Weekly Market Commentary
26th February 2012
Provided by TA Knowledge
Welcome to the Weekly Market Commentary from DGCX, providing you with a snapshot of what's happening in the energy, precious metal and currency futures markets.
The commentary and analysis included in the DGCX Weekly newsletter is provided by TA Knowledge, a leading UK-based provider of news and intelligence.
Please note that the observations and views expressed in this newsletter do not reflect the views of DGCX and are solely the view of the writer (TA Knowledge).
Economic Data Overview
Last week was one of the best news weeks for commodities, equities, bonds and beleaguered currencies in some time. Oil rallied aggressively on a combination of continued geopolitical concerns, positive economic data, hedging pressure and speculative interest. The worries sparked by Iran's nuclear program continue to have wide reaching consequences with international condemnation coming from the US and Russia. There also is the increased prospect of a pre-emptive strike by Israel to keep the status quo in the region, for the market to digest. All these facts also pushed gold prices higher. The US stock market closed at its highest level since June 2008, as the economy continues to improve and investors are willing to take more risk in search of both dividend yield and capital appreciation. The US bond market benefited by Fed purchases at the long end. Finally, Europe has a bailout deal with Greece and this helped most major western currencies rally against the dollar. The yen however continued to lose ground as the BOJ pursues active reflation of the Japanese economy. Another interesting week lies ahead, as a G20 response to Europe's progress on the bailout will be seen from their meeting in Mexico. This gathering should also update the market on their thinking about financing an additional IMF rescue fund. Inflation data is expected in Europe and the US next week. Another ECB tender on February 28 could see European banks awash with cash, as financial institutions are expected to ask for over €450 billion in funds. The destination for some of this money is likely to be sovereign bonds which will help keep yields low and also allow the banks to refinance their depleted balance sheets. A by-product of which will be more euro strength....Read more