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Tuesday, 30 June 2015

Oil prices fall more than $1 after Greece imposes capital controls

Rigging equipment is pictured in a field outside of Sweetwater, Texas June 4, 2015.   REUTERS/Cooper Neill


Oil prices fell more than $1 on Monday, with U.S. crude dropping to its lowest in almost three weeks below $59 per barrel, after Greece imposed capital controls as lenders refused to extend the country's bailout.

Financial markets weakened across the board, with the euro dropping to its lowest in almost a month and share prices in Asia tumbling, amid worries of cash-strapped Greece being forced out of the euro zone. [MKTS/GLOB]

"As far as the oil market is concerned, the potential ramifications are downward," said Ric Spooner, chief market analyst at Sydney's CMC Markets. "If the situation drags out then that will be a dent to confidence for investors."

Brent crude LCOc1 was down $1.04 at $62.22 a barrel by 0625 GMT, near a one-week low of $62.20 hit earlier in the session. It closed up 6 cents at $63.26 a barrel on Friday.

U.S. crude CLc1 was down $1.05 cents at $58.58 a barrel, after falling to $58.56 earlier, the lowest since June 9. The benchmark closed down 7 cents on Friday at $59.63.

Oil prices are expected to be volatile this week due to the Greek situation and negotiations on Iran's disputed nuclear program going on in Vienna, Phillip Futures said.

"For the Greek default, we believe oil prices are going to adjust based on the U.S. dollar index. If the euro continues to weaken, we could see crude prices continue to drop, similar to what we have seen at market open," it said.

Oil prices would immediately tumble if Iran and six world powers agreed a nuclear deal, Phillip Futures said.

Iran is backtracking from an interim nuclear agreement with world powers three months ago, Western officials suggested on Sunday, as U.S. and Iranian officials said talks on a final accord would likely run past a June 30 deadline.

Securing an agreement would end the nuclear standoff between Iran and the West. This could eventually lead to suspending sanctions and allow Tehran to raise crude exports, adding to an already well-supplied world market.

"The surplus in the market isn't going to clear terribly quickly. Indeed, it could be somewhere in the middle of 2016 till we start eating into inventories on a global basis so we’re relatively cautious in terms of upside," said David Fyfe, head of market research & analysis at Gunvor Group.

"On the flip side, at $60, a lot of people are stopping developing new projects, there's maybe a million barrels a day (of oil) by 2017 that's not going to be there. So at some stage, there's going to be rebound in prices when some of these project deferrals start having an impact on the market," Fyfe added.

Reference: AARON SHELDRICK AND KEITH WALLIS

Wall St. tumbles as investors flee equities on Greek debt crisis



U.S. stocks fell sharply in heavy trading on Monday and the S&P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the euro zone.

The European Central Bank froze funding to Greek banks, forcing Athens to shut banks for a week to keep them from collapsing.

And Greece appeared to confirm it was heading for a default after a government official said the country would not pay a 1.6 billon euro loan installment due to the International Monetary Fund on Tuesday.

U.S. investors also worried about Puerto Rico's debt problems and a bear market in China the day before quarter-end and ahead of Thursday's U.S. jobs report and the long weekend for U.S. Independence Day.

"None of that bodes well for people stepping in and buying the dips as has been the mentality most of the year," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles who said U.S. shares could fall again Tuesday.

"Could that reverse itself tomorrow? It's going to take a lot of good news from Greece," he said noting that portfolio managers would not want to show risky equities on their books at the end of the second quarter.

The S&P and Dow Jones Industrial Average .DJI had their worst days since Oct. 9 and both turned slightly negative for the year to date. The last annual decline for both indexes was 2008. The Nasdaq had its biggest one-day percentage decline on Monday since March 25.

Volatility rose sharply and all 10 S&P sectors retreated while the Global X FTSE Greece exchange-traded fund (GREK.K), which tracks the Athens stock market, fell 20 percent. In Europe, the blue-chip Euro STOXX 50 index .STOXX50E had suffered its biggest one-day fall since 2011.

"There is no mechanism to be ejected from the European Union. This has never happened before," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "When you don't know what could happen you sell. You get on the sidelines."

While the Greek economy is small and most U.S. corporations have limited direct exposure, investors are concerned about the fallout across Europe if Greece exits the euro zone.

A snap Reuters poll of economists and traders found a median 45 percent probability that Greece would leave the euro zone.

Chinese stocks had closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank.


Alternative investments become more attractive

Markets fall but no Greek panic yet
On top of this, U.S. territory Puerto Rico faces a restructuring of its $73 billion debt burden.

The Dow Jones industrial average .DJI fell 350.33 points, or 1.95 percent, to 17,596.35, the S&P 500 .SPX lost 43.85 points, or 2.09 percent, to 2,057.64 and the Nasdaq Composite .IXIC dropped 122.04 points, or 2.4 percent, to 4,958.47.

The CBOE Volatility index .VIX, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped 34.5 percent to 18.86, its highest level in almost five months.

Financials .SPSY was the worst S&P sector with a 2.44 percent decline. U.S. banks have an exposure to $12.7 billion of Greek debt.

JPMorgan Chase (JPM.N), down 2.5 percent, was the biggest drag on the S&P financial sector followed by Wells Fargo (WFC.N), down 2.4 percent. Goldman Sachs (GS.N) weighed the most on the Dow with a 2.6 percent decline.

Assured Guaranty (AGO.N) fell 13.3 percent and MBIA Inc (MBI.N) fell more than 23.4 percent after BTIG downgraded the insurers on concerns over Puerto Rico's debts.

Declining issues outnumbered advancing ones on the NYSE by 2,874 to 282, for a 10.19-to-1 ratio on the downside; on the Nasdaq, 2,469 issues fell and 367 advanced for a 6.73-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 2 new 52-week highs and 25 new lows; the Nasdaq Composite was recording 48 new highs and 126 new lows.

About 7.3 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion average for the month-to-date, according to data from BATS Global Markets.

Reference: Reuters

Monday, 29 June 2015

Crowdfunding is growing up - but with great power comes responsibility


In 2012, Emilie Holmes needed money to kit out her 1970s Citroen H van, and she needed it fast. With grand ideas for the old truck – she wanted to transform it into a travelling tea shop – she signed up as one of Kickstarter's first UK projects and raised £14,500 in five days, which was 45 per cent more than her target.

"At the time, it felt serendipitous," she remembers, midway through another round of funding, this time with Crowdcube. "It felt good to bring people together, and ever since, this community has been a really lovely source of support." She will soon open a bricks-and-mortar version, with another not far behind.
When the concept of crowdfunding emerged in the UK around six years ago (Kickstarter launched its UK site in early 2013), it was seen as more of a philanthropic affair rather than an investment opportunity, often supporting creative projects where there was no expected financial return. Musician Amanda Palmer raised $1.2m (£770,600) in 2012 for an album and tour (controversially, given her existing success). A project on Indiegogo, "Fly Edward Snowden Fly", asked for $200,000 (£128,500) to help the NSA whistleblower when he was trapped in a Moscow airport in 2013. It raised a few hundred dollars.

These types of projects still exist, and they still thrive with money raised from a wide network of investors, but crowdfunding itself has grown up. It attracts pitches for funds not only from small, existing companies, but also from very large and successful organisations, such as Adzuna, a search engine for jobs which is currently asking for £1.5m on Crowdcube, and is already overfunded with a week to go. JustPark, a website that matches drivers with the owners of spare parking spaces, raised £3.7m in 34 days earlier this year, also with Crowdcube.
Crowdfunding is often described as a "disruptive" force in financing. Bank loans and venture capital-backed funding are typically closed to start-ups or more unusual business ideas, and amateur investors don't have access to a great number of potential cash cows, so crowdfunding fills this gap.


