Month: June 2011

It was a tale of two halves yesterday with the dollar rallying and European equities plummeting in the morning after Trichet’s traffic light comments. The second half of the trading day saw the declines in the euro and sterling reduced following the announcement by Reuters of the deal between Greece and the EU/IMF. Today’s trading could see more of the former type environment as credit markets continue to tighten and the austerity vote must still take place in the Greek parliament before a significant rebound in higher yielding assets may be seen.

Today’s Economic Data Releases:

EUR – German Ifo Business Climate – 08:00 GMT
Expectations: 113.6. Previous: 114.2.
A dip in the business outlook is expected but this report may be overshadowed by the EU economic summit that is taking place today in Brussels. The next key milestone in Greece is the new austerity measures the nation must approve in order to receive the new EU/IMF package. Political risks remain for the euro and the currency may come under pressure before the weekend. Look for the EUR/CHF to continue to make new all-time lows below the 1.2000 mark.

GBP – BOE Governor King Speaks – 09:30 GMT
Both sterling and the short sterling futures contracts reflect new assumptions for BOE rates in 2012 as the BOE meeting minutes this week showed downside risks remain for inflation with the former plummeting and the latter shooting higher. A late day rally saved cable from closing below 1.6000 while yesterday’s daily low coincides with the support from the late March low. The next significant support is found at the late January low of 1.5750.

Continue reading “Greek Risks Drag Markets Lower”

Contributor Article:

By Shelly Zhao

China’s presence in Angola presents a fascinating case study of China’s oil relationships with African nations, and there is a complex interplay of benefits and challenges. In Angola, China’s presence remains modest relative to that of the Western IOC giants. However, beyond the percentage share of stakes, China’s loan-for-oil deals with Angola represent its growing reach and point to many intangible ramifications. China’s loans are an attractive alternative to those from international institutions that can have democratic-promoting strings attached. One common criticism is that China’s economic policy is resource-driven and goal-oriented; its means-to-an-end, non-interference approach can thus challenge Western countries’ hopes for democratic progress in Angola.

A fundamental question is whether moral responsibility is part of the equation, or whether oil deals are business transactions in essence – one exchange for another. Another is what kind of balance is preferable between Angola’s economic growth and economic development objectives.

These perspectives can be useful for assessing the lens through which observers view China’s Angola policy. There is little doubt that an increase in Angola’s GDP output is necessary to increase its standard of living, but oil-rich countries – Saudi Arabia and Oman, for example – that experience “windfall gains” from oil may need more time to adjust.

Thomas L. Friedman’s “First Law of Petropolitics” posits an inverse relationship between the price of crude oil and the pace of freedom. Yet China also provides Angola with much-needed infrastructure construction, at the opportunity cost of possible transparency and corruption improvements often required of International Monetary Fund assistance. Ian Taylor has remarked that Angolan elites are “deeply appreciative of China’s ‘non-interference’ stance.” Comparatively speaking, the low-interest, condition-free, and infrastructure-friendly Chinese loans remain attractive to the Angolan government.

From Angola’s side, analysts note that the Angolan government also wishes to diversify both its exports and its trade partners. A 2007 Chatham House paper “Angola and China: A Pragmatic Partnership” found that the African officials interviewed wished to avoid overdependence on China as an economic partner. The Angolan government has also expressed this publically. For example, in 2008, Angolan President dos Santos remarked on the country’s economic relationships that “globalization naturally makes us see the need to diversify international relations and to accept the principle of competition, which has in a dynamic manner, replaced the petrified concept of zones of influence that used to characterize the world.” The People’s Daily also reported that the Angolan Trade Minister Maria Idalina Valente said in January 2011 that Angola’s biggest challenge is diversification of its economy beyond oil.

About the Author

Read the rest of this article by Shelly Zhao at China business news website, China-Briefing.com.

The site is published by the China business guide publishers, Asia Briefing Media, which also publishes the Vietnam business news site, Vietnam-Briefing.com.

Being supported by the uptrend line from 0.9444 to 0.9669, USDCAD rebounded from 0.9701. Range trading between 0.9669 and 0.9898 would likely be seen in a couple of days. As long as 0.9669 key support holds, the price action in the range is treated as consolidation of uptrend from 0.9444, and one more rise towards 1.0000 is still possible after consolidation. However, a breakdown below 0.9669 will indicate that the uptrend from 0.9444 had completed at 0.9898 already, then the following downward move could bring price to 0.9500-0.9550 area.

