Tag Archives: Europe

Oil hit an eight-month low in Asia, keeping consistent in its recent jumpy behavior that tends to mirror news coming out of Europe. This comes down from crude oil’s up position June 11 after a European pledge that the euro zone countries would lend Spain $125B to alleviate the pain in its struggling banks. This, combined with talk about how investors have been looking into commodities as a safe place to park their capital as they wait out this passing economic storm, made me want to take a closer look at what’s going on in energy today.

Right now, Chesapeake Energy, the world’s second largest natural gas company, is a pretty entertaining case to follow. For anyone who hasn’t been doing so, the Chesapeake story started picking up June 4 as their stock saw a sudden turnaround rising 6.03 percent to $16.52 a share (previously on a longtime downward spiral as their stock had dwindled around 55 percent from its peak performance). At that time, I couldn’t help but wonder what kind of an investment this company could potentially turn into.

The change was a direct result of some democratic cuts that took place amongst the company’s board of directors. It was actually billionaire Carl Icahn, with his sturdy 7.56-percent stake in the natural gas conglomerate, who set things in motion.

In a letter he wrote to the company last month, Icahn spoke on behalf of himself and a group of disgruntled fellow Chesapeake investors voicing dismay with how the board was operating the company. In it, he expressed that he felt it was these board members who were largely responsible for the dismal Chesapeake stock performance.

On June 11, the company responded to Icahn by announcing that they planned to remove four of their nine current board members. This seemed to be just the antidote investors were looking for, as many of them openly expressed their satisfaction with the decision.

Though the company’s June 11 stock performance demonstrated Chesapeake was starting to regain traction with investors, they were and are still nowhere near a comfortable monetary state. With $12.6 billion in long-term debt, they are looking to disperse $14 billion in assets in an attempt to alleviate their weighty debt burden.

On June 8, Chesapeake announced at an annual meeting that it would be selling its Midstream Partners pipelines and Chesapeake Midstream Development to Global Infrastructure Partners June 26 for a combined $4 billion dollars. This move came at a prime time, as the company is clearly strapped for cash under their hefty debt.

The question now is, given the mitigating circumstances with both the company and the global economy, how should investors approach the wounded (but slowly recovering) beast that is Chesapeake Energy? Engage in buying off their debt via corporate bonds? Bank on materialization of a positive rebranding turnaround as Carl Icahn takes matters into his own hands? Consider commodities as a safe place to stash their dough until European turmoil cools off? Decisions, decisions.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

­­Our Two Cents – Week of 1/30/12

As January flips to February this week, U.S. economic optimism continues prevailing, while Europe strides toward economic reform.

Focusing on the economy, President Barack Obama delivered his State of the Union address, outlining a path to constructing “an economy built to last.” On the heels of the president’s speech, The Wall Street Journal and NBC released a poll showing that Americans view the economy a bit brighter. According to results, 37 percent of respondents said the economy will get better in the next 12 months. One sign of economic restoration is consumer confidence. The U.S. Consumer Confidence Index climbed to 75 from 69.9 at the end of December—the highest level in almost a year. Experts said an improving jobs market and higher stock prices helped fuel the increase. Additionally, about two-thirds of economists who participated in the National Association for Business Economic survey believe the nation’s gross domestic product will bump to a rate of more than 2 percent. The week ended with the economy growing at an annual pace of nearly 3 percent in Q4 of 2011.

While the U.S. received economic assurance, Europe remained focus on its fiscal matters. At the Jan. 30 summit, European Union leaders agreed to a permanent rescue fund for the euro zone. Leaders will sign a treaty establishing the European Stability Mechanism (ESM), “a 500-billion-euro permanent bailout fund that is due to become operational in July, a year earlier than first planned.” Summit participants also discussed ways to create more job opportunities and financial growth. Aside from the treaty, Spain still faces recession as tourism is expected to remain low in the winter. Factors such as austerity measures and higher taxes also might bruise the country.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

We sat with our Currensee Trade Leaders and asked them three questions on volatility, trading strategy and the euro. The interviews give a brief glimpse inside the minds of our traders and shines some light on the coming year. The first post in this series starts off with Gabor Asirikuy Trading.