In 2012, the innovation charity Nesta carried out an investigation into the industry and found that while it had generated £200m of investment in the UK that year, it had the potential to reach £15bn in the coming years – and £4.4bn in 2015 alone. "Since I started just three years ago, the industry has grown in both scale and maturity," says Julia Groves, chief executive of Trillion Fund, which offers asset-backed loans for investment in solar farms and wind turbines. This equity crowdfunding model, shared by Crowdcube and Seedrs, differs from the rewards-based example of Kickstarter, where you might invest in, say, a video game and receive a special edition of the game as your reward.


"There are now more than 9 million members of UK Crowdfunding sites. More than 600,000 projects have been funded and it remains a diverse and competitive industry – two attributes that we think were somewhat lacking in financial services before we came along," says Groves.
With the greater reach and responsibility of this pretender to traditional financing arrive the consequences of coming of age. Greater regulation is part of this. The UK Crowdfunding Association (UKFCA) was set up in December 2012 by the CEOs of 12 platforms to promote and protect the crowdfunding industry, as well as to work with regulators to find safe and straightforward ways for investment to become more accessible to the average investor.


For Crowdcube, that average investor is in their thirties or forties, lives in an urban area and has some existing knowledge of the finance sector. Just under 60 per cent are earning more than £60,000, while 15 per cent earn more than £200,000.
This certainly sounds very grown up, but crowdfunding sites are still full of really fascinating ideas. Who wouldn't be tempted by a vertical record player? Or an Oyster card for desks? Or a shirt that comes with a dry-cleaning contract?


Members of the UKFCA, which include Crowdcube, Trillion Fund and Seedrs, must now conform to a strict set of safeguards for investors, based on the Financial Conduct Authority's (FCA) recommendations. This self-examination has come at a price: the UKFCA threw two members out of its club last week for not conforming to its code of conduct. It has also been especially clear about its disregard for forms of crowdfunding that take different approaches, such as craft beer company Brewdog's Equity for Punks scheme. The fourth round of its self-organised funding drive raised £5m in three weeks in April."


Reference: The Independent


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Euro sharply down as Greece crisis deepens, default looms

Fifty-euro notes are seen at the Belgian Central Bank in Brussels in this December 8, 2011 file photo. REUTERS/Yves Herman

The euro was off its session lows but still sharply down on the day in Asian trading on Monday after Greece failed to strike a deal with its lenders, taking it a step closer to a debt default that could force its exit from the euro zone.

The Swiss and Japanese currencies, both of which often appreciate during times of uncertainty on their perceived safe-haven status, were broadly higher, while the dollar notched a three-week high against a basket of currencies.

The euro EUR=EBS fell to a one-month low of $1.0955 on the EBS trading platform, from around $1.1165 late on Friday. It had last recovered to $1.1010, still down about 1.4 percent on the day.

"It looks like a bit of stability has returned after the earlier onslaught, so I'd say there was a bit of profit-taking, given that we are very much in a state of flux," said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong.

"Headline risk remains quite acute, with the focus squarely on Greece," she said.

Against the Swiss franc EURCHF=R, the euro fell as low as 1.0256 francs according to Reuters data, its weakest level since late April, and was last buying 1.0331 francs. The euro also plumbed a one-month low around 133.80 yen EURJPY=EBS on EBS, and was last at 135.33 yen, down about 2.1 percent.

The dollar JPY=EBS fell to a one-month low of 122.10 yen before pulling away from a test of the 122 level. It last stood at 122.86 yen, off 0.8 percent.

The dollar index, which tracks the greenback against a basket of six major rival currencies, added about 0.7 percent on the day to 96.170 .DXY, after earlier rising as high as 96.369, its highest since June 8.

"Ahead of the weekend, there seemed to be a market consensus that something would get done for Greece, so it was a rare occasion when the market takes position for the optimistic view," said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo.

Japanese Finance Minister Taro Aso said on Monday he did not think the yen would suddenly spike or Japanese stock declines would spread due to turmoil triggered by Greece's deepening crisis.

The Bank of Japan is not considering offering emergency liquidity, though it stands ready to act if the Greek crisis were to trigger global market turmoil, sources told Reuters.

But the likelihood of a Greek default on a 1.6 billion-euro payment to the InternationalMonetary Fund by a Tuesday deadline appeared greater after Athens effectively rejected proposals made by its European lenders in exchange for more credit at last-minute bailout talks at the weekend.

Greek Prime Minister Alexis Tsipras shocked European officials by instead calling for a referendum to be held on July 5 to ask Greek voters to decide whether to accept the bailout terms which his government opposes. Athens also closed banks and imposed capital controls to prevent a collapse of its banks as anxious investors pulled out their cash.

Given relatively low liquidity as investors cut their euro positions, Wakabayashi said the single currency's drop so far did not suggest any panic selling in the foreign exchange market.

"It's been surprisingly orderly, as the reaction was expected because of the headlines over the weekend. It could have been much uglier," he said.

Some investors had begun paring bets on the euro even before the situation reached its latest crisis point, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. Net short positions in the euro increased to 99,306 contracts in the week ended June 23 from the previous week's 89,357 contracts, which was the smallest level of net euro short positions since late July.

A Greek default could set it on a path out of the euro zone, which many investors fear could fatally weaken the entire currency bloc.

Analysts said that in addition to increasing uncertainties about Greece's future in the euro zone, the vote would raise political risks for Tsipras's government if the public votes in favor of accepting the bailout proposals.

With Greece's woes in the spotlight, the timing of the U.S. Federal Reserve's move to raise interest rates is even more cloudy. Most economists had seen the Fed hiking rates in September, but those expectations could be pushed back if a Greek exit from the euro zone were to roil financial markets and possibly even dent global growth.

Federal Reserve chair Janet Yellen has said that any decision to lift interest rates would rest on labor market improvement. Economists polled by Reuters expect the next nonfarm payrolls report, to be released on Thursday because of Friday's July 4 holiday, will show the U.S. economy added 232,000 jobs in June after May's unexpected 280,000 surge.

Reference: LISA TWARONITE AND NAOMI TAJITSU

Friday, 26 June 2015

Top 7 Technical Analysis Tools Securities


Basic Trading Concepts Defined

Relative Strength Index:
The relative strength index (RSI) is used to signal overbought and oversold conditions in a security. The indicator is plotted between a range of zero-100, where 100 is the highest overbought condition and zero is the highest oversold condition. The RSI helps to measure the strength of a security's recent up moves, compared to the strength of its recent down moves. This helps to indicate whether a security has seen more buying or selling pressure over the trading period.




The stochastic oscillator:
The stochastic oscillator is another well-known momentum indicator used in technical analysis. In an upward trend, the price should be closing near the highs of the trading range. In a downward trend, the price should be closing near the lows of the trading range. When this occurs, it signals continued momentum and strength in the direction of the prevailing trend. The stochastic oscillator is plotted within a range of zero-100, and signals overbought conditions above 80 and oversold conditions below 20. 

Tools of the Trade: Conclusion

The goal of every short-term trader is to determine the direction of a given asset's momentum and to attempt to profit from it. There have been hundreds of technical indicators and oscillators developed for this specific purpose, and these graphics have just revealed the tip of the iceberg. Now that you have been acquainted with a few of the basic indicators used in technical analysis, you can go forward and learn more - you are one step closer to being able to incorporate powerful technical indicators into your own strategies.

Reference: Investopedia

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No deal for Greece, creditors; top-level talks resume Saturday




default next week amid fears of financial market turmoil.

