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I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!
Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>
You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.
You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.
Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>
Yours 'Forexly',
Cliff
Simon Denham's Daily Market Comment
The first round of loans was mostly taken up by Italian and Spanish banks so it will be interesting to see when the details are revealed just how much more these institutions helped themselves too this time round. France was also in for almost a fifth of the loans and here again investors will want to see how much their banks, which were in the eye of the storm of the debt crisis until LTRO I last December, have borrowed. UK government owned banks will also be joining the queue which should come as no surprise considering their poor results recently. They’ll want to take advantage of the cheap funds to further their work in repairing their balance sheets.
Yet the main thing that has happened as a result of all this liquidity is that there hasn’t been any great trickle down to normal businesses and consumers. It’s all very well the banks repairing themselves, but it’s the businesses on the front line that are crying out for the cash. The problem is that we are in a vicious circle whereby banks are happier to horde the cash as opposed to lending it out and the same would probably be said for businesses if they did get the loans. They may perceive the risks to be too great in trying to invest and expand at a time when the economy is flat lining at best.
On the economic data front we’ve already had UK consumer confidence out and that did not come in at the expected improvement, so no improvement on last month and a highlight of the figures was an improvement in the personal finance number. Here consumers are more confident about their finances than they were a year ago and a little more optimistic about the economy. Whilst the headline figure hasn’t changed, these glimmers of hope for the consumer might signal a turning point. At the beginning of last year we saw consumers starting to get more confident, but that was swiftly reversed as the European debt crisis unravelled. This time round with the Greek situation to one side there’s hope that overall confidence can continue to improve.
There’s plenty more in the way of data today. Also from the UK this morning we get money supply data. At lunch time there’s US GDP figures followed by the Chicago PMI number. After that oil inventories and then this evening the Fed’s Beige Book.
Sterling has benefited somewhat following the slightly positive consumer confidence numbers. GBP is up a tad at 1.1830, a way off the highs and strong resistance around the 1.2000 mark and it would seem with the euro’s recent strength any sterling gains against the single currency could remain short lived. For the euro the bulls are in the ascendency ahead of the LTRO with EUR/USD at 1.3455 just below its recent highs of 1.3485. Today’s session might be volatile especially around the time of the LTRO release this morning so all eyes are on the near term support and resistance seen at 1.3400 and 1.3500 respectively.
Silver was the stand out asset yesterday when it saw a rally of nearly 5% after breaking beyond resistance at the $35.70 level that has proved so difficult to overcome in the past. The prospect of the cash injection from the ECB today supported precious metal prices and after silver made the initial move in spiking higher, eventually gold followed suit. This morning silver is trading on its highs at 37.20 and gold is at 1788, nearing a 4 month high.
Brent has taken a breather for now and is at 122.30, just finding a little short term support on the 200 one hour moving average. With oil inventories later and the LTRO today, volatility in commodities cannot be ruled out either.
Well this day only comes round every four years and so it’s worth
trying to make the most of it. That’s what the ECB will be attempting
to do as they dish out another round of cheap loans this morning. The
markets leading into today’s LTRO have traded sideways as investors
remain apprehensive to exactly what the “big figure” will be and just
what it’ll mean for the markets if it is higher or lower than December’s
number of €489b. This morning the FTSE is trading roughly flat at 5925
in anticipation as the last few sessions seem to have been building up
to something, maybe today?
The first round of loans was mostly taken up by Italian and Spanish banks so it will be interesting to see when the details are revealed just how much more these institutions helped themselves too this time round. France was also in for almost a fifth of the loans and here again investors will want to see how much their banks, which were in the eye of the storm of the debt crisis until LTRO I last December, have borrowed. UK government owned banks will also be joining the queue which should come as no surprise considering their poor results recently. They’ll want to take advantage of the cheap funds to further their work in repairing their balance sheets.
Yet the main thing that has happened as a result of all this liquidity is that there hasn’t been any great trickle down to normal businesses and consumers. It’s all very well the banks repairing themselves, but it’s the businesses on the front line that are crying out for the cash. The problem is that we are in a vicious circle whereby banks are happier to horde the cash as opposed to lending it out and the same would probably be said for businesses if they did get the loans. They may perceive the risks to be too great in trying to invest and expand at a time when the economy is flat lining at best.
On the economic data front we’ve already had UK consumer confidence out and that did not come in at the expected improvement, so no improvement on last month and a highlight of the figures was an improvement in the personal finance number. Here consumers are more confident about their finances than they were a year ago and a little more optimistic about the economy. Whilst the headline figure hasn’t changed, these glimmers of hope for the consumer might signal a turning point. At the beginning of last year we saw consumers starting to get more confident, but that was swiftly reversed as the European debt crisis unravelled. This time round with the Greek situation to one side there’s hope that overall confidence can continue to improve.
There’s plenty more in the way of data today. Also from the UK this morning we get money supply data. At lunch time there’s US GDP figures followed by the Chicago PMI number. After that oil inventories and then this evening the Fed’s Beige Book.
Sterling has benefited somewhat following the slightly positive consumer confidence numbers. GBP is up a tad at 1.1830, a way off the highs and strong resistance around the 1.2000 mark and it would seem with the euro’s recent strength any sterling gains against the single currency could remain short lived. For the euro the bulls are in the ascendency ahead of the LTRO with EUR/USD at 1.3455 just below its recent highs of 1.3485. Today’s session might be volatile especially around the time of the LTRO release this morning so all eyes are on the near term support and resistance seen at 1.3400 and 1.3500 respectively.
Silver was the stand out asset yesterday when it saw a rally of nearly 5% after breaking beyond resistance at the $35.70 level that has proved so difficult to overcome in the past. The prospect of the cash injection from the ECB today supported precious metal prices and after silver made the initial move in spiking higher, eventually gold followed suit. This morning silver is trading on its highs at 37.20 and gold is at 1788, nearing a 4 month high.
Brent has taken a breather for now and is at 122.30, just finding a little short term support on the 200 one hour moving average. With oil inventories later and the LTRO today, volatility in commodities cannot be ruled out either.
