Trading News and Views:  11  March 2010

Indices:

European markets:

Banking stocks and firm crude prices took European Shares like FTSE, DAX to end on higher note. Geoff Wilkinson, head of investment research at Mint said: "The news from the United States has generally been quite encouraging on the jobs front. It seems to have been enough to have drawn a lot of people into the market who were waiting for some confirmation of further activity."  
(source: reuters.com).

Mic Mills, senior trader at ETX Capital said:  "Wall Street came in with some early gains and stirred the FTSE from an earlier torpor late afternoon.  But aside from strength in heavyweight commodity issues there really looks to be little underlying the advance and with new multi-month peaks being struck, investors might start to find the air getting a bit rarified at these levels."
(source: reuters.com).

Dax, a German stock rose when former European Commission President Romano Prodi said: "Tas he worst of Greece’s financial crisis is over and other European nations won’t follow in its path."   

UK’s FTSE 100, France’s CAC 40 and the Germany’s DAX ended up between 0.7 to 0.9 percent higher.
(source: reuters.com).

US markets:

Banks and Technology shares saw a great day yesterday at Wall Street and there were hopes that a recovery in business demand would encourage corporate profits, this hope took the stocks in US to end up on a high note.   Angel Mata, managing director of listed equity trading at Stifel Nicolaus in Baltimore said:  "The natural conclusion investors are making is, if the economy is turning, financials are poised to do well.  There's demand out there and (businesses) are going to have to build up those inventories"
(source:reuters.com).

Dow Jones  edged up 2.95 points to end at 10,567.33.  The S&P 500 index 5.16 points to 1,145.61. The Nasdaq Composite Index rose 18.27 points to 2,358.95.
(source:reuters.com).

Asian markets:  

Asian stocks were seen fluctuating a bit yesterday as commodity-related companies were down on concern that China would pare back measures that encouraged growth.  While the Japanese shares like Nikkei were flat with gains in machine stocks.  Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets said:  "Investors took heart from the machinery data. The incident in America is taken as negative for Toyota as it has yet to completely resolve its recall problems." (source:reuters.com).

Japan’s Nikkei 225 Stock Average down 3.73 points to 10,563.92.
(source: reuters.com).

Rise in European and US stocks improved risk appetite and this boosted demand for higher yielding currencies.  The dollar fell against the euro.  The euro was quite volatile swinging between gains and losses against the dollar.
(source: reuters.com).

John McCarthy, director of foreign exchange at ING Capital Markets in New York said:  "It's still a risk play. We saw gold and oil come off and that caused the dollar and yen to recover a bit, but overall the euro is still higher and dollar/yen is still up.The market is still in a "buy dollar" mode, "but selectively," with investors still taking long bets on the dollar versus the euro and sterling, but not against the likes of the Norwegian and Swedish crowns." 
(source: reuters.com).

Commodities:

Oil Trading:

Oil prices saw a good start on wednesday when a government report showed that the gasoline stocks in the US dropped suddenly.  Chris Jarvis, senior analyst, Caprock Risk Management, Hampton Falls, New Hampshire said:  "Today's EIA data certainly has a bullish undertone with both gasoline and distillates off much more than expected.   Given the fact that we are heading into the driving season, a drop in gasoline supplies will drive bullish sentiment. Couple that with the dollar starting to weaken again and equities rallying and we wouldn't be surprised to see crude oil break out of this $80 level and march toward the $90 level in the coming months."
(source: reuters.com).

A weaker dollar typically supports oil prices as it makes dollar-denominated commodities such as oil less expensive.
(source: reuters.com).

US crude for April settled 60 cents higher at $82.09 a barrel.
(source: reuters.com).

Gold Trading:

Gold again saw a bad day for a third consecutive day on heavy futures liquidation and safe-haven buying on Greek sovereign debt worries reduced.  Traders said:  Speculators had been increasing their net long position in gold for four straight week but they may now be trimming those positions, putting selling pressure on the gold.  Christophe Jacot, vice president of FX and precious metals at EFG Bank said:  "We saw some liquidation on futures again, with more than 1 million ounces being sold."
(source: reuters.com).

Bonds:

(Yields move inversely to bond prices)

US Bonds:

Treasuries ended on a low note as Stockmarket in Europe rose amid speculation that the economic recovery is on hold and adding to his US prepared to sell $21 billion in 10-year notes.  Orlando Green,  a fixed-income strategist at Credit Agricole CIB in London said:  “Supply seems to be the main issue at the moment.  We’re looking for yields to move up from here.”
(source: bloomberg.com).

European Bonds:

German bonds saw a disappointing day when Germany sold 5 billion euros of 2-year notes and Portugal's securities auction helped to reduce the appeal of the safest debt. David Schnautz, a fixed-income strategist at Commerzbank AG in Frankfurt said: “There’s an unwinding of safe-haven trades.We expect stronger underperformance of bunds.”  
(source: bloomberg.com).

The yield on the two-year note rose three basis points to 1.01 percent.
(source: bloomberg.com).