Currensee Trade Leader Gabor Asirikuy Trading (Ticker: GAFLL.B and GAFLL.C) uses a distinctive automated system that leverages the signals of 10 trend-following trading systems, each leveraging different trading tactics. The system leverages the work of an international trading community that analyzes systems using purely statistical methods, and is built to take advantage of the long-term investment horizon. The system is built on the foundation of the Turtle Trading System, with volatility adjusted profit/stop targets and position sizing.

Do you believe 2012 will be as volatile as the end of 2011 has been?

The global economy is not in a good shape at the moment and probably this will be the situation for the whole year. Usually markets are less volatile when investors are optimistic and central banks gradually increase interest rates. This kind of environment usually starts carry trading in the currency markets.

However, 2012 is probably not about that, especially if Europe does not manage to find a credible solution for the sovereign debt problems. The solution would need the member countries to partly give up their political sovereignty, which is a very hard decision for them and won't happen overnight. If the EU debt crisis extends and the EU finally breaks up, then that might lead to a quite chaotic situation in the financial markets. This would surely increase volatility as investors would escape to safe haven currencies.

Elections in the US and France won't help either, because world leaders will be more concerned with domestic political battles then with the global economy.

On the other hand as a systematic trader I can only say that future is unknown and instead of predictions I keep looking at the statistical numbers of my systems, trade consistently and manage risk properly.

What types of Forex strategies will continue to prevail in 2012?

Well, that's hard to answer, carry trade probably won't for the reasons listed above. However a trader had better not to try to predict market conditions, but to trade strategies that can survive the unfavorable periods, which always come sooner or later. Some markets/periods are better for trend following systems and others for counter-trending (or mean reversion) systems, but that might change over time. Consistency and risk management are the keys.

At Currensee, I trade short-term trend following systems (H1 swing trading) on the major pairs. Major currency pairs tend to build up larger trends, because they are rather moved by global fundamental events than speculation, so for that reason trend following seems to be more apt for these instruments. But this doesn't mean that range bounded periods would not come from time to time even during volatile periods.

What would a breakup of the euro mean for your strategy?

This is an interesting question, indeed. It already occurred at Asirikuy before, and we made experiments to model this problem. The introduction of the euro in 1999 gives us the opportunity to model the impact of an instrument change. We created a few daily trading systems with the help of our genetic algorithm framework, that were optimized on the historical price data of the DEM/USD pair during the 1990 - 1999 period. These systems were then backtested on EUR/USD from 2000-2010. Those systems that were stable during the original optimization period - which means that their performance didn't deteriorate dramatically when we changed slightly their entry/exit parameters or the spread - did well on EUR/USD in the 2000-2010 out-of-sample period, in fact most of them did a bit better.

What that means is that before 2000 it was the Deutsch mark which represented the best the economic performance of the continental Europe, no wonder that Germany is called the economic engine of the EU. After the birth of the euro the characteristics of the market didn't change much: the same traders in the same institutions / banks / corporations in the same time zone speculated or hedged on fundamental events of the same economic conglomerate. In addition the EUR/USD became more liquid than the DEM/USD, which means that technical trading works a bit better in this market.

The same can be assumed in the opposite process when euro ceases to exist. The economic environment won't change dramatically, but the new currency (maybe the euro of a smaller group of countries or the Deutsch mark) will be less liquid, so technicals will work less, and this might mean slightly worse performance.

Of course if the breakup happens in a chaotic manner that might mean that the new currency pair will not be accessible for the retail traders for some time. In that regard we don't have experience - and I personally would be glad not to have one - but time will tell.

 

Next week: TCM Spencer Beezley (Ticker: SPBJP.A)

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Our Two Cents – Week of 1/23/12

There’s nothing better than kicking off the week on some high notes—especially coming off last night’s victory from the New England Patriots, sending them to the Super Bowl.

