March 2012 – Page 47 – InvestMacro FX

March 13, 2012

Kiwi and Aussie Reverse Decline against the Greenback

By TraderVox.com

Tradervox (Dublin) – The two South Pacific currencies have been on the decline against the greenback for the last three trading days; however, this seemed to be reversed today in Sydney when the two currencies increased against the US dollar and the yen.

The kiwi and the Aussie increased against major currencies as the Asian stock rallied increasing the demand for riskier assets. Reports from New Zealand showing an increase in the food and house prices in the month of February boosted the demand for kiwi which gained against all its major peers.

The Australian dollar increased against the dollar and the Yen despite negative home loans report and the declining business confidence. The increase in the currency might be attributed to markets appetite for riskier assets as Fed is expected to shelve its quantitative easing measures. The currency increased against the yen as BOJ decided to keep interest rates unchanged and indicated no further asset purchases.

Kumiko Gervaise, who is an analyst in Tokyo, indicated that the firm footing of the stocks had resulted to the strengthening of the South Pacific currencies. The Aussie increased against the US dollar by 0.2 percent to settle at $1.0541 from a low of $1.0474, which is the lowest it has been since January 25. Against the yen, the Australian dollar traded at 86.49 yens per AUD, having changed a little from yesterday’s close of 86.48 yen.

New Zealand’s food and house prices increased by 0.6 and 0.8 percent respectively according to a report from The Real Estate Institute of New Zealand Inc; this has resulted to the strengthening of the kiwi by 0.5 percent against the dollar to settle at $0.8218. The currency also climbed against the yen by 0.2 percent to settle at 67.41 yen after it had dropped 0.7 percent yesterday.

The two South Pacific dollars gained against major peers today after a three-day decline. This shows that the market is ditching the safe haven assets and going for riskier assets. However, this trend is expected to change after the FOMC decision is announced later today in the US.

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March 13, 2012

Merger News: MDS, ESRX, MHS

Midas (MDS) announced that tire company TBC would buy the company for $11.50 per share, or about $310 million in cash. TBC would also assume $137 million in debt and pension liabilities.

March 13, 2012

Euro Finance Ministers Say Yes To Greek Bailout Plan

By TraderVox.com

Tradervox (Dublin) – Euro zone finance ministers have endorsed the second Greek bailout plan. According to Jean-Claude Juncker, Luxembourg Prime Minister said that the program have received political backing, paving way for the first payment to the Greek government. However, the formal approval from the finance ministers will be released on March 14, after which the IMF is expected to vote on the issue.

The payment, which is scheduled to start in March with a payment 5.9 billion Euros, will see Greece get 100 billion Euros in three years. The country is expected to get 3.3 and 5.3 billion Euros in April and May respectively. The agreement is a culmination of months of negotiations with stakeholders which has resulted to bondholders agreeing to shed 75 percent of their investments in the country.

Evangelos Venizelos, Greek Finance Minister said after the meeting that despite the change in situation for Greece, the government has a great responsibility of ensuring that economic and austerity program proposed must be implemented if the country is to get out of its greatest recession. By agreeing to this bailout plan, the euro area finance ministers have assured Greece’s future in the euro zone.

Despite the efforts made, there are some analysts who are adamant and have insisted that the debt crisis is far from over. The crisis looming in Spain, Portugal, Italy, and Ireland have been cited as possible indicators of the depth of debt crisis in Europe. This has led some analysts to predict a possible recession in the region later in the year.

As Europe struggles with the debt crisis, the US economy is showing signs of recovery as the Department of Commerce produce very promising reports. The FOMC meeting expected to release a statement later today, is projected to leave interest rates unchanged but speculations are high on whether the Fed will deviate from its “Operation Twist” or it is going to stick to it and make the third round of large scale bond buying.

March 13, 2012

Five Game-Changing Growth Stocks for 2012

IDC expects business data to increase 44 times over the next decade to 35 zettabytes (1 zettabyte = 1,000,000,000,000,000,000,000 bytes).

In just 11 days – at the 14^th Annual Investment U Conference – I’m going to reveal five companies with cutting-edge technologies that could literally change the world.

Before you dismiss such boldness, you need to at least consider the evidence.

