Black Monday seems to be followed by a bleaker Tuesday. Wall Street saw one of its worst falls when world markets
continued its free fall. Investors desperately leaving stocks looking for other outlets. Treasuries soared while GOLD broke new records reaching 1785 in Asian trade.
President Barack Obamas assurances that US was still a triple rated country which honoured its obligations did not calm markets. While the President spoke, Dow Jones, NASDAQ and SAP fall to new lows and Gold soared, demonstrating the worst political confidence crisis since autumn of 2008. No big expectations for Fed Chief Bernanke’s speech today.
Fundamental facts, not words and political oratory are needed in order to convince world’s investors that US is not in for a second dip recession. European stock indices today are pointing steeply down reminding investors that also the Euro-zone is in a mess. China’s inflation figures neither gave any comfort illustrating that this is a worldwide crisis. Yesterdays 7,83 % stock market loss yesterday just added to the fact that this a worldwide financial crisis might be deeper than experienced in 2008.
Yen and Swiss francs are still favoured currencies. Currencies in commodity and oil producing countries under pressure. with Australian dollars in free fall. Downward trend expected for Rubles and Norwegian krones (NOK). Oil has fallen 20 USD a barrel in one week. Also agricultural commodities like corn and wheat are falling.
DOW Jones bounced back at the end of yesterday’s session and added 3,98 % after more closely digesting the American Federal
Central Bank, FED, statement to leave interest rate unchanged to 2013 in light of continued sluggish economic growth.
DOW initially fall into negative territory, but FED made the trick that President Obama’s statement on Monday did not obtain.
It calmed nervous markets and regained some confidence after the last ten days turmoil.
All the US indices went strongly up with Nasdaq in the driver’s seat with a 5,29 % jump. The Asian markets followed suit and European futures are pointing up. China contributed to a more optimistic sentiment by presenting a monthly high record trade surplus beating by far expert’s predictions.
Commodity markets stabilized. Gold is steady around 1750. Oil stronger on better market sentiments trading at 104,47. 5 % up from yesterday’s inter day bottom on 99,50. FED’s statement was no favor to the Dollar which is falling against most currencies. YEN and Swiss franc still investors favored currencies. USD – EURO is trading at 1.4348.
Markets have been given sigh of relief. But sluggish economic growth and sovereign debt worries shall soon enough be back at the top of the economic agenda.
The relief rally in stocks lasted some few hours before markets were back in red.
Yesterday good night sessions in Asia was followed by opening optimism in Europe.
But after some few hours trading the European exchanges were back in deep red.
Speculation on possible downgrading this time of France’s credit rating dominated
along with renewed credit fears and worries of slower economic growth.
Wall Street saw a new terrible session. Asian exchanges picked up somewhat
in the second half, but ended down approximately 2 %.
This led to new records in Gold prices which surpassed record 1800. Adjusted for
inflation Gold has still future potential. The 900 level reached in 1979 equals
2500.
USD was stable towards EURO – 1.4215. YEN and Swiss Franc continue up while
Australian dollar made a little come back in view of more optimistic forecasts
for commodities. Oil fall back in Asia, but Brent is now back on 106 levels.
The markets seem to have stabilized somewhat during the last hours with futures
for USA pointing up in the morning.
Stock globally made a strong comeback yesterday with markets rallying in late European sessions. Dow Jones
Sky-rocketed with 3,9 % and Asian markets ended in positive territory after days with consecutive big losses.
Investors demonstrated bigger risk appetite and sent Gold down close to hundred dollars from its peak on
1815. Gold stabilized in Asia and is now trading at 1865. Funds went from treasuries into stocks. Strong correction
in Swiss Franc after central bank intervention. Dollar is slightly stronger against most currencies except YEN.
The rally came on the back drop of slightly better employment figures from the US. Job claims for June was down from 402 000
in May to 395 000. US trade balance figures for June did, however, show a decline in export and record deficit.