In the U.S., optimism remained the key theme last week. Jobless claims dropped 50,000 to 325,000—down from 402,000 last week—marking the lowest level since April 2008 and the biggest drop since September 2005. Experts said the sharp decrease illustrated signs of an upward-ticking economy. According to new survey results, 40 percent of wealthy Americans have optimistic thoughts about the U.S. economy in 2012, the highest level of optimism in six months. The findings came from the December 2011 Ipsos Mendelsohn Affluent Barometer, which examines lifestyles, spending patterns and media habits of wealthy Americans (those whose household income is $100,000 or more). While wealthy Americans signaled their optimism for 2012, the hedge fund industry also displayed early signs of a good year. In terms of inflows, more than half of investors planned to boost their hedge fund investments this year, according to a Barclays survey. In the Forex world, U.S. client profitability has increased on average 6.4 percent in Q4 of 2011.

Signs of economic confidence even transcended the Atlantic to Europe. Spain enjoyed a successful auction of benchmark 10-year bonds that investors gobbled up. In Italy, Prime Minister Mario Monti said Germany—in its own self-interest—must assist Italy and other embattled euro zone nations to help lower borrowing costs. Monti heralded Germany’s

“culture of stability” as “a precious German product [that] has been marvelously exported.” In Greece, officials and private creditors continued to devise solutions for its debt, nearing agreements to write down 50 percent of the face value of the country’s debt by exchanging existing bonds for newer ones with longer maturities and lower interest rates. Officials are expected to meet Jan. 23 to further discuss and resolve Greece’s debt.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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One of the things that's gotten a fair bit of chatter in the press of late has been the idea of a de-coupling between US markets and those in Europe. It is suggested that traders and market participants are taking a comparative look at the two economies and seeing better opportunities in the US, which is leading to better performance for US stocks and also for the dollar. Let's take a look at the numbers to see how that's really playing out.

The chart below looks at the correlations between the USD Index and the S&P 500 (red), US 10yr Note yields (green), Oil (purple), and Gold (yellow). The correlation figures are based on a 20-period look-back calculation using daily closing data.

Dollar correlation

 

 

What immediately jumps out is that the dollar has become much more positively correlated to all of these major markets in the last several weeks. In the case of the stock and bond markets, this has been developing since mid-November, meaning the commentators talking about this stuff recently have actually be rather late to the game, which is often the case.

Interestingly, just as stocks and bonds were shifting toward more positive correlations in mid-November, the commodities were moving toward more negative ones. They have obviously since turned that around again, very sharply in the case of gold since the start of the new year.

Be aware, though, that there's a difference between "more positively correlated" and being actually positively correlated. In all these cases we're talking about markets having gone from very negatively correlated (the closer you get to -1 the more directly opposite the two markets tend to move). At this point these markets have only reached near the 0 correlation level, meaning the markets haven't really been trading in unison at all of late.

The move in the S&P 500's correlation to the USD Index is the most interesting in that we're seeing the most positive reading we've seen since June of last year. What makes this really interesting is that in the past the higher correlations between the two markets have come when the dollar was falling. The last time the two markets were positively correlated during a USD rally was during the latter part of 2009 and early 2010.

USD correlation

 

 

Notice how there was a kind of choppy positive correlation between the two markets (S&P 500 in green) during December 2009 that broke down in January before things turned back again in February. Now consider that we've got a choppy kind of positive correlation between the two markets working now. Could be we're setting up for some kind of repeat performance.

 

­­Our Two Cents – Week of 1/9/12

With the first week of 2012 crossed off the calendar and the Iowa caucus in the past, the one word to describe the start of January—especially in the United States and European financial markets—is optimism.

The U.S. economy added 200,000 jobs, and its unemployment rate fell to 8.5 percent in December (from 8.7 percent in November). These figures paint an initially positive scene that the long-awaited economic recovery is finally making some positive strides. This good news comes on the heels of news earlier in the week about weekly jobless claims which have dropped to 372,000. Even though the holidays have passed, retailers and the economy also unwrapped a nice financial present. According to the International Council of Shopping Centers’ tally of 25 retailers, sellers collectively reported a 3.5-percent increase in monthly revenue at stores open at least a year. For November and December, retailers saw holiday sales increase 3.3 percent. While consumers were purchasing, hedge funds were gaining. In November, hedge funds raked in $3.6 billion in new money, according to BarclayHedge and TrimTabs Investment Research. Also, investors are confident about the 2012 hedge fund outlook, especially after they experienced a rough 2011.

