The Risk Is On With Commodities Up And USD Down

Commodities continued to rise as investors move away for the safe-haven USD and look for higher-yield assets in risk on trading. Meanwhile S. Korean economy has grown at its highest level in several years for Q1 even with the tensions between their Northerly neighbor. Economic growth was 0.9 percent for Q1 as compared with 0.3 percent for Q4 of last year. South Korea’s gross domestic product stayed at 1.5 percent although investors had expected a rise of 0.7 percent. BoJ meeting tomorrow is widely anticipated by investors after announcing the aggressive plan to double up its asset buying program over the next several years. The Bank of Japan will announce its semi annual report which will give indications to inflation and economic outlook. Some believe that this may bring the USD to break through the 100 mark to trade at 110 against the JPY, this would be the highest level for the pair in almost five years.

Stocks

Asia
A real mixed bag with the Asian stocks in overnight trading. With two of the main markets closed the Japanese Nikkei 225 gained 0.14 percent. Some investors expect the Nikkei to attempt the 14,000 level today, this would be a five-year high for the index which has already gained 60 percent in the last half year.

The Hang Seng in Hong Kong gained 0.49 percent and the Shanghai Composite lost 0.77 percent. Goldman Sachs commented on the current attractiveness of the price of Chinese stocks. Public holidays in both Australia and New Zealand.

U.S.
US stocks closed slightly down yesterday with investors remaining cautious ahead of earnings reports. The DJIA closed down 0.29 percent, the S&P 500 was flat and the Nasdaq closed up 0.01percent.

Procter & Gamble earnings were lower than expected in Q3 sending its share price down. The consumer manufacturers earnings came in at $20.6 bn for Q3 which is under the expected $20.71.

A good day for Boeing who have a rosy outlook based on their Q1 earnings with earnings for Q1 at $18.89 bn which beats expectations of $18.81. Boeing commented that these strong reports came as a reflection of greater deliveries of the 737 and 777 airplanes.

Europe
A good day also for European stocks that closed higher yesterday, although investors sentiments dampened by the negative German business data which only increases expectations that the ECB will cut rates.

The EURO STOXX 50 gained 0.62 percent in afternoon session, French CAC 40 gained 0.71 percent and the German DAX 30 was up 0.50 percent. The German business climate data was at a four-month low this month at 104.4 from 106.7 in the previous month. This comes after other German reports for the manufacturing and service sectors which also show declines for the month of April.

Forex
Ahead of the BoJ’s monthly meeting on Friday the U.S. dollar was trading slightly down against the Yen in overnight session. The USD/JPY pair shrunk 0.05 percent to 99.47. Meanwhile the EUR against the JPY gained 0.19 percent to 129.79. The dollar is trading lower against most other currencies at time of writing. The EUR/USD was up 0.10 percent to 1.3031 even with the string of negative euro zone data yesterday. The GBP against the USD leapt 0.35 percent to 1.5321. The NZD also trading higher against the greenback as investors move away from the USD to currencies yielding higher returns. The NZD/USD gained 0.32 percent to 0.8505.

Commodities
There was high volume trading and another day of rises for the commodity markets with gold and silver both firming in U.S. trading and continuing to rise in the Asian session Gold up 1.49% and Silver gaining 1.58%. Crude Oil rose after it was announced yesterday that stockpiles in the U.S. were less than expected. Natural Gas continued to decline on warm weather reports and was 0.42% down

Today’s trading
Another busy day of trading ahead with all investor eyes on the UK GDP announcement this morning. An increase is expected which should provide a boost to the UK economy teetering on the brink of a triple dip recession and to the British Pound which has suffered in 2013. Later attention is switched to the U.S. and its key jobless claims driving U.S. trading.