Tag: spread trading

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Investors Struggle with Exceptionally Volatile Commodity Markets

Gold and oil seesawed in recent trading activity and finished mixed as pressure from end-of-month profit taking and mixed U.S. economic readings were countered at times by hopes for new central bank stimulus measures and big declines in the gasoline inventory.

Trading in most commodity markets was choppy, as investors adjusted their books for the end of an exceptionally volatile August, a month typically slowed by summer vacations. Arabica coffee and raw sugar futures on ICE eased back, tracking a setback in a wide range of commodity markets including grains and base metals. Note that you can speculate on coffee futures with FinancialSpreads.com.

Other financial markets, including global equities, were also losing ground with investors entering the month in one of the most bearish moods seen lately. Corn, soybeans and wheat also rose as investors in agricultural commodities focused on fundamentals such as crop yields.

Industrial commodities dropped after the figures, and traders and analysts said they would have fallen further except that the weak data made it more likely the U.S. Federal Reserve would launch a third round of government debt purchases, or quantitative easing, known on Wall Street as QE3.

Also in commodities, U.S. natural gas futures ended lower in recent trading activity, as East Coast power outages left in the wake of Hurricane Irene and moderating U.S. weather slowed overall demand and helped drive the September futures market to a soft expiration.

Hurricane Irene, which tore up the East Coast, left more than 5 million homes and businesses without power, but there are no indications of any serious damage to gas pipeline and power plant infrastructure.

The natural gas price declines came as comfortable supplies, a weak economy and forecasts for milder weather trumped concerns about a Gulf Coast storm.

CFD Trading and Spread Trading are financially geared trading products which entail a high level of risk. You may incur losses that are in excess of the original amount you invested. If you are trading through Spread Trading and CFDs, only speculate with money that you can afford to lose. Always ensure you fully recognise the risk involved when investing with these investment formats. Please be aware that Spread Trading and CFD Trading may not be suited to your investment needs. Where necessary, obtain independent investment guidance.

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US Dollar on Worries Over Flagging Economy

The dollar fell in recent forex trading activity after Federal Reserve Chairman Ben Bernanke stopped short of detailing further action to spur a flagging economy, though further losses could be limited ahead of key US jobs data.

Lately, weak data has fuelled concern the United States is in danger of slipping back into a recession and CFDs investors will look to upcoming data on personal spending, manufacturing and the labour market for clues about the health of the economy.

That should keep spread trading investors cautious about taking on risk and provide some sort of support for the safe-haven dollar. An expected drop in liquidity, due to a bank holiday in London and a hurricane that could affect parts of the US East Coast is also likely to limit risk-taking.

Bernanke, speaking in Jackson Hole, Wyoming in recent trading activity, said the Fed had marked down its outlook for the US economy and that the Fed would extend its September meeting to two days from one to consider its options. However, he also said the onus for boosting long-term growth prospects lay at the feet of the White House and the US Congress.

The Labour Department is due to release August US jobs data. Economists are looking for an increase of 80,000 jobs, with unemployment steady at 9.1 percent.

In recent currency trading activity, the dollar jumped 2 percent versus the swiss franc and the euro gained 2.9 percent. Worries about the US economy and the euro zone debt crisis have boosted demand for the Swiss franc and Japanese yen in the last few months, prompting efforts by authorities in both countries to weaken their currencies.

In US data, new orders for long-lasting US manufactured goods rose in July, offering hope the ailing economy could dodge a second recession even though a gauge of business spending fell. Durable goods orders jumped 4 percent, the Commerce Department said, as demand for autos and airplanes surged, more than erasing June’s 1.3 percent drop. The rise was double economists’ expectations.

Financial Spread Trading and CFDs are geared types of investing which involve high levels of risk. You can incur losses that are greater than your initial stake or investment. Ensure that you only trade with money that you can afford to lose; always ensure you fully understand the risks. Note that Contracts for Difference and Spread Trading might not be suited to all investors. Where appropriate, seek independent advice.

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Gold Prices See Biggest Increase Since November 2009

Oil and industrial metals fell in recent commodities spread trading activity as US jobs data for June showed employers hired the fewest workers in nine months, making investors jittery about the outlook for raw materials demand.

In agricultural markets, corn, wheat and soybean prices rose as forecasters called for hotter and drier weather in the US Midwest.

Trading was volatile as investors took in conflicting signals about the global economy. The US Labour Department said nonfarm payrolls rose by 18,000, far fewer than the 90,000 new jobs economists had forecast and the weakest reading since September 2010. The unemployment rate rose to 9.2 percent, its highest since December 2010.

CFD trading investors were still fretting over the weak Greek and Portuguese economies, and gold was seen as a hedge against holding the euro.

Gold prices posted their biggest weekly rise since November 2009, achieved after weak US labour market data renewed fears about the health of the world’s biggest economy and spurred safe-haven buying. US payrolls growth ground to a near halt in June, as employers hired the fewest workers in nine months, frustrating hopes that economic growth would pick up pace in the second half of the year.

Instead, some CFD analysts and investors began speculating about how quickly a next government stimulus plan might be enacted in the United States, triggering safe-haven purchases. The dollar dropped against several currencies as the US jobs data strengthened expectations the US Federal Reserve would leave interest rates low into next year, prompting investors to embrace alternate safe-haven assets like gold.

A weaker dollar also often boosts dollar-denominated assets, such as gold, because of the advantage it provides buyers outside the United States.

Contracts for Difference and Financial Spread Trading are both financially geared forms of trading which do carry a high level of risk to your funds and you can lose more than the original amount of capital that you invested. You should always invest using capital that you can afford to lose. Before trading make sure that you fully recognise the risks. Spread Trading and Contracts for Difference Trading might not always be suited to your trading requirements. Seek impartial trading advice when appropriate.