In Europe, the markets rallied early last week, showing early signs of optimism after the previous year that saw economic chaos. To start 2012, Germany successfully auctioned its bond issuance by selling its 10-year benchmark bund. The nation sold $5.28 billion of the 2-percent January 2022 bund, its current 10-year benchmark paper, with bids reaching $6.52 billion. Successful bonds also found their way to the United Kingdom. British bond experts say U.K. government bonds—seeing record lows at the end of 2011—will remain as safe-haven assets, especially because the euro zone crisis hasn’t been solved. Experts say investors will continue to turn to U.K. government bonds because the country is able to control its currency and enact a monetary policy stimulus if needed.

 

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

­­Our Two Cents – Week of 1/3/12

The crystal ball atop New York City’s Times Square has dropped, champagne glasses have clinked and confetti has strewn—all signs welcoming 2012. As we said goodbye to a year that saw economic commotion, we greeted the new year with a refined sense of optimism for the U.S. and equal thoughts of hope for abroad.

Americans are more confident about 2012 after what they say was a less-than stellar 2011, according to an Associated Press poll. Nearly 70 percent of Americans said 2011 was a poor year because of continuing economic crisis, and 62 percent said they were hopeful for a more positive 2012. About 37 respondents said they saw economic improvements coming within the next 12 months, and almost 40 percent believed their personal financial situations will improve. Signs that the U.S. economy is starting to accelerate are already coming to fruition. Experts say an improving job market and increasing retail sales—especially in the past holiday season—are reasons for why growth in the U.S. economy may hasten even if conditions abroad aren’t replicated. Holiday sales during the week ending Dec. 24 ascended nearly 15 percent from the same period in 2010 to $44 billion, thanks to Christmas Eve falling on a Saturday.

While the U.S. conditions are rebounding, Europe’s markets are starting 2012 on the right foot. Italy’s FTSE MIB index is up nearly 1 percent, and Germany DAX is also up more than 1 percent. Yields in Italy are down to below 6.9 percent.

In the last few days of 2011, Italy’s Treasury paid significantly less to borrow money for six months than it did a month ago, restoring some senses of economic confidence. Even though Spain has slipped into recession, the country’s inflation has eased much more than expected in December to its lowest level in 13 months. Inflation rates also relaxed in Germany for the third straight month.

Speaking of Germany, it received the highest mark on the Bank of Montreal’s economic report card of the world’s most important economies in 2011. The nation earned a score of 89.2 because of its 2.5-percent inflation rate, 7.1-percent jobless rate and 1.2-percent budget deficit. Greece closed the list at No. 12 because of its 3.2-percent inflation rate, 16.6-percent jobless rate and 5.9-percent budget deficit. The U.S. earned the No. 6 spot for its 3.2-percent inflation, 9-percent jobless rate and 10-percent budget deficit. The bank based ratings on low inflation, low unemployment and low budget deficits.

The year 2012 also observes the 10th anniversary of the euro. While some individuals blamed the euro for causing Europe’s economic meltdown, the monetary unit could become the world’s leading single-currency alliance if leaders can succeed in tightening fiscal integration, according to one official from the European Central Bank. ECB policymaker Christian Noyer said if European officials can implement the actions from the Dec. 9, 2011, emergency summit, the union will emerge stronger.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

News broke Sunday night reporting the death of North Korea’s enigmatic leader, Kim Jong Il, followed swiftly by debate about the impact his successor Kim Jong Un will have on the country’s economy and society – as well as the market’s reaction to his father’s death.

Meanwhile Europe continued to dominate world headlines as it devises next steps after proposing a treaty last week designed to strength fiscal discipline for the European Union. In the United States, the economy continues showing signs of improvement as it eases some minds heading into the highly anticipated holiday week.

