Oil prices have soared over the past couple of weeks and are now consolidating as investors are looking to the middle east to determine the future direction of prices. The fundamentals in Europe are relatively robust, and inventories are in the middle of the average range for this time of year. In the US, the inventory situation is not bullish, but this can change very quickly as the current force major on Libyan crude could draw from stocks very quickly. Continue reading
The New Zealand dollar has dropped nearly 2 big figures against the US dollar as sentiment quickly during negative on the currency after a horrific earthquake rocked the country. New Zealand’s second-largest city, Christchurch, was hit Tuesday by an earthquake that destroyed part of its cathedral and killed at least 65 people.
Multiple deaths were confirmed Tuesday after a 6.3-magnitude earthquake struck Christchurch in New Zealand’s south, leaving scenes of destruction across the city that had barely recovered from a massive quake last September. The first quake was followed by aftershocks, including one measured at 5.6 magnitude. Tremors from the earthquake were felt as far away as the city of Dunedin, about 320 kilometers south of Christchurch.
The earthquake comes less than six months after a 7.1-magnitude earthquake struck the area in early September. Matthew Stevens, a geologist with GNS Science, said the earthquake was occurring in the same fault line as September’s shock.
New Zealand’s central bank may hold back from raising its overnight cash rate until well into 2012 as the economy tries to heal itself from the impact of another major earthquake. The two-year swap, the best indicator of wholesale interest rates, was down 15 basis points post the quake.
The NZD/USD pushed below support at .7335, would quickly lead to a test of lower levels.
Asset : NZD/USD
The trade : Binary Put Option
Expiry time : End of day
When : On a daily close below .7335
Inflation expectations continue to push the precious metals complex higher, creating a great opportunity to make money in binary options. Last week, the markets needed to absorb news of higher than expected inflation during the week. The Producer Price Index (PPI), in the US rose a seasonally adjusted 0.8% in January from December, according to the Labor Department. The majority of the rise was in energy prices. Core PPI, which excludes food and energy, increased 0.5% last month. Economists were expecting a 0.9% increase in overall producer prices and a 0.2% increase in the core index. Earlier in the week greater than expected increase in import prices. Late in the week, the Consumer Price Index showed the markets that inflation was moving over into the retail leve.
Outside the US, Chinese inflation on the retail level came in at a 4.6% increase and in the UK, the 4% year over year increase creates a situation where the Bank of England needed to write another letter explaining the rise to the government.
To take advantage of this situation, traders have bid up the price of precious metals, mainly silver, over the past week. Gold is not far behind and a breakout is close to occurring.
A break of the all time highs at 1431.50, would lead to a new bull trend.
Asset : Gold
The trade : Binary Call Option
Expiry time : End of day
When : On a daily close above 1431.50
The GBP/JPY cross has been moving higher as the Japanese economy has been slow to move into recovery mode, while the UK economy is beginning to show continued signs of higher inflation.
Japans economy contracted in the fourth quarter by .3%. The reduction in growth was largely due to a sharp fall in household spending -0.7% in the current quarter compared to +0.9% in Q3. This reduction came after the termination of the purchase incentives to buy eco-friendly cars in September. Car sales plummeted in Q4 of 2010. Overall, private consumption deducted 0.4 point from GDP growth. Exports in Japan fell by 0.7%, which was related to the slower world trade growth. Another important factor was the appreciation of the yen in Q3 and Q4, gaining 6% and 1.7%, respectively, in effective terms. Continue reading
Exxon Mobile, one of the largest oil and gas companies in the world, continues to show momentum to the upside, and could potential break out above current resistance.
The company report excellent 4th quarter earnings. EPS of US$1.85 beat consensus by 16%. The key driver of the beat was the upstream, where XOM produced very impressive production growth of 19% on 4Q09. Although XTO accounted for most of this, the base portfolio also performed very well, with much of the 6% annual organic growth from its Qatar developments, which are now operating close to capacity. At our maintained price target of US$75, we calculate XOM would be on a PER of 11.0x, a 10% premium to the sector Continue reading
Silver prices have rebounded significantly after taking a tumble late in 2010 and early 2011. Some analyst the big catalyst for surging silver prices in the coming years will be exponentially increasing investment demand, which is already beginning to overwhelm existing silver supplies. The mining industry only produces around 800 tons of silver per annum. This is a relatively inelastic supply, regardless of silver prices, he adds.
As household investors are becoming increasingly jittery about the debasement of the U.S. dollar and other major currencies, they are loading up in record numbers on silver bars, coins and silver-denominated exchange traded funds. Continue reading
Yesterday’s announcement that the People’s Bank of China would again be raising benchmark interest rates initially surprised currency markets by its timing. The repercussions were felt swiftly, but nowhere stronger than in Australia where the Australian Dollar fell on the news report. That fall, however, turned out to be brief as investors digested the news further, and saw the interest rate hike ultimately for what it was – encouraging news of a growing economy. Continue reading
The Canadian economy continues to remain strong and recent jobs data helped reinforce this points. On Friday, Statistic Canada released employment data that was much better than expected. The net change in employment was 69.4 thousand jobs, more than triple the 22.4 thousand expected and the 22.0 thousand from December.
The Canada’s dollar fluctuated against its U.S. counterpart its lowest level in a week and the greenback gained versus almost all of its most- traded counterparts. Continue reading
Manufacturing PMI reports for January generally came in better than expected and showed continued improvement in the global outlook. The US and the UK gave the equity markets a one two punch that created a solid rally for US equities to start the week.
The UK PMI saw a particularly big jump to 62.0 from a revise 58.7 (was 58.3). UK consulting firm today put out a report calling for 3 BOE hikes this year to 1.25% (vs. 1 hike to 0.75% forecast back in October) as shifting interest rate expectations continue to show some tightening by the end of 2010. Continue reading