Read the Daily Market Report from Dave Evans, Professional Trader
Markets slip back as Cyprus vote delayed again Morning Report: 08.30 London
• Markets made a good stab at recovering some of yesterday’s losses, but momentum is stalling this morning. The parliamentary vote on the bank levy is to be delayed by another day in Cyprus as the President attempts to balance the competing demands of small investors and one of its largest investors – Russia. In the original deal, small investors were to be charged a 6.7% fee on balances, while investors with 100k+ would be charged 9.9%. There is talk of the levy on smaller investors being reduced or removed, but there is some analysis that suggests that this part of the levy is required to help make the ‘maths work’. Adding too much of the burden on richer depositors risks angering wealthy Russians who hold a substantial amount of cash in Cyprus. Russia holds a potential trump card in this as they were set to ease conditions on a €2.5bn loan that has been keeping the government afloat. •So while Cyprus may indeed be an isolated case, the ECB/IMF have not exactly covered themselves in glory and have potentially shifted perspectives on what is possible when envisioning worse case scenarios.
• The dollar index is back on the rise this morning as traders shift back into risk averse positions. The New Zealand and Australian dollars are the biggest fallers, while the EUR/USD drops back again.
• This morning we have UK CPI and RPI due at 09.30, with both expected to rise. At 10 we have German ZEW economic sentiment.
• At 12.30 we switch to North America with Canadian manufacturing sales and US building permits.
Bet Idea:
• After yesterday’s rally blew off some of the excessive selling, markets could be set for a more sustained bout of negativity, especially if the Cyprus vote is delayed further.
Markets slip back as Cyprus vote delayed again
Morning Report: 08.30 London
• Markets made a good stab at recovering some of yesterday’s losses, but momentum is stalling this morning. The parliamentary vote on the bank levy is to be delayed by another day in Cyprus as the President attempts to balance the competing demands of small investors and one of its largest investors – Russia. In the original deal, small investors were to be charged a 6.7% fee on balances, while investors with 100k+ would be charged 9.9%. There is talk of the levy on smaller investors being reduced or removed, but there is some analysis that suggests that this part of the levy is required to help make the ‘maths work’. Adding too much of the burden on richer depositors risks angering wealthy Russians who hold a substantial amount of cash in Cyprus. Russia holds a potential trump card in this as they were set to ease conditions on a €2.5bn loan that has been keeping the government afloat.
• So while Cyprus may indeed be an isolated case, the ECB/IMF have not exactly covered themselves in glory and have potentially shifted perspectives on what is possible when envisioning worse case scenarios.
• The dollar index is back on the rise this morning as traders shift back into risk averse positions. The New Zealand and Australian dollars are the biggest fallers, while the EUR/USD drops back again.
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• The yen pairs are also dropping back with the EUR/JPY retreating from the morning highs.
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Coming up today:
• This morning we have UK CPI and RPI due at 09.30, with both expected to rise. At 10 we have German ZEW economic sentiment.
• At 12.30 we switch to North America with Canadian manufacturing sales and US building permits.
Bet Idea:
• After yesterday’s rally blew off some of the excessive selling, markets could be set for a more sustained bout of negativity, especially if the Cyprus vote is delayed further.
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This could be bad news for the AUD/USD which could see further downside. A good way to play this could be a LOWER trade predicting that the AUD/USD closes below 1.0350 in 2 days time for a potential return of 129%.
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This is presented as an idea to stimulate fixed odds financial betting ideas and is not financial advice.
Summary:
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