Spread Trading Markets Quiet Ahead of Key US Labour Data

Calendar September 3, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“As expected we have seen minimal trading activity this morning ahead of the all important US labour data.

In spread betting we have seen the markets edge higher and clearly the resilience shown in the FTSE over the last week or so, where the market has rallied for 6 straight days, has restored some elements of confidence in investors after a poor months trading in August.

That said, all traders have their eyes on today’s nonfarm payroll data and there is a sense that with the FTSE near resistance levels where we have seen sellers come in before since May, we could head significantly lower should a bad figure come out. The worry is that with September historically a bad month for equities, if we get a really bad number it could lock in a bearish month ahead.

On the flip side to that argument is the fact that this week has so far proved to be a much more positive for economic data and with expectations already very low after recent comments from Ben Bernanke indicated that the US recovery was slowing quicker than expected, there is every chance that investors could view any in line numbers as a positive.

The market is expecting a loss of 100,000 nonfarm payrolls whilst there will also be a large focus on private payrolls which some consider being a better health check of the US labour market.

A strengthening labour market will be key to driving recovery efforts in the US and globally which is why today’s jobs data, particularly in light of fears of a double dip, is so important for traders.

I would expect that the numbers could add a degree of volatility to trading as we approach the close.

The banks and miners are leading the charge higher for European Indices yet again today with Barclays the top bank performer.

Autonomy maintains its place near the top of the FTSE 100 leader board on continued bid speculation from Microsoft or Oracle. Its shares have now rallied 15% this week alone.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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FTSE Spreads Trade Flat Ahead of US Non Farm Payrolls

Calendar September 2, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“Investors have paused for breath today after European Indices enjoyed their best days trading in almost two months yesterday with investors quickly turning their focus towards tomorrow’s all important Non Farm Payrolls.

We have not seen any dramatic elements of profit taking as of yet, which can be interpreted as a sign that investors are betting tomorrows jobs data might show some resilience, particular after yesterdays better than expected ISM manufacturing data.

Normally having seen the FTSE rally as much as 2.5% in a day’s session and almost 5% this week alone, our financial spread betting clients may be enticed into cashing in some gains with a market moving piece of data to come.

It will be interesting to see whether investors downsize some of the riskier assets classes from their portfolios as we approach the close.

Presently, we have seen minimal strength in the miners, banks and oil firms, but this strength is being weighed down by weakness in pharmaceutical firms, resulting in a rather flat FTSE 100.

In a session rather devoid of any fundamental news, it is broker actions that are facilitating a lot of individual equity moves so far. ARM Holdings is the top faller on the FTSE 100 after JP Morgan Cazenove indicated that Intel’s acquisition of Infineon would not be as positive for the firm as had been initially hoped by traders. ARM shares had rallied as much as 12% on the back of the Intel deal.

We have also seen some selling in shares in Lonmin after Citigroup cut its rating on the stock citing precious metal prices may be subdued in the second half of this year.

On the upside, we have seen a lot of buyer interest in shares of Autonomy this morning, on market speculation that there could be bid interest from Microsoft or Oracle.

This has helped to lift its share prices to a new monthly high but with its shares at the top of a one month trading range, they could be at risk of profit taking if there are no legs to this bid story.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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Positive Chinese Manufacturing Data Boosts Mining Sector Shares

Calendar September 1, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“European shares traded higher for the second day in a row after stable manufacturing data out of China helped to increase demand for mining stocks.

The Chinese Purchasing Manufacturing Index rose to 51.7 in August, broadly in line with market expectations, and this has helped to calm fears of a slowdown in demand for resources from one of the fasting growing economies in the world.

The Chinese data has triggered gains in metal prices, where Copper traded at a new 4 month high, and this has had a knock on effect on the key heavyweight miners in Europe, with BHP Billiton, Rio Tinto and Kazakhmys all trading higher. Most of the day’s gains in the FTSE 100 can be located to strength in the mining sector.

Energy firms are also performing strongly today, on the back of a 0.7% rise in the price of crude oil.

