European Equity Spread Betting Markets Down as Bond Yields Rise
|
|
|
For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 15 November 2011: 11.00am Update
European equities fell this morning as mixed economic data added to investors' concern over Europe's ability to tackle its debt problems, while government bond yields continued to rise.
By 10.30am (London time) the FTSE 100 was down 0.81% to 5474.28 and the broader FTSE 250 was 0.53% lower at 10,292.07. In Europe, shares were also lower with the French CAC and German DAX both down 1.5% and the Italian FTSE MIB almost 2% lower.
UK inflation eases slightly
Inflation in the UK eased more than expected in October, but was still a long way from the Bank of England's (BoE) 2% target. Data released this morning showed that inflation eased to an annual rate of 5% last month, from 5.2% the previous month, supporting BoE expectations that inflation will fall sharply next year.
The slowdown in inflation was driven by lower food, air transport and petrol inflation. The retail price inflation gauge slowed to 5.4% on the year from 5.6% in September.
Later today, BoE governor Mervyn King will present the Bank's quarterly forecasts. Investors expect him to provide a gloomy outlook for Britain's economy as the Eurozone crisis deteriorates and signs of a recession mount. The bank is widely expected to slash its growth forecast for the coming year.
Eurozone economic data
Despite the unsettled financial markets over the past few months, data released this morning from the Eurozone showed that German and French economic growth rebounded in the third quarter of this year, suggesting that the two largest countries in the Eurozone are in slightly better shape to withstand a recession.
German GDP increased by 0.5% in the three months to September compared to the previous quarter which was revised upwards from 0.1% to show a 0.3% increase. Simultaneously, France reported a 0.4% increase in the third quarter following a downward revision in the second quarter to show a 0.1% contraction.
As a whole, Eurozone GDP grew as expected by 0.2% in the third quarter compared to the previous quarter and 1.4% last quarter compared to last year.
However sharp falls in business and consumer confidence as well as the first effects of widespread fiscal austerity measures are expecting to result in the Eurozone contracting in the fourth quarter, in line with ECB president, Mario Draghi's expectations of a mild recession by the end of 2011.
German investor confidence fell to a three-year low in November to 34.2, while Eurozone economic confidence fell more than expected to -59.1 in November from -51.2 the previous month.
Burberry profit rises
Luxury goods company, Burberry, announced a 26% rise in first-half profit this morning, which was in line with expectations and helped by buoyant tourist spending around the world.
The 155-year-old maker of raincoats and leather goods said it remains mindful of local and global uncertainties, with fears that the Eurozone debt crisis could drag the world back into recession potentially curbing luxury spending. However, growth targets were kept unchanged.
This morning the company announced it made a pre-profit before tax and one-off items of £162 million in the six months ending 30 September. The results come after the group beat forecasts with a 29% increase in second-quarter revenue last month, and said it was seeing no sign of slowing demand. Burberry shares were over 4% lower this morning at 1358p.
US pre-market
US December futures are pointing to a lower open on Wall Street this afternoon. Dow futures are 0.47% lower at 12,003.00, while S&P 500 futures contracts are down 0.5% to 1246.10.
While US data was notably absent yesterday, this afternoon at 1.30pm (London time) producer price, retail sales and Empire manufacturing data are all released. At 3pm (London time) business inventories are due. Later, spread betting markets will also hear from Federal Reserve policy members John Williams, Charles Evans and Richard Fisher.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
|
Spread Betting 15 November 2011: 6.00am Update
Global markets retreated overnight after European bond markets failed to appease investors.
Italy and Spain’s borrowing costs increased to record levels, prompting concerns that Europe will struggle to contain its debt crisis. A sale of five-year Italian government bonds came at the highest cost for the government since 1997.
Among the major averages, the Dow Jones Industrial Average fell 0.6% to end at 12079. The S&P declined 1% to close at 1252 and the Nasdaq shed 0.8% to finish at 2657. The S&P has struggled to break through significant resistance near the 200-day moving average at around 1280.
Asia & Australia
Across Asia, regional markets are mostly weaker, as rising European bond yields are fuelling concerns that Europe will struggle to contain its debt crisis.
The European debt situation is weighing on Chinese and Japanese exporters, and a stronger yen is also hitting Japan’s exporters after USD/JPY dipped below 77 overnight. The Nikkei is down 0.4%, the Hang Seng is 0.7% lower and the Shanghai Composite is flat.
Australia's S&P/ASX 200 index is down 0.5% at 4285 on light volume, paring an early decline to 4276.5 despite a 1% fall in European and US equity markets.
Indices spread betting investors will be encouraged by the move, considering the Aussie market has underperformed its global peers this year. The more defensive names are leading the recovery, with strong gains in the telecoms and healthcare stocks. Within the strongest sectors, the leaders are Telstra (+0.6%), CSL (+1.4%) and Computershare (+2.1%).
In the cyclical space, energy is leading the way with strong gains for the uranium players. Uranium stocks have taken on a firm lead after Australian Prime Minister Julia Gillard declared the present policy (Australia’s ban on uranium exports to India) outdated. Paladin is up 5.3% on the news.