Euro zone finance ministers ended their third meeting in a week without agreement after the three creditor institutions put a final cash-for-reform proposal on the table in a showdown with Athens's leftist government.

"The door is still open for the Greek side to come with new proposals or accept what is on the table," Eurogroup chairman Jeroen Dijsselbloem told reporters before briefing European Union leaders, meeting at a summit next door, on the impasse.

Greek Finance Minister Yanis Varoufakis played down the latest setback after Athens submitted its own proposals, based largely on increases in tax and social contributions that the country's lenders say would not raise enough revenue to plug a gaping budget hole.

"The institutions are going to look again at the two documents - our documents and their own. There will be discussions with the Greek government, and we'll continue until we find a solution," Varoufakis told reporters.

German Chancellor Angela Merkel told center-right party leaders there must be a deal on Greece before financial markets open on Monday, two participants said. Her comment behind closed doors echoed the height of euro zone debt crisis in 2012, when EU leaders feared a possible meltdown of their single currency.

The sources also quoted her as telling the European People's Party meeting that Germany, the biggest creditor nation, "will not be blackmailed" by Greece.

Without a deal by the weekend to unlock frozen aid, Greece, which has received two bailouts worth 240 billion euros since 2010, is set to default on a crucial repayment to the International Monetary Fund next Tuesday.

That could trigger a bank run and capital controls, possibly setting Athens on a path out of the euro zone and undermining the founding principle that membership is irrevocable.

"The decision lies exclusively with the Greek authorities. They have, however, rather gone backwards," German Finance Minister Wolfgang Schaeuble said.

Market jitters are on a much smaller scale now than in 2012, thanks largely to the European Central Bank's bond-buying program, and are mostly confined to Greek assets. However, many EU officials and analysts say the longer-term damage to the 19-nation single currency area from a possible Greek exit could be more profound.

ULTIMATUM

After five months of acrimonious negotiations, the heads of the European Commission, ECB and IMF gave leftist Prime Minister Alexis Tsipras an ultimatum to offer a credible reform plan by mid-morning on Thursday, saying they would otherwise send their own version to the Eurogroup.

Greece let the deadline slip, saying it stood by proposals it had submitted on Monday with of some modifications. They included restoring an exemption from value added tax for Greek islands, as demanded by Tsipras's coalition partners.

The dramatic move came before EU leaders met for a summit on migration, the long-term future of the euro zone and launching a renegotiation of Britain's membership terms, which has been overshadowed by the Greek crisis.

Tsipras left European Commission headquarters smiling and flashing a thumbs-up sign after three hours of meetings but made no comment. Diplomats said the lenders' tactics reflected exasperation at his refusal to compromise on key reforms of pensions, labor markets, wages and taxation, which cross his Syriza party's self-declared "red lines".

Greek officials say the government has already compromised by offering to raise taxes and pension deductions. They say the lenders keep revising downwards estimates of how much each measure proposed by Greece could raise, making it difficult to come up with an acceptable offer.

Euro zone officials said there would be no further meetings between the creditors and Greece until Saturday morning's Eurogroup session - both to prevent Tsipras trying to get a political deal at the summit and to make clear to his government that the choice was now "take it or leave it".

Hardline Austrian Finance Minister Hans Joerg Schelling said the final deadline for a deal was Sunday, a day before a German parliament sitting that would have to approve the release of aid to meet the IMF payment.

"ANNIHILATING MEASURES"

Greek politicians in Tsipras' party continued to be defiant.

"The lenders' demand to bring annihilating measures back to the table shows that the blackmail against Greece is reaching a climax," Nikos Filis, Syriza's parliamentary spokesman, told Mega TV.

He said the Greek side was maintaining its insistence on debt relief as part of any accord, in comments that were echoed by Labor Minister Panos Skourletis.

"There cannot be a deal without a substantial reference and specific steps on the issue of debt," Skourletis said in an interview with state broadcaster ERT.

Frustration was palpable on both sides, with one euro zone official describing the loss of trust in the Greeks as "extreme" and questioning whether an agreement was realistic given the intransigence from Athens.

In Frankfurt, powerful German Bundesbank chief Jens Weidmann voiced concern in a speech about the continued provision of emergency liquidity assistance to keep Greek banks afloat in the face of massive deposit withdrawals.

ECB policy-setters held the limit on this emergency funding for Greek banks steady for a second day running after weeks of increases, raising pressure on Athens.

The mood in Brussels has swung from hope to foreboding this week but seasoned diplomats cautioned that in EU negotiations the situation often looks bleakest before a last-gasp deal.

Among key unresolved issues are Greek demands for debt restructuring, which euro zone governments have said they are not prepared to discuss until Athens implements the reforms.

The more concessions Tsipras makes, the more resistance he will face in parliament within his coalition and on the streets, where recent protests, some organized with Syriza's support, have underlined opposition to yet more belt-tightening.

"The lenders' hard core faction does not want a deal but a rift, Greece's humiliation and the fall of the Tsipras government," Dimitris Papadimoulis, a Syriza lawmaker at the European parliament, tweeted on Thursday morning.

"It won't get its way."

Reference:  RENEE MALTEZOU AND ROBIN EMMOTT

Thursday, 25 June 2015

Top 7 Technical Analysis Tools Securities


Basic Trading Concepts Defined


Aroon Indicator:

The Aroon osciallater is a technical indicator used to measure if a security is in a trend, and the magnitude of that trend. The indicator can also be used to identify when a new trend is set to begin. The indicator is comprised of two lines: an Aroon-up line and an Aroon-down line. A security is considered to be in an uptrend when the Aroon-up line is above 70, along with being above the Aroon-down line. The security is in a downtrend when the Aroon-down line is above 70 and also above the Aroon-up line. 



MACD:

The moving average convergence divergence (MACD) is one of the most well-known and used indicators in technical analysis. It is used to signal both the trend and momentum behind a security. The indicator is comprised of two exponential moving averages (EMA), covering two different time periods, which help to measure momentum in the security. The idea behind this momentum indicator is to measure short-term momentum compared to long-term momentum to help determine the future direction of the asset. The MACD is simply the difference between these two moving averages, which (in practice) are generally a 12-period and 26-period EMA. 

To be continued tomorrow.

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Greek deal or not, the euro is now a different beast

A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013. REUTERS/Kai Pfaffenbach

By invoking a Greek euro exit as a possible outcome of failed bailout negotiations, European governments have effectively rewritten a key tenet of the shared currency - and maybe even for the better.

Deal or no deal on staving off Greek default or 'Grexit', euro governments have talked openly for the first time of how Greece could slide uncontrollably out of the currency bloc if it failed to agree bailout terms and meet debt payments.

Of course, all insisted that keeping Greece in the bloc was still 'Plan A' at least. But the signalling was clear for all who wanted to hear: failure to reach a deal could reverse the 'irrevocably fixed exchange rates' of European Union Treaties into something that was, after all, revocable.

The message was certainly clear to Greek depositors, who have withdrawn tens of billions of euros from banks this year and more than 4 billion euros last week alone.

And while German Chancellor Angela Merkel has studiously avoided talking of a Greek exit, her hawkish finance minister Wolfgang Schaueble made clear on a number of occasions that this was still a potential, if undesirable, outcome.

"We can't rule it out," he said in March, when asked if Greece could accidentally slide out of the euro.

Closer to the EU centreground, European Commission President Jean-Claude Juncker, a founding father of the euro, said Grexit was not on the table but that he couldn't "pull a rabbit out of a hat" to prevent it.

Smaller countries bailed out along with Greece five years ago spoke likewise. Irish finance minister Michael Noonan said euro leaders had gone as far as they could to prevent Grexit. "The option now is to prepare for Plan B."

