New Zealand and Australian Dollar surged on Tuesday against the Greenback, reaching 2-month record high after China reported bigger-than-predicted increase in GDP. Investor sentiment improved on hopes growth will be sufficient to support Australia's and New Zealand's export demand. Aussie and Kiwi appreciated 0.6% against its US peer, reaching $1.0376 and $0.7980, respectively. AUD/USD currently is trading at $1.0394 while NZD/USD is trading at $0.7994.
European equity markets surged and closed higher after France faced a successful bond sale, as its 10-year borrowing costs dropped despite S&P downgrade. Stoxx Europe 600 gained 0.8% and finished at 251.12, while French CAC 40 index jumped 0.9 and finished at 3,225. UK FTSE 100 added 0.4%, closing at 5,657.44 and German DAX rallied 1.3% to 6,220.01.
Mario Draghi, ECB president, questioned the role of rating agencies, suggesting their moves may have too strong impact on markets. Draghi pointed out that investors should learn to anticipate changes, price them and evaluate creditworthiness without relying extensively on rating agencies.
French bonds surged on Monday's debt sale as their yields dropped in the first country's first auction since S&P downgrade. Successful note auction helped to improve market sentiment across Euro Zone, said Orlando Green, Credit Agricole strategist. The borrowing costs on 10-year French bills dropped 4 b.p. or 0.04 p.p. reaching 3.04%. Analysts suggest, S&P move was not a surprise,
Standard and Poor's downgraded the EFSF from AAA to AA+. European Financial Stability Facility was created to bailout indebted countries such as Ireland, Portugal and Greece. EFSF AAA rating was based on ratings of its AAA rated sponsoring nations. Yesterday two of these sponsors, Austria and France lost their triple-A credit rating and thus reduced creditworthiness of whole bailout fund.
Chinese economy expanded slower in the 4th quarter of 2011 than in 10 previous quarters. Gross Domestic Product added annual 8.9% in the last quarter of 2011. GDP expansion fell below 9% first time since 2009, highlighting cooled export demand and effects of property curbs. Economists earlier predicted GDP to grow at 8.7%. The data is likely to urge PM
The link between DAX Index and EUR/USD currency pair weakened further, reaching 0.48 in afternoon trade. A rapid downward pattern was observed between German benchmark and Nasdaq Composite (CCMP) as coefficient dropped to 0.6 on Monday. German DAX index faced diminishing relationship with its European counterpart Stoxx Europe 600 Index (SXXP) in the last trading session as the correlation coefficient
German DAX Index closed 0.6% down at 6,143.08 on Friday, but managed to recover on Monday, led by car makers and consumer goods sector. BMW AG and Daimler AG surged 2.6% and 3.48% respectively, after Goldman Sachs upgraded both companies to buy status. On the downside were Heidelbergcement and Thyssenkrupp AG, declining 3.86% and 1.39% respectively. At the moment of
FTSE 100 (UKX) Index moved relative close with S&P 500 Index (SPX) and Stoxx Europe 600 Index (SXXP) in last trading sessions, as both correlation coefficients averaged 0.66 and 0.68 respectively. The link between UK benchmark index and gold (GOLDSH) remained steady at 0.4. Meanwhile the negative relationship between UK benchmark and USD/CAD currency pair weakened from minus 0.6 to
Crude oil's link with Brent oil and natural gas remained stable at 0.95 and 0.89, respectively. At the same time, correlation with natural strengthened over the weak attaining 0.63 on Friday as all energy commodities negatively responded to credit cuts of nine members of the Euro Zone and increasing US stock levels. Crude oil connection with Standard and Poor's SP500
After closing week 0.5% down at 5,636.64 on Friday, UK FTSE 100 Index extended loss on Monday, falling to 5,620.3 in morning trade. The index recovered later and was trading flat at 5,641.84. The financial sector posted main drops after S&P agency's downgrading with Barclays giving up 2.1% and Lloyds Banking Group declining 1.9%. Carnival PLC plunged 17% on Costa
Base metals faced losses after rally in the beginning of the week as Standard and Poor's credit ratings cuts in the Euro Zone increased fears over recession in the region. Aluminium was the top loser on Friday, tumbling 0.83% over the day. However, aluminum price may find support in expected metal's supply shortage. Industrial metals opened higher on Monday with
Aluminium continues to face strong correlation with zinc while interrelation with copper tumbled from 0.69 to 0.58 over the week as copper tended to generate stronger response to economic data from China. Meanwhile, alumimium correspondence to price moves of nickel remains almost unchanged at 0.68. Aluminium connection to Standard Poor's SP 500 (SPX) edged up to 0.64 on Friday as
Energy commodities continued to tumble on Friday with Dow Jones-UBS Energy Index falling by 0.56. Crude oil erased gains occurred in the beginning of the week and closed on Friday with 2.8% decrease. Crude oil mainly was impacted by easing tensions between Iran and Western economies, by raising US energy stock levels and by credits cuts in the Euro Zone.
