BetOnMarkets

Contents This Week:
Economic calendar for week  7th - 11th July 2008.
Commentary: The week ahead.
Economic Calendar for week 7th - 11th July 2008

PLEASE NOTE - All times GMT not BST. BST is +1 Hr.

Monday July 7th:

 EU - 08:30 - Sentix Investor Confidence.
 UK - 08:30 - Industrial Production M/M.
 UK - 08:30 - Manufacturing Production M/M.
 GE - 10:00 - Industrial Production M/M.
 UK - 23:01 - NIESR GDP Estimate.

 Tuesday July 8th:

 UK - 08:30 - DCLG HPI Y/Y.
 US - 14:00 - Pending Home Sales M/M.
 US - 14:00 - Wholesale Inventories M/M.
 US - 19:00 - Consumer Credit M/M.
 UK - 23:01 - Consumer Confidence Index.

 Wednesday July 9th:

 GE - 06:00 - Trade Balance.
 FR - 06:45 - Trade Balance.
 UK - 08:30 - Trade Balance.
 UK - 09:30 - BRC Shop Price Index Y/Y.
 US - 14:35 - Crude Oil Inventories.

Thursday July 10th:

 FR - 06:45 - Industrial Production M/M.
 EU - 09:00 - ECB Bulletin.
 UK - Tentative - MPC Rate Statement.
 UK - 11:00 - Official Bank Rate.
 US - 12:30 - Unemployment Claims,
 EU - 14:35 - Natural Gas Storage.

Friday July 11th:

 US - 12:30 - Trade Balance.
 US - 12:30 - Import Price Index M/M.
 GE - 13:55 - Prelim Michigan Sentiment.

 EU - Europe wide
 FR - France
 UK - United Kingdom
 US - United States
 GE - Germany

The week ahead.
 

The half year report card for global stock markets was not one to be proud of. The first half of 2008 was the worst first half to a year for the Dow Jones Industrial Average since 1970, when the index was down 14.60%. The 14.44% decline of 2008 is actually the tenth worse performance since 1900. July hasnt exactly started off with a bang and US traders may be thankful for the long weekend last week. The S&P 500 closed the week down 1.19%, registering its lowest daily close for almost two years. June was especially hard for US markets with a drop of 8.55% for the S&P 500, and a 10.19% collapse on the Dow, making up most of the years losses to date.
The culprits are not too hard to find. The first half performance of the US financial sector was -30%, while the Energy sector managed to find a rise of 8.12%. If you were asked to list the top dangers for the global economy, you would be hard pressed to find any factors that are not already playing themselves out. Firstly we have oil prices that seem to reach new record highs with each passing week. $150 per barrel is looming ever closer. This price action is linked to the second danger, further conflict in the Middle East. Last week, a former Israeli air force commander was quoted as saying that Israel was ready to attack Iran if diplomacy fails. The Iranian oil minister has responded by saying that Iran is ready to defend itself, and that an attack on Iranian nuclear facilities would be the start of war.
Oil fuelled inflation is still causing central bankers headaches, with Citi Group today predicting that UK inflation jumped to 4.6% in June. Last week, the ECB went to great lengths to stress that the recent rate hike didnt automatically precede a series of hikes. Nevertheless, Trichets firm stance on fighting inflation has caused some disagreements between the ECB and the Federal Reserve in the US. The final horseman of the apocalypse could be when the global economy finally yields to the pressures of inflation and the aftermath of the credit crunch. There are increasing signs that the worlds largest economy is slowing. Thursdays US payroll figures showed a 20% increase in unemployment year on year. Also Non Farm Payrolls shrank for the 6th consecutive month. With UK house prices going the same way as the US market, the bricks and mortar ATM is no longer paying out, and UK households are already at record levels of indebtedness. Shocking figures from Marks & Spencer last week was testament to this.

 The week ahead is a quieter affair with fewer top tier announcements than the week just gone. That said, there are still some potential market moving datasets due. UK industrial and manufacturing production figures are released on Monday morning. The recent Purchasing Managers Index monthly survey of UK manufacturing was described as truly dreadful, with indications that this sector at least may be heading for a recession. On the same day, we provisionally have the UK Halifax Price Index delayed from last week. On the same note, US pending home sales are released on Tuesday. Bad news is expected for both, the only question being how bad the news actually is.

 The weeks top ticket trading is the MPC interest statement on Thursday. The Bank of England is still stuck between a rock and a hard place, with record oil prices driving inflation, and slowing consumer spending hurting the economy. A no change verdict is widely expected to be the more likely course of action.

 With next week being relatively lighter on the economic news front, it may be a good time for a trade that looks to profit from low volatility. A barrier range trade wins if neither of two levels are hit within the specific time period. A barrier range trade predicting that the FTSE 100 will not touch 5016 or 5875 in the next 16 days could return 10%.

