AM Analysis
Bank Of Japan Did Not Hint At Any Additional Easing
Japanese shares have ended the day slightly higher after the Bank of Japan did not hint at any additional easing. Japanese policy makers have pointed to accelerating inflation highlighting the progress made in its bid to stamp out 15 years of falling prices. Significantly, the dollar remains bullish trading at a 2-month high. This is owing to the fact that most economists expect the U.S. Federal Reserve to further trim its bond-buying next week.
Gold remains firmly under the spotlight after analysts at Morgan Stanley lowered bullion forecasts once again. The 2014 target has been cut 12 percent to $1,160 an ounce whilst forecasts for 2015 have been reduced 13 percent to $1,138. Analysts have cited gains in equity markets - thus reducing the need for haven assets - and increased regulation as main factors contributing to gold’s weakness. The commodity fell 28 percent in 2013 signalling the end of a 12-year bull run as Federal Reserve policy makers decided to cut monthly bond purchases, the biggest fall since 1981.
– Lee Mumford
PM Analysis
Data Better Than Forecast
The major news in UK markets this morning was unemployment data being announced at 7.1%, 0.2% better than forecast and closing in on the forward guidance target of 7%; leading investors to speculate that a hike in interest rates may be approaching. The decline in unemployment by 167,000 is the largest decline since 1997 and at 7.1% unemployment is at its lowest level since 2009. After opening up for the day, UK markets reacted negatively to the figure with speculators driving the market into decline for the day. Expect further volatility for the rest of the week as investors look to position themselves and adapt to the better than expected numbers.
US futures are slightly down on the day as earnings season continues with Coach and IBM the latest to disappoint investors sliding 5.8% and 3.4% respectively. Blackberry’s decision to sell off most of its assets in Canada to raise cash saw its stock rise 2.7%, a welcome site after a year of struggles.
– Alex Conroy
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