Australian Stocks Continue To Rally

Binary options traders owning calls on the ASX 200 continue to be very happy. The ASX 200 is up another 28.6 points to 5032.30. The close yesterday above the key 5000 level has got the momentum traders in the market expecting further gains. Overall, confidence is quite high in the Australian market amid signs that the global recovery is firmly in tact. The main driver for Australian stocks has been the solid data out of China, which is Australia’s number one export market. Growth in China is very bullish for Australia’s resource sector and resource stocks are leading the gains today.

Japan’s Economy Unexpectedly Shrinks Last Quarter

Japan’s GDP shrank 0.4 percent last quarter following a revised 3.8 percent in the 3rd quarter. The Japanese economy is still stuck in recession. Companies have yet to benefit from the weaker yen and I see that as bullish for binary options on Japanese stocks. The weak Japanese economy further strengthens the case for the Bank of Japan to do more to spur economic growth.

The Japanese yen strengthened after a potential candidate to head the Bank of Japan said that he sees the dollar at 90 to 100 yen. The candidates to become the next BOJ Governor know that to win the job they must promise and deliver more monetary stimulus.

In Japan, the Nikkei 225 is up 37.93 to 11,289.30. The US dollar is at 93.481 yen and the euro is at 125.75 yen. Markets in Japan are now waiting for the Bank of Japan to conclude its two-day policy meeting. Investors are not expecting a change in monetary policy. A surprise could move markets.

New Zealand Dollar Continues To Strengthen

The New Zealand dollar is stronger against all its major peers on the back of a strong Performance of Manufacturing Index, which rose to 55.2 in January. The kiwi continues to outperform the Australian dollar as the economy in New Zealand is performing better than Australia’s. This chart shows the Aussie weakness as the market trades at nearly two year lows to the New Zealand dollar.

Also the New Zealand dollar is on the verge of breaking out against the US dollar. The 85 cent level is a key resistance area and a break above will be the highest level in over a year.

British Pound Gets Hammered After BOE Inflation Report

Pound Sterling drops against all its major peers after the Bank of England said that the UK economy faces significant challenges and weak growth. The trend for binary and forex traders is to continue to sell the pound and buy puts. The British Pound has been the second weakest currency after the Japanese yen. The bear trend is firmly in place.

As you can see from the GBP/USD chart, the pound looks set to challenge the lows from the summer of around 1.53.

The pound has been even weaker against the euro. The pound weakness looks set to continue against the euro.

Large Money Managers Buying The Dip In Apple Shares

Most large money managers are saying that Apple is extremely undervalued relative to the S&P 500. The company is trading at a 29 percent discount to the S&P 500 and has lost $200 billion in market value since September. The P/E for Apple is around 10 compared to a 15 P/E for the S&P 500. If Apple had the same multiple, it would be trading at $661, compared to its closing price of $467.90 yesterday.

Oil Drops On Supply Gain

In yesterday’s news post I mentioned that the crude oil inventory report would move markets and it did. Stockpiles in the US rose 560,000 barrels. US crude production is at the highest level since December 1992. Crude oil continues to struggle above the $98 level and the further increases in supply hurt the bull’s case to continue buying. WTI is trading at $97.15 and Brent at $117.97.

Economic Data Calendar

0630 French GDP (QoQ) -0.2% forecast 0.1% prev (EUR)
0700 German GDP (QoQ) -0.5% forecast 0.2% prev (EUR)
0700 German GDP (YoY) 0.2% forecast 0.4% prev (EUR)
0745 French Non-Farm Payrolls (QoQ) -0.2% forecast -0.3% prev (EUR)
0830 Spanish Industrial New Orders (YoY) -1.0% forecast -1.5% prev (EUR)
0900 Italian GDP (QoQ) -0.6% forecast -0.2% prev (EUR)
0900 Italian GDP (YoY) -2.3% forecast -2.4% prev (EUR)
0900 ECB Monthly Report (EUR)
1000 Euro Zone GDP (QoQ) -0.4% forecast -0.1% prev (EUR)
1000 Portuguese GDP (YoY) -2.9% forecast -3.5% prev (EUR)
1000 Greek GDP (YoY) -6.9% prev (EUR)
1000 Greek Unemployment Rate 26.80% prev (EUR)
1330 US Initial Jobless Claims 360K forecast 366K prev (USD)
1800 US 30-Year Bond Auction 3.070% prev (USD)
2145 New Zealand Core Retail Sales (QoQ) -0.3% prev (NZD)
2145 New Zealand Retail Sales (QoQ) 1.1% forecast -0.4% prev (NZD)

As always, good luck to all binary and forex traders. Be sure to check back for the latest updates!