Sunday, July 22, 2012


by Arne Treholt Vice-President of Business Development and Investments
After a string of good corporate quarterly results, US- factory activities contracted for a third straight month in July as new claims for jobless aid surged last week. The tech sector with companies as IBM, eBay and Google presented strong earnings and lifted the S&P to a two and a half month high. Nasdaq gained 0,80 %. Dow Jones ended also slightly up after a mixed session where earnings were fighting dismal economic macro news for attention, raising new hopes for an injection of economic stimulus.

Asian shares were down this morning after a strong week posting its biggest weekly gain since January. Oil prices reached a 8-week high as Middle East tensions stoked supply concerns. Brent crude traded close to USD 108 barrel and NYMEX jumped to 92 on fear that the serious internal situation in Syria might spill over and tempt an Israeli/American strike on Iran. The rally in soft commodities as corn and soybean continues. Copper prices, which have traded upwards this week, fall in Asia trade. Gold is steady on 1582.

The Euro zone crisis was back in focus as the German Bundestag discussed emergency aid for the Spanish banks. Spain has tried to distinguish between their 100 Billion Euro bail-out package for their struggling banks and the country’s sovereign debt. The debate made abundantly clear that the Spanish state in the end is fully responsible for support given to its bank through different EU emergency mechanism. The demands for austerity measures have created strong reactions in Spain with mass demonstrations in Barcelona and Madrid.

The Euro is under continued pressure falling towards the USD to 1.2258. The Euro fall to a record low level against the Australian dollar. USD/JPY is keeping up its high levels trading at 78,605. The Libor scandal continues. A group of banks investigated for interest-rate rigging, are looking to pursue a group settlement with regulators. This rather than to face a Barclays style backlash. Barclay settled with British regulators paying a USD 453 million penalty.

Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities.
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