BetOnMarkets

The FTSE is currently indicating a flat open, as we approach the first Friday of the Q3. With the US off on holidays, we believe that the volume of todays session will be low and boring. Traders do have a few things on their mind, with the ECB hinting at the fact that this might be the only rate hike, UK traders are wondering just how much room will the BOE have.  A lower interest rate outlook is a positive thing for equities, and we are expecting an extra boost of 100 points for the FTSE.

Oil is continuing its push to hit 150; we feel that once the peak is hit, traders will do some profit taking. This will cause a fall in the price, probably back to the 130 level.  Gold managed to survive the US positive news, only giving back 10$ per ounce. We believe that the trend is strong, and we will see 950 within the next week.

Betonmarkets.com

Posted in Investments

The FTSE is currently indicating a sharply higher open, as traders are betting that the Construction spending data which will be released at 8.30am today will be better then expected. While this will be another month that spending slowed down in the sector, we believe that most analysts are being extremely bearish, especially after yesterdays huge miss by the manufacturing numbers.

Oil should continue its volatile trade as traders are awaiting the US inventory numbers. Some expect the inventory to fall for the sixth time in seven weeks, as consumers have been cutting back on all unnecessary and some necessary trips. Gold continued its advance as traders continue to buy precious metals as a hedge against the weakening US dollar. We expect gold to touch 950 dollars per ounce.

Betonmarkets.com

Posted in Finance

Financial markets were a sea of red numbers last week as the classic ‘Fade the Fed’ trade played out. The initial reaction to Wednesday’s US interest rate decision was neutral to positive, then the selling set in and hardly stopped. Thursday’s mini rally did a very poor job of papering over the cracks in the global economy. On Friday those cracks were wide open for all to see with housing and financial stocks hit the hardest. Barclays in particular was back to square one, erasing all gains from the start of the week, as investors took a second look at their fund raising plans in light of Goldman’s predictions of further write downs for major western banks. Citi Group was also floored on similar sentiment, falling to its lowest level since 1998.

The Dow Jones Industrial average ended the week down 4.2% and nearly 8% down over the last fortnight. The FTSE faired little better, falling 2.88% on the week and 6.26% over the fortnight. The twin evils of Gold and Oil were again the sectors in demand, as investors looked to profit from further economic turmoil, and hedge their bets against inflation. Oil refused to budge below $130 and set a new all time high of $143. $150 a barrel, scoffed at by some just a few months ago, is looking increasingly more likely and is surely now only a matter of time.

Some positive cheer came with US consumer spending rising as Bush’s stimulus cheques hit. While this lift at least created a pause from the continuous stream of bad news, market participants were wary of reading too much into what may be a short term patch for the US economy.

Despite a shortened trading week with Independence Day on Friday the 4th of July, it is a very busy week ahead. Currency markets will be eyeing Thursday’s ECB interest rate decision and accompanying statement. The European Central Bank is expected to raise rates by a quarter of a percent to 4.25%. With this starting to be priced in already, market participants will be more interested in the prospects of a string of inflation fighting rate rises from the ECB.

Thursday also sees the all important US Non Farm Payroll data brought forward a day because of the holiday on Friday. This more than anything could have the greatest impact on currency and equity markets for the new month of July. The UK certainly doesn’t escape without any top tier data with two lots of house price announcements. Nationwide release their data on Tuesday and The Halifax House Price index is tentatively planned for Thursday. The news is expected to be dire from both these announcements with Stephen Nickell, the head of the Prime Minister’s housing planning unit predicting that the UK housing market won’t boom again until 2015. To make matters worse, recent data shows that British households are more indebted than any other country in recorded history. 173% of household incomes are owed in debts. This is higher even than Japan’s peak in 1990 that preceded decades of deflation. Barclays added to the gloom by warning their clients to prepare for the financial storm ahead.

While Thursday was an impressive sell off, doubts remain whether the ‘puking’ point has been reached just yet. Bottom feeders will start to become interested, but the VIX options volatility index is still some way off the January and March spikes. In addition we are not seeing the same flight to safe havens such as short term fixed income, that we saw in the first quarter.


According to BetOnMarkets traders, with Gold bottoming around $860 and renewed concern over inflation, it is perhaps time for the precious metal to follow its evil twin, oil higher after a few months in the doldrums. A One Touch trade for Gold to hit $1000 again within the next two months could return 70%.

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Contents This Week:
Economic calendar for week  30th June - 4th July 2008.
Commentary: The week ahead.
Economic Calendar for week 30th June - 4th July 2008

PLEASE NOTE - All times GMT not BST. BST is +1 Hr.

Monday June 30th:

 UK - 08:30 - Index of Services Q/Q.
 UK - 08:30 - Mortgage Approvals.
 UK - 08:30 - Net Lending to Individuals M/M.
 EU - 09:00 - CPI Flash Estimate Y/Y.
 US - 23:30 - Chicago PMI.