While talk of an accidental Greek exit may have been a negotiating bluff never truly contemplated by European Union leaders, others claim powerful voices argued that a euro without Greece may be better off and that the rest of the zone could survive the divorce.

Either way, the message from European capitals was a far cry from European Central Bank chief Mario Draghi's defiant 2012 speech on doing "whatever it takes" to safeguard the euro.

And the change of tone is important way beyond the Greek brinkmanship.

REVERSIBLE?

If it's now conceivable that Greece could leave the bloc when push comes to shove, then it has to be at least theoretically possible for any euro member to go - however low the chances or unlikely the circumstances.

And this matters because of the way investors behaved in decade leading up to 2008, where the seeds of the crisis were sown in the huge buildup of banking, household, corporate and public debts across the currency zone when benchmark borrowing rates collapsed to Germany's 'risk free' rate.


In effect, private creditors saw no difference in risk between sovereign credits and were lending to all countries at ludicrously low rates regardless of government balances, default possibilities, political or redenomination risks.

Once the Lehman crisis hit and later when Greece revealed its public accounts hole in 2010, investors raced to the other extreme, ballooning bond spreads, forcing serial bailouts and threatening the collapse of the whole bloc.

If neither peak nor trough seemed terribly well thought through, there are reasonable questions over political messages that bordered on guarantees and unreasonable 'certainties'.

The ECB's interventions since 2012, its backstops, liquidity injections and this year's quantitative easing programme, have helped to collapse spreads once again in recent years.

Yet few think a return to pre-2008 spreads makes any more sense than it did back then.

"There are a lot of idiots in financial markets: I don't believe in rational markets. The idea that people were lending money on that scale to Greeks at German interest rates - they wanted their heads examined," former UK finance minister and pro-EU Conservative Ken Clarke told the BBC on Monday.

Investors counter that they were simply taking the irreversibility of euro membership on the word of its designers and assumed, as proved at least partly correct over 2010-13, that bailouts would prevent sovereign default within the bloc.

University College Dublin professor Karl Whelan argues there was never a strict 'no bailout' clause in euro treaties to begin with and, despite all the political rhetoric, financial rescues were always possible in extremis.

Markets opted to believe politicians about 'no exit' but saw through the 'no bailout' line and assumed the sheer political will behind the euro would trump all. Given the disastrous consequences, the political message needs a rewrite.

And if these Greek talks have ushered in a new world where exit and default are no longer unthinkable, bond investors will simply have to work harder on risk assessment.

Whether the cost of that is bearable by the euro economy is a more existential question for the currency. But somewhere between the bond extremes of 2006 and 2012, maybe where we are now with the help of the ECB, would be bearable and sensible.

The euro may already be a different beast as a result.

Reference: MIKE DOLAN

Wednesday, 24 June 2015

Investors eye improvements in data for housing stocks

Street signs for Wall St. and Broad St. hang at the corner outside the New York Stock Exchange March 24, 2015. REUTERS/Brendan McDermid


Housing stocks rallied on Friday and the industry group should get more good news next week, though sustained and robust future gains may depend on wage growth and other signs of improving home affordability.

On Monday, the National Association of Realtors is expected to report strong growth in existing home sales for May. On Wednesday, Lennar (LEN.N), the No. 2 U.S. homebuilder is expected to report that it had a strong second quarter.

The housing recovery has been uneven. U.S. permits for future home construction surged to a near eight-year high in May, a sign of a buildup of momentum, but housing starts fell.

Permits were driven by multifamily construction plans, which jumped 24.9 percent, while single-family permits, the largest share of the market, increased only 2.6 percent.

Broadly, shares of housing stocks have reflected this. Building materials companies have fared better than single-family home builders as materials companies have benefited from multi-family housing construction aimed at renters.

Construction materials supplier Vulcan Materials (VMC.N) has risen 35.8 percent so far this year and home improvement and building products firm Masco (MAS.N) is up almost 10 percent.

Even with a 2.3 percent gain on Friday, the S&P 500 homebuilding index .SPLRCHOME is up just 3.7 percent for the year. The broader PHLX housing index .HGX, including builders, building products and mortgage companies, is up 7.8 percent for 2015 but down 2.7 percent from its 2015 high hit in early April.

Wage growth may be key to better performance in future, as affordability remains an issue.

The median home became less affordable for the median family between April 2014 and April 2015 as prices rose with demand but new home construction did not, according to the latest data from The National Association of Realtors.

Furthermore, average new home prices seem out of reach of first-time buyers. Millennials, those born after 1981, are entering the market more slowly than their predecessors. Only 34.6 percent of millennials now own homes. This is the lowest percentage for U.S. residents under 35 since the Census bureau started releasing age-related ownership statistics in 1982.

Entry-level buyers cannot afford new homes because builders are concentrating on constructing higher-end houses that are out of their price range rather than building so-called starter homes, according to Alex Barron, founder and senior research analyst at Housing Research Center in El Paso, Texas.

As a result sales volume is about half where it should be, making home builder stocks less attractive, Barron said.

"If you start seeing the unemployment rate come down with a broad swath of jobs being created, it should be positive for the housing stocks," said Quincy Krosby, market strategist at Prudential Financial, which is based in Newark, New Jersey.

Next week's data is expected to show existing home sales climbing 4.4 percent in May after falling 3.3 percent in April.

New home sales are seen rising 1.5 percent on top of April's 6.8 percent increase, based on Reuters' polling. New home sales data is set for release on Tuesday.

Lennar is expected to report an 11 percent increase in revenue and an almost 7 percent increase in earnings per share.

The other S&P 500 homebuilders - D.R. Horton (DHI.N) and PulteGroup (PHM.N) are expected to post sharp gains in quarterly earnings from a year ago, Thomson Reuters data showed.

Shares of homebuilders jumped on Friday after KB Home (KBH.N) posted stronger-than-expected quarterly earnings and revenue as it sold more homes at higher prices. KB Home's shares rose 9.4 percent and hit a five-month high.

That earnings-bolstered bump may not last unless the market improves more fully, which may take two years or more, said John Augustine, chief investment officer at the Huntington Trust in Columbus, Ohio.

"The best scenario is that the stock market keeps moving up, the baby boomers retire and the millennials get their jobs,”

Reference: CAROLINE VALETKEVITCH AND SINEAD CAREW

Japan shares clear 18-year peak, dollar firm

A man holding a signboard of a shareholders meeting and a pedestrian are reflected in an electronic board showing the graph of the recent fluctuations of the Japan's Nikkei average outside a brokerage in Tokyo, Japan, June 23, 2015.  REUTERS/Yuya Shino

Asia shares were trying to score a sixth session of gains on Wednesday as investors chose to be optimistic on the chances of a Greek debt deal, while the dollar held firm as the prospect of U.S. rate rises came back into view.

Japan's Nikkei .N225 led the way as a rise of 0.5 percent cleared a peak from 2000 to reach ground last trod in late 1996.

MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.13 percent to bring its gains over the past six sessions to about 2.9 percent.

In China, official efforts to calm jittery investors seem to have steadied sentiment after steep losses last week. Shanghai stocks .SSEC were up 1.6 percent but trade remained volatile.

Gains on Wall Street had been minor, though still enough to see the Nasdaq to a record peak. The Dow .DJI ended Tuesday up 0.13 percent, while the S&P 500 .SPX added 0.06 percent and the Nasdaq .IXIC 0.12 percent.

Risk appetites were whetted after Greece's leftwing government expressed confidence that parliament would approve a debt deal with lenders, despite an angry reaction from some of its own lawmakers.