France, Spain and Italy have along with Asian markets introduced prohibition against short selling
echoing measures taken during the 2008 crisis. Measures are taken in effort to stabilize bank stocks which have been in free fall.
Oil is up from its lows with Brent trading on USD 107 signalizing some optimism for growth., but volatility
and nervousness are just around the corner indicating that the stock rally shall prove short lived.
The week has started on a positive note with market stabilizing after last weeks turmoil. Europe followed
the upward trend from Asia. Dow Jones added 1,90 % and Nasdaq 1,88 %. Asia continues slightly up
this morning.
Guru investor Warren Buffet is on a buying spree, and declared stocks at sales at present prices.
While some of the nervousness, at least for now, seems to be have lost its grip grip in the United States, new
crisis loom around the corner in Europe. Euro-bonds which would have given at Euro zone a necessary
injection and an insurance against sovereign defaults is not on the agenda for the Merkel -
Sarkozy meeting today.
Amidst the uncertainty Euro rose to its highest two weeks level against USD; 1.4450. USD is also loosing
ground towards other currencies while gold is up from yesterday’s 1745 now trading at 1765.
Merkel and Sarkozy yesterday agreed on stronger financial and fiscal bilateral co-ordination, but stopped short of
introducing the Eurobonds many observers had hoped for. The markets reacted negatively. Dow and Nasdaq fell
on continued debt crisis fears in Europe. Shanghai was up, but other Asian markets ended flat. Europe is set to open
down. US futures are slightly up.
Dollar is gaining ground against EURO trading at 1.4385. Gold is close to all time high on 1785 while
oil prices are steady on Brent USD 109 levels. Swiss franc is down fourth day in row following Central
Bank intervention and rumours that Swiss authorities want to see the Franc pegged to EURO.
Gold continues to be the preferred safe haven reaching an end of the day record 1795 yesterday close to the inter day high, 1817, set on August 8th.
Gold is up for a sixth straight month outshining all other metals and equity classes. No end seems to be in sight. Predictions for 2011 is set to 2000, and Standard chartered bank has 5000 in sight for 2020 as Gold is seen as the best hedge against inflation.
Why is money continuing to flow into Gold? The debt crisis in Europe, uncertainties regarding economic growth in the United States
and a consequent slow down in Asia dominate. India with 9 % inflation is by far the biggest buyer of Gold. Central Banks all over the world are storing gold, and the Russian and Mexican central banks are predicted to be the big buyers in 2012.
No wonder that gold shines.
After three – four positive days stock markets in US and Asia ended flat or down. Futures for Europe and opening in US are down.
Oil prices stable. Brent trading around 110. US/Euro is 1.44 and Yen and CHF continue upward.
Global markets ended in deep red yesterday after one of the worst sell off’s markets have seen. Germany was down a record 5,92 %. Sell off’s continued with DOW and Nasdaq falling steeply and in Asia where the KOSPI was especially hard hit. European stock futures are pointing down. Gold reached a new record high on 1851. Oil prices are tumbling. Brent trading at 106 down 5 $ since yesterday.
After a couple of optimistic days panic has again stricken the markets. In spite of some good economic data from the US, investors have already started to price in a double dip recession. Markets were in blood red yesterday and futures are pointing down.
The Merkel-Sarkozy Summit in Wednesday did nothing to calm investor’s nerves in Europe. Worries on a sovereign debt crisis in is increasing by the day. The future of the Euro is coming on the top. Investors don’t seem at all convinced that politicians and central bankers shall find a way out. Markets then tend to jump miles ahead of governments creating a serious confidence crisis.
Five days after Gold broke 1800, the precious metal smashed through the 1900 level with investors panicking into Gold as
the preferred safe haven. 1908 represents a temporarily new record set during last night’s Asia trading.
At the same time analysts wonder whether the flight into Gold may represent a new bobble
which it is better to get out before it is, too, late. They argue that Gold is not an industrial metal, and advise
that this might be the right time to consider oil, silver or palladium as an alternative.
Stock markets in Europe and US continued the stabilizing, slightly upward trend seen at the beginning of the week in Asia
making optimists think that the bottom is reached for now. KOSPI (South Korea) is the winner in Asia this
morning.
CHF and Yen continue to be preferred currencies with EURO/USD trading at 1.4350, waiting for whether Bernanke
and his FED shall come up with a new stimulus package. In Germany Merkel defiantly stated that markets shall
not be allowed to dictate her policies.
[B]30.08.2011[/B]
[B]
Optimism rules
in strong markets[/B]
The optimistic sentiments which have ruled the markets since Bernanke’s Friday speech continued
through yesterday’s Wall Street sessions with Dow adding an impressing 2,26 % and Nasdaq up 3,32 %.
The Asian stock exchanges are up, and European futures are indicating a new good day on European
stock exchanges.
Asian markets are up four day in row. A contributing factor was the strong American consumption figures
Monday night. Hong Kong was the winner with a gain on 2,2 %. European markets expected to follow
suit. Healthy rebound in Russian market with a stronger ruble.
Oil prices are higher with Brent trading on 112,26. Better stock markets have had a negative effect on Gold
which fall back below 1800. Investors are taking profit and moving into equities. Dollar is falling. Euro/USD
trading at 1.4525. Market optimism has boosted smaller currencies. Norwegian krones (NOK) with
strong currency reserves is close to a year high. NOK/USD 5,34.
After a mixed session were markets tried to fight off negative news as reduced US consumer optimism Dow Jones tipped into positive territory and ended slightly up; 0,18 % and Nasdaq (0,55 %) following suit. Asian markets were mixed with the South Korean KOSPI gaining after a 15 % free fall during August. European markets dipping between red and blue.
Gold made a strong recovery with 1835 after last days profit taking and some renewed optimism for equities. The US index for
consumer sentiment, poured some cold water back in the head of investors thinking that the bottom is reached and the worst over in stock markets. Oil prices are up. Brent is trading on 114 this morning, the highest level seen for weeks.
Dollar gained ground against the EURO at 1.4429 telling it’s story of an unsettled sovereign debt and looming bank
crisis within the Euro-zone. Finland’s insistence on firm collaterals before extending any helping hand to Greece, continues to
rattle market confidence. A stronger Yen tells that safe haven currencies are back in mood.
After a couple of days respite be prepared for increased currency and market volatility for the rest of the week.
[B]Chinese industry stagnates
raises fear of stagflation[/B]
World markets have seen a temporary stabilization during the first three trading days of the week. European markets
ended up, while US struggled before DOW and Nasdaq finished in blue for the fourth consecutive day. In Asia the South Korean,
Kospi, jumped 2,5 % gaining back some of the steep losses from first weeks of August.
The Euro is loosing ground. Euro/USD is again down at 1.4355. Yen somewhat weaker towards the dollar at 76,83. Gold
at 1822, loosing USD 12 from yesterday’s top. Oil prices are up with NYMEX touching USD 90 level and Brent trading
at 114.
August industry production figures for China came in slightly better than July, but confirmed China’s challenge in finding a balance
between growth and inflation. With stagnating growth in US and Western Europe, Chinese export is struggling with
weaker export without domestic demand picking up.
In spite of China being more independent from a possible double dip Western recession, a stagflation in US and Europe with slower growth combined with inflationary pressure shall have a strong negative effect on China and other emerging markets.
Pessimism ruled in Asia Friday morning with falling markets in nervous waiting for unemployment figures
coming out of the US later during the day. The Japanese Nikkei was down 1,4 % followed by 1,3 % both in
Shanghai and Hongkong. South Korean Kospei is falling 1,3 %. In US both Dow (- 1,03 %) and Nasdaq (-1,30 %)
were down.
Sluggish economic growth, sovereign debt worries in Europe and global fears for stagflation in the form of a
combination of weak growth and higher inflation, seemed to be back on the top of the agenda superseding the
more positive sentiments which have given markets a lift during the last days. US Unemployment numbers
which is one the best indicators of the health of the economy is expected to stay at 9,1 %.
Gold and old prices are steady while EURO continues to loose against the Dollar at 1.4243. Expect big
turbulence in late afternoon trading both in Gold and currencies if the unemployment figures come in
lower than expected.
US unemployment figures sent new shivers through global financial markets on Friday renewing fears for a double dip recession. Unemployment stayed at 9,1 %, missing to add a single new job in August.
US stock markets plummeted. Dow lost 2,20 % while Nasdaq dipped 2,58 %. European markets were in free fall. Asia markets have fallen steeply during the night and Europe is expected to follow suit during to-day’s trade. US is closed for Labor Day.
Gold rebounded strongly and reached 1890 during Friday’s night trade, stabilizing around 1880 in this morning’s trade. Silver as well strongly up to 43,30. EURO/USD Is at 1.4150. Oil prices are loosing ground on weaker demand expectations.
EURO’s down trend is expected to continue. Western European leaders seem unable to get their act together. Merkel lost her sixth
regional elections in row campaigning on her handling of the sovereign crisis; leaving the electorate confused and bewildered.
All the major Asian indexes rallied this morning probably as a result of a weaker YEN trading at 77,25 against USD. Major companies as Toyota, Nissan and Hundai rose sharply on better export expectations. Gold fall back from 1910 peak yesterday and traded on 130 – 1850 range. After yesterday’s steep falls in European and US market, today’s futures are up indicating a good opening in Europe. Euro/USD somewhat stronger on 1.4050.
Switzerland has with immediate effect decided to peg the Swiss Franc to Euro diminishing its attractiveness as safe haven. With YEN weaker following days of Japanese central bank interventions, investors spotlight is now on smaller currencies as Norwegian and Swedish krones along with Australian dollars. Australia delivered stronger economic growth numbers for August than expected.
The sovereign debt crisis continues to create shivers on both sides of the Atlantic and in Asia where the Chinese markets also rose this morning after several days decline. Sovereign debt and slow US growth continue to create fears for a double dip recession. Deutsche Bank’s Ackermann warned that present financial and economic signals equals similar alarm warnings seen prior to the 2008 crisis, giving a clear indication that the bumpy markets are with us to stay.
A new stimulus package on USD 300 billions is expected when President Obama today is addressing a joint session of Congress. Tax cuts along with infrastructure investments and financial encouragements for companies hiring unemployed workers
are the ordained medicine for getting the US economy out of a looming recession.
The indicated initiatives have been well received in Asia. A stronger US economy is seen as necessary for a continued strong Asian export. Australia presented disappointing growth numbers this morning which led to a fall in the Aussie dollar. EURO/USD is trading at 1.4062 prior to the rent decision of European Central Bank (ECB) later today. Gold at 1828 is picking up from last day’s low. Forecasts predicting 50 % rise in Gold for 2012. Oil prices steady with NYMEX at 89,50 and Brent hovering towards 116.
Yen continues to slide; 77,70 against USD. Increased pressure on Norwegian (NOK) and Swedish (SEK) krones expected during the next days as investors look for new opportunities.
Obama proposed yesterday a 443 Billion support package to encourage growth. The stimulus is concentrated on infrastructure upgrading of schools, roads and bridges along with pay roll tax cuts favoring both employees and small businesses. Markets have reacted positively, but questions remain whether the President get the measures through Congress.
USD is falling slightly against other currencies: EURO/USD 1.3895. YEN/USD 77.48. Oil prices strengthen. Brent at 114,78. Gold decreases to 1860. New figures indicate Chinese inflation is dampening. US markets ended in red after FED chief Bernanke’s speech avoided given markets any clear directions.
Lack of ability to reduce deficit and start wanted reforms raise new questions on Greece and European sovereign
debt. ECB keep interest rate unchanged on 1,5 %.