Sugar faced sharp decline in the correlation with other agriculture commodities and the pair EUR/USD in the beginning of the year as sugar price was growing on China's plans to increase its sugar stockpiles. At the same time, link with wheat, coffee and corn improved this week after mass fall in the commodity group prices caused by the US crop
Agriculture commodities tumbled on Friday following fall in grain commodities after the US crop report indicated higher than expected stockpiles. Even adverse weather conditions in South America were unable to limit the losses. Sugar futures were the most resilient edging down only 0.11%. However, sugar continues to face downward pressure from higher than expected output in Brasilia and Russia coupled
Gold's ties with silver and platinum remained stable over the week while yellow metal's connection with palladium has stayed relatively low at 0.53. Gold's correlation with palladium faced sharp fall since the beginning of the year as palladium tends to move closer to industrial metals and performance of automobile industry. Gold's interdependence with Bent oil stayed at about 0.59 over
Precious metals, except for palladium, tumbled after Standard & Poor's downgraded credit rating of nine Euro Zone members on Friday. Silver and gold were among the top losers while palladium gained 0.31% indicating its resilience to economic outlook on the Euro Zone. Investors' sentiment also was dampened by the Shanghai Gold Exchange decision to raise margins and daily trading limits
The correlation between two dominating Asian market indexes Nikkei 225 (NKY) and Hang Seng (HI) recovered on January 16, as coefficient jumped to 0.48, after both indexes sharply fell. The link between Japanese benchmark and Shanghai Composite (SHCOMP) also retreated from negative area and reached 0.01. The correlation between Nikkei 225 and USD/JPY currency pair jumped from minus 0.3 to
Carnival Corp. experienced a sharp drop in share price on Monday trade in London after Costa Concordia ship suffered in crash near the cost of Italy where 5 people died. Company's equities lost 20% and Morgan Stanley downgraded its shares from overweight to equal predicting Carnival Corp. may suffer further loss if investigation proves failure of meeting safety standards.
Japan's Nikkei Stock Average tumbled 1.43% or 121.66 points closing at 8,378.36 on Monday, with all 10 industries posting losses after S&P ratings agency downgraded 9 Euro Zone nations including France and Italy. European demand-exposed producers and financials faced the biggest drop as Mazda Corp. edged down 3.1%, and Sony Corp. lost 2.3%. Nomura Holdings Inc. declined 2.8%, whereas Mitsubishi
Hang Seng Index (HI) faced weakening link with gold (GOLDSH) commodity as both assets moved in the opposite directions in each of the last four trading sessions suggesting gold is more demanded when securities face uncertainty. The link between Stoxx Europe 600 Index (SXXP) and Hang Seng Index (HI) kept strengthening on Friday, approaching 0.25 though it still can be
Hong Kong's Hang Seng Index fell sharply on Monday as investors anticipated news that S&P agency cut France's AAA rating and downgraded 8 other European nations. Decline was boosted also by Greek battle to cut their debt. Hang Seng Index lost 1.0% or 192.22 points and finished at 19,012.20 led by insurance companies. China Life Insurance Co. tumbled 3.3%, while
The link between Dow Jones Index (INDU) and Hang Seng Index (HI) strengthened on Friday, approaching 0.48. In contrast, the relationship between US blue chip index and German DAX index deteriorated from 0.62 to 0.57. Meanwhile the correlation coefficient between Dow Jones and EUR/JPY currency pair climbed, reaching 0.65. The link between Brent oil (CO1) and blue chip index slightly