Each company is a pioneer – with patent-protected products – already booking sales and profits. In other words, they’re not just innovators with great ideas stuck in the lab. To the contrary, they’re proving their real world potential as we speak.

Most important of all, though, each company is tapping into demand from an unstoppable growth trend. Or forever growth trends, as I like to call them. These are trends that are destined to continue, no matter what happens in the world.

Like the following:

Forever Growth Trend #1: Mobile

I’ve said this before. The exploding use of mobile devices promises to be the fastest growing – and possibly biggest – technological trend ever. And more and more data keeps backing me up.

Consider:

Cisco (Nasdaq: CSCO) estimates there will be 15 billion mobile devices in use by 2016. That’s more than double the current amount. And equal to two devices for every man, woman and child on Earth.
Total annual sales for all mobile-related devices and services just topped $1 trillion (and counting). That’s an incredible milestone. Only three other industries in the history of the world have ever pulled off that feat (automobiles, food and defense).

Against this backdrop, all we have to do is find innovative companies in the mobile space early enough and our portfolios are destined to profit. Case in point: Mitek Systems (Nasdaq: MITK).

I first turned subscribers on to the company behind Chase’s popular remote check deposit app in December 2010. Back then, it was a lowly bulletin board-traded stock worth about $4 per share. Fast-forward to today and it’s listed on the Nasdaq. Major Wall Street investment banks are finally catching wind of it. And shares now trade for about $12.50.

Here’s the good news: I’m set to unveil a duo of up-and-coming microcaps in the mobile space with even more upside potential. And that’s not all…

Forever Growth Trend #2: Data Storage

You don’t need to be the next Einstein to realize that we’re living in an age of increasingly vast digital information.

Businesses alone create and use enormous amounts of data.

Take retailing giant, Wal-Mart (NYSE: WMT), for instance. It now handles more than one million customer transactions every hour. All that information gets fed into databases that store more than 2.5 petabytes of data – the equivalent of 167 times the number of books in the Library of Congress!

And Wal-Mart is just one of thousands of companies handling such volume. Collectively, IDC expects business data to increase 44 times over the next decade to 35 zettabytes (1 zettabyte = 1,000,000,000,000,000,000,000 bytes).

Consumers are data gluts, too.

Every single minute we spend texting, snapping photos, or surfing the web on our mobile devices generates data. So much so, mobile data traffic nearly tripled in 2010. And yet, Cisco expects it to increase another 26-fold by 2015, equal to a compound annual growth rate of 92%.

Quite literally, data is everywhere. And this proliferation of data isn’t expected to stop anytime soon. Instead it’s going to double every 18 months, based on recent estimates.

With that in mind, is there any doubt that this qualifies as another forever growth trend, much like the exploding use of mobile devices? Not in my mind. And I’ve uncovered the perfect pure-play to profit from this data tsunami headed for the world. And it’s still trading for $5 per share. But it won’t be for long.

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Good Investing,

Louis Basenese

Article by Investment U

March 13, 2012

Gold Buyers “On the Sidelines” Playing “Wait and See” Ahead of FOMC Announcement

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 13 March 2012, 08:30 EDT

SPOT MARKET gold prices drifted as low as $1694 per ounce Tuesday morning in London – 1.3% down on the week so far – while stocks and commodities rose slightly and US Treasuries dipped ahead of today’s US Federal Reserve interest rate decision.

Silver prices fell to $33.43 per ounce – 2.5% down on last week’s close – before, like gold, recovering some ground before lunchtime.

“There’s not much going on, especially on the physical side,” Dick Poon, Hong Kong-based precious metals manager at refiner Heraeus, said Tuesday morning.

“Everybody is staying on the sidelines.”

“On and off, we are still seeing some buying, but it’s not much,” one Singapore dealer tells Reuters news agency.

“It’s all about wait-and-see.”

In Washington later today the Federal Open Market Committee is due to announce its latest monetary policy decision. The Federal Reserve has held interest rates at 0.25% since December 2008. Since then it has also launched two rounds of so-called quantitative easing, as well as Operation Twist last September, which runs until June this year.

“If there are no announced changes to the Fed program [today], then the Fed statement is unlikely to have any obvious implications for the US Dollar,” says James Steel, chief commodities analyst at HSBC in New York.

