Most Asian Markets Closed For Lunar New Year
It’s a quiet start to the new week as most Asian markets are closed for the lunar New Year celebrations. Markets in Japan, Taiwan, China, Hong Kong, Singapore, South Korea, Vietnam, and Malaysia are closed for public holidays. Volume is very light in Australia and US futures markets. Things will remain slow throughout the Chinese New Year holiday.
Brent Oil Near Highs On Iran Comments
President Mahmoud Ahmadinejad said that nothing will stop Iran’s advancement in nuclear technology. The Iranian story along with global growth is keeping a bid in Brent oil. Brent has become the international barometer for the price of oil because it is produced outside the United States. The US has undergone a shale bonanza and is on the verge of becoming self-sufficient in energy by the end of this decade. That is why there is a premium in the price of Brent over West Texas Intermediate (WTI), the US benchmark. Brent is currently trading near $119 versus $95.70 for WTI.
Australia December Home-Loan Approvals Drop Again
The demand for new homes in Australia is still not picking up, even after the interest rate cuts by the Reserve Bank of Australia. This further adds to the negative data that has come out of Australia for further interest rate cuts. The weakness in the Australian economy is why the Aussie dollar has been so weak. The Aussie has dropped from 1.06 to the US dollar to just above 1.03.
All Eyes On Europe Today
Finance chiefs from Europe are set to meet today in Brussels to discuss bailouts to Cyprus and Greece. Markets are also paying attention to the political situations in Spain and Italy. There are calls for Spanish Prime Minister Mariano Rajoy to resign over illegal cash contributions and former Italian Premier Silvio Berlusconi has promised to roll back austerity measures in order to win the election later this month. A change in the Spanish or Italian political landscape is very bearish for the euro zone recovery. Markets right now want stability and any change would spook the markets.
Japanese Finance Minister Aso’s Comments Strengthen The Yen
Finance Minister Taro Aso said on Friday that the yen as depreciated too fast. The Group of 20 finance chiefs are to meet this week in Russia. I see his comments as trying to appease the other finance chiefs ahead of the meeting as other countries have accused Japan of trying to spark a currency war. The US dollar has gone from 78 yen to 94 yen on comments from Japanese officials and speculation of action from Japan. There has been no action by the Bank of Japan to weaken the currency yet.
Economic Data Calendar
- 0745 French Industrial Production (MoM) -0.2% forecast 0.5% prev (Euro)
That’s really it on the data front. Binary and forex traders will need to pay attention to comments out of Brussels regarding Cyprus and Greece along with anything out of Spain and Italy.
This is one of the tougher parts of this business is that comments by officials can really move markets and they come out of nowhere. A forex or binary trader needs to be checking our site or twitter for the latest headlines. The Bloomberg financial channel is a great source of information for traders.
I hope all binary and forex traders had a great weekend. Be sure to check back for the latest update and good luck this week in the markets!