It’s the first day of the month and what we have seen is investors coming back from the summer and taking a slightly longer term view of the financial spread betting markets. They are tending to look at sectors as a whole that might perform better over the coming months particular with major Indices in Europe still firmly locked in trading ranges.

British Manufacturing Slump Weakens Sterling

The Pound Sterling was sold off today after British manufacturing grew at its slowest pace in 9 months in August, hurt by a weak number of new orders. British PMI came in at 54.3, much lower than the 57.0 that was expected by the market whilst July’s PMI was revised lower too.

One of the more concerning elements of the manufacturing data is the slowdown in new orders, which now stands at its weakest in over a year. Considering the strength in British manufacturing earlier this year, today’s PMI data is unlikely to give a significant rise in fears of a double dip recession.

Investors sold Sterling spreads as an immediate reaction to today’s British PMI data, forcing the Pound to lose as much as 0.5% against the US Dollar in a matter of minutes.

TUI Travel Shares Buoy FTSE 100

TUI Travel shares have jumped to the top of the FTSE 100 leader board after a report in the FT Deutschland that majority shareholder TUI AG is considering buying up the remaining 42.5% of shares in the travel firm it does not already own.

This has got shareholders fairly excited this morning and as a result we have seen high demand for TUI shares in London on hopes that the remaining shares could be bought at a higher premium that the 211p that shares are currently trading at today.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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FTSE 100 Spreads Pull Back Following Weakness on Dow and Nikkei

Calendar August 31, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“The FTSE 100 opened 1% lower tracking weakness in the US last night and Asia this morning as traders continued to fret about the strength of the economic recovery.

We have investors returning, somewhat slowly, to the market after the bank holiday weekend and clearly they are taking their lead from the large falls in US markets overnight, which eradicated any gains from Fridays Jackson Hole induced rally.

Traders have not taken comments made by President Obama in the positive light that he would have hoped and it seems that Friday’s better than expected US GDP number has quickly been forgotten amongst those pessimistic about recovery efforts.

Moreover, the Nikkei suffered its worst daily fall in three months this morning which has sent a bit of a shockwave through trading in Europe this morning.

I would hope that the recent weakness is purely a feature of light volumes exacerbating market moves than sentiment turning dramatically bearish.

With Non Farm Payrolls due out later this week, traders could simply be putting the shutters up in fear of a bad number, particularly after Bernanke’s’ comments.

Banks and Miners Weigh on UK Index

Much of today’s equity weakness is focused on the miners and the banks, two sectors that are sensitive to the strength of the recovery.

Barclays is one of the biggest fallers on the FTSE 100 today, with its shares off 3% and hurt by concerns over the economic recovery. We have seen our financial spread betting clients downsize their positions in the bank to minimise their risk exposure.

We have also seen weakness in commodities such as the miners and oil firms on risk aversion and falls in the prices of Crude Oil and Copper, which had hit a three month higher yesterday.

There has been some significant selling in shares of Serco with traders taking their lead from a downgrade in the stock by Bank of America/Merrill Lynch.

They cut their rating on the stock to a ‘neutral’ stance on uncertainty over the effect of the collation government’s spending review which is set to come out in October.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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Spread Betting Weekly: Volatility Remains a Threat to Equities

Calendar August 30, 2010 | Posted by Robert

The Weekly Spread Betting Review from Spreadex:

The M&A melee from the last two weeks has certainly taken its toll on equity markets

After hitting 6-week lows on Wednesday, the FTSE and the Dow both rebounded slightly on Friday’s better than expected GDP figures from both the US and the UK.

Trading volumes remained low ahead of the long weekend and volatility remained a threat to equities.

Bond prices fell on the good news though, and in forex spread betting, the dollar rallied against sterling, the euro and the yen.

Investors found Vedanta oversold in the wake of its takeover of Cairn India, and BHP Billiton remains down 39 points this week on its attempted Potash takeover, despite strong quarterly results. The Canadian fertilizer company continues searching for alternative bidders.

AMEC’s 28% rise in 1H earnings looks set to continue based on medium-term orders, and miner Kazakhmys also reported an 11% rise in net profit, though it takes a slightly more cautious outlook for the rest of the year.

