Mute Reaction On Cyprus Deal

A rebound of Asian stocks in overnight trading alleviated investor concerns to the knock-on effect on Global financial markets. Trading was mixed in Asian session; ;low volumes were traded as investors remained cautious as a result of the Cyprus problem. Volume began increasing after positive Manufacturing data was released in China.

Meanwhile, in the U.S., the Fed reserve started its two day policy meeting. It’s widely believed that they will leave the monetary policy in place. Strong data came from housing starts and data, which leads to the belief that the U.S. economy is recovering.

Stocks Technical Analysis

Japanese markets are closed for a public holiday. The Hang Seng in Hong Kong gained 0.68 per cent, and the Shanghai Composite added 1.54 per cent. Meanwhile the Australian ASX 200 lost 0.60 per cent on the back of decreasing mining shares.

U.S. stocks yesterday closed mixed to higher, having rebounded from losses earlier in the session after investors realized that assets were not so sensitive to Cyprus uncertainties. Investors were fueled to find safe haven assets such as the dollar, which caused low trading volumes in the U.S. Stock markets.

By the end of the U.S. session, the DJIA closed up 0.03per cent, S&P 500 closed down by 0.24 per cent and the Nasdaq dropped by 0.26 per cent.

European stocks stayed down yesterday by the close of the European session, over the uncertainty in Cyprus. During late trading the EURO STOXX 50 fell by 0.33 per cent, the French CAC 40 dropped 0.51 per cent and the German DAX 3 crept down by 0.19 per cent.

Forex Technical Analysis

The EUR rallied after touching its 4 month lowest level against the dollar. This came after Cyprus rejected the EU savings levy. The EUR/USD pair moved up 0.21per cent after the USD strengthened on Cyprus troubles. Later in the session, the USD was pressurized and dropped against most of its counterpart currencies, except the YEN with the pair rising 0.16 per cent.

Commodities Technical Analysis

Crude oil managed to add 0.45 per cent and gold stayed unmoved in Asian trading. Silver gained once again, buoyed 0.29 per cent by the weakening USD in later trading. Natural Gas fell from its 17 month high perch and lost .29 per cent on the day.

Today’s outlook

German PPI expected today after Jobs and earnings releases in the U.K. Germany will hold its 10-yr bond auction. Later in the day, the FOMC statement is expected, as well as an address from Bernanke, who will be speaking from the US.