Daily Market Reviews by UWCFX

[UWC Neeraj]

11 DECEMBER 2012: EUROPEAN LEADERS URGE MONTI TO STAY

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

EU leaders urged the next Italian government to stick to Mario Monti’s reform agenda after the Prime Minister’s surprise decision to resign earlier than expected. Silvio Berlusconi’s return to front-line politics rattled the financial markets in Europe. Ten year Italian bonds, a good barometer on investor’s confidence, fell to 4,75 percent. EURO/USD also fell well below 1,29 on Monday, but has since recovered and trades at 1.2942 in early Asian trading.

Monti’s surprise weekend announcement came after Berlusconi’s People of Freedom Party withdraw its support for his technocrat government which over the last year has brought some predictability back to Italian politics. Monti, a former EU-Commissioner, has been seen as Brussels’ man and enjoy strong support from Germany’s Angela Merkel. Monti is a strong supporter of the Euro in contrast to Berlusconi who is seen as a Euro skeptic. Italian shares fell along with bonds yesterday. New elections are scheduled for February.

In the US political haggling over the “fiscal cliff” continues with no solution in sight as the clock is ticking closer to the 31st December deadline. US indexes ended flat with low turn-over. Asian stocks are marginally up. Australian stocks gained 0,4 percent on stronger commodity prices and better prospects for China. The Japanese Nikkei dropped after successive days of gain. A 10 % rally over the last month has worried investors as see signs of over buying.

The dollar firmed against Yen trading at 82,40. JPY is also under pressure by expectations of monetary easing by the Bank of Japan (BOJ). Oil prices were up during yesterday’s trade. Brent crude reached USD 108 a barrel, but has as gold and precious metals fallen back in early Asian trade. Brent trades at 107,25 and gold has dropped from 1715 to 1708.

Copyright: United World Capital

 

[UWC Neeraj]

VIDEO MARKET REVIEWS

11 December 2012: Daily Market Reviews from Mr. Arne Treholt (Vice-President of Business Development and Investments UWCFX)

[video=youtube;0bRRW6tFiU8][/video]

 

[UWC Neeraj]

12 DECEMBER 2012: WORLD STOCK MARKETS GROW ON POSITIVE EXPECTATIONS FROM FRS MEETING

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The stock market in the USA has finished trading session rising on positive expectations concerning results of negotiations of politicians about reduction of state expenses and a country budget deficit. Index Dow Jones reached level of 13248.44 and added 0.59%, S&P increased for 0.65%.

Today in Vienna the next meeting of the countries of exporters of oil of OPEC will take place. Main question: discussion of quotas of oil production. According to Platts agency the cartel extracts 31,08 million barrels per day at a quota in 30 million. There will not be eventual influence on an environment of the oil market. This morning the oil futures are adding in price with Brent traded on 106.90 and Light on 86.35.

In India industrial production in October grew by 8,2%, increase for 4,5% was expected. In the last three months the government of India undertook a number of measures for attraction to the country of foreign investments, and also developed the steps directed on maintenance of internal demand and export. The reserve bank of India also tries to support economic growth and, in particular, gave a feeling that can reduce the main rates in the next quarter.

Democratic People's Republic of Korea carried out Ynkha-3 rocket start with an artificial Earth satellite "Kvanmenson-3". This is the second attempt then North Korea was trying to send the satellite on orbit, the rocket firing which taken place in April has ended with a failure. Japan regarded rocket start as violation of the international norms and decisions. Special session of UN Security Council on start of "Ynkhi-3", which Japan demanded to carry out, can pass already today.

Euro grows the second day in relation to dollar after the report showed that the trust of the German investors grew in December to a 7-month maximum. The German index of economic expectations of ZEW in December unexpectedly jumped up from -15,7 points to positive value in 6,9 points though -12 points were expected. This morning EUR/USD managed to stabilize above level of 1.30 and is traded on a level 1.3001.

Copyright: United World Capital

 

[UWC Neeraj]

13 DECEMBER 2012: BERNANKE UNDERMINED ENTHUSIASM OF BULLS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Investors finally got the most awaited news of a December after FRS announced its decisions. Results of meeting were quite expected: was made the decision on repayment of state bonds with longer circulation periods for $45 billion. Plus to it will remain the QE3 program of $40 billion a month. Total $85 billion a month.

And the markets fell into thoughtfulness: in fact, FRS finally undersigns that constant injections is the only thing that can help economy and a financial system. The debt market reacted to it with the sales of treasures - rates on 10-year bonds grew to 1,7%. Dow Jones, Nasdaq and S&P500 could not continue its upward development and were closed practically at a zero level.

EUR/USD tested a reasonable demand from the very beginning of trading day though it is impossible to tell that movements had large-scale character. The British positive data gave optimism; however confusion with the Greek debt and expectation of the next meeting of Ministers of Finance of Europe limited growth, but further publication of the accompanying statement of FOMC which has coincided with expectations of the QE expansion led the prices to a maximum of 1,3097. This morning EUR/USD is traded on a level of 1.3082.

