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 Despite a lack of details, the surprisingly good outcome from the E.U. Summit was enough to give oil prices a lift, with NYMEX-traded WTI crude trading higher currently at $79.51 per barrel, a gain of 1.82 or 2.34%. Analysts say, however, that that even if the rally continues through the day, oil is still on track to record its worst quarterly result since 2008; prices are down nearly 20% this quarter. Yesterday, oil prices had fallen by nearly 3%, so today’s rally – driven by bargain hunters and short covering according to oil analysts – hasn’t even offset those losses.
Oil ... more →
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At long last, the E.U. Summit has yielded an outcome that could actually help improve the crisis situation there. It was reported that after a late night session, the E.U. leadership has agreed that a common supervisory body would be created which would oversee the Eurozone’s many banks. More importantly, especially for Spain and other highly indebted sovereign states, funds from the European Stability Mechanism will be funneled through the supervisory body directly to the banks in need, effectively bypassing the respective governments’ balance sheet. Spain and Italy had essentially ... more →
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 Gold prices are on their way up as uncertainty and growing fear send investors to the safe haven. At the heart of the issue today is the consensus feeling that the European Union Summit will have been nothing more than a futile undertaking and that no positive decision will have been made at its conclusion. Gold has lost a bit of its appeal as a safe haven in recent months, moving more like a typical commodity, and many investors turning to instead to the U.S. Dollar or Japanese Yen. Nonetheless, there is growing expectation among market participants that the central banks will be compelled ... more →
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 While European equity markets are clinging to gains coming from what analysts say is “defensive support,” Wall Street is not expected to follow their lead. U.S. stock futures are pointing to a flat opening, as investors have run out of reasons to hope for a positive conclusion to the E.U. Summit which begins tomorrow. The depressing signs are all too clear; Germany is adamant that there will be no possibility of a joint Eurobond whereby debt would be a shared burden, the cost of Italy’s short-term sovereign debt rose to 2.957 % earlier today, well above the 2.1% paid last month and ... more →
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 With the E.U. summit due to begin tomorrow, there is word that the U.K.’s financial district, aka the City of London, is now expressing concern over David Cameron’s decision last December to reject the E.U.’s then-proposal for a fiscal treaty. The reasoning behind Cameron’s decision was simple; the E.U. refused to provide any safeguards or legal protections for the City of London. Cameron was the lone holdout among all of the E.U. members, and his decision resulted in the E.U. membership having to create a work around to move the fiscal treaty proposal forward.
As Cameron prepares ... more →
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 Australia is one of the few countries that have been able to retain its AAA credit rating despite a slowdown in global growth, a downtrend in commodity prices and its own diminished outlook. Its currency also remains remarkably resilient, if not somewhat overvalued, according to some analysts. Regardless, central banks’ purchases of the Australian Dollar have increased in recent months, with the Russian central bank adding the Aussie Dollar to its foreign reserve mix, to the tune of AUD$5 billion. Earlier in the month, it was rumored that the German Bundesbank was looking at including ... more →
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 With investors’ worries reaching new heights the safe haven currencies are once again seeing a resurgence in demand. Earlier today, the Japanese Yen struck a 2-month high against the “other” safe haven currency (the U.S. Dollar) before retreating. Analysts say that so long as the Eurozone crisis continues unresolved and global growth worries perpetuate, risk appetite will wane as safe haven appeal is whetted.
Over the past quarter, the Yen has appreciated more than 5% against the greenback and though the currency’s rise is of great concern to Japanese exporters, the former Vice ... more →
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 The U.S stock market fought back Friday, after receiving big losses in yesterdays trading. The reason for the change: Banks. Even though being among the worst hit on Thursday, they rose as the Moody’s Investors Service credit downgrades for 15 of the world’s largest banks was less than expected. Furthermore analysts said the round of downgrades removed one piece of uncertainty that had been weighing on banks.
Leaders of the euro zone largest economies agreed to back a €130 billion ($163billion) rescue plan to support growth and defend the common currency, but itremained divided over ... more →
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 Analysts called this one correctly; yesterday, Federal Reserve Chairman Ben Bernanke announced only that the central bank would extend the Operation Twist program rather than offer more aggressive stimulus. The $400 billion program was initially scheduled to end later this month, now it will continue through till the year’s end and be increased by $267 billion. The vote is still out on the Operation Twist program, however quite a few analysts believe it has been ineffective at worst and benign at best.
An outright QE3 would have given equity markets a good reason to rally, but Wall ... more →
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 Earlier today, the Bank of England released the minutes from its most recent policy setting committee, and it appears that the central bank could be set to release another round of quantitative easing. In the end the MPC voted against restarting the gilt purchase scheme by a razor slim margin of 5-4; the Committee hasn’t had a vote that was that close in more than five years, and suggests to analysts that more QE is a lot closer than previously expected, perhaps even as soon as next month.