Daily Forex Forecast

By Elliott Wave International

The question: Why use the Wave Principle when trading or investing?

The answer: To avoid the herd that usually loses money in the markets.

The explanation: Herding makes it difficult to follow the most useful trading advice to buy low and sell high. More often than not, what really happens is that you hear about a stock or an index and decide to buy it because it’s in the news. Why is it in the news? Usually because the price has been going higher. Lots of people in the financial media say that it’s doing well, so you decide to “get in now” — even though you know the shares are not at a low. After all, why would people talk up the stock if it were headed down? And you wouldn’t really want to buy a stock other people were selling … would you?

Once you buy, one of these three things usually happens:

1. The stock or index continues up for a brief time. You manage to hold on until just after it turns down, and sell so that you get out near the top. (You didn’t buy low, but you sold it for more than you paid and made some money.)
2. It goes up and then down, and then up and down again — and again — while you agonize. You read whatever you can find to help decide whether to stay in or get out. You finally get out about where you got in. (You neither bought low nor sold high, nor did you make any money.)
3. It turns down after you purchase it. And it keeps drifting down until you can’t stand it anymore. So you sell. (You bought high and sold low; depending on how long you held it, you lost a little or a lot of money.)

The outcome: Either you win small, you come out even (except for brokerage fees), or you lose either big or small. What happened to the simple and elegant idea of buying low and selling high? Well, that idea vanished in the labyrinth of your quickly turning, emotional mind. When it comes to real-time decisions, it seems nearly impossible to do what you know you should to do to make the most money. The irrational mind beats out the rational mind. Welcome to the world of herding.

Elliott Wave International’s educational guru, Wayne Gorman, explains it this way in the Elliott Wave Crash Course:

“The process is being driven by an emotional, unconscious response by investors who look at the market subjectively and impulsively and who must make decisions under conditions of ignorance and uncertainty.… Most people tend to engage in what we call herding. They follow the actions of others, whether those others are on the right side of the market or not.

“The result is that prices move up and down according to investors’ optimism and pessimism. Investors use the news to rationalize their emotional decisions, and most people lose money.”

Even the big boys do it. Stock mutual funds tout their investing know-how, yet this chart shows that they also succumb to buying at tops when prices are high and selling at lows. It compares 40 years of the S&P 500’s price moves with the changes in stock mutual funds’ cash vs. assets ratio. When the percentage of cash is low, it means that the funds are buying stocks and keeping less cash (marked as “Bought” on the chart). When the percentage of cash is high, they are selling stocks and converting to cash (marked as “Sold” on the chart).

Gorman again: “Notice that funds are heavily invested in stocks at top of markets and little invested in stocks at major bottom. This pattern tends to repeat itself over time — and results in losses.”

The better way to do it: The Wave Principle, on the other hand, provides rules and guidelines to help you avoid the herd of investors, particularly as they react to the latest news. You can see patterns in price charts and decide when a market may be about to turn up or down; you can also plan when to trade or invest with some objectivity.

By Ulli G. Niemann

If you are fed up with early redemption charges and ever increasing mutual fund management fees on top of bad-performing fund managers, read on. There is a quiet revolution going on in the no-load mutual fund industry and you, the individual investor, may benefit from it greatly.

I am referring to Exchange Traded Funds (ETFs), which have been around for years, but have grown tremendously since their inception. There are currently over 100 choices with around $10 billion in assets.

In a nutshell, an ETF is a specific kind of no-load mutual fund that you might consider to be a basket of stocks. ETFs are diversified like mutual funds, only they trade like stocks. They are cheap to trade (as low as $8.00) and don’t hit you with any short-term redemption fees. And they offer investing opportunities across the board.

ETFs track every index under the sun including the S&P 500, the Nasdaq 100, The Russell 2000 and many others. Available through any discount broker, they basically fall into one of three categories: broad-based U.S. indexes, sectors and international.

The have esoteric names such as iShares, StreetTracks, HOLDRs and SPYDRs. The difference is in the index they are tracking and the company marketing them. You will see big name companies offering them, like the American Stock Exchange, Barclay’s Global Investors, Vanguard, and State Street Global Investors.

