Month: March 2012

Source: ForexYard

It appears the decline in US dollar values has not yet been priced into commodities and we may be expecting a major correction in physical asset prices this week as a result.

So far the EUR/USD has climbed over 0.9% on the day, but Gold, Silver, and Crude Oil prices are still falling. Either the market is pulling out of commodities in tandem with the US dollar as part of a portfolio diversification in equity markets, or the USD’s plummet has not yet been priced in. Either way, commodities should climb in the days ahead.

Here’s why:

Gold and Silver are both approaching significant support barriers. Gold’s 3-month psychological support level at $1,335 an ounce is near at hand and we are already beginning to see Gold quiver and shake as it reaches that price, hinting at its upcoming bounce.

Silver’s month-and-a-half support line at $27.00 an ounce is literally mimicking Gold’s price behavior. Both should see an upward retracement of around 3-5% in the forthcoming two weeks of trading as a result of these technical indications.

Crude Oil likewise appears to be approaching a relevant price barrier near $87.50 a barrel. However, we don’t see the same quakes on oil prices as we do in precious metals, suggesting a fundamental valuation is in play on Crude Oil.

In short, if any of the commodities are to break through their immediate support levels, it looks like Crude Oil has the best chance. On the other hand, the heavy downward movement of the USD today suggests that all commodities should experience a corrective upturn this week.

Look for the swing and capture the bullish movement as it heads your way!

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

Crude Oil rose by the most in 6-weeks on a weak USD and a stock market rally in the U.S. As a result, this boosted investor’s confidence that energy demand will increase significantly in the coming months. Crude Oil closed at $79.46 from an opening of $77.22. Crude was helped as traders bought-up the commodity as an alternative investment, due to the mass sell-off of the USD.

It seems that traders are optimistic about the U.S. and global economy. This has really helped Crude prices. However, the commodity may only rise significantly above $80, if we see more impressive data and significantly higher demand too. It seems that the Organization of Oil Petroleum Exporting Countries (OPEC) is happy with the current prices levels. They expect prices to rise in the very near future.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The Dollar experienced in most cases a bearish trading day on Monday, as it fell against the EUR, the CAD and the CHF. With regards to the British Pound, the British currency tumbled vs. the USD, EUR and JPY.

Crude Oil and Gold rising significantly on Monday helped put additional downward pressure on the USD. This trend accelerated as the trading day continued to unfold.

08:30 GMT – GBP CPI
•Measures the change in the price of services and goods that are produced by the British economy.
•Key indicator of British economic health.
•Positive Results are likely to lead to a bullish British Pound.

09:00 GMT – EUR German ZEW Economic Sentiment
•Measures the level of a diffusion index that is based on surveyed German institutional analysts and investors.
•There is expected to be high volatility in the forex market on the publication of the above data.
•Traders should pay close attention to the forex market as there is an opportunity for them to take advantage of fluctuations that are likely to follow this key release.

Tentative – USD Federal Budget Balance
•The difference in the value between the federal budget’s spending and income during the previous month.
•The indicator is expected to rise from the previous reading.
•A higher than forecast figure may push the USD lower. Whereas a lower than forecast result could push the USD far higher today.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

The Chairman and Chief Executive Officer of McGraw-Hill Companies, Harold McGraw III, is receiving less in his paycheck in 2011. The CEO earned $8.7 million last year, a 7.8% decline from 2010. His drop in compensation could be attributed to the restructuring of the company last year. McGraw-Hill decided to split its markets arm and its education business into two separate companies and sell its broadcast business. In 2011, the company cut staff in education and revamped its retirement benefits, among other moves. However, its earnings rose throughout much of 2011, improving on its brands like Standard & Poors to compensate for the decline in revenues in the education business.Last year, McGraw-Hill stock rose about 24%.Currently, the company is trading close to 1% higher at $47.45 in afternoon trading.

