Trading News and Views:  04  March 2010 

Indices:

European markets:

Markets in Europe advanced on Wednesday after Greece came forward with measures to deal on its own to come out of its fiscal deficit. It managed to cut additional deficit to the tune of 4.8bn euros ($6.6bn).
(source: sharecast.com).

Adidas AG, posted losses, but good earnings news coming in from steelmakers andsolar-power companies kept stocks up.  Matthias Joerss, head of equity strategy at Sal. Oppenheim Jr. & Cie. in Frankfurt, said: "Markets hope that over the weekend, we’ll get positive news on support for Greece. We fear they are a bit too optimistic in this respect, but we also had good news from the US ISM non-manufacturing which points a bit to better jobs data.”
(source: bloomberg.com).

The UK’s FTSE 100 climbed 0.9 percent, while Germany’s DAX increased 0.7 percent and France’s CAC 40 gained 0.8 percent.
(source: bloomberg.com).

US markets:

US markets were boosted after the ADP Employer Services and Institute for Supply Management's service industry gauge reported fewer job cuts by US companies.  Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said: "The equity market will continue to move higher. The news out of Greece is encouraging. The latest economic figures in the US indicate that we’re past the worst of the pain. And the pick-up in M&A activity is one more indication that assets are cheap.”
(source: bloomberg.com).

Dow Jones  fell nine points to 10,396.  The S&P 500 index was also flat at 1,118. Nasdaq Composite finished 7 flat at 2,280.
(source:sharecast.com).

Asian markets:  

There was a lot of Greek fiscal deficit mending speculation which may bolster global recovery.  Hiroshi Morikawa, a strategist at MU Investments Co., said: "Greece has been a source of anxiety. The main scenario is that the issue will be concluded after the government’s announcement. But if the government measures are not what investors expect, concerns on Greece issues will reignite and shares will plunge.”
(source: bloomberg.com).

Another expert, Hans Goetti, chief investment officer of LGT Bank in Liechtenstein (Singapore) Ltd, said: "There will be no default for Greece as it announces further spending cuts. We think the rally in equities will continue.”
(source: bloomberg.com).

Forex/Currencies:

The dollar fell against the euro yesterday after traders speculated on interest rates to be kept near zero by the Federal Reserve.  Takeshi Makita, senior economist in Tokyo at Japan Research Institute Ltd, said: "With a recovery in the jobs market in the US remaining weak, the Fed can’t start raising its federal fund rate immediately. This view will continue to weigh on the dollar.”
(source: bloomberg.com).

Greece's efforts to mend its deficit problem by pay cuts and tax hikes worth $6.5bn, gave a welcome relief to the euro.  JP Morgan said in a note: "The measures are moderately good news for the euro. The euro has become increasingly cheap over the past few weeks relative to high-frequency valuation models. Together with extreme positioning in the euro, this weakness highlights the potential for a squeeze should the news flow around Greece turn slightly more positive."
(source: reuters.com).

The dollar dropped to $1.3639 per euro. The greenback traded at 88.85 yen. The euro was 121.19 yen. The pound rose 0.4 percent to $1.5023.
(source: sharecast.com).

Commodities:

Oil Trading:

Oil was also on the rise after Greece's deficit problem seemed to be getting solved. US inventory report showed drop of 4.07m barrels.  David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said: "US inventories are still high, but not as high as they were in the first half of 2009. Markets are becoming a little more optimistic about the international economic outlook.”
(source: bloomberg.com).

Crude oil futures gained $1.19 a barrel to settle at $80.87 a barrel in New York.
(source: sharecast.com).

Gold Trading:

With the dollar loosing ground against the euro, gold was seen an alternate investment option.  Matt Zeman, a trader at LaSalle Futures Group in Chicago, said: "Gold is going to become the currency of choice as people lose faith in fiat currencies. These countries continue to write checks that they can’t cash.”
(source: bloomberg.com).

Another view came in the form of a report from  GoldCore Ltd., a broker in Dublin: "There are hopes that the Greek deficit cuts will stem the tide of the declining euro. Concerns that the austerity measures being taken in Greece may soon have to be undertaken in other European economies and in the UK should lead to continuing safe-haven demand for gold.”
(source: bloomberg.com).

Gold for April delivery rose $5.90 to $1,143.30 an ounce.
(source: sharecast.com).

Bonds:

(Yields move inversely to bond prices)

US Bonds:

Fewer job-cuts in the US gave equity trading for investors more lucrative than bonds, taking treasuries lower.  Tom Porcelli, senior economist in New York at Royal Bank of Canada, said: "The rate of decline is slowing, but slowing at a glacial pace. It’s going to be a slow, drawn-out recovery.”
(source: bloomberg.com).

The yield on the 10-year US treasury climbed by three basis points to 3.64%.
(source: sharecast.com).

European Bonds: