Forex Trades for the Greek Elections and Wednesday's Fed Meeting - Marketwatch
By Benzinga.com
Over the coming days, two major events will dominate global markets: on Sunday, Greeks will vote in a national election. Then, next week, the Federal Reserve will hold its June meeting. Traders looking to take a position on these events may turn to the forex market to do so.
EUR/USD Traders can take a position on the outcome of the Greek election via the EUR/USD pair. Those who believe that there will be a negative outcome in Greece (a Radical Left victory) would want to short the EUR/USD, especially after the currency pair has seen recent gains. As the chart below shows, the pair is running into significant neckline support (the straight red line across the top) and is supported by the upward-sloping tend line from the lows hit at the end of May.
This technical formation is interesting in that it usually results in a breakout of prices, often to the upside. However, as this pattern is aligning with the fundamental story of the Greek elections, a wise trader would expect that the results will determine the next move. A negative outcome may send the pair lower, near $1.25 and then to $1.2450, where there are significant technical supports. Upside resistance is in the $1.2780-1.2820 range, so there is significant room for a move on either side.
Gold Some market watchers have said that a negative outcome from the Greek elections will prompt the Fed to take action next week. Traders who follow this view would be wise to buy gold as a hedge against aggressive monetary policy, and a great way to take a position would be with the XAU/EUR cross. Buying gold against the euro will allow traders to hedge dollar exposure ahead of the Fed meeting and also allow traders to grasp onto potential losses in the euro.
Looking at the above chart, support is not too strong until 1259 and then again at 1245, so those are the levels to watch on the downside. On the upside, resistance is at 1300 and then again just below 1315. For those who believe in the optimistic scenario, shorting this pair will allow traders to benefit twice: first from the expected fall in gold (diminished hopes of liquidity) and second from euro appreciation. On the other hand, those that feel a bad outcome is destined should buy this pair, as the long gold exposure is beneficial in situations of added liquidity and being short the euro will allow investors to have a bearish stance on the common currency.
Long the Spread of French 10-Year Bonds Over German 10-Year Any contagion effects of a negative outcome in the Greek elections will be felt in peripheral bonds as traders see European leaders not living up to their words (remember, it was only last summer that Merkel continuously reiterated that no nation is to leave the euro). A loss of confidence in these leaders will result in a dumping of peripheral debt, but the contagion could also move to France, the weakest of the core nations. If French finances start being called into check, French bond yields will move higher and capital flight may weaken the banks. France's two biggest banks, Societe Generale and BNP Paribas, had more assets than the GDP of France at the end of 2011. Thus, if they were to get into trouble, France would have to bail them out--thus putting serious pressure on the nation's finances.
This pressure would result in even higher bond yields and capital flight out of the banks and into German banks or even German bunds. Thus, German bond yields would fall and French yields would rise, driving the spread between them higher. As difficult as it may be to buy bunds at ultra-low yields, it may be the safest play still. By buying bunds, traders are investing in a negative real return (and potentially even negative nominal return), however they are getting an implied call option on a new German deutschmark. Consider that if the euro dissolves, each nation would revert to its own domestic currency. German bunds would then be re-denominated and paid out in this new currency, which would likely appreciate significantly against the euro (some say between 25-50%). Thus, by buying bunds and shorting French bonds, traders get exposure to the potentially negative sentiment surrounding the elections, the flight to quality and out of risky assets, and a call option on a new, stronger German currency.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Forex: GBP/USD makes it through 1.5600 - NASDAQ
FXstreet.com (Córdoba) - Following a period of hesitation after the BoE announced new unorthodox measures to provide liquidity and boost the UK economy, the Cable finally gathered momentum and broke to the upside, taking out the 1.5600 resistance level.
Without a clear catalyst, GBP/USD rallied at the beginning of the New York session and reached its highest level in over 2 weeks at 1.5623. At time of writing, the cross is quoting at the 1.5610 zone, recording a 0.3% gain on the day.
From a technical view, "The hourly chart shows price back above a still flat 20 SMA while indicators head north above their midlines, while in the 4 hours chart the neutral stance seen over the past few days remains intact", says Valeria Bednarik, chief analyst at FXstreet.com.
"A strong static resistance level is located at 1.5635 and it can be reached on a break above 1.5600 although expect further gains to remain limited today", said Bednarik while placing supports at 1.5525, 1.5500 and 1.5445.
Nigeria's finance minister orders fuel subsidy slow down - Reuters
By Camillus Eboh
ABUJA (Reuters) - Nigeria's finance minister said on Thursday she had ordered a slow down to fuel subsidy payments to allow verification that they are for genuine deliveries, an effort to combat fraud costing it billions of dollars.
"I decided that we should slow down the payments until we verify ... that what we are paying is really being paid for genuine product delivered, to avoid the mistakes we made in the past," Ngozi Okonjo-Iweala told a news conference.
Fuel shippers say they are facing delays at import terminals while their subsidy payments are scrutinised, and some private firms have halted deliveries, while others are relying on swaps for crude oil to receive payments.
Accountant-General Jonah Otunla, also at the conference, said the government had spent 1.44 trillion Nigerian naira in the first half of 2012, of which 1.036 trillion was on recurrent expenditure, the largest component of that being the fuel subsidy.
A parliamentary probe into the subsidy scheme released last month found it was riddled with fraud that had cost Nigeria $6.8 billion in just three years -- equal to a quarter of the national budget. It was one of the biggest corruption scandals in the history of Africa's top energy producer.
Okonjo-Iweala said she had come to the realisation that the subsidy must be slowed after paying out 451 billion naira -- more than half of the 888 billion naira the country budgeted for this year -- just on arrears for last year.
"It was at that point in time I decided," she said. "We will not be stampeded to make payment until we verify that what we are paying is correct ... We are taking it very cautiously."
She added that only 17 billion naira had been released against 2012 fuel deliveries as a result. Continued...
WORLD FOREX: Eerie Calm Before Greek Elections; Sterling Stumbles - NASDAQ
-- Norwegian krone, Swedish krona and Japanese yen make last-minute safe-haven surge before Greek election weekend
-- Euro holds steady in nervous trading ahead of Greek elections
-- Sterling briefly dives as BOE launches fresh crisis-fighting liquidity measures
By Alexandra Fletcher
Sterling stole the show in early European trade in an otherwise quiet session ahead of the Greek elections, diving against other major currencies as the Bank of England announced a new liquidity facility to help shield the U.K. from euro-crisis fallout, fanning suspicions the central bank is preparing for a rate cut.
The pound shed some 0.3% against the dollar, trading to a low $1.5477 and the euro surged to the day's high of GBP0.8152 as London traders digested the news that the Bank of England will launch its first auction as part of a series of emergency liquidity measures that will offer six-month loans to U.K. banks in exchange for a wide range of collateral.
The announcement of the initiative has prompted expectations that the Bank of England might extend its asset purchasing program, or quantitative easing, at next month's monetary policy meeting, with Barclays--a prominent U.K. bank--shifting its view so that it now expects a boost to so-called QE at the central bank's July meeting.
Further fuelling sterling sellers, the BOE also signaled deepening gloom over the U.K. economy, and concern over euro- crisis fallout. In addition to the liquidity boost, it also kickstarted a new program to encourage banks' lending to businesses.
"The alarm [over the deepening of the euro-zone crisis] in official circles was evident in the new initiatives on bank support... It remains to be seen how effective these two measures will be, and in the meantime we believe there is a strong argument for augmenting them with more QE," said Simon Hayes, an economist at Barclays in London.
However, alarm bells didn't ring for long and sterling rebounded to levels seen overnight during Asian hours.
Elsewhere, the euro was trading steadily, holding onto some small overnight gains against the dollar ahead of the Greek elections this Sunday, the result of which could determine whether Greece stays in the euro zone or not.
Some investors were seeking out safe havens for their cash in advance of the vote that is seen as a referendum on Greece's membership of the common currency. The hunt for safety sent the Norwegian krone to a three-month high against the euro and the Swedish krona to the day's high. The Japanese yen also benefited from safe-haven flows, charging to a one-week high against the dollar.
Looking ahead, after a bad run of U.S. data Thursday, the U.S. June Empire State manufacturing survey is due at 1230 GMT, along with U.S. May industrial production data at 1315 GMT.