According to the minutes the BoE governor, along with policy doves Adam Posen and David Miles, ... more →
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 As markets turn their attention to the Federal Reserve Bank’s interest rate decision which will be announced later today, crude oil and gold prices have both turned to the upside in anticipation of a more accommodative stance by the Fed. Initially, analysts had been betting that the worsening global outlook combined with a sluggish U.S. rebound and significant deterioration in the labor market would be enough to convince Ben Bernanke and the FOMC to offer another round of real QE. However, in recent days quite a few analysts have reconsidered their initial forecasts and now believe that ... more →
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 With markets craving more liquidity to quell skittish sentiment, investors are looking now to the U.S. Federal Reserve to be the next major central bank to print money. Today begins the 2-day session of the Fed’s Open Market Committee, and though there is little scope for easing via interest rates given the already ultra low 0.25% benchmark rate, there are still a few weapons left in Chairman Ben Bernanke’s arsenal. A deteriorating labor market and a crisis escalation in the Eurozone are giving rise to growing speculation that the Fed will finally react.
Analysts polled expect that ... more →
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 Earlier this month, unsurprisingly, the Reserve Bank of Australia had lowered its benchmark interest rate by 25 basis points. The release of the central bank’s minutes today suggests that the members of the policy setting committee sought to address head on the strong probability of a worsening global outlook which could eventually wreak havoc on their domestic economy. The day following the rate decision the Australian Statistics Bureau reported first quarter economic growth far more improved than analysts’ expected.
Despite the surprise GDP data, and comments from the RBA governor ... more →
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 I yesterday watched the movie “Too Big to Fail” and I was just struck by the fact that the situations today are just the same, if not worse. It is a brilliantly made movie and any person planning to make a career in trading and finance will do well to see this. It is quite a critical day today and OpenBook has been quite useful in giving a view to the people mind set. It was quite interesting to see that our trading decisions were some times entwined with our political beliefs and supports.
From my perspective, I need to keep one factor in mind. I am a trader, I am not a politician ... more →
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 Hedge Against Exchange Rate Risk With Currency ETFs
June 17 2012| Filed Under » ETFs, Forex, Short Selling
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Investments in overseas instruments, such as stocks and bonds, can generate substantial returns and provide a greater degree of portfolio diversification, but they introduce an added risk, that of exchange rates. Since foreign exchange rates can have a significant impact on portfolio returns, investors should consider hedging this risk where appropriate. While hedging instruments such as currency ... more →
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 U.S. Indices gained in value for a second session in row on hopes that central bankers stand ready to support global markets, if this weekend’s Greek election results end in market turmoil. The news offset the latest round of weak U.S. economic data, which pointed to sluggish growth domestically.
The EU indices ended the week in positive as well. The main concern is the possibility for a contagion, should the Greek election end with an exit.
The DJ30 closed at 12,767.17, gaining 115.26 points (+0.91%) in today’s trading. The SPX500 closed at 1,342.84, gaining 13.74 points (+1.03%) ... more →
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 U.S. indices rallied today after an announcement from G20 officials who said that a coordinated action is being prepared by the Eurozone’s major banks by providing liquidity and preventing a credit squeeze if the results of Greece’s elections this weekend create chaos in the financial markets.
After the E.U. market closed, the Bank of England and Britain’s government revealed that it will take action with a new fiscal policy to deal with tightening credit and financial market environment triggered by the Eurozone crisis.
The DJ30 closed at 12,651.91, gaining 155.91 points (+1.24 ... more →
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 Analysts are expecting, and investors are hoping, that the world’s largest central banks haven’t made any plans to curtail their respective money making proclivity. Data has shown that the world’s four largest central banks, i.e., the Federal Reserve, the ECB, the Bank of Japan and the Bank of England, have combined pumped some $6 trillion in liquidity into the global financial system since 2008. The current near catastrophic situation in the Eurozone which has far-reaching repercussions, and a looming crisis with a failing economic recovery in the U.S., suggest that those banks will ... more →
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 In a recently released article published in Germany, renowned economist Nouriel Roubini weighed in on the Eurozone crisis once again. Roubini reiterated his position that the E.U. leadership should focus on growth and give up their long-held conviction that austerity and savings is the only way to go. That sentiment is very much in line with the anti-austerity drive that is sweeping through much of the Eurozone, though Germany’s policy makers continue to insist that budgets can be brought under control only through austerity.
As Roubini puts it, the “savings madness” should be ... more →
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 Usually leverage quotes a ratio that is 100:1.
It means that you can trade with 100 units by just investing one unit. By just investing 1,000 USD you can trade up to 100,000 USD.
Margin is quite same as leverage, but a viewpoint is little different. Margin is usually quoted as a percentage that is 10%.
Borrowed money trading is leverage. Brokers on the foreign exchange provides greater leverage than the brokers in the equities and future market that makes Forex more tempting and interesting than other kinds of traders. It is important to understand that the leverage is not without ... more →
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