Elsewhere in spread betting, Light Crude prices fell, hurting BP and Tullow Oil, which suffered further on news that the Ugandan government may deny extension of one of the driller’s licences. British Airways shares rallied on the cheaper fuel.

The Spread Betting Markets – The Coming Week:

UK equity markets are shut today for the bank holiday, but Japanese Industrial Production and EU Economic Sentiment figures are released today, as well as US Personal Income and Outlays.

GCM makes an announcement Wednesday and Ford motors releases its August sales figures, and the ISM manufacturing index has potential to push equity markets.

Both Fortune Oil and Hays make interim statements on Thursday.

A number of US retailers including Target, Dillard’s Gap, Nordstrom and Saks all give sales data for August on Thursday, which will be eyed closely for an indication of consumer spending. An ECB rate announcement is also expected that day,

The US employment report Friday closes out the week.

 

Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.

Spreadex is authorised and regulated by the Financial Services Authority.

The above comments do not constitute investment advice and neither Spreadex nor Spread-Betting.org accept any responsibility for any use that may be made of them.

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How to Spread Bet on the Nikkei 225

Calendar August 29, 2010 | Posted by Robert

Where can I Spread Bet on the Nikkei 225?

 
With any of the following spread betting companies you can spread bet on the Nikkei 225 index:

These companies also offer tax free* trading on a wide variety of other spread betting markets including indices, forex and commodities. For more details see Spread Betting Companies.

How to Spread Bet on the Nikkei 225

 

At the time of writing, the price of the Nikkei 225 (September) market is 9010 – 9030 with Tradefair.

As with most principal indices, you can place a spread bet on the Nikkei 225 either increasing or decreasing. With the Nikkei 225 (September) market, an investor can speculate on:

a) The Nikkei 225 to settle higher than 9030, or
b) The Nikkei 225 to settle lower than 9010

on the closing date for this September market, 09-Sep-10.

Note that with the Nikkei 225 market you trade in £X per point, where a point is 1 point of Nikkei 225 movement. As a brief example, if your stake was £2 per point and the Nikkei 225 index moves 5 points then that would be a difference to your P&L of £10.

Nikkei 225 (September) Trading Example
 
Considering an example, let’s assume you see the real time price on a spread betting website that shows the spread of 9010 – 9030. So, following your market analysis, you may come to feel that the Nikkei 225 is going to move above 9030. Therefore:

  1. You think that the Nikkei 225 will rise
  2. Therefore, you decide you want to go long of the market at 9030 and you risk £1 per point
  3. The market rises and the spread moves to 9174 – 9194
  4. As a result, you may choose to guarantee a profit and settle your position. In order to do this you would sell at 9174
  5. You initially bought the spread at 9030
  6. P&L = (Closing Level – Opening Level) x stake
  7. P&L = (9174 – 9030) x £1 per point
  8. P&L = 144 x £1 per point
  9. P&L = £144 profit

 
Investing does not always go to plan. If the trade did not move as forecast, and had the Nikkei 225 decreased in price, with the market moving down to 8895 – 8915, then you can choose to close your bet and prevent any more losses by selling at 8895.

  1. Your initial buy price = 9030
  2. P&L = (Closing Level – Opening Level) x stake
  3. P&L = (8895 – 9030) x £1 per point
  4. P&L = -135 x £1 per point
  5. P&L = -£135 loss

 
(Financial spread trading prices accurate as of 27-Aug-10, expiry date for this Nikkei 225 (September) futures market is 09-Sep-10)

For more information about:

 
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
 
* Spread betting is tax free in the UK. This tax free status is subject to change and can differ if you pay tax outside the UK.
 

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How to Spread Bet on the Nasdaq 100

Calendar August 28, 2010 | Posted by Robert

Where can I Spread Bet on the Nasdaq 100?

 
With any of the following spread betting companies you can spread bet on the Nasdaq 100 index:

These companies also offer tax free* trading on a wide variety of other spread betting markets including indices, forex and commodities. For more details see Spread Betting Companies.

