Equity markets and high yielding currencies are seeing major advances higher as improved housing data in the US and cited anticipation in German business confidence surveys helps fuel a low volume, pre-Christmas rally. Other pieces of supportive news came with the ECB's release of the first tranche of funds in its 3 year loan programme and the successful bond auction in Spain. Yesterday's financial policy meeting with the Bank of Japan was mostly uneventful, with no change in the states base rate and no new additions to its asset purchase plan.
Yesterday's macro data concentrated on the US housing market and German business confidence. US Housing Starts information rose to its highest level in 19 months and researchers will use this together with today's releases (MBA Mortgage Applications and Existing Home Sales) to pinpoint the validity of the general trend. We will also see some important takings releases in the household goods sector as Walgreen's and Bed Bath & Beyond will report along with CarMax and Micron Technology. The key title in US securities came after Oracle released disheartening quarterly profits and dropped almost 9% in the OEM session.
In ratings stories, Fitch placed Italian and Spanish private banks on "negative watch" and reduced its credit outlook on 4 extra French banks, on the argument the EU Monetary Soundness Facility might become ruined itself and limit the capability of these banks to get private funding when needed. The total impact of these statements was limited, as order flows appear to govern price activity but the long term impact of these events is probably going to be reviewed next year.
In the US, the Fed has began plans to require banks to increase their capital reserve proportions (as agreed by Basel III world requirements and the most recent Dodd-Frank bill). The general view is that this is a defensive move (instead of an attempt to limit pricing pressures) with the main goal of protecting banks against potential liquidity shocks that could enter the financial sector at a later date.
Today's price activity is an indication of what can be seen when trading volumes decrease. At the start of this week's trade, volatility slowed to a near halt before posting intraday gains of over 3% in some indices with only a few basic drivers. Due to these probabilities, traders should get ready for the likelihood of unexpected and extreme moves in either direction and stop loss levels should be conservative.
Yesterday's macro data concentrated on the US housing market and German business confidence. US Housing Starts information rose to its highest level in 19 months and researchers will use this together with today's releases (MBA Mortgage Applications and Existing Home Sales) to pinpoint the validity of the general trend. We will also see some important takings releases in the household goods sector as Walgreen's and Bed Bath & Beyond will report along with CarMax and Micron Technology. The key title in US securities came after Oracle released disheartening quarterly profits and dropped almost 9% in the OEM session.
In ratings stories, Fitch placed Italian and Spanish private banks on "negative watch" and reduced its credit outlook on 4 extra French banks, on the argument the EU Monetary Soundness Facility might become ruined itself and limit the capability of these banks to get private funding when needed. The total impact of these statements was limited, as order flows appear to govern price activity but the long term impact of these events is probably going to be reviewed next year.
In the US, the Fed has began plans to require banks to increase their capital reserve proportions (as agreed by Basel III world requirements and the most recent Dodd-Frank bill). The general view is that this is a defensive move (instead of an attempt to limit pricing pressures) with the main goal of protecting banks against potential liquidity shocks that could enter the financial sector at a later date.
Today's price activity is an indication of what can be seen when trading volumes decrease. At the start of this week's trade, volatility slowed to a near halt before posting intraday gains of over 3% in some indices with only a few basic drivers. Due to these probabilities, traders should get ready for the likelihood of unexpected and extreme moves in either direction and stop loss levels should be conservative.
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