The EURO continued its downward slide in Asia this morning trading at its lowest level for months against the USD: 1.3536
amidst Greek default speculation. Euro/USD has fallen from 1,41 levels since the midst of last week.
After Greece postponed it’s early September meeting with the controlling troika from ECB (European Central Bank), IMF (International Monetary Fund) and EU (European Commission), markets have been ripe with rumors that Greece would mishandle its promised obligations leading to a no payment of the September tranche. This shall for all practical purposes mean a technical Greek default.
Germany tired of Greek promises is playing hard ball threatening to bail out it’s own banks banks with a strong Greek debt exposure and leaving Greece to leave the Euro. Such a step shall, however, have unpredictable and grave consequences for the whole EURO-zone. It seems therefore unlikely that any of the involved EU-parties shall permit this to happen in the short run. A more likely scenario is an orderly default, payment of the September tranche an preparations for Greece leaving the Euro in a couple of years time.
In the mean time the currency unrest is supposed to continue with Euro/USD testing in some month’s time its bottom 1,19 level. Gold is keeping steady at 1855. Oil prices sliding with Brent at 1.1150. Future for the stock markets both in Europe and US down.
[B]13.09.2011[/B]
[B]
Weak EURO regains
some of its losses[/B]
The EURO regained some its early steep losses after dipping to 1.3550 in yesterday’s inter-day trading. Euro/USD is trading at at 1.3678 this morning, recovering somewhat. Oil prices are up 1 % with Brent close to 113. Gold has recovered from it’s low on 1815 trading at 1834. Stock futures for Europe are pointing up after yesterday’s onslaught hitting banks and financial shares especially hard.
After falling close to 20 % in 2011 European stocks continue to be highly volatile even more so than their American pairs. The sovereign debt in Greece and the fear for a default continue to create nervousness not only in Europe, but far beyond. Pessimism continues to rule the day. Amid rumors that China is buying Italian bonds, Italian Premier, Berlusconi, heads to Brussels to present his austerity package, keeping the fear for a Greek “development” in other Eurozone countries very much alive.
The future fate of the Euro continues to be on everybody’s mind. Forecasts point to a further weakening of EURO with a next test on low levels at 1.19 – 1.20 within a foreseeable future. YEN/USD has recovered trading at 77,03. GBP/USD is still below 1.60.
Expect currency volatility to continue during the week, giving traders new opportunities. Most observers seem to count on Greece’ willingness to follow up on austerity measures and troika demanded “reforms” to secure payment of September tranche. This should lead to a temporary strengthening of the Euro.
After a short spell of relief and as a reaction to the latest steep decline of the EURO, fear and nervousness again dominated global markets with Euro/USD trading at 1.3625. An emergency meeting is called between the prime ministers from Germany, France and Greece after Merkel assuring that Germany would not allow Greece to default.
It is expected that the two leading EU-countries, France and Germany, shall issue a strong warning to Greece to live up to its austerity and reform promises; simultaneously stressing willingness to take what it costs to bail Greece out and save the Euro. A strong political message seems absolutely necessary to calm global markets overreacting on unsubstantiated news and speculative rumors.
After a mixed session in the US, Asian markets again dropped on fear of a banking collapse in Europe following a Greek default. In a key speech the Premier plaid down Chinese willingness to come to the support of striving European economies. He stressed that China with its huge reserves are ready to invest in Europe, only preconditioned that Europe got their finances in order.
The major French banks rebounded strongly yesterday after an initial 10 % tumbling on fears that the French banks no longer had USD available. The panic sell stresses the contagion effects a possible Greek default shall have on banks and the banking system. US Finance Secretary,Timothy Geithner, is going to talk tough to its European counter-parties at a meeting at the end of the week. But is Geithner in a position to talk tough? He travels when a record high 62 % of US citizens have lost belief in President Obama’s and his own handling of the US economy.
Oil prices are falling on expected slower growth. Gold is also down at 1820. US/Yen at 76,89.