In Europe, Italian Prime Minister Mario Monti won a confidence vote from officials to expedite its 30-billion-euro budget crafted to restore the country’s economic confidence and revive its stagnant growth. The passage comes after a week of strikes from Italy’s three biggest labor unions because they say Monti’s package will hurt workers, pensions and the country itself. After passing the House, the measure now moves to the Senate where it’s expected to be actioned by Christmas. While Italy seeks to improve its economy, Poland has been recognized for its robust economy. Experts believe that Poland may have the last healthy economy in Europe as the country’s capital Warsaw received revitalization and the country overall experienced economic growth and increased foreign investments. The question, though, is Poland going to remain as strong as it is now? Because many of its neighbors are suffering in the euro zone, residual effects could spill over the borders to Poland—especially because the country’s main stock index is down 24 percent since April. Unfortunately, some other European countries aren’t in as great shape as Poland. France could see a downgrade of its triple-A rating by Standard & Poor’s. French officials say the speculated credit lowering would be “cataclysmic” to its economy. Germany is still trying to lead through the crisis, opposing euro bonds and lifting bailout cap. In Greece, the nation has abandoned the euro and returned to its drachma currency, and in Britain, Prime Minister David Cameron faced hecklers about vetoing the proposed European Union treaty.

There was good news in the United States last week. Retail sales rose for the sixth straight month, increasing 0.2 percent in November and showing signs that the U.S. economy is growing. Consumer prices also remained steady as the consumer price index went unchanged last month in November. Jobless claims dropped to 366,000, marking a three-year low and signal some recovery to the job market. In the hedge fund world, legendary hedge funder Julian Robertson of Tiger Management Co. is explaining why so many hedge funds are now cropping up. He says the hedge funds business is becoming tougher because more hedge funds are being created as they’re the best way to pay the experienced Wall Street guys.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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The upturn in global economic activity that began more than two years ago faces a stern test of its resilience – in view of the ongoing trauma in the euro-zone – and, could well be short-circuited should the elevated stress in credit markets refuse to subside in the near future.  The financial markets have already priced in a mild European recession over the next two quarters, which the global economy should be able to withstand without too much dislocation but, such optimism could well be misplaced.

Indeed, it is not difficult to construct a scenario in which a probable downturn in euro-zone activity is more severe and, of longer duration than most commentators currently believe.  Should such an outcome unfold, strong global interdependence amongst economies virtually ensures that the negative impact on economic activity across the globe would be far more pronounced than the consensus currently anticipates.

The current cheery consensus among market practitioners is difficult to fathom given recent developments in the euro-zone and, more than likely, reflects the all-too-human tendency to overweigh the positive potential outcomes and, to place too little emphasis on uncomfortable negative scenarios.  The fact of the matter however, is that the probability of a severe recession can no longer be considered non-trivial for a number of reasons and, as a result, asset allocations should be adjusted appropriately to reflect expected outcomes rather than wishful thinking.

Euro-zone business surveys have already slipped to levels that are consistent with a contraction in economic activity but, the optimists are confident that Europe’s leadership will do whatever is necessary to contain the decline.  Such optimism appears to be based on hope rather than reality however, as both Brussels and Frankfurt appear to believe that the only road to lower market interest rates and a return to healthy economic growth is fiscal austerity – a policy prescription that is almost certain to lead to heightened rather than reduced market stress.

Fiscal austerity across the euro-zone is unlikely to appease the financial markets for one simply reason – domestic private demand is not sufficiently strong to absorb the deflationary impact.  Indeed, the elevated stress in the credit markets has already taken a heavy toll on business confidence while, surveys of lending conditions show that the banking system has become less willing to supply credit and, standards are virtually certain to tighten further, once the recapitalisation of ailing balance sheets – as prescribed by policymakers – gets underway.

A deep recession is virtually certain given current policy prescriptions and, as a result, financial market stress is unlikely to ease.  The contraction in economic output will cause tax revenues to fall short of plan and, government expenditures to exceed original estimates due to the rise in unemployment benefits.  The wider-than-expected budget deficits mean that public debt-to-GDP ratios across the euro-zone are likely to edge higher and, ensure that yields on sovereign debt remain uncomfortably high.