How to Spread Bet on the Nasdaq 100

 

The current price of the Nasdaq 100 Rolling Daily market is 1780 – 1782 with companies such as paddypowertrader.

Like most major stock market indices, investors can spread bet on the Nasdaq 100 to go up or down. With the Nasdaq 100 Rolling Daily market, an investor can speculate on:

a) The Nasdaq 100 to go higher than 1782, or
b) The Nasdaq 100 to go lower than 1780.

Note that with the Nasdaq 100 market you trade in £X per point, where a point is 1 point of Nasdaq 100 movement. As an example, if your stake was £6 per point and the Nasdaq 100 index moves 5 points then your profits (or losses) would change by £30.

Nasdaq 100 Rolling Daily Trading Example

 
For example, let’s say you see the real time price on a spread trading website that gives the current spread of 1780 – 1782. So, having done your analysis, you could think that the Nasdaq 100 will increase and move above 1782. This would mean:

  • You think the Nasdaq 100 should go up
  • Therefore, you want to ‘buy’ the market at 1782 and you risk £3 per point
  • The market increases and the spread becomes 1822 – 1824
  • With this new spread you might choose to guarantee a profit and close your bet. To do this you would sell at 1822
  • You initially bought the spread at 1782
  • Profit = (Final Price – Initial Price) x stake
  • Profit = (1822 – 1782) x £3 per point
  • Profit = 40 x £3 per point
  • Profit = £120 profit

Spread bets don’t always go to plan. If the trade did not move as predicted, and had the Nasdaq 100 decreased in price, with the spread going down to 1737 – 1739, then you could choose to settle your bet and restrict your losses. You would do this by selling at 1737.

  • Initial price you bought the market at: 1782
  • Loss = (Final Price – Initial Price) x stake
  • Loss = (1737 – 1782) x £3 per point
  • Loss = -45 x £3 per point
  • Loss = -£135 loss

Please note that with a Rolling Daily Financial Spread Bet if you Roll a bet over to the next day you may incur a charge or income for each day that the trade is held into the next trading day. For more details please read: Rolling Daily Spread Betting Charges.

(Spread trading prices quoted as of 27-Aug-10)

For more information about:

 
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
 
* Spread betting is tax free in the UK. This tax free status is subject to change and can differ if you pay tax outside the UK.
 

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UK Spread Betting Markets Weaken Ahead of Bernanke Fed Speech

Calendar August 27, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“Investors shrugged off a minimal rise in the second reading of UK Q2 GDP today to help ease the market lower in anticipation of a major speech by Fed Chairman Ben Bernanke later in the day.

Much of today’s Index weakness is being focused on the energy sector, with heavy falls in both Tullow Oil and BP.

The sell off in the US markets last night to finish near the lows on the day locked in a negative opening to European trading.

What we have also seen are investors removing elements of risk from their portfolios in case of any market turbulence on Monday as the UK market is shut for the bank holiday.

UK GDP Revised Upwards

In a positive sign for the UK economy, the second reading of Q2 GDP was revised higher to 1.2%, from 1.1%, by the Office of National Statistics.

There had been some hope of a higher reading after construction activity grew better than expected, and indeed much of the higher reading can be traced back to construction output.

In truth however, today’s higher reading of GDP is nothing to shout home about. It is an upward revision of 0.1% on top of the first reading and this is not enough to give the market any significant boost in confidence that the recovery will be strong, particularly with major public spending cuts to come.

This point is further emphasised by the minimal impact the revision has had on the market today.

Investors Await Bernanke Speech

Much of the market is focusing on what could prove to be an important speech by Ben Bernanke later in the day as the world’s central bankers retreat to Wyoming for their annual three day conference.

Investors are trying to feed on any clues as to the strength of the US economic recovery which is why the market has proved so sensitive to economic data.

Today’s speech by Bernanke is an opportunity for investors to hear of the plans in the pipeline to stimulate the US economy, particularly after the really poor US home sales data announced this week.

