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Broadgate: Market News 8/6

8 June 2012

Analysts worldwide mark that in the near future investors, who has recently aggressively got rid of the Euro, will be more favorable to it. There are three main factors that are important to restore trust of the market participants in EU. First of all it is crucial whether officials will be able to agree on some particular measures on the EU summit at June 28-29.

It’s assumed that it is possible. Secondly, Greece will probably remain a part of the Euro zone. And Spain eventually will ask for the aid of the EU and the IMF.

Thirdly, all that might help to calm the investors, who are concerned about the potential collapse of the Euro zone, and might help to support the Euro recovery. Nevertheless the perspectives of the Euro are not so positive taking to account the contrast between the economic situation in Europe and the United States.

Oil fell a second day in New York, heading for the longest weekly losing streak in more than 13 years, on speculation the economies of the U.S. and China, the world’s biggest crude consumers, will slow and curb fuel demand.

Oil for July delivery decreased as much as $2.23 to $82.59 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.86 at 5:49 p.m. Sydney time. The contract yesterday slipped 0.2 percent to $84.82, the lowest close since June 5. Prices are down 0.4 percent since June 1 and poised for a sixth weekly decline, the longest losing streak since December 1998. Oil has fallen 16 percent this year.

Brent for July settlement slid $1.59, or 1.6 percent, to $98.34 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.48, from $15.11 yesterday.

EUR / USD – Yesterday the Euro appreciated against the US Dollar from 1.2400 to 1.2585. The pair is moving towards the correction goal of 1.2660. The European officials are allegedly devising the rescue plan for Spain. Among the investors there’s a speculation about another probable stage of easing of the US monetary poicly. Against the background of all these factors the Euro will most probably continue the process of correction. There are two more goals left: 1.2780 and 1.2905.

USD / JPY – The US dollar appreciated against the Yen from 78.60 to 79.38. The American currency is growing 4 days in a row in this currency pair. Apparently the pair aspires to test the level of 81.50 in the near future.

GBP / USD – Yesterday the Pound grew against the US Dollar from 1.5371 to 1.5515. The further reduction of short positions in risky assets might support the restoration of the Pound according to an assumption of  a lot of analysts worldwide. The Pound is approaching the first correction goal of 1.5660. If  the process of correction continues after reaching this level the next goals will probably  be 1.5780 and 1.5910.

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.