Cyprus Bailout Deal Rubber Stamped, Large Bank To Close

Investors waited impatiently over the weekend to see what would happen to the markets today, in the wake of the Cyprus situation. News today that Cyprus has managed to secure a bailout which avoids a messy exit from the Eurozone has boosted markets on positive market sentiment. European stocks jump up on the news.

Finance ministers at the EU finally agreed to a EUR10 billion bailout for Cyprus, which will see big losses of savers deposits of over the EUR100,000 threshold. It will also mean the closure for the nations second largest Bank, Laiki Bank. But on the upside for small depositors, accounts with less than EUR100,000 will be “fully guaranteed”. The deal closes last week’s uncertainties.

In the US investors wait in anticipation for a speech by Fed Reserve Chair Ben Bernanke today. He will be talking about lessons learned from the financial crisis.

Daily Analysis Assets:

Stocks

The EURO STOXX 50 rebounded to 1.15 per cent, the French CAC 40 climbed to 1.22 per cent and the German DAX leaped up 1 per cent. Also the Asian indices were pushed on the positive market sentiment with Japan’s Nikkei 225 gaining 1.37 per cent. The Nikkei is close to its highest high since Sept 2008. The Hong Kong Hang Seng moved up by 0.46 per cent and the Shanghai Composite crept up by 0.05 per cent. US stocks too were pushed higher on Friday with DJIA up 0.63 per cent, S&P 500 up 0.72 per cent and the NASDAQ up 0.70 per cent.

Forex

The USD moved up against the JPY today, taking away safe haven status from the Japanese currency. The pair touched 94.96 in overnight trading. The JPY also moved down against the EUR with the EURJPY gaining 0.30 per cent to 123.10. A wakened JPY signifies a rise in the worth of Japanese income overseas that will be repatriated.

The EUR was over a 1-week high today against the USD after the bailout agreement was rubber-stamped by the ministers at the Eurozone. The EURUSD pair touched 13048 in overnight trading, a gain of 0.29 per cent. The EUR was also up against the GBP and JPY with EURGBP gaining 0.20 per cent to 0.8546 and EURJPY gaining 0.58 per cent to 123.46.

NZD crept down against the USD today as the pair hit 0.8338 in Asian trading session.

Commodities

Copper undid gains this morning to trade at $3.454 a pound for May delivery. Crude oil is trading at almost a 1 week high as news from Cyprus fueled investors taste for growth assets. The Crude oil this morning was trading at $94.11 a barrel which is a 0.4 per cent gain on the previous day. Meanwhile gold was fluctuating slightly between gains and losses this morning as news in Cyrpus prompted ivnestors to move into riskier assets (stocks and industrial commodities) and away from safe haven assets (USD, JPY and natural commodities). Gold for April delivery was priced at $1607.85 troy ounce.