EU finance ministers meet on Wednesday to discuss whether or not to put the plan to euro zone state heads. If it goes ahead, the Greek parliament could vote as early as this weekend.

Bond investors were encouraged enough to push down yields on Greek 10-year debt GR10YT=TWEB by 60 basis points, with yields in Italy and Portugal following.

Yields went the other way in the United States following a string of generally upbeat economic data and comments from Fed Governor Jerome Powell that the economy could be ready for interest rate increases in both September and December.

That was unwelcome news for debt markets which are priced for only one hike this year <0#FF:>. Yields on 10-year Treasury notes duly rose to their highest in 1-1/2 weeks at 2.43 percent.

"Markets appear to have interpreted the prospect of a deal between Greece and its creditors as removing a source of uncertainty, which may allow the Fed to commence hiking interest rates in September," said analysts at ANZ.

All of which helped give the U.S. dollar index .DXY its biggest daily gain since late May.

The greenback was particularly strong against the euro, which had peeled off to $1.1176 EUR= from a $1.1410 top at the start of the week. Against the yen, the euro was down at 138.34 EURJPY=R, having fallen from 140.

The dollar was also firm at 124.86 yen JPY= and well above the recent trough of 122.46.

In commodity markets, oil prices rebounding ahead of U.S. inventory data expected to show strong demand for gasoline.

U.S. crude futures CLc1 added 11 cents to $61.12 a barrel, while Brent LCOc1 rose 10 cents to $64.55.

Gold slipped on the firmer dollar to reach $1,176.90 an ounce XAU=.

Reference: WAYNE COLE

Tuesday, 23 June 2015

Top 7 Technical Analysis Tools Securities


Basic Trading Concepts Defined


Indicators are used as a measure to gain further insight into to the supply and demand of securities within technical analysis. Those indicators (such as volume) confirm price movement, and the probability that the move will continue. The Indicators can also be used as a basis for trading, as they can form buy-and-sell signals. Here we'll take you through building block of technical analysis, and explore oscillators and indicators.


The on-balance volume indicator:
The on-balance volume indicator (OBV) is used to measure the positive and negative flow of volume in a security, relative to its price over time. It is a simple measure that keeps a cumulative total of volume by adding or subtracting each period's volume, depending on the price movement. This measure expands on the basic volume measure by combining volume and price movement. The idea behind this indicator is that volume precedes price movement, so if a security is seeing an increasing OBV, it is a signal that volume is increasing on upward price moves. Decreases mean that the security is seeing increasing volume on down days. (For more, see Introduction to On-Balance Volume.)




Accumulation/Distribution Line:
One of the most commonly used indicators to determine the money flow of a security is the accumulation/distribution line (A/D line). It is similar to on-balance volume indicator but, instead of only considering the closing price of the security for the period, it also takes into account the trading range for the period. This is thought to give a more accurate picture of money flow than of balance volume. The line trending up is a signal of increasing buying pressure, as the stock is closing above the halfway point of the range. The line is trending downward is a signal of increasing selling pressure in the security. 



Average Directional Index
The average directional index (ADX) is a trend indicator used to measure the strength and momentum of an existing trend. This indicator's main focus is not on the direction of the trend, but with the momentum. When the ADX is above 40, the trend is considered to have a lot of directional strength - either up or down, depending on the current direction of the trend. Extreme readings to the upside are considered to be quite rare compared to low readings. When the ADX indicator is below 20, the trend is considered to be weak or non-trending. 

To be continued on Thursday

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Oil prices nudge higher as worries ease over Greek debt

A petro-industrial factory is reflected in a traffic mirror in Kawasaki near Tokyo December 18, 2014. REUTERS/Thomas Peter/Files

Oil prices nudged higher in Asian trade on Monday, after initially falling on concerns about the outcome of a eurozone meeting on the Greek debt crisis later in the day and continuing worries about global oversupply.

Prices rebounded from early lows after a European Commission official tweeted the latest proposal from Greece was a "good basis for progress" in Monday's talks.

"We're seeing ... a snap back from Friday's losses, which were too aggressive," said Ben Le Brun, market analyst with Sydney's OptionsXpress.

Oil prices fell nearly 2 per cent on Friday over worries about a Greek debt default.

"On a 24 hour basis we'll see some volatility depending on what happens with Greece," said Ric Spooner, chief market analyst at Sydney's CMC Markets.

Brent crude for August delivery was up 8 cents at $63.10 a barrel as of 0559 GMT, after dipping as much as 52 cents when Asian markets opened. The benchmark lost $1.24 in the previous session.

Front month U.S. crude was 6 cents higher at $59.67 a barrel, after finishing the previous session down 84 cents.

Greek Prime Minister Alexis Tsipras offered a new reforms package to foreign creditors on Sunday in an effort to avoid default this month on 1.6 billion euros in debt repayments to the International Monetary Fund.

Worries over high domestic U.S. oil production, which has held around 9.6 million barrels a day - the highest level since the early 1970s, still weighed on oil prices, Spooner said.

U.S. oil producers added a rig each in the Permian and Bakken shale basins last week, fuelling worries over high domestic oil output, even as the total number of active U.S. rigs fell last week, data on Friday showed.

"My expectation for a price increase is fairly limited," Spooner said. "One way or another we are likely to see some production cuts. If we did see prices go up then OPEC would increase production and/or U.S. producers would increase theirs as well."

Other analysts also continue to point to the overhang of supply in the market.

Ten million barrels of unsold crude - mainly from Nigeria - are held in offshore storage despite strong summer demand, Morgan Stanley said in a research note on Monday, posing a worrying outlook for oil in the second half of the year.

"If there are this many challenged cargoes in this strong demand environment, we worry about the outlook for physical oil this fall when crude runs and gasoline demand fall seasonally," the note said.

And considering the prospects of new supply from Libya and Iran a lower price environment seems increasing likely, Morgan Stanley analysts said.

Reference:  KEITH WALLIS

Monday, 22 June 2015

A Day in the Life of a Forex Trader- 5 Tips by Amin Hemani



Basic Trading Concepts Defined


The alarm goes off as the sun goes up. You roll over with a groan – and then it comes back to you. Did you dream that you left that position open, or have you bankrupted yourself overnight? You run into the office, glance at the screens and breathe a sigh of relief.

Forex Trader Lesson #1: Risk management is job one, even when you’re asleep.


Emboldened, you walk back to the bathroom and get in the shower. Refreshed and glowing, you step out and start to get dressed. You start to psych yourself up for the day – and begin to feel invincible. In fact, you feel so good that you try a two-footed jump into your pants. Humbled and bruised, you opt for a more conventional approach the second time round.

Forex Trader Lesson #2: Overconfidence is bad. Put your pants on one leg at a time just like everyone else.


Now out for a quick morning run. You dodge through the crowds of intrepid athletes, bursting with health and vitality. It’s raining and you get soaked. Back for a quick towel off and then on to a hearty breakfast – Shreddies and low-fat plain yogurt. The breakfast of disgruntled champions and a Pumped up Forex Trader!

Forex Trader Lesson #3: Healthy body, healthy trading. Note to self – stay off the nachos until the weekend.

Now it’s time to start trading. First you look at the markets – nothing unusual. You check again – again nothing unusual. No stunning economic news, no encouraging chart patterns, nothing. You check once more, surely there has to be a stunning trade.

Forex Trader Lesson #4: Patience is a virtue, don’t trade just for the sake of trading.


Now it’s time to get for a Forex trader to get serious. You play your keyboard like a virtuoso, whip your mouse through the air a few times – before you know it all of your favorite indicators appear like magic on your charts. You study them intently until one grabs your interest – that moving dark arrow points to an amazing trading opportunity. You’re not quite sure what it means – in fact the chart looks pretty ordinary – but it’s dancing around so much that you have to trust it. You open another position. You lose another $500. And then the fly decides it has something better to do than wander all over your screen.

