Monthly Archives: May 2011

Binary Options Signal CAC 05/31/11

Germany has eased its position for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, which has increased risk appetite for market participants.  The relaxing of their position has lead equity indexes such as the CAC higher, and could generate a rally that could lead to a significant breakout

Berlin’s concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece’s funding needs before the country runs out capital by mid-July. Continue reading →

Binary Options Signal EUR/USD 05/26/11

The Euro continues to experience choppy trade and headline news continues to push peripheral yields higher and create a flight to safety which is driving up the price of bunds, and pushing German yields lower.  This in turn is reducing the interest rate differential between the US and Germany, and reducing the value of the Euro.

Today’s worse than expected US GDP data will likely help the Euro given that yields in the US will likely be lower.  The 10-year yields is at the 3.1% level and could make a push toward 3%.  US first quarter GDP was expected to remain stable at 2.2%, but moved down to 1,8% as an estimate.

There has been no shortage of comments about Greece this week, both official and unofficial, making for choppy, headline-driven trading conditions.  Positive sentiment today is being helped by EFS head Klaus Regling, quoted by the FT saying that Beijing was “clearly interested” in the auctions for the Portuguese bailout bonds. The article also confirmed that China had participated in the January auction to raise funds for Ireland’s bailout. While positive at the margin, these purchases would do little to address the more important liquidity and solvency concerns of periphery debt.

That German Chancellor Merkel yesterday ruled out any sort of change in Greece’s debt structure before 2013 could signal a change in stance.  Many Germans officials were recently and openly talking about restructuring.  Now, perhaps Merkel is clamping down on this with the hopes that taking the Greece restructuring option off the table may reduce market stresses and improve Spain’s chances of dodging the bullet.  In other words, back to kicking the can down the road.  Recent frank talk about restructuring spooked markets.  If the restructuring fears ebb near-term, the can is kicked again, and Spain avoids pressure, then this would be euro-positive.

The Euro is trading in a tight range, the FOMC and the ECB are in different places which should eventually take the Euro higher.

The Euro faces two levels of resistance near the 1.44 level and a close above 1.4430 would lead to a test of the 1.46 level.

The Trade, purchase a daily binary call option on a daily close above 1.4430.

Signal Summary

Asset : EUR/USD

The trade : Binary Call Option

Expiry time : End of day

When : On a daily close above 1.4430 but not higher then 1.4480

 

 

Binary Options Signal EUR/USD 05/23/11

The current trading environment has created very choppy trading with “risk on/ risk off” changing the direction of the global markets on a daily basis.  Without any market trends, specific breakout and breakdown levels have become an important guideline for the savvy traders.

Euro zone political issues continue to remain an important downside risk for the euro and are likely to pose a potential temporary headwind for the euro, despite the supportive outlook for the ECB. Given that the ECB is likely to increase interest rates in July, the yield differentials should be the guiding force for the currency. Continue reading →

Binary Options Signal GBP/USD 05/18/11

The BoE’s MPC minutes confirmed expectations of an unchanged four-way split in the vote, consisting of a 6-3 vote for an unchanged Bank Rate at 0.5% and another 8-1 vote for steady £200bn APF. Cable saw a mixed reaction as the unchanged votes defied earlier speculation that Weale may have dropped the case for a rate hike. The BoE’s voting pattern this year highlights the fact that the chances of a rate hike in the UK are not determined by the short-term deviation of UK inflation from the government’s 2% target but by the factors that the various members of the Committee see as the drivers of inflation over the medium term. Continue reading →

Binary Options Signal WTI Crude 05/16/11

Crude oil prices started to unwind over the past two weeks in the wake of increases in the dollar and higher margin requirement enacted by the Chicago Mercantile Exchange.  Crude oil inventories have remained stubbornly high, while gasoline inventories are now at relatively low levels, prior to the beginning of the US driving season. Continue reading →

Binary Options Signal NASDAQ 05/12/11

The unwind in the commodity markets should be categorized as a liquidity even in which market particpants were forced out by an increase in margin requirements on commodity products that are well known.  The recent increases on Silver and then petroleum, which includes crude oil, gasoline and heating oil, removed the speculative fronth in these markets.

Margin requirements are based on a risk array (Spam) that is run by the Chicago Mercantile Exchange, and is influenced by volatility and price.  As the money leaves these leveraged instruments, its natural home will be other risky assets such as equities. Continue reading →

Binary Options Signal GBP/USD 05/11/11

The BoE Inflation Report released today downgraded growth in the UK,  but raised its inflation forecasts, which has weighed on gilts (UK long term bonds).  The increase in implied rates supported the GBP, as the markets factored in the higher probability of a rate move in late Q4 2011.  As such, overnight OIS swaps now imply a 50% chance of a rate hike to 0.75% by November, which is a sizeable increase compare to the 38% chance priced into the market yesterday. Continue reading →

Binary Options Signal DAX 05/09/11

The unscheduled meeting late Friday evening between senior euro zone financial officials represents official recognition that Greece will require additional assistance, while exit from the euro zone is unlikely at this juncture.  The meeting does not mean that Greece is exiting the euro, but that officials are reviewing various options to help Greece.  Following the meeting, Juncker said “we think that Greece does need a further adjustment program”.

The initial Greek package has already been adjusted, with interest rates lowered and maturities extended.  In many past debt crises, easing repayment terms has been insufficient, and ultimately required some sort of reduction to the debt level itself.  The discussions now appear to be on how best to provide Greece with additional help in a politically acceptable manner.  The May 16 summit of European finance ministers now takes on additional importance.

The economics of Europe are continuing to diverge. German export data today was well beyond expectations at +7.3% m-o-m, and continues to show the split in economic performance within Europe, particularly between Germany and the periphery.  The beneficiary of this split is the DAX index which continues to thrive and break to hire levels. Continue reading →

Binary Options Signal FTSE 05/04/11

As the market prepares for rate decisions this week from the BOE and the ECB, equity markets continue to consolidate after showing solid returns through most of 2011.  With the exception of the 2 week downdraft created by the disaster in Japan, European markets has shown robust performance and a desire by investors to trade riskier assets.

The FTSE has followed the DAX and the US markets higher by still has not broken out to the upside above recent resistance levels. Continue reading →

Binary Options Signal EUR/GBP 05/02/11

The euro reached another cycle high against the pound and continues to show strength against most major currencies. That means since January 2010 the euro has retraced nearly 100% of the leg down and has also brought it closer in line with long-term measures of fair value.  The move in the euro continues to be supported by a confluence of factors that include in particular the outlook for central bank policy and the reduction in fiscal premium following the grand bargain agreed upon in late March. Continue reading →

Binary Options Signal EUR/USD 05/02/11

Although the dollar has gain some ground at the beginning of this week, on the back of lower oil prices and the news of the death of Osama bin laden, that dollar weakness will come back into play as the week unfolds.  Policy differences between the Fed and other central banks, and the resulting interest rate differentials, have been the greatest contributor to the  dollar weakness.

The US-German 2 year spreads have reached a new cycle high today at 119 basis points.  The ECB, BOE and RBA all meet this week, and although most expect all to be on hold, the ECB should maintain its hawkish bias as it continues to normalize policy, following the April rate increase. Continue reading →