In my newsletter I track the currently most appropriate ETFs for you to consider. For more detailed information you can visit these web sites:

www.nasdaq.com

www.amex.com

www.ishares.com

In addition to inexpensive trades and no short-term redemption fees, how else can ETFs save you money vs. no load mutual funds? One way is on their annual management fees. That fee for ETFs is in the area of 0.45% vs. 1.5% on average for no load mutual funds. The fees charged by discount brokers are so low they almost can be disregarded, usually less than 0.1% of the transaction.

For example, I have used ETFs for some managed account clients during my last Buy cycle, which started on 4/29/03, and paid $27 for a $28,000 order – and that wasn’t even with the cheapest discount broker.

So, if these ETFs are so great, why hasn’t your broker or financial planner recommended them to you? Simple! Brokers, and those advisors working on commissions, don’t make money on ETFs; no commissions up front or hidden on the back end. It’s simply not in their interest to promote them.

With all the positives for the investor, there is one disadvantage, which may not be applicable to you unless you are a hot shot no load mutual fund picker. It is that in any given economic environment really super performing mutual funds can outperform the indexes, but an ETF can never outperform the index it’s tied to. You would need to look at your own investment record to know whether this is a downside for you.

Here’s a real life example from my advisory practice. My trend tracking indicator signaled a Buy on 4/29/03. Based on my momentum indicators I chose 5 no load mutual funds and 4 ETFs. Over the following 3 months my ETFs gained anywhere from +10.02% to +22.36%, while my no load mutual funds gained from +9.15% to +36.35%. If you’re fortunate enough to make a superior selection you will outperform an ETF. Of course, that presumes you picked a very successful fund as compared to only a moderately successful ETF.

A word of caution! Just because ETFs are cheap and easy to buy doesn’t mean they will guarantee you a profit. You can lose money with them just as easily as you do with no-load mutual funds. You still need to make sure you have a disciplined methodology in place to help you get into and out of the market. If you don’t, you’re gambling no matter what you invest in.

Having gotten the disclaimer out of the way, hopefully these insights into ETFs will broaden your perspective on ways you can prosper in your investments.

© Ulli G. Niemann

By Early To Rise

The starting point of great success has always been the same. It is to dream big dreams. There is nothing more important than to begin by fantasizing about what you can become, have, and do.

But there are obstacles along the way to achieving those dreams.

Business management expert Elihu Goldratt explains this with what he calls the “Theory of Constraints.” In accomplishing any goal, he says, there is a bottleneck that serves as a constraint on the process. This constraint sets the speed at which you achieve the goal. But he has found that if you concentrate on eliminating that limitation, you can speed up the process.

Let’s say you want to double your income. What is the limiting factor that’s holding you back and slowing you down?

Well, you know that your income is a direct reward for the quality and quantity of the services you render to the world. This tells you that if you want to double your income, you have to double the quality and quantity of what you do for that income. Or you have to make a change so that your time is worth twice as much.

Let me give you an example…

A friend of mine is one of the highest-paid commission-based professionals in the United States. One of his goals was to double his income in three to five years. When he analyzed his client base, he discovered that only a fraction of them contributed the majority of his profits. He also found that the amount of time he spent on a high-profit client was pretty much the same as the amount of time he spent on a low-profit client.

So he very carefully, politely, and strategically handed off the low-profit clients to other professionals in his industry.

He then put together a profile of his top clients and began looking exclusively for new clients who fit that profile. And by taking on only clients who could become major contributors to his profits, instead of doubling his income in three to five years, he doubled it the first year!

Three Keys to Living Without Limits

So what is holding you back? Is it your level of education or skill? Is it your current occupation or job? Is it your environment or health? What is setting the speed for achieving your goals?

Remember, whatever you have learned, you can unlearn. Whatever situation you have gotten yourself into, you can probably get yourself out of.

To live without limiting what you can achieve, you must recognize your constraints and then act to expunge them. To do that, you need clarity, competence, and concentration.

#1. Clarity

Clarity means that you are absolutely clear about who you are, what you want, and where you’re going. You write down your goals and make plans to accomplish them. You set priorities and do something every day to move yourself forward.

