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Broadgate: Market News 16/2

16 February 2012

Beijing has pledged to help EU, and Chinese investment in European companies has skyrocketed. Chinese Premier Wen Jiabao said, “China is firm in supporting the EU side in dealing with the debt problems. We match our words with actions.”

On Tuesday, the Bank of Japan said it will pump $130 billion more into the ailing economy, the latest push to combat stubborn deflation that has plagued the country for over a decade.
The dollar rose to 78.67 yen at one point Wednesday morning—its highest level since Nov 1—from 78.44 yen late Tuesday in New York, before easing slightly to sit at 78.48 yen. “The yen is trending weaker and the Bank of Japan’s monetary easing continues having effects,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.

IPMGCHNG rose 0.7 percent after a revised 1.5 percent gain in December, the best two-month performance since July and August 2009, when the world’s largest economy was emerging from the recession, according to figures issued by the FED today in Washington. Other reports showed homebuilders turned less pessimistic in February and manufacturing in the New York region grew.

Prices for Brent crude oil rose to their highest level since April 2011 Wednesday on fears that Iran might halt shipments of oil to Europe. Brent crude spiked more than 1.8% Wednesday to $119.53 per barrel. U.S. gasoline prices are often closely tied to the price of Brent crude oil, since many U.S. refineries import oil from overseas to make gas. Gas prices have been steadily rising since late December, hitting an average of $3.58 a gallon Wednesday, according to motorist group AAA.

Employment in Australia is projected to increase 10.0K after contracting 29.3K in December, and the improvement in the labor market may prop up the high-yielding currency as the data raises the outlook for growth. Expectations for a rebound in employment casts a bullish outlook for the high-yielding currency, and an above-forecast print could set the stage for a long Australian dollar trade as growth prospects improve. Therefore, if the economy adds 10K jobs or more, we will need a green, five-minute candle following the report to establish a long trade on two-lots of AUD/USD.

U.K. consumer confidence rose in January to the highest in five months on signs of strength in the economy, according to Nationwide Building Society, which said the increase may be a “temporary bounce.” An index of sentiment rose to 47 from 38 the previous month, the Swindon, England-based customer-owned lender said in an e-mailed report today. The reading was down 2 points from a year earlier. A gauge of consumers’ outlook for the economy jumped by 14 points.

The information set out herein has been obtained from various public sources and is by way of information only. Broadgate Financial can accept no liability of any sort in relation thereto and readers should obtain their own verification of any statement before making any decision which may have any financial or other impact.

Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell investments.