 Tuesday July 1st:

 GE - 06:00 - Retail Sales M/M.
 UK - 06:00 - Nationwide House Prices M/M.
 GE - 07:55 - Unemployment Change..
 EU - 08:00 - Manufacturing PMI.
 UK - 08:30 - Manufacturing PMI.
 EU - 09:00 - Unemployment Rate.
 US - 14:00 - ISM Manufacturing Index.
 US - 14:00 - ISM Manufacturing Prices.
 US - 14:00 - Construction Spending M/M.

 Wednesday July 2nd:

 EU - 07:15 - ECB President Trichet Speaks.
 UK - 08:30 - Construction PMI.
 UK - 08:30 - Housing Equity Withdrawal Q/Q.
 EU - 09:00 - PPI M/M.
 US - 11:30 - Challenger Job Cuts Y/Y.
 US - 12:15 - ADP Nonfarm Employment Change.
 US - 14:00 - Factory Orders M/M.~
 US - 14:30 - Crude Oil Inventories.
 US - 14:30 - Treasury Sec Paulson Speaks.
 US - 16:00 - FOMC Member Mishkin Speaks.

Thursday July 3rd:

 US - Tentative  - Halifax HPI M/M.
 EU - 08:00 - Services PMI.
 UK - 08:30 - Services PMI.
 UK - 08:30 - Credit Conditions Survey.
 EU - 09:00 - Retail Sales M/M.
 EU - 11:45 - Minimum Bid Rate.
 EU - 12:30 - ECB Press Conference.
 US - 12:30 - Nonfarm Employment Change.
 US - 12:30 - Unemployment rate.
 US - 12:30 - Average Hourly Earnings M/M.
 US - 12:30 - Unemployment Claims.
 US - 14:00 - ISM Non-Manufacturing Composite.
 US - 14:00 - Natural Gas Storage.

Friday July 4tf:

 US - All Day - Independence Day US Holiday.
 FR - 06:45 - Government Budget Balance.
 GE - 10:00 - German Factory Orders M/M.

 EU - Europe wide
 FR - France
 UK - United Kingdom
 US - United States
 GE - Germany

The week ahead.
 

Financial markets were a sea of red numbers last week as the classic Fade the Fed trade played out. The initial reaction to Wednesdays US interest rate decision was neutral to positive, then the selling set in and hardly stopped. Thursdays mini rally did a very poor job of papering over the cracks in the global economy. On Friday those cracks were wide open for all to see with housing and financial stocks hit the hardest. Barclays in particular was back to square one, erasing all gains from the start of the week, as investors took a second look at their fund raising plans in light of Goldmans predictions of further write downs for major western banks. Citi Group was also floored on similar sentiment, falling to its lowest level since 1998.

 The Dow Jones Industrial average ended the week down 4.2% and nearly 8% down over the last fortnight. The FTSE faired little better, falling 2.88% on the week and 6.26% over the fortnight. The twin evils of Gold and Oil were again the sectors in demand, as investors looked to profit from further economic turmoil, and hedge their bets against inflation. Oil refused to budge below $130 and set a new all time high of $143. $150 a barrel, scoffed at by some just a few months ago, is looking increasingly more likely and is surely now only a matter of time.

 Some positive cheer came with US consumer spending rising as Bushs stimulus cheques hit. While this lift at least created a pause from the continuous stream of bad news, market participants were wary of reading too much into what may be a short term patch for the US economy.

 Despite a shortened trading week with Independence Day on Friday the 4th of July, it is a very busy week ahead. Currency markets will be eyeing Thursdays ECB interest rate decision and accompanying statement. The European Central Bank is expected to raise rates by a quarter of a percent to 4.25%. With this starting to be priced in already, market participants will be more interested in the prospects of a string of inflation fighting rate rises from the ECB.
Thursday also sees the all important US Non Farm Payroll data brought forward a day because of the holiday on Friday. This more than anything could have the greatest impact on currency and equity markets for the new month of July. The UK certainly doesnt escape without any top tier data with two lots of house price announcements. Nationwide release their data on Tuesday and The Halifax House Price index is tentatively planned for Thursday. The news is expected to be dire from both these announcements with Stephen Nickell, the head of the Prime Ministers housing planning unit predicting that the UK housing market wont boom again until 2015. To make matters worse, recent data shows that British households are more indebted than any other country in recorded history. 173% of household incomes are owed in debts. This is higher even than Japans peak in 1990 that preceded decades of deflation. Barclays added to the gloom by warning their clients to prepare for the financial storm ahead.
While Thursday was an impressive sell off, doubts remain whether the puking point has been reached just yet. Bottom feeders will start to become interested, but the VIX options volatility index is still some way off the January and March spikes. In addition we are not seeing the same flight to safe havens such as short term fixed income, that we saw in the first quarter.
With Gold bottoming around $860 and renewed concern over inflation, it is perhaps time for the precious metal to follow its evil twin, oil higher after a few months in the doldrums. A One Touch trade for Gold to hit $1000 again within the next two months could return 70%.

Betonmarkets.com