At 1005 GMT, the euro was trading at $1.2619 against the dollar, compared with $1.2633 late Thursday in New York, according to trading system EBS. The dollar was at Y78.68 against the yen, compared with Y79.35, while the euro was at Y99.29, compared with Y100.26. Meanwhile, the pound was trading at $1.5548 against the dollar, compared with $1.5563 late Thursday in New York. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 81.786 from about 81.810.
-By Alexandra Fletcher, Dow Jones Newswires; +44 (0) 20 7842 9462, alexandra.fletcher@dowjones.com; @djfxtrader
(END) Dow Jones Newswires 06-15-120734ET Copyright (c) 2012 Dow Jones & Company, Inc.
FOREX-Euro steadies vs dollar ahead of Greek vote - Reuters
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Forex Trend Wave an Easy Application For Beginner Fx Traders Now Available - PRLog (free press release)
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China Finance Online To Announce 2012 First Quarter Financial Results on June 27 - Yahoo Finance
BEIJING, June 15, 2012 /PRNewswire-Asia/ -- China Finance Online Co. Limited ("China Finance Online", "the Company") (NASDAQ GS: JRJC), a technology-driven, user-focused market leader in China in providing vertically integrated financial information and services including news, data, analytics, securities investment advisory and brokerage-related services, today announced that the Company will report its 2012 first quarter financial results ended March 31, 2012, after the market closes on Wednesday, June 27, 2012.
The Company will host a conference call and a simultaneous webcast, on June 27, 2012 at 8:00 p.m. Eastern Time/June 28, 2012 8:00 a.m. Beijing Time. Interested parties may participate in the conference call by dialing approximately five minutes before the call start time at U.S. +1-877-847-0047, Hong Kong +852-3006-8101, Singapore 8008-523-396, or China 800-876-5011, and the pass code for all regions is 675169.
A replay of the conference call will be available shortly after the conclusion of the event through 11:59 a.m. Eastern Time on July 5, 2012 (or 11:59 p.m. Beijing Time on July 5, 2012). The dial-in details for the replay: U.S. +1-866-572-7808, Hong Kong +852-3012-8000, Singapore 800-101-2157, China 800-876-5013. Access code: 675169.
The conference call will be available as a live webcast and replay at:
http://www.media-server.com/m/p/6itzpumo
About China Finance Online
China Finance Online Co. Limited is a technology-driven, user-focused market leader in China in providing vertically integrated financial information and services including news, data, analytics, securities investment advisory and brokerage-related services. Through its flagship portal sites, www.jrj.com and www.stockstar.com, the Company offers basic software and information services to individual investors which integrate financial and listed-company data, information and analytics from multiple sources. Leveraging on its robust internet capabilities and registered user base, China Finance Online is developing securities investment advisory and over time wealth management services. Through its subsidiary, Genius, the Company provides financial database and analytics to institutional customers including domestic brokerages and investment firms. Through its subsidiary, Daily Growth, the Company provides securities brokerage services in Hong Kong.
Contact:
Julie Zhu
China Finance Online Co. Limited
+86-10-5832-5288
ir@jrj.com
Shiwei Yin
Grayling
+1-646-284-9474
shiwei.yin@grayling.com
Possible candidates as finance minister - YAHOO!
NEW DELHI (Reuters) - The Congress party is seen to be close to nominating Finance Minister Pranab Mukherjee to be the country's next president, creating an opening to take charge of an economy battered by policy gridlock, inflation, and sluggish investment.
In the March quarter, growth in Asia's third-largest economy skidded to a nine-year low of 5.3 percent even as inflation rose to nearly 7.6 percent in May.
Wide current account and fiscal deficits have battered investor sentiment and recently sent the rupee tumbling to a record low, raising the spectre of a balance of payment crisis like the one India faced in 1991.
Known as a Congress trouble-shooter, Mukherjee has been thwarted by a fractious ruling coalition from pushing through reforms, and it's not clear whether his successor would get better results.
In the absence of an obvious successor, talk in New Delhi also suggests Prime Minister Manmohan Singh could take the finance portfolio, possibly on an interim basis. Singh was finance minister during India's 1991 crisis, pushing through reforms that unleashed two decades of faster growth.
If he does opt for a full-time finance minister, there are several names doing the rounds. Following are profiles of some of the probable candidates that Prime Minister Manmohan Singh and his party chief Sonia Gandhi may look to replace Mukherjee.