Today the Japanese yen is again sharply weakening and bargains on the minimum levels since spring of the current year against euro and dollar. Dynamics of yen also gives support to the Japanese market, helping to show a steady growth. Pair yesterday from levels of opening 82,53 broke through higher than 83,00, reached a maximum 83,29 and was rolled away to the area 83,20 on closing. This morning, we can already see USD/JPY traded on a level of 83.61. There is not much time left till elections, so movements will be warmed up upward not only with USD strengthening, but also on expectations on political change in Japan.

Prices of oil following the results of last trading session showed positive dynamics. The OPEC countries following the results of the meeting on Wednesday, as expected, kept a quota of oil production at former level - 30 million barrels a day. At the same time, the OPEC plans to reduce gradually raw materials production to correspond to the designated quota. Today Brent crude bargains with fall, losing 0,23% to level of closing of previous day.

Prices for metals and precious metals are strongly falling, gold is losing more than 1% and traded on a level of 1699.38; silver is on a level of 32.97 and decreasing for 2.40%.

Copyright: United World Capital

 

[UWC Neeraj]

14 DECEMBER 2012: THE PROBLEM OF "FISCAL CLIFF" AGAIN CAME TO THE FOREFRONT

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

After decisions coming from meeting of FRS nothing distracts investors from a problem of "fiscal cliff", especially, taking into account that till Christmas there is less than two weeks, and gleams in negotiations between democrats and republicans aren't observed yet. For example, the speaker John Beyner noted that the president Barack Obama “isn't serious" concerning a question of decrease of expenses which republicans consider as the main priority. Even successful data on a labor market according to which the number of primary requests for unemployment benefits fell in one week to 343 thousand at being expected 370 thousand couldn't affect moods of investors. Dow Jones and S&P500 ended up with loosing 0.56% and 0.63% accordingly.

In the last day of the current working week the index of China SSE again shows growth almost for 3%, practically coming back to the autumn maximum levels. As occasion to such positive became preliminary statistics on the production index PMI from HSBC bank according to which the index grew again and reached level of 50,9. It is a maximum level since October of last year, besides value of an index increases the second month in a row that testifies about growth of business activity in production sector.

Important news were coming from Europe where Ministers of Finance agreed to give a right to European Central Bank to regulate the main European banks of the Euro zone, however while it isn't known when the regulator will be able to start new duties. Besides, today the Euro group approved allocation of the following monetary tranche to Greece as it estimated efforts of the country on national debt reduction. This factor is a positive moment for the EU markets. 34 billion euro will be available to Greece immediately, and total amount for a repayment of a debt will be 49.1 billion euro.

The European currency still keeps above a level of 1.30 in relation to dollar, however today it was corrected from 1.3090 to 1.3045 points, and now reached a level of 1.3105.

Meanwhile the Japanese currency continues to fall. Today USD/JPY pair bargains at the level of 83,9, against yesterday's level of 83,5. On this background the exporters sensitive to fluctuations of exchange rates, still are leaders of growth, Sharp rises in price for 4,4%, and Toshiba and Pioneer for 1,8%.

Prices of oil following the results of last trading session showed negative dynamics against decrease in the majority of world stock markets. Further weakening of dollar in case of resolution of a collision around the budgetary agreement in the USA can become a key factor of growth of the oil prices. Today this morning Brent crude is traded on a level of 107.01.

Copyright: United World Capital

 

[UWC Neeraj]

17 DECEMBER 2012: USD/JPY AT 20-MONTH LOW AFTER ELECTIONS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The yen slumped to its lowest level against the dollar after Japan’s conservative Liberal Democratic Party (LDP), which is committed to aggressive monetary easing, won a landslide victory in Sunday’s Japanese elections. The LDP surged back to power giving ex-Premier, Shinzo Abe, another chance to push through his agenda which includes outspoken active steps towards deflation, possibly revival of Japan’s nuclear energy program and a more nationalistic policy that might cause more tense relation towards China.

The dollar rose to 84,18 yen reaching its highest level since April 2011 from around 83,50 yen on Friday. There has been active profit taking in the morning, but USD/JPY is still trading above the 84 level. The Euro jumped to 111.30 yen from 109,81. The Australian dollar climbed above 89 for yen for the first time since May 2011. The Bank of Japan meets later this week and most analysts expect the central bank will ease policy further by asset buying and lending program which will continue to put downward pressure on the yen.

The open question is whether Prime Minister Abe shall follow up on his tough talk. Strategists at Barclays bank recommend long positions in three-month dollar/yen call options on estimates suggesting that a 10 percent multilateral nominal yen depreciation would be needed to get a one-off inflation boost of just 1,5 percent. Other analyst and market participants warned that the yen might be poised for a rebound as Abe’s actions are likely to fall short of tough intentions.