The financial and materials sectors are weighing on the market, with declines in some of the heavyweights. Commonwealth Bank is down 1.5% after saying that operating conditions remained challenging and net interest margins contracted in the first quarter. Spotless is up 2.6% after the Australian Financial Review stated that Pacific Equity Partners was finalising a takeover bid worth up to $700 million.
Europe
Turning to the European open and equity markets are likely to see a continuation of yesterday’s trade with the bears getting the benefit of the doubt on open. It seems the DAX is perhaps going to see the biggest fall at present, with a test of 5900 perhaps more likely to be seen before 6000.
Stock - specifically earnings from Burberry - will be closely watched to get a clearer sense of how retail spending is holding up in the more luxury end of town, whilst reports from British Land and Vivendi will also get close attention.
On the data front, Eurozone GDP is expected to grow 0.2% on the quarter. Keep an eye on French GDP figures, with consensus calling for 0.4% growth.
French President Nicolas Sarkozy has implemented two emergency budget packages in the last three months in response to ailing growth, whilst also trying to win over bond investors who have been quite happy to sell out of French bonds and park their money in the relative safety of German bunds.
UK CPI is expected to fall to 0.2%, so this could increase the case for traders to take profits on EUR/GBP positions.
It is worth paying attention for comments from Fed Governors Charles Evans and James Bullard. Given the market has a mild anticipation of QE3 and dovish comments from them could put a bid in risk assets and push gold up toward $1800.
Ahead of the open we're calling the FTSE down 16 at 5503, the DAX down 47 at 5938 and the CAC down 16 at 3093.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
|
"European Equity Spread Betting Markets Down as Bond Yields Rise" last update by AG, 15-Nov-2011
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.
Similar articles:
Spread Betting Daily - last update: 17-May-2012
Your daily spread betting update from the insiders. A look at the FTSE 100 and a range of other spread betting markets from Crude Oil to Shares to Gold to . . . read more Spread Betting Daily.
Spread Bets Daily Markets - last update: 16-May-2012
Spread Betting Daily News - A daily trading update from IG Index. Every weekday the experts offer their view of the markets . . . read more Spread Bets Daily Markets.
Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits - last update: 26-Apr-2012
Drug maker GlaxoSmithKline dropped 0.4% after it reported a 13% decline in first-quarter profits, while AstraZeneca declined 5.6% after it reported a 40% drop in pre-tax profits. Unilever shares climbed 3% to 2635p after sales rose . . . read more Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits.
ARM Holdings Spreads Rally amid Stellar Apple Results - last update: 25-Apr-2012
In equities spread trading, ARM Holdings was the top FTSE 100 gainer, up 4.3%, bouncing after a lukewarm reception to in-line results from the British chip designer on Tuesday. The price gain was on the back of forecast-beating . . . read more ARM Holdings Spreads Rally amid Stellar Apple Results.
Spread Trading: Rallying Banking Stocks Push FTSE Higher - last update: 24-Apr-2012
Banking stocks led the FTSE's marginal recovery. Lloyds rose 2.25 %, while Barclays, Standard Chartered and HSBC spread trading markets were up by 1.34%, 0.15% and 0.1% respectively. Miners also edged up today . . . read more Spread Trading: Rallying Banking Stocks Push FTSE Higher.
Index Spread Betting: FTSE Falls 100 Points as Sarkozy Losses Election Round - last update: 23-Apr-2012
The FTSE 100 shed a hundred points during the morning session as uncertainty over the French presidential election on Sunday unnerved investors. Current French President Nicolas Sarkozy lost to Francois Gerard Georges . . . read more Index Spread Betting: FTSE Falls 100 Points as Sarkozy Losses Election Round.
Broker Upgrade Boosts Lloyds Shares Spread Betting Market - last update: 20-Apr-2012
Elsewhere in shares spread betting, Lloyds was the second-biggest FTSE 100 gainer, up 3.5% as Investec Securities reiterated its 'buy' rating on the part state-owned British lender. Unsurprisingly, shares in Barclays and . . . read more Broker Upgrade Boosts Lloyds Shares Spread Betting Market.
FTSE 100 Spread Betting Index Rises on Successful Spanish Auction - last update: 19-Apr-2012
The FTSE 100 spread betting index traded at 5783.8, gaining 0.64% by midday (London time) on the back of a successful Spanish bond sale. Spain sold €2.541 billion of debt, slightly above the upper end of their target . . . read more FTSE 100 Spread Betting Index Rises on Successful Spanish Auction.
Increased Gold Output Causes Fresnillo Spreads to Rally - last update: 18-Apr-2012
Also in shares spread betting, Fresnillo was one of the mining sector's best performers, gaining more than 3% as gold output was ahead of target, due to the opening of a new mine, Noche Buena. This came despite an . . . read more Increased Gold Output Causes Fresnillo Spreads to Rally.
EUR/USD Forex Spreads Push Higher Despite Rising Spanish Yields - last update: 17-Apr-2012
Talk on the floors seems to be centred on the sharp move higher for the EUR/USD financial spread betting market in US trade, despite no one single catalyst to attribute the move too. One gets the sense though that $1.30 seems . . . read more EUR/USD Forex Spreads Push Higher Despite Rising Spanish Yields.
Spread Betting Daily Index - An index of Mid-Morning Daily Spread Betting Reports covering the key Index, Forex, Shares and Commodities markets.
|
|
|
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads.
Click here to sign up.
|
|