The more progress you make toward accomplishing what’s important to you, the more self-confidence you have and the more convinced you become that you have no limits.

# 2. Competence

Competence means that you begin to become very good in your chosen field. You dedicate yourself to continuous learning. You never stop growing. You realize that excellence is a moving target. And you make a commitment to do something every day that enables you to become better and better.

# 3. Concentration

Concentration means having the discipline to focus on one thing, the most important thing, and stay with it until it’s complete.

It’s knowing exactly what you want to be, have, and do. It’s persevering, without diversion or distraction, in a straight line toward the things that can make a real difference in your life.

When you allow yourself to dream big dreams, abandon the activities that are taking up too much of your time, and focus your energies on alleviating your constraints, you start to feel an incredible sense of power. As you focus on doing what you love to do and becoming excellent in a few areas, you begin to think in terms of possibilities rather than impossibilities. And you move ever closer to the realization of your full potential.

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This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.

The Bank of Uganda announced that it would commence inflation targeting in the fiscal year through June 2012, with an annual inflation target of 7% during the first 3 years.  The Bank also said it would begin using the 7-day repo rate to influence inflation, rather than adjusting money supply.  The Bank commented: “We are making a shift from using quantities to inflation targeting,”.

The Ceska Narodni Banka (CNB) held the two-week repurchase rate unchanged at 0.75%.  The Bank also maintained the the discount rate unchanged at 0.25% and the Lombard rate at 1.75%. The Bank said: "Headline and monetary-policy relevant inflation will be close to the inflation target over the monetary policy horizon.  Consistent with the forecast is broad stability of market interest rates in the near future and a gradual rise in rates starting in 2011 Q4.  Risks to the forecast are balanced for monetary-policy relevant inflation."

By Cedric Welsch

In the past getting employment involved searching through the situations vacant columns, compiling resumes and submitting to job interviews. The situation has now changed. There are many new opportunities to find employment on the Internet and be self employed. Trading forex is one of these.

Automation and computer technology have altered the employment scenario in the twenty-first century. Many jobs formerly done by human beings are now performed automatically or by computer technology. The large corporations that used to provide employment for whole towns and villages now have fewer job opportunities and new employment avenues have to take up the slack.

Many of these new employment opportunities are generated by the Internet. For those who refuse to embrace the new technology the pool is emptying rapidly. Many people have an emotional resistance to computer technology, perhaps generated by fear. It is difficult to adapt at the rate that the new technology develops.

However, the Internet generates jobs that do not always require high levels of programming knowledge or skill. For example, Internet entrepreneurs have taken opportunities to make short cuts for novices. There are even sites that make it easy to construct websites without programming skills. Online sites for buying and selling foreign exchange are other examples.

The forex is the biggest and most volatile in the world. It is possible to make huge amounts in minutes. Some people have made such vast amounts that monthly income amounts like salaries no longer have any significance for them. It is possible for anyone who starts forex trading to end up in the same enviable situation.

The reality that gives food for thought is that the risk of losing slightly outweighs the chance of winning. This is because brokers take a cut of every trade. Of those who start about ninety percent lose money and stop. One needs strong discipline, a winning strategy and absolute determination.

Employees need trading and experiences before they can be expected to perform adequately. In self employment training is even more significant since success will be sweeter and failure more bitter. Automated trading systems may take away some of the stress of decision making but will not guarantee success. Training course are also available. They will help but are not infallible.

Trading forex is stimulating, exciting and challenging, like playing an earnest game. One needs to be alert and aware. News must be followed and acted upon. Prices must also be tracked with a view to finding exact entry and exit points in a world wide market that is full of noise and movement. It will keep an old person young, and provide experiences that make a young person feel mature.

About the Author

The arrival of different forex trading schemes makes the business very complicated today.
That is why you should be able to develop a currency trading technique that is simply effective.

The Monetary Policy Committee of the Central Bank of the Republic of Turkey held its 1-week repo rate steady at 6.25%.  The Bank also held the overnight borrowing and lending rates unchanged at 1.50% and 9.00% respectively.  The Bank said: "Overall, in order to contain the risks towards price stability and financial stability, the Committee has decided to monitor the tightening impact of the existing policy mix and take additional measures along the same lines, if needed,"