BinaryOptionStrategy.com Daily Expert Analysis
Risk-on Trading Continues with Commodities Up and USD Down
Commodities continued to rise as investors move away for the safe haven USD and look for higher-yield assets in risk on trading. Meanwhile S Korean economy has grown at its highest level in several years for Q1 even with the tensions between their Northerly neighbor. Economic growth was 0.9 per cent for Q1 as compared with 0.3 per cent for Q4 of last year. South Korea’s gross domestic product stayed at 1.5 per cent although investors had expected a rise of 0.7 per cent. BOJ meeting tomorrow is widely anticipated by investors after announcing the aggressive plan to double up its asset buying program over the next several years. The Bank of Japan will announce its semi annual report which will give indications to inflation and economic outlook. Some believe that this may bring the USD to break through the 100 mark to trade at 110 against the JPY, this would be the highest level for the pair in almost 5 years.
USD Down Against all Currencies, Stocks Gain
USD down against all other currencies
Asian markets opened higher today although the Japanese and Chinese exchanges are closed for public holidays which meant a lower trading volume in the session. Sentiment is rife that central banks across the world will heighten monetary easing measures or at least maintain them in their current form. This sentiment was reinforced after the soft GDP data coming from the US last week as well as the troubling employment numbers in the Eurozone, which in France and Spain specifically are at record lows.
Weak US Economic Data to Affect Trading and Europe Today
US
The US Markets had a rather mixed day on Friday with the S&P500 and the NASDAQ each ending a 5 day winning streak. All three major averages ended higher with gains despite going in and out of winning and losing sessions all week. The last time the Dow did this was in December of 2010. The below 5 day graph shows the zig zag pattern the DJIA has been in. The DJIA was up 11.75 points on Friday to finish at 14712.55 while the NASDAQ lost nearly 11 points to close at 3279.26. The S&P500 lost nearly 3 points to close at 1582.24.
Market review: DJIA
Among some of the most popular traded equities for the week, Starbucks lost ground after lackluster revenues. One of the biggest gainers for the day was on the S&P 500. JC Penney soared as Goldman Sachs secured a $1.75 billion loan for the company and George Soros announced he had a 7.9% stake in the retailer.
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Big Trouble in Little China
The Asian stocks and commodities continue plummeting with the Q1 Gross Domestic Product report in China falling below investor expectation. This was a further blow to the markets that were already suffering from the disappointing US retail and consumer data releases on Friday.
GDP in China, the 2nd largest global economy gained 7.7 per cent for the first quarter of 2013 since the same time last year. While this does represent an increase it is still beneath analyst expectation of 8 per cent. Another release which fell below forecast was industrial production figures in China which gained 8.9 per cent in March but still fell short of the 10 per cent expectation. Bad data all round in China with even retail sales disappointing analysts; the figure added 12.4 per cent for the first quarter yet was 2.4 per cent below the figure for the same period last year.
All of this weak data pushed harder against already negative market sentiment over fears for economic growth. This data along with the weak US data as discussed in the weekly analysis has sent analysts running to the safety of the USD.
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