Forex Trader Lesson #5: Don’t use indicators unless you understand them – especially ones with wings.

Now it’s time for lunch. You decide that, after this morning’s debacle, you need a few hours to unwind. You head for the golfing range and beat a baskets of balls to death. Tension gone, you head back to your office – and there it is. The perfect setup. You look for  some confirming signals – there they are. You finally remember to pull out that copy of your trading plan, and then follow it to the letter. The deal comes in, and by the end of the day you’re back in the game. Your account shows another healthy green number. Whew!

Forex Trader Lesson #6: If you can’t see an opportunity, walk away. Your golf game will thank you.

Reference: Amin Hemani



 I just found this article by Amin Hemani. I think it is a great article.:-)

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Euro rises as Greece offers new proposals to avert default



The euro rose against the dollar on Monday on a glimmer of hope that Greece may avert a debt default after Athens offered new proposals to foreign creditors ahead of the emergency euro zone summit later in the day.

The common currency EUR= ticked up 0.3 percent to $1.1383, inching closer to a one-month high of $1.1440 hit on Thursday.

But many investors remained cautious because it was not immediately clear how far the new proposals yielded to creditors' demands for additional spending cuts and tax hikes, nor whether creditors can stomach the offer.

"The euro is surprisingly solid. It's either that markets are still betting that some sort of fix can be found for Greece's funding woes or speculators are closing their short positions," said Daisuke Karakama, chief market economist at Mizuho Bank.

"Many players are sitting on the sidelines and nervously waiting for news headlines from Europe. It's all about the euro today."

After four months of wrangling and with anxious depositors pulling billions of euros out of Greek banks, Prime Minister Alexis Tsipras' leftist government showed a new willingness at the weekend to make an offer which they hope will unlock frozen aid and avert default.

Tsipras will meet European Commission President Juncker, ECB President Mario Draghi, IMF head Christine Lagarde and euro zone finance ministers chairman Jeroen Dijsselbloem 11 a.m. (0500 EDT).

Euro zone finance ministers are due to meet 90 minutes later and a summit of euro zone prime ministers and presidents is also scheduled later in the day.

"Greece will be reaching a climax this week and markets will be extremely nervous. The markets are on the whole moderately hopeful on a deal. But it is difficult to tell the outcome as this will be a highly political decision," said Masakazu Kabeya, chief global strategist at Daiwa Securities.

Speculation is rife that, if no deal were reached on Monday, Greece may need to impose capital controls on Tuesday to avert a banking crisis as savers keep withdrawing funds from banks.

Bank of Greece Governor Yannis Stournaras met senior bankers on Friday and told them to brace for a "difficult day" on Tuesday if no deal is reached, two bankers at the meeting told Reuters.

Against the British pound, the common currency rebounded from Friday's three-week low of 71.26 pence and last stood at 71.615 pence EURGBP=D4.

To the yen, the euro EURJPY= gained 0.3 percent to 139.68 yen.

The dollar JPY= was little changed at 122.72 yen after shedding 0.2 percent the previous session. The benchmark U.S. Treasury 10-year yield US10YT=RR fell about 8 basis points on Friday on safe-haven bids generated by Greek debt angst.

Reference: TOMO UETAKE

Friday, 19 June 2015

Support and Resistance Defined


Basic Trading Concepts defined


If you’re at all familiar with trading you’ve probably heard about support and resistance. In fact, if you look closely you can see support and resistance in anything with regular price fluctuations, from gasoline to loaves of bread. In simplest terms a resistance is a price it’s hard for something to rise above, while a support is a price it’s hard for something to fall below.

If you graph a price and it comes up as a stepped line, the points are your supports and resistances. T

The first high point is your resistance, and it then falls until it reaches a support, at which time the trend reverses and it rises again to almost the same resistance point as before. It then drops to a new support, and begins a slow rise to a new point of resistance.

Here’s the simple way of looking at it:

Resistance: Reversal point on an upwards trend.

Support: Reversal point on a downwards trend.


Neither resistance nor support points are fixed. Instead they move up and down as the market fluctuates. A great real world example of support and resistance comes with gas prices.

Remember when gas passed $2.00 a gallon in the US? At first it kept creeping up to it, but never passing. $2.00 was the resistance. It broke through once or twice, but quickly dropped back below it. Then prices went up, and over $2.00 became the norm. It wasn’t long before you never saw the price below $2.00 anymore. It had changed from a resistance to a support.

When you’re plotting support and resistance, it’s important to remember that the forex market’s fluid and nothing is permanently fixed. Don’t think of support and resistance as single points but rather as zones. Modern forex charting software normally carries things to four significant figures, and neither resistance nor support is going to be that specific. It’s more likely that you’ll see resistance between 1.9 and 1.93 than at 1.9134, regardless of what your software’s showing.

If you’re using candlestick charts, base your resistance and support on the closes, not the highs and lows. Highs and lows are best viewed as tests of resistance and support, not breakthroughs.


The thing to remember is that while we sometimes saw prices spike higher than our resistance line, it never closed above it.

So then, you might ask how we tell if a resistance line is broken. The simplest way is to just say it’s broken if the session closes above that value. But what happens if it closes above one day, then back down below it the next?

You could say that it broke the resistance, but you could also argue that it didn’t really, because it couldn’t stay above it for any length of time. Before declaring that a breakout has occurred, it’s best to make sure that not only has the market closed above the previous resistance line, but that it’s kept going.

Don’t be fooled by the extremes of highs and lows


When you’re looking for breakouts you want to see a new trend forming that continues past the previous support or resistance point. Because we’re looking for trends it’s important to remember that one point does not make a trend. Look at things over time and you’ll be better able to see trends, and that’s what will tell you when you’ve got a real breakout.

Reference: Forextradersdaily

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Asian shares edge higher after Fed vote, China, Greece eyed

Visitors look at the Tokyo Stock Exchange (TSE) bourse in Tokyo June 11, 2015.  REUTERS/Thomas Peter

A broad index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.6 percent while Japan's Nikkei .N225 rose 0.9 percent from a one-month low set on Thursday.

Major U.S. share indexes .SPX .DJI jumped about one percent, with the Nasdaq Composite .IXIC finally erasing its last standing milestone from the dot-com era to set a record intraday high.

While analysts concluded the Federal Reserve is still on track for September to implement its first rate hike since the global financial crisis, fixed income derivatives markets such as Fed fund futures <0#FF:> expected the first rate increase only in December.

"The markets seem to be concluding that the Fed will raise rates only once this year, and not twice as had been priced in (before the Fed's policy meeting ended on Wednesday)," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

Growing expectations of a slower trajectory of U.S. interest rate increases sent the dollar swooning against a basket of currencies with the broad dollar index =USD languishing near one-month lows.

Despite the quiet optimism across Asia, investors are keeping a close eye on the ongoing turbulence in Chinese stocks where benchmark indexes are down more than 3 percent in early trade.

At current levels, mainland shares .SSEC are on course for their worst weekly performance since the first week of October 2008 -- or the depths of the global financial crisis.

CLSA strategists said in a recent note the market rally is more fragile than in 2007 when the economy was overheating and growing at a nominal 20 percent, while this time around the common driver is the strong belief in the government's ability to protect the economy against a sharp slowdown.

In another potential headwind for markets next week, euro zone leaders will hold an emergency summit on Monday after the currency bloc's finance ministers failed to make a breakthrough on a cash-for-reforms agreement with Greece on Thursday.