The optimists argue that such a scenario is unlikely to unfold, which seems to be predicated on the belief that the ECB will reduce policy rates aggressively and, ultimately purchase sovereign debt in sufficient size to ease the strain on governments.  Once again, such premises are built on hope rather than hard fact.

First, market funding costs have already disconnected from policy rates, while lending standards are beginning to show a similar dynamic.  As such, it is reasonable to argue that the stimulus to economic activity, arising from a reduction in interest rates from their current low levels, is likely to be negligible.

Second, the ECB is extremely reluctant to expand its balance sheet and purchase large quantities of stressed sovereign debt given the credit risk that it would assume.  Any sovereign that issues debt in a currency that it does not control, is simply not free of default risk.  Indeed, the Greek case clearly demonstrates to private investors that holding distressed euro-zone sovereign debt is not that far removed from owning high-yield bonds.

The truth of the matter is that the ECB is unlikely to purchase troubled sovereign debt without an ironclad guarantee that it will be compensated in the event of losses.  Such a guarantee would not appear to be on the table in Berlin and, is unlikely to be, in the absence of further fiscal integration.  This process will take time and as a result, aggressive ECB action could happen later rather than sooner.

The odds of a severe euro-zone recession are growing by the day and, it would be foolish to believe that the rest of the world would emerge unscathed given the increase in financial interconnections and trade linkages.  Indeed, one important lesson to glean from the ‘Great Recession’ is that greater global integration ensures that an economic crisis in one region is quickly transmitted to another.

Global decoupling is nothing but an old wives’ tale and, investors should note that the escalating euro crisis puts the entire world economy at risk.

Originally posted on www.charliefell.com

Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Italian reforms, British backlash, German refusal and French strength made headlines last week. We hedged our bets on the best news in the currency market, and here’s how we made out.

All eyes were on Europe again this past week as Italy’s premier-designate Mario Monti stepped into the spotlight to help right Italy’s fiscal flounders. Monti faced a monumental task of galvanizing the country’s electorate and politicians to accept crucial reforms that would stop Italy’s sinking economy. This sparked some fears for economists because Italy’s economy is the eighth largest in the world and if not rightly handled could cause global reverberations. While Monti pushed reforms, former Prime Minister Silvio Berlusconi hit the recording studio. The once-battled politician is releasing a CD of love songs, where he croons with Mariano Apicella, a Neapolitan ballad singer he has collaborated with for previous albums. In England, Britain saw rising unemployment at 8.3 percent for September, but that didn’t stop Germany from blasting the U.K. to start helping the euro zone. Volker Kauder, parliamentary leader of the Christian Democratic Union and a senior member of Chancellor Angela Merkel’s party, blasted the British government, saying that “Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.” Germany said it wasn’t planning to pay for the bulk of spending from other countries because it wants a unified continent. However, more core European nations were starting to feel the heat of the euro zone as AAA nations such as France were under pressure for their financial strength—a characteristic that’s no longer taken for granted. France’s cost of borrowing increased more than a half percentage point, and Austria’s spread between its 10-year bonds and benchmark German Bunds hit euro-era highs. Dutch and Finnish spreads have also seen their highest spreads since 2009, generating thoughts about the direction of a new Europe.

In the U.S., some good news about jobs. The number of unemployment benefits fell last week to its lowest level since early April, showing signs that hiring may be rebounding. The Occupy movements in cities such as Los Angeles, Boston and Las Vegas saw for the most part peaceful protests last week, but throngs of demonstrators in New York City took to the New York Stock Exchange and subways to raise concerns about corporate excess. In the markets themselves, hedge funds posted gains of 2.04 percent in October, marking some optimism after two difficult months. We conclude with a look at spending for Black Friday as shoppers are expected to gobble up purchases Nov. 25. According to the National Retail Federation, the average American spent $365.34 on Black Friday in 2010 with overall sales calculating $45 billion.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.