Confusion in the Markets

12-01-2012

Investors scrambled to buy Dollars and shied away from other major currencies yesterday, in part due to ever worrying concerns over Europe. The greenback was up against the Euro near the end of trading yesterday, with the EUR/USD trading at 1.2703. Euro Zone leaders are planning an unprecedented debt sale this week, in order to resume their so far unsuccessful bailout strategy. The USD also gained ground on the Pound, with the GBP/USD down 1.01% and trading at 1.5327.

Key reports today

Retail and unemployment numbers are scheduled for release today in the United States. The Unemployment Claims report indicates the amount of first time filers for unemployment benefits. The number is estimated to be 373 thousand – in line with analyst’s expectations. The monthly European Central Bank press conference will also be taking place today and will likely influence the markets heavily due to ongoing investor uncertainty and the debt sale of both Italy and Spain which will take place today and tomorrow.

Forex markets this morning

Mixed results in the currency markets, with plenty of unanswered questions creating confusion with investor sentiment. The EUR/USD and the EUR/JPY are both up this morning by 0.071% and 0.118%, trading at 1.2716 and 97.77. The EUR/CHF is down however, trading at 1.2118. Both the GBP/USD and AUD/USD are down in trading so far today, with the Aussie down by 0.092% and trading at 1.0300 against the greenback.

Wall Street up yesterday

Wall Street enjoyed a boost yesterday, with primary banks and high-tech firms leading the way. The Nasdaq Composite finished the day 0.315 higher and the S&P 500 experienced a slight gain of 0.3%. The Dow Jones Industrial was down however by 0.10%. Japanese stocks fell for the first time in several days this morning. The Nikkei 225 Stock Average dropped by 0.7 percent to 8,385.59. One reason for the decline in Japanese indices is the drop in the Japanese Government’s surplus by about 86 percent.

Small gains in commodities

There is a slight bump in the commodities market this morning, due in part to investor concern over the Euro and the desire for more stable investments. Gold is up by 0.44%, trading at 1646.85. Crude and Brent oil are up as well, trading at 101.39 and 113.06 USD per barrel. One reason for the increase in gold value is an increase in Chinese gold imports. Chinese interest in the precious metal helped gold increase in value, despite the fact that investors made a push for Dollars and abandoned the Euro yesterday. When the greenback increases in value, gold tends to move in the opposite direction.

Oil set to rise

The value of oil may very well experience a rise in value over the next several days, as oil resources experience instability around the world. Several Nigerian refineries are being shutdown, as local workers protest the end of government fuel subsidies. Japan has announced that it will limit its oil imports from Iran, which in turn has reiterated its threat to block the Strait of Hormuz in response to any sanctions. This political instability could drive the price of oil much higher than the current 101 USD per barrel where it currently stands.

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