“This would also mean that the FOMC meeting is likely to have little effect on gold.”

“Gold prices could be supported if we see some fresh easing talk from the US Fed,” says Natalie Robertson, commodity research strategist at investment bank ANZ in Melbourne.

“But at the moment the market does not appear to be pricing in that outcome.”

“QE3 [a third round of quantitative easing] is not a guarantee,” adds says Michael Hanson, US economist at Bank of America Merrill Lynch.

“We would expect the Fed to ease further only if growth drops below trend, inflation undershoots their target and possibly the equity market sells off.”

“I don’t think they’re convinced they won’t need to add additional stimulus,” counters Carl Riccadonna, New York-based senior US economist at Deutsche Bank.

“But the tone of data in last three months seems to have been surprising the Fed to the upside.”

Monthly nonfarm payroll data released last Friday show that the US economy added 227,000 nonagricultural private sector jobs in February, slightly above analysts’ consensus expectations.

The unemployment rate meantime held at 8.3%, having fallen from over 9% last year. The latest US consumer price inflation data are due to be published this Friday.

Earlier on Tuesday, the Bank of Japan left its main policy rate on hold at 0.1%. Like the Fed funds rate, the BoJ’s main policy rate has not changed since December 2008.

Here in Europe, Spain agreed to additional budget cuts at Monday’s meeting of Eurozone finance ministers, lowering its deficit target as a percentage of GDP this year by half a percentage point.

Earlier this month, Spain said it would not comply with the European Union’s 2012 target of 4.4% of GDP. Instead, in what is called a “sovereign decision”, Spain announced a target of 5.8%.

Eurozone finance minister chairman Jean-Claude Juncker last night described that target as “dead”.
Spain has agreed to target a deficit-to-GDP ratio of 3% in 2013.

“That is the main figure that should be kept in mind,” said Juncker on Monday.

Spain’s 2011 target, agreed by its previous administration, was 6%. The actual figure achieved was 8.5%, the Wall Street Journal reports.

The German government meantime only managed to implement 42% of its planned spending cuts last year, German newspaper Der Spiegel reports.

The ongoing investigation into alleged “manipulation” of the benchmark Libor exchange rate – which acts as a measure of the rate at which banks lend to each other – could lead to a change in the method of calculation, news agency Bloomberg reports Tuesday.

At present, bank employees are asked to report their estimates of what it would cost to borrow in the interbank market, rather than reporting rates from actual transactions. The US Justice Department has begun a criminal investigation into whether banks have underreported the rates they have been charged in order to appear healthier and thus hide any financial difficulties. Enforcement agencies in Europe, Canada and Japan have also launched investigations.

“Proved manipulation of index rates could expose banks to a legal and regulatory bonanza,” the Financial Times writes, “from big fines to class action lawsuits, several of which have already been filed.”

Libor, referenced in many standard financial contracts, is used as the benchmark rate for $360 trillion of securities, Bloomberg reports.

Barclays, Citigroup and UBS have all voluntarily given information to regulators about possible abuse of the Libor setting process. Employees at several other institutions have been “fired, suspended or placed on administrative leave”, the FT reports. These banks include Deutsche Bank, HSBC, interdealer brokers Icap, JPMorgan Chase, Brokers RP Martin and Royal Bank of Scotland.

RBS is facing potential legal action meantime from shareholders who allege that the information in its rights issue prospectus, published in 2008 just weeks before the UK government bailed out the bank, was misleading.

RBS is also among a group of banks the New York Times reports is offering to buy claims from customers of MF Global for up to 91 cents on the Dollar. MF Global collapsed late last year, resulting in losses for some investors who were using the brokerage to buy gold via futures contracts.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

March 13, 2012

Dollar to Continue With its Bullish Run on FOMC Decision

By TraderVox.com

Tradervox (Dublin) – With the crisis in euro-zone taking a backseat for the moment, investors are looking for new catalysts that will spur the market. Strong labor market report from the US seemed to give the dollar the much needed momentum but the start of the week has not been so cozy for the greenback.

The lackluster performance of the dollar could not take it through the critical breakout level to maintain the bullish momentum. However, investors are keeping a close eye on the US retail sales report expected today and the FOMC report expected later today. The dollar has been left on the cusp of making a meaningful break or reverse to its normal trend.

