripping investors at the moment as the Eurozone debt crisis seems to be getting out of control.
Politicians in the US are now trying to calm nerves by saying that their exposure to Italian debt is wholly containable and that their banks will be able to weather the storm in the event of any default.
Indices spread betting markets were in sell mode throughout last night's session in New York and this morning this has followed through to the start of European trade.
For the FTSE 100 we've been calling it to open below the important support level of 5400 throughout the night and at the open we're trading at 5360.
This breach of 5400 is worrying for the bulls who've been citing this as the previous resistance, turned major support level. So now the focus is going to be on the 5330/00 and 5270 area and then of course it's the major low around 4800.
The bears seem to be very much in control of proceedings and if the fear grows we could be testing the resolve of these support areas.
The euro has remained the whipping boy on the forex spread betting markets, trading down at $1.3540, as the Eurozone debt crisis continues. For more details also see our feature FX Spread Betting: EUR/USD Tumbles as EU Leaders Discuss Eurozone Break Up.
Economic data today comes in the form of the Bank of England's interest rate decision where things are expected to remain on hold after having extended quantitative easing last month.
After their claims that the first round of QE helped to boost GDP, the pressure will be on them this time for their actions to have a material effect on UK growth and job creation.
For people on the street the real worry is rising prices and unfortunately whilst QE might give a boost to GDP, we've seen that it is only short term and it also puts pressure on underlying inflation.
Even though gold is considered to be a safe haven it hasn't managed to capitalise on the recent turmoil within the markets.
Rejecting $1800 only a couple of days ago has seen it retrace back to $1760 at the time of writing.
The uptrend remains in tact and so bulls are probably sitting on the sidelines waiting to dip back in again as this little bout of weakness could present them a buying opportunity.
Crude oil prices have also suffered selling in line with the risk off trade of the past few days.
Just when the Brent crude oil spread betting market looked like it had made a little breakout to the upside, the market turns negative again.
This has shown that any traders who've been opposing any recent rallies and falls would have done rather well, as markets have stuck within a relatively narrow trading range. This morning Brent is at $112.40.
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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'Indices Spread Betting Markets Sink on Eurozone Debt Crisis Fears' edited by SD, updated 10-Nov-11
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