Energy Stocks Weaken on Tullow Oil Uncertainty

The energy sector is the weakest performing sector so far today, largely on the back of strong selling in Tullow Oil. Shares in the oil firm have slumped almost 10% this week alone as investors fretted about the uncertainty regarding regulatory approval for their operations in Uganda.

Investors hate uncertainty and clearly this week concerns regarding licensing and regulatory approval from the Ugandan government in the midst of a tax dispute is hurting sentiment in Tullow Oil. The news is dragging down the energy sector with BP shares also heavy fallers.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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UK Markets Rise as Mining Sector Sees Bargain Hunting and Positive Earnings

Calendar August 26, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“European Indices traded higher by 0.5% in early trade Thursday as bargain hunters made their move having seen the US markets recover last night to finish in positive territory.

In truth however, I get the feeling that there are a lot of nervous traders out there considering how weak recent economic data is proving to be.

The Dow Jones traded below the psychologically important 10,000 level for the second session in a row. But there is some hope having seen the S+P bounce from significant support around the 1040 level and this breeds confidence that the aggression showed by the bears could be waning.

Much will rely on economic data however with the bearish moves we have seen this week being dictated by much weaker than expected home sales and durable goods orders out of the US. Last week’s jobless claims underperformed market expectations and caused further equity weakness so trading could be choppy in and around today’s claims at 1.30pm.

Tomorrow we have the headline piece of macroeconomic data for the week in the shape of GDP readings for both the US and UK. For months now the question on every trader’s lips has been ‘what sort of recovery are we going to have?’

To this end, GDP readings are vital in giving the market clues as to the potential to slip into a double dip recession. There is every chance that volumes could remain particularly low going into Friday’s session with investors unwilling to add more risk with the markets closed for bank holiday Monday.

Much of today’s stronger market is being dictated by strength in the mining sector, which is higher by 1.8%. The mining sector has fallen by as much as 7% this week alone and after some solid company earnings today, this has encouraged some bargain hunting.

Kazakhmys is the leading riser on the FTSE 100 after the Kazak miner reported a 130% rise in underlying earnings per share for the first half of the year. The miner also maintained that the outlook for Copper spread trading market remains positive, boosting confidence in the sector.

Oil services firm AMEC has also seen high trader demand after reporting a 20% jump in profits on the back of a strengthening order book and customer spending.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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Indices Spreads Market Sees Volatility on Irish Ratings Cut and Positive German Ifo

Calendar August 25, 2010 | Posted by Robert

Joshua Raymond, Market Strategist City Index commented:

“European Indices traded choppy on Wednesday with positive company earnings and a surprising rise in the German Ifo Index to 106.7 been kept in check by a ratings downgrade from the S&P on Ireland.

The somewhat surprising rise in the German Ifo Index shows that business sentiment in Germany is stronger than initially expected and this has had a positive effect on both stocks and the Euro.

However, traders remained a little edgy after Standard and Poor cut its long term rating on Ireland to AA- and assigned negative outlook, claiming it believes the country will face substantially higher costs to support its ailing financial institutions.

The FTSE 100 has fallen by as much as 5% since the start of the month and yesterday traded near support levels.

We also have the Dow Jones bouncing from the 10,000 level last night and this means that Indices have entered ‘shark territory’ where investors come in to pick up what they see are short term bargains and we have certainly seen elements of this today.

That said many long positions that we seen our spread betting clients take have had fairly close stop losses which convinces that investors are not willing to take on too much risk with important economic data coming in thick and fast.

Later in the session traders will play a close eye on US New Home Sales data, which has taken on added significance after yesterdays very poor Existing home Sales and the profit warning issued by Irish construction firm CRH.

Shares in Admiral have been in strong demand today after the car insurer announced much better than expected half year earnings.

The firm announced a 21% rise in pre-tax profits through higher revenues and strong new customer acquisition.

This has heightened optimism in the firms’ full year performance and its ability to improve its market share whilst investors have also cheered a 18% hike in their interim dividend, which at 32.6p is a record amount. Admirals’ shares topped the FTSE 100 leader board, rallying 5%.”

CFDs, forex trading and spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

City Index Limited is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.

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