JAIRAM RAMESH, 58, rural development minister
An economist, the MIT graduate is seen as close to the Gandhi family. He was one of the backroom players who shepherded the Congress party's election campaigns in 2004 and 2009.
Articulate and media savvy, Ramesh supports cutting fuel subsidies and opening up the supermarket industry, which he opposed earlier.
In a recent interview with a local business daily, he said time for "pussyfooting" on major economic reforms was over and the government needed to "take the bull by its horns".
To his advantage, Ramesh is able to build rapport with alliance partners as well as opposition parties. At a time when the government has been left hamstrung by unruly allies, Sonia Gandhi could settle for a person who can bring partners on board to push divisive reforms needed to revive the economy.
However, he carries an image of being anti-development. As an environment minister, he had red-flagged several mining and infrastructure projects on environmental concerns.
C RANGARAJAN, 80, chairman of the Economic Advisory Council to the Prime Minister
Seen as a dark horse in the running for finance minister, he is one of the most trusted aides of Prime Minister Singh.
Rangarajan has worn various hats both within and outside the government, and would bring long experience to the job. Unlike other contenders, he has generally avoided controversy.
He is widely perceived as a hawk who frowns upon expansionary fiscal policy and high inflation, and is an advocate for fuel subsidy reforms and long-pending financial sector reforms. He favours building consensus before allowing foreign investment in multi-brand retail and aviation.
However, Rangarajan is not seen as a political heavyweight, even though he was governor of Andhra Pradesh for six years and was a member of the Rajya Sabha. Congress is seen to prefer a politician who can deliver votes in the 2014 parliamentary elections.
ANAND SHARMA, 59, trade minister
A lawyer-turned politician, Sharma is perceived to be reform-oriented and enjoys the confidence of the Gandhi family.
He is credited with arresting the slide in India's exports after taking over as trade minister in 2009 through a combination of bilateral trade agreements and diversification of export markets. He has also overseen bold steps to liberalise trade ties with arch-rival Pakistan.
Sharma has been pushing for liberalising foreign direct investment rules and succeeded in getting the government's approval for allowing foreign direct investment (FDI) in multi-brand retail, an initiative thwarted by coalition allies. Permitting FDI in the aviation sector is the next big ticket item on his agenda.
Sharma's stature in the party could be a handicap. He is not seen as a political operator and does not bring a large base of political support. Blame for the embarrassing flip-flop on FDI in retail is often put at his doorstep.
P CHIDAMBARAM, 66, home minister
A familiar face and a senior party stalwart who held the post during the global financial crisis in 2008.
His deft handling of the situation then, helping India avoid the worst of the downturn, makes him a leading candidate to take over an economy mired in the doldrums.
Although it's been nearly four years since he moved over to the interior ministry, his heart is seen to be in his previous job. Former colleagues from the finance ministry recall him as having an eye for detail and cannot be bluffed.
Considered to be a reform-oriented taskmaster and a market friendly face, Chidambaram enjoys the confidence of both Prime Minister Singh and Sonia Gandhi.
But an image of "intellectual arrogance" has earned him detractors both within and outside the party.
He is also under siege. Opposition parties question his role in a multi-billion dollar telecoms scam that has undermined the Congress-led government. His family is under scrutiny over a controversial telecom deal. Chidambaram, himself, is battling charges of rigging his election to parliament in 2009.
MONTEK SINGH AHLUWALIA, 68, deputy chairman, Planning Commission
The Oxford-trained economist has been a key figure in Indian economic policy since the mid-1980s. He is an influential adviser to the prime minister and is also India's Sherpa for the G20 Summit.
A supporter of open markets, he has been pushing the government to implement long-pending reforms like ending controls on fuel prices, lifting caps on foreign stakes in the insurance sector and allowing in foreign supermarkets.
He is close to Singh and was a key member of the team that navigated the economy out of the 1991 balance of payment crisis.
Ahluwalia is said to harbour political ambitions and was seen as front-runner for finance minister in 2009, but was thought by Congress to be too market friendly. A lack of political base also went against him.
He has also been hurt by controversies, including the definition of a poverty line at 32 rupees a day.
(Reporting by Rajesh Kumar Singh; Editing by Tony Munroe and Ed Lane)
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