Asia Markets Face Tough Times as Beijing and Tokyo Plea for Calm

Asian stock markets started the week with no clear direction in the absence of Tokyo closed for a holiday. In Hong Kong, the Hang Seng remains close to balance (+0.1%), while the Shanghai Composite lost 1.1%, and 0.3% yield in Seoul. For its part, the Taiwan Stock Exchange advance 0.3%, 0.5% and Sydney wins Singapore at 0.2%. Only the Bombay Stock Exchange is characterized by an increase of 0.8% after the announcement by the government-shock of opening up the Indian market to foreign competition in the distribution and air transport.

After the relief provided by the Fed on Thursday night (purchase of $ 40 billion per month of mortgages securitized), investors find some caution against a still uncertain global economic situation. On the foreign exchange market, the dollar continues to erode at a $ 1.3136 Euro (0.04% for the latter) in interbank trading in Asia, while the raw materials benefit from a deferral of investors to tangible assets. Gold gained 0.25% to $ 1,774 an ounce, while the WTI oil remains near $ 100 a barrel to $ 99.10 (+0.1%). On equity markets, the values ​​related to its popular base materials, including Sydney, hence the title BHP Billiton gained 2.9% and that of its rival Rio Tinto ahead at 1.7%.

The Tokyo Stock Exchange is closed, she could not respond to violent protests that erupted this weekend in 85 cities in China against Japanese interests. The tension between Beijing and Tokyo on the sovereignty of a chain of islands in the China Sea that both countries argue … Shops and production facilities and Panasonic Toyota Motors have been especially targeted and suffered damage … Yesterday, the Premier Minister of Japan Yoshihiko Noda asked Chinese authorities to ensure the safety of its citizens and its economic interests …

In addition, Hong Kong property companies are struggling this morning after the government announced measures to calm speculation in the property market of Hong Kong, became the most expensive in the world, partly because of the influx of buyers from mainland China. Finally, in India, investors welcomed the government’s plan to allow foreign groups to intervene in retailing, while they were so far limited to wholesale. Foreigners may also acquire a minority stake of up to 49% in the capital of Indian airlines, announced Prime Minister Manmohan Singh. Among the most spectacular movements observed this morning in Bombay, the action of the distributor Pantaloon Retail India jumped by over 17% and Kingfisher Airlines, a private airline in financial trouble, jumped nearly 20%!

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Markets Look To Halt Declines In Early Wednesday Trading

The U.S. equity markets limit their decline Wednesday after the release of a higher-than-expected promises of home sales in the United States, a good sign for the housing market.

To 11:30 am (New York time), the Dow Jones is stable at 13,102.6 points and the Nasdaq was down less than 0.1% at 3075.5 points, in volumes still anemic. Investors continue to limit their initiatives to 48 hours of highly anticipated speech of the President of the Federal Reserve in Jackson Hole.

‘Nervousness is probably the key word in today’s session, “said one trader. ‘The speech of Ben Bernanke approaching and investors are increasingly tempted to do nothing,’ he adds.

‘Who can blame them? Opinions are still very divided on the action of the Fed and everyone opts for an approach of ‘wait and see,” concludes the professional.

The trend has been boosted a bit later in the morning by the publication of promises of home sales for July, which rose 2.4% in July according to figures from the National Association of Realtors (NAR ).

By comparison, economists had forecast an increase of about 1% last month. The second estimate of GDP, published earlier in the morning, stood up to 1.7% against 1.5% in the first estimate, in line with expectations.

Still discovering the Fed Beige Book will be published in the second part of the session.

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Leverage Accounts Make Forex More Attractive

The popularity of Forex trading is partly due to margin accounts with leverage. Without this margin, currency trading would be out of reach of individual investors. Margin accounts are available to trade all types of markets on the rising or falling, you can trade online through a broker using CFDs, currencies with a forex broker, but also raw materials , indices, ETFs, precious metals etc. …

What is the margin and leverage?

Margin accounts allow you to control large amounts of money with a relatively small deposit. Opening a margin account with a forex broker allows you to borrow money to the broker to trade currency lots which generally have a value of $ 100,000. The maximum loan amount is determined by the leverage. A leverage of 100:1 means you can control assets worth 100 times more important to the filing.

With a margin account for 1% (100:1 leverage), so you can trade a standard lot of $ 100,000 for a $ 1,000 deposit. Trading with leverage increases both potential profits but also losses. The trader can quickly lose their initial deposit does not comply with strict risk management. Traditionally, brokers have a system that limits the maximum loss in the initial filing automatically closing positions if the loss is too great. This is called a margin call or stop out.

The benefits of leverage in a Forex trading strategy.

The advantage of the margin account is that it can make profits on small movements of the exchange market. It is possible to make gains even if the market is not very volatile.

Currencies are traded in forex with small units, sometimes up to 5 decimal places. The reference unit is the pip, it represents a variation of 0.0001, the fourth decimal place. For example, if you trade a lot of $ 100,000 on the EUR / USD each pip is worth $ 10. However, the value of a pip is different depending on the cross currency.

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Bank Of Japan Looking To Strengthen Position

Addressing risks to the global economy, the Bank of Japan is preparing to strengthen itself … While the debate continues in the U.S. and Europe on the roles of the Fed and the ECB, the BoJ is expected to announce new measures on 27th April, after its next meeting. The Vice-Governor and the Governor of the BoJ and have both confirmed for 24 hours to be ready to act, citing the latent risks of deflation in Japan, and the uncertainties surrounding the global economy, starting with the continuing crisis sovereign debt in the Euro …

The BoJ could announce such an increase in its share repurchase program of government bonds, currently set at 65,000 billion yen (614 bn), analysts said. The last intervention of the BoJ was in February, when it increased the amount of its programs of asset purchases.

Under the effect of these expectations easing, the price of yen fell slightly against the dollar this morning at 81.40 Y / $ (-0.16%). However, the Tokyo Stock Exchange remained insensitive to the new, the Nikkei is folding up 0.9% at the end of the session, dominated by great caution before a new bond issue Spanish scheduled for today Thursday …

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