Investors are wary of the situation in Europe and the signs of a coming recession are keeping the market on the low. If euro zone goes into a recession, it is will weaken the global GDP severely. Signs are already showing with China lowering its growth target in part because of the economic conditions in the region. Investors are expected to find some direction in the FOMC decision which is widely expected to retain the current monetary policy.

However, investors will closely analyze the decision as they try to get any clues of when the next Quantitative easing might occur. The Fed is expected stave off making any suggestions for the next big bond purchases as it adopts a wait-and-see move toward the situation. In contrast, if the fed give an indication of another bond purchases or a continuation of its “Operation Twist,” investors will take this a show of dwindling confidence in the recovering economy.

The US economic news is expected to counter the negative news from Europe providing safe haven for investors. The dollar is expected to continue with its bullish run as positive US retail report and FOMC decision are released today. If the Fed suggests a possible QE the dollar might go down while suggestions that the QE plans have been kept on hold will drive the dollar up.

March 13, 2012

Euro under pressure, trading below 1.3100

By TraderVox.com

Tradervox (Dublin) – The recovery of Euro during the US session was stalled at 1.3171 yesterday. Today the pair failed to capitalize on the recovery as it failed to break the 1.3200 levels. It traded mostly in red for most part of the day and formed a low of 1.3084.

It is currently trading near the low at 1.30991, down about 0.40% for the day. The support may be seen at 1.3080 and below at 1.3020 levels. The resistance may be seen at 1.3100 and above 1.3160. The economic sentiment from Germany and EMU came above the expectation at 22.3 and 11 respectively.

The Sterling Pound is trading below the 1.5600 levels at 1.5640, near its opening price. The support may be seen at 1.5600 and below at 1.5560. The resistance may be seen at 1.5660 and above at 1.5710 levels. The trade balance data came better than expectation at a deficit of 3.678 billion pounds. The consensus was a deficit of 4.250 billion pounds.

The USD/CHF has come above the 0.9200 levels and is trading around 0.9214, up about half a percent for the day. The resistance may be seen at 0.9250 and above at 0.9300. The support may be seen at 0.9150 and below at 0.9125 levels.

USD/JPY is printing new highs after taking a pause yesterday. The pair picked up a momentum during the late European session and is currently trading around 82.75, up about 0.55% for the day. The high so far is 82.81. The resistance may be seen at 83 and 83.30 levels while the support may be seen at 82.55 and below at 82.30 levels. Earlier the interest rate was kept unchanged at 0.1% by Bank of Japan.

After visiting the areas below the 1.0500 levels yesterday, the pair has come above it. But it is currently trading tantalizing near the 1.0500 levels at 1.0504, almost flat for the day. The support may be seen at 1.0500 and below at 1.0450. The resistance may be seen at 1.0560 and 1.0060 levels.

March 13, 2012

Barnes & Noble Announces New CFO

Barnes & Noble (NYSE:BKS) announced Michael Huseby as the company’s new Chief Financial Officer.Huseby previously was the CFO at Cablevision Corps (NYSE:CVC).He will manage Barnes & Noble’s capital structure and assist with its digital business. Huseby replaces Joseph Lombardi, who stepped down from the position last year.Barnes & Noble (NYSE:BKS) has potential upside of 22.3% based on a current price of $13.36 and an average consensus analyst price target of $16.33.

March 13, 2012

Crude Oil Remains Steady—For Now

Source: ForexYard

Crude oil is staying steady today following last week’s gains. As of this morning, Brent crude oil is trading at $106.88. Investors are keeping an eye on crude oil given the recent gains made by the USD seem to be retracting thus far this morning. Despite the recent slump by the USD, some analysts believe that we me have already witnessed the peak of crude oil’s recent surge. Various factors around the market are contributing to the notion that we may possibly be seeing a surge before a steep drop. For example, the recent news out of China regarding its shrinking manufacturing sector and overall weakened growth rate has pushed down demand for crude oil. Countries across Europe have also been reporting a shrinking demand for oil, which could inhibit any further rise.

Forex CT 13-3-12 Market Update & Outlook

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