Forex Blog by Greg Secker

On Friday, the FTSE 100 closed at 4,850.89 up 2.9% for the week. On Friday, the Dow Jones industrial average 9,505.96 up 1.98% for the week. On Friday, the Nasdaq Composite Index closed at 2020.9 up 1.78% that week. The S and P 500 index closed last week up at 1026.13 up 2.20% that week.

 

Governments around the world are still sitting on multi-billion dollar losses from their direct shareholdings in banks, in spite of a strong rebound in equity markets in recent months. In contrast to Switzerland (which sold its 9 per cent UBS stake last week) the world’s other large economies – except the US – are sitting on combined losses of $10.8bn relating to their holdings in the equity of listed banks they bailed out over the past 12 months. In the UK, the Institute of Chartered Accountants in England and Wales reports that UK business confidence has turned positive for the first time in 2 years, with the business confidence monitor (BCM) showing a record rise to +4.8 from -28.2.  This is the biggest quarterly improvement since the monitor began in 2003. The FT reports that London’s Aim market might have recorded one of its worst performances in 2008, but it appeared to have had little damping effect on the pay packages for directors. Jean-Claude Trichet; president of the European Central Bank, has rounded on his US critics over charges that he has been too cautious in his handling of the economic and financial crisis in the Eurozone, reports the telegraph. They accused Mr Trichet and the ECB of waiting too long to cut interest rates and being more cautious than the Fed in the way they attempted to stimulate the Eurozone. Mr Trichet defended his position that the ECB was guided by its primary aim, which was to deliver stable prices and to revive bank lending.

 

EUR/USD and GBP/USD trading lower in early European trade at 1.4320 and 1.6464, respectively. The JPY has weakened overnight, USD/JPY up at 94.80 from around 94.30 on Friday, while EUR/JPY is up at 135.81 from around 135.07. The JPY weakness comes with general risk appetite in good shape at the start of the new week, hopes growing that the global economy is coming out of recession. Asian stocks have made gains overnight.

 

This morning, Gold is at, 954.60 USD, Copper 289.85 USX and Brent Crude 74.61 USD. Steadily rising commodity prices and improving economic confidence are supporting oil and gas stocks hammered by last autumn’s unprecedented downturn, writes the Independent. China July copper imports fell 23% and coal prices are at their highest in a year as a drop in Chinese mining output has forced the country to import.

 

Due for release today, according to Greg Secker, there are the GBP Nationwide House Prices, CAD Retail Sales, CAD Retail Sales Less Autos and USD Chicago Fed National Activity Index.