In the US House of Representative Speaker, John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican obstacle to deal with the revolving year-end “fiscal cliff”. Boehner shall presumably have offered extended tax hikes for everyone who has less than one million in net annual income. Taxes for all income above USD 1 million shall rise. President Obama’s reaction on this presumed offer is going to be decisive for a possible solution within the 31st December deadline.

Copyright: United World Capital

 

[UWC Neeraj]

VIDEO MARKET REVIEWS

17 December 2012: Daily Market Reviews from Mr. Arne Treholt (Vice-President of Business Development and Investments UWCFX)

[video=youtube;c7tGaYSW19w][/video]

 

[UWC Neeraj]

18 DECEMBER 2012: “CLIFF” OPTIMISM BOOSTS MARKETS

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Both US and Asian shares inched higher as optimism grew for a “fiscal cliff” deal as President Barack Obama yesterday met with his Republican counterpart, House of Representative Speaker, John Boehner. Obama presented a counter-offer to the Republicans that is said to include a major change in position on tax hikes for the wealthy in efforts to hammer out a compromise to avert steep tax hikes and indiscriminate spending reductions set for the beginning of 2013.

According to informed sources the White House in a dramatic change of position has proposed leaving lower tax rates for everyone except for those earning above USD 400 000. That is up from the former threshold of USD 250 000 proposed by the President, but still far from the Republican proposal of USD 1 million. Obama is also said to be willing to compromise on budget cuts and revenue figures.

The rumors on movement in the negotiations had the US stock indexes to soar led by financials and other growth-orientated sectors. Bank of America jumped by 3,97 % followed by other major blue chips as Home Depot, JP Morgan, General Electric and Sisco. Dow Jones were up 0,76 % to 13 235. Nasdaq rose 1.32 % and ended at 3010 again passing the 3000 threshold. The positive trend continued in Asia this morning where Australian shares outperformed with a 0,7 percent increase. Also Nikkei, Shanghai and the MSCI index for Asian Pacific rose.

The more optimistic market attitude had a positive impact on commodities and precious metals. Oil prices led by Brent crude are up to 108,18 and gold again passed the USD 1700 ounce level after falling back to below 1690. The pressure on Yen following the Japanese elections continues. USD/JPY is trading at 83,98 after reaching 84,48 on Monday. The dollar has probably still an upside against yen prior to the Central Bank of Japan’s meeting later this week. Prime Minister Abe’s comments yesterday strengthened the assumption that BOJ would initiate monetary easing. EURO/USD stands at 1.3170, in line with the new higher level seen established in relation between USD and Euro. The Euro countries principle decision to establish a banking union has positively impacted the strength of the Euro.

Copyright: United World Capital

 

[UWC Neeraj]

VIDEO MARKET REVIEWS

18 December 2012: Daily Market Reviews from Mr. Arne Treholt (Vice-President of Business Development and Investments UWCFX)

[video=youtube;yasgYA0rdIQ][/video]

 

[UWC Neeraj]

19 DECEMBER 2012: EURO OUTPERFORMS ON INCREASED RISK APPETITE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The Euro reached multi-months high against dollar and Japanese yen on Wednesday extending recent gains. Signs of progress in the US fiscal talks bolstered demand for riskier assets. Euro/USD is trading at 1.324655. USD/JPY stands at 84,282. The Scandinavian currencies, Norwegian, Swedish and Danish krones have gained substantially against the dollar over last week.

The US House of Representatives Majority Leader, Eric Cantor, said yesterday that he expected a vote on a Republican offer to avert the “fiscal cliff” on Thursday. Republicans plan a vote on a bill to raise taxes on income above USD 1 million while extending low rates on other tax payers. The White House has proposed a compromise USD 400 000 threshold. Cantor said he expected to have enough votes to pass the measure.

In spite of the big distance between the two parties’ stock markets all over the world rose on expectations of a compromise. Gains in Asia this morning came after Wall Street S&P 500 index for the biggest 500 companies rose more than one percent completing the best two-day rally in a month. The US market is higher driven by the fact that the parties now at least are engaged in constructive negotiations striving to find a middle ground.

Tokyo’s Nikkei rose 1,3 percent topping 10 000 points for the first time since April as Bank of Japan (BOJ)started their two day meeting. BOJ is expected to take measures for monetary easing and a more expansionistic fiscal policy. The Yen continues to fall against most currencies. Australian shares rose to a 17-month high led by miners and banks. Australian dollar, however, barely budged in part because currency speculators were already holding record long positions.

Boosted by optimism on a US budget compromise analysts predict that EURO/USD might reach the 1.33 level year-end targets. Oil prices are steady with Brent crude trading at 108,88 on better economic outlook. Copper is flat in the morning after falling Tuesday. Both Gold and silver fell rather dramatically yesterday slowly recovering somewhat this morning. Gold fell from a 1705 peak down to a 1660 bottom. It is now trading at 1670.

Copyright: United World Capital