In bonds, ten-year U.S. Treasury yields US10YT=RR settled at 2.33 percent while comparable Japanese yields JP10YT=RR held at 0.44 percent.

In commodities, oil prices were a shade weaker, but plentiful output was broadly met by demand.

U.S. crude futures CLc1 edged lower to $60.41 a barrel, while Brent LCOc1 slipped 8 cents to $64.18.

Gold was sidelined at $1,199.15 an ounce XAU=.

Reference:

 SAIKAT CHATTERJEE

Thursday, 18 June 2015

UK clamps down on markets after trader scandals

Bank of England Governor Mark Carney speaks during the Bankers and Merchants Dinner at the Masion House in London, Britain June 10, 2015.  REUTERS/Neil Hall

Britain announced a clamp-down on abusive practices in financial markets on Wednesday after a string of scandals involving the banking system, and Bank of England Governor Mark Carney said "the age of irresponsibility is over."

Under the proposals, criminal penalties for insider trading would be extended to Britain's huge fixed-income, currency and commodity (FICC) markets and jail sentences for offenders would be lengthened to up to 10 years.

So-called "rolling bad apples" or individuals who are fired from financial firms would no longer be able to move to another job without their new employer knowing about their history.

And thousands more senior staff would be on the hook to make sure their teams stick to the rules, although unlike bankers they will not automatically be presumed to be responsible for misconduct on their watch, potentially weakening the proposals' impact.

Bank of England Governor Mark Carney said central banks had shared in the failings of the system in the past. The new accountability rules would extend to him and his deputies at the BoE which was caught up in a foreign exchange scandal last year.

Carney said real markets were key for prosperity. "Not markets where transactions occur in chat rooms. Not markets where no one appears accountable for anything," he said.

His comments were made in excerpts of an annual speech he was due to give to London's finance industry chiefs.

The Fair and Effective Markets Review (FEMR) -- which aims to plug gaps in rules for the foreign exchange market in particular -- was ordered by British finance minister George Osborne a year ago after British banks were fined billions of pounds in 2013 for trying to rig a widely used interest rate benchmark, the London Interbank Offered Rate or Libor.

Some of the same banks were hit later by more fines for trying to manipulate the $5 trillion-a-day foreign exchange market even as the Libor rigging was being revealed.

"Individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are -- and they will be," Osborne said.

The 100-page review was put together by the BoE, the Financial Conduct Authority (FCA), Britain's top markets regulator, and the finance ministry.

Britain has already introduced a law to prevent manipulation of eight major market benchmark rates, including those at the centre of the Libor and foreign exchange scandals.

The British Bankers' Association welcomed the widening of the rules to trading firms beyond banks.

Rob Moulton, a regulatory lawyer at law firm Ashurst, said the changes were not far-reaching but could pave the way for more enforcement action by the FCA.

"Criminalising what has already been earmarked as unacceptable market practice is not a game changer. It does however increase the pressure on the UK regulator to take its first scalp," said

NO MORE ETHICAL DRIFT

Reaction was mixed to the creation of a new, industry-led Market Standards Board to promote good practice in markets.

"The FCA is there to regulate conduct, and a key part of this is encouraging firms to get their culture right," said Simon Morris, a lawyer with law firm CMS. "We don't need an overlapping conduct standard body to issue high-sounding codes with few real powers to back them up."

Carney said firms would face tougher rules if they did not follow the new body's recommendations.

The success of Britain's review will largely hinge on whether regulators from other parts of the world follow suit, given the global nature of the markets involved.

Carney, who chairs a global regulators body, the Financial Stability Board, said he would urge his peers to adopt similar measures "to reverse the tide of ethical drift".

The European Union is close to approving a law to tighten supervision of market benchmarks after agreeing to penalise abusive trading practices and inject more transparency into trading.

Reference: HUW JONES AND WILLIAM SCHOMBERG

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Caution reigns as Fed and Greek uncertainty rumble on

Electronic information boards display market information at the London Stock Exchange in the City of London January 2, 2013.  REUTERS/Paul Hackett

Markets were hoping the U.S. central bank's statement due at 2 p.m. yesterday, followed half an hour later by Chair Janet Yellen's news conference, will trim down the list of potential hike dates which currently stretches from September to late next year.

After watching the U.S. economy contract in the first quarter, Fed policymakers will have to judge whether healthier recent jobs, wage and consumer spending data are enough to allow its first rate rise in almost a decade."Right now, markets are pricing a-less-than 30 percent probability the Fed hikes in September, but a-greater-than 60 percent probability they hike by December," said Richard Clarida, global strategic advisor at bond fund giant PIMCO.

"I suspect Yellen would not be unhappy if, after her press conference, the markets price in a higher probability of a September."

The dollar was barely budging ahead of the Wall Street restart, at $1.1258 per euro, buying 123.97 yen though stronger-than-expected wage growth in Britain saw it bow to sterling at $1.57.

Whenever a Fed hike comes, it will mark a major turning point for global markets, effectively ending an unprecedented era of easy money that has helped drive both global stock and many major bond prices to record highs.

There still remains far too much uncertainty in other parts of the world however to signal the all clear, especially in the euro zone where its debt crisis continues to flare.

Relations between Greece and its creditors have become increasingly acrimonious in recent days, leaving hopes that the country will avoid a default on IMF loans hanging by a thread.

Euro zone finance minister are due to meet on Thursday but there was talk of plans being put in place for another emergency summit at the weekend.

EMERGING PRESSURE

Greece's national central bank sent out a stark warning that failure to clinch a deal would: "mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and, most likely, from the European Union,"

"Striking an agreement with our partners is a historical imperative that we cannot afford to ignore," it said.

Spanish, Italian and Portuguese bond yields which have climbed to multi-month highs this week in one of the most serious episodes of euro debt contagion since the height of the debt crisis in 2010-12, dipped for a second day despite a higher start.

However, Portugal, which like Greece had to be bailed out by the European Union and IMF, saw its short-term borrowing costs rise sharply at a debt auction. Germany also saw its costs rise at an auction it held.

Overnight in Asia the mood had seemed a bit more positive.

MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.8 percent, moving away from a three-month low on Tuesday as Chinese stocks rallied by more than 2 percent from the day's lows.

The Shanghai market had gained 50 percent since the start of the year, making Chinese stocks the world's best performers in U.S. dollar terms.

There are, however, worries about frothiness. Thomson Reuters data shows that some stock markets, such as the Shenzhen stock exchange .SZCE, currently trade far above their 10-year median average.

Emerging markets were closely watching the Fed's moves. Traditionally they are highly sensitive to changes in U.S. rates because it makes their own ones relatively less attractive for global investors and can play havoc with their currencies.

Deutsche Bank Managing Director Nick Lawson said he expected MSCI's benchmark EM stock index .MSCIEF - standing at a 2-1/2 month low - to break down out of a range it has been in for the last four years when U.S. rate hikes begin.

Outflows from emerging market equity and bond funds hit their highest since 2008 according to data from fund-tracker EPFR.

In commodities, oil prices were a shade firmer as plentiful output was met by strong demand, with the market waiting for U.S. storage figures later in the day.

U.S. crude futures CLc1 was up over a dollar at $61.17 a barrel, while Brent LCOc1 climbed to $65.17. Gold was sidelined at $1,179.50 an ounce and copper nudged off a three-month low.

Reference: MARC JONES

Wednesday, 17 June 2015

Oil prices fall on oversupply, but US crude supported by Gulf of Mexico storm

A fuel tanker truck driver stores his hoses after a gasoline delivery at the Costco in Beltsville, Maryland December 16, 2014.  REUTERS/Gary Cameron


Oil prices extended declines on Monday after two straight days of losses late last week as high production offset strong refinery runs, but a storm that could impact Gulf of Mexico operations supported U.S. crude.