UPS is hoping to reach an agreement to buy TNT Express NV as early as next week after making progress in discussions on jobs and pensions, according to Bloomberg. The companies are now primarily focusing on price negotiations. TNT may struggle to get much beyond a Feb. 11th offer of 9 euros a share because the company posted a full-year operating loss. Buying TNT, Europe’s second-largest package- delivery company, would put Atlanta-based UPS on equal footing in the region with DHL, the market leader. UPS has potential upside of % based on a current price of $ and an average consensus analyst price target of $

The past week in monetary policy saw 13 central banks reviewing policy settings, with 3 banks changing rates; Vietnam -100bps to 14.00%, Mozambique -125bps to 13.75%, and Norway -25bps to 1.50%.  Meanwhile those that held rates unchanged were: Japan 0-0.10%, Russia 8.00%, USA 0-0.25%, Hong Kong 0.50%, Sri Lanka 7.50%, India 8.50%, Switzerland 0-0.25%, Rwanda 7.00%, Chile 5.00%, and Mexico 4.50%. Japan also announced enhancements to its loan program, and Central Bank News launched a new central banking links list series.

Looking at the central bank calendar, the week ahead features decisions from a number of emerging and frontier market economies; with the central banks of Thailand, Iceland, Nigeria, Egypt, Taiwan, and Colombia all meeting to review policy settings.  Also due out next week is the Reserve Bank of Australia’s monetary policy meeting minutes, and the Bank of England’s monetary policy committee meeting minutes.   There’s also speeches from Fed Chairman Ben Bernanke, and ECB chairman Mario Draghi.

The Banco de Mexico held its overnight interest rate target steady at 4.50%.  The Bank said [Google Translated]: “From the foregoing, the Governing Board considers that the current stance of monetary policy is conducive to achieving the goal of permanent inflation of 3%, so we decided to keep unchanged the target for the interbank interest rate one day. Going forward, the Board will remain attentive to the prospects for growth of the Mexican economy, inflation and financial markets, which in a context of strong monetary laxity in major advanced and emerging countries, could make recommended a relaxation of monetary policy.”

The Mexican central bank also kept the overnight interest rate target steady at 4.50% at its previous meeting.  Mexico reported annual inflation of 3.9% in February, up from 3.8% in December, 3.2% in October, 3.14% in September, 3.42% in August, while inflation was 3.28% at the end of June, 3.4% April and 3% in March, and within the Bank’s inflation target range of 3% +/- 1%.

The Banco Central de Chile kept its monetary policy interest rate unchanged at 5.00%.  The Bank noted: “Domestically, economic activity and domestic demand have tended to outperform forecasts from the latest Monetary Policy Report. The labor market remains tight and nominal wages show increased dynamism. Credit market conditions are stable. Y‐o‐y CPI inflation is above the tolerance range, while core inflation measures are around 3% annually. Short term inflation expectations have risen, but remain around the target over the projection horizon.”

Chile’s central bank last cut the monetary policy interest rate by 25 basis points to 5.00% at its January meeting.  The Bank last raised its monetary policy interest rate by 25 basis points to 5.25% at its June meeting last year.  Chile reported annual consumer price inflation of 4.2% in January this year, compared to 3.7% in October, 3.3% in September, 3.2% in August, 2.9% in July, 3.4% in June, 3.3% in May and 3.2% in April last year; within the Bank’s inflation target of 2-4%.  

The National Bank of Rwanda held its key repo rate unchanged at 7.00%.  Bank Governor, Claver Gatete, said: “The monetary and exchange rate policy implemented to date continues to sustain Rwanda’s macroeconomic stability. The financial sector is sound and resilient to external shocks, inflation remains moderate and the Rwandan Franc is stable.  In the second quarter of 2012, headline inflation is expected to remain stable as a result of pursuing tight monetary policy, good coordination between the monetary and fiscal policies and other Government policy measures aiming at mitigating exogenous supply shocks that include high oil prices and sovereign debt in the Euro zone.”

The Bank previously increased the repo rate by 50 basis points in November and October, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year.  Rwanda  recorded annual inflation of 7.85% in February, compared to 7.5% in August, 5.82% in June, and just 1.09% in January last year.  According to IMF data Rwanda saw annual GDP growth of 5.39% during 2010, meanwhile the IMF recently scaled down its growth estimate for Rwanda to 7% for 2011, from a previous forecast of 7.5%.  The Rwandan Franc (RWF) last traded around 607 against the US dollar, having weakened about 1% so far this year.

Cisco (NASDAQ:CSCO) announced early Thursday morning that they are purchasing NDS Group for $5 billion. The deal is expected to close sometime in the second half of the year.NDS Group is a supplier of video software and content security products based in London.Cisco Systems (NASDAQ:CSCO) has potential upside of 14.7% based on a current price of $20.19 and an average consensus analyst price target of $23.16.Cisco Systems is currently above its 50-day moving average (MA) of $19.74 and above its 200-day of $17.37.