Saudi Arabia, the world's biggest crude oil exporter, hinted late last week that it was ready to increase production above record levels to meet strong demand, if needed, pushing down prices.

The decline in prices followed two sessions of falls last Thursday and Friday after U.S. crude had risen close to $62 per barrel earlier in the week, a level it only climbed above during one day in May this year.

U.S. investment bank Jefferies said on Monday that oil markets remained oversupplied in the near-term.

"Fundamental data indicates that the oil market is oversupplied by over 2 million barrels per day," the bank said. But it added that due to a recent rally in prices it had lifted its average 2015 Brent and WTI price forecasts to $60 and $55.10 per barrel respectively, up from $52.50 and $48.60 a barrel previously.

Front-month U.S. crude CLc1 had fallen 22 cents to $59.74 a barrel by 0605 GMT. Brent futures LCOc1 were down 21 cents at $63.66 a barrel.

"Oil prices remain under pressure as the hype of strong seasonal demand comes to an end and markets refocus on bearish supply-side fundamentals," ANZ bank said.

Monday's smaller drop in U.S. prices was a result of a large tropical disturbance in the southern Gulf of Mexico which the U.S. National Hurricane Center said had a 70 percent chance of developing into a tropical cyclone in the next 48 hours, potentially threatening oil production output in the region.

The spread between the two crude futures benchmarks CL-LCO1=R narrowed to around $3.50 per barrel, its lowest since April when the spread touched 2015 lows.

Barclays said that because of stronger U.S. refinery margins than in Europe or Asia, it expected the Brent-WTI spread to narrow to $3 a barrel.

Reference: HENNING GLOYSTEIN

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Euro on defensive on Greece default fears, dollar upbeat ahead of Fed

The shadow of the logo of Euro is seen on a U.S. one dollar note in this picture illustration taken in Madrid March 10, 2015. REUTERS/Sergio Perez

The euro was little changed at $1.1261 GBP=, having slipped from Tuesday's high of $1.1330. Although it remained in a familiar range between $1.11 and $1.14 in recent days, traders see this as the calm before storm rather than a sign of stability.

Athens showed no sign of backing off in its tense negotiations with creditors as Prime Minister Alexis Tsipras accused them of trying to "humiliate" Greeks with more cuts.

His comments suggested he has no intention of making a last-minute U-turn and accepting austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks. This sent European stock prices to the lowest level since February.

While recent rises in European bond yields raised the attraction of investing in euro zone bonds and underpinned the currency, caution on the euro's downside is also clear in the option market.

Risk reversal spread EUR1MRR=FN of the euro/dollar widened in favor of euro/dollar puts to the highest level in about two months, suggesting many investors want to hedge against the euro's fall.

As investors sought shelter from possible turmoil in the euro, it was the British pound EURGBP=D4 that benefited from some safe-haven buying.

The pound on Tuesday rose to a two-week high against the euro of 71.75 pence per euro. It last stood at 72.00.

Sterling kept its firm tone against the dollar as well, hitting a four-week high of $1.5655 GBP=D4, having risen almost five cents from its low so far this month of $1.5170. It last was at $1.5642.

The dollar held firm against most other currencies as investors expect Fed policymakers to intimate that U.S. interest rates will start rising later this year after news of U.S. housing permits for future construction surging to a near eight-year high.

"The latest economic data is showing improvement so how the Fed perceives them will be a key. We suspect the Fed will acknowledge the improvement, concluding the weakness in January-March was temporary," said Shin Kadota, chief strategist at Barclays in Tokyo.

The Fed statement is due at 1400 ET, followed half an hour later by Chair Janet Yellen's news conference where analysts assume she will focus on signs the economy is recovering after a bumpy start to the year.

There will be particular attention on the Fed's median forecast for the funds rate over 2015 which could be trimmed from the previous 0.625 percent, in line with Yellen's assurance that any tightening cycle will be very gradual.

The dollar's index against a basket of major currencies stood at 94.881 .DXY, off Tuesday's low of 94.557.

Against the yen, the dollar traded flat at 123.45 yen JPY=, with support seen at around last week's low of 122.46 yen.

Traders are reluctant to bid the dollar aggressively, however, after Bank of Japan Governor Haruhiko Kuroda surprised the markets last week by saying the yen is unlikely to weaken further.

There are few Asian economic indicators due on Wednesday, with markets' now firmly focused on the Fed's policy meeting and developments in the Greek debt crisis.

Reference:  HIDEYUKI SANO

Tuesday, 16 June 2015

Trading Platforms



Basic Trading Concepts Defined


In the United States most reputable brokers are registered as Futures Commission Merchants (FCMs) with the Commodity Futures Trading Commission (CFTC) as well as with the NFA (National Futures Association); two organizations which were founded to protect the public from market manipulation, fraud and other abuses.

Forex Trading Online


Part of the attraction of forex is the ability to trade at all hours from home, and the best way to do that is online.


Trading Platforms


On-line trading platforms have two main aspects, the platform and the interface. The platform is how your computer connects to the market, while the interface is how the user connects to the market.

Let’s look at the platform first.


Trading Platform Overview:

There are two main kinds of trading platforms. One kind runs on your computer, the other runs through the broker’s web page, usually in a Java. Each has advantages and disadvantages.

Local Trading Platform Programs:
Pros:
Speed: They’re usually faster than web-based programs.
Cons: Need to be installed: You have to install it on every computer you’re going to be trading from. Platform Specific: If your broker’s program is Windows-specific, any Mac or Linux users are going to be out of luck.

Web-Based Programs:
Pros:
Portability: You can log in to your account from any computer that has an internet connection. If Jimmy stays at a friend’s for the weekend he can check his trades from their computer.
Security: Web-based programs are more secure, everything requires a log-in to access and the program itself stays behind the broker’s firewall. It’s also safe from any viruses that might be on a user’s computer.
Cons:
Speed: Usually web based platforms run slower than local ones. But mostly this will be due to your internet connection speed.Which one you want to use is up to you. 


The Interface
Regardless of the nature of the platform, whichever broker you go with has to provide a good interface for their software package. The interface is what you’re going to be looking at every time you research, plan, or make a trade. You can’t do without it.

A good interface has to give you real-time information on data in two main categories in order to do any good: Your account and market rates.
On the account side you need a summary of your account with the following information clearly visible:
•Your current balance
•What your balance would be if your open trades closed now.
•Your available margin
•Your locked in margin.
If you don’t have that information, you don’t know where you stand, and without that knowledge you won’t be able to trade effectively.

The market rate side is equally important. The software has to be able to give you a continuous feed of the current rates for the currency you’re trading. It’s the other half of the puzzle. If you don’t know what you have or what you’re trading there’s no way you can make money.

It should also provide real-time graphing and charting capability so you can see the trends. Spot values won’t give you enough data for a successful trade.

You should take a look at several brokers and their software platforms before you commit to a single broker.

While we’re on the subject of software and online trading, there’s one more thing we cannot stress enough. The software is only as good as your connection. If you don’t have a fast internet connection no software platform, whether installed locally or used on the web is going to do you any good.


You Can’t Trade on Dial-Up
A fast computer helps, but a fast connection is a requirement. It’s a fast moving market and the best way to lose money is to always be behind the curve. If you don’t have current information your trades are going to be based on guesses, not facts and that’s a sure way to fail. YOU CANNOT TRADE ON DIAL-UP!

I know that sounded repetitive, but it’s vitally important. Trading on dial-up is like sprinting in lead overshoes. You’re not going to win any races that way. 

Reference: Forextradersdaily