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Showing posts from April, 2011

Week ended 29th April, 2011 – Currencies this week .

Chinese YUAN rose first time since 1993 to a level of 6.5 versus US$ .As I told in last week that there is a growing expectation that central bank will allow this appreciation to curb the rising inflation. Appreciation of YUAN is making the imports cheaper for China. Yuan’s weekly gain is the longest since 2008 as it gains 7th straight weeks.

Week ended 29th April , 2011 – Treasury this week

S&P cut sovereign rating outlook of Japan , saying that Japanese debt load will increase with the reconstruction needs . It looks to me something different from Japanese government statement . As in last week Japanese government said that they will not issue bonds or takes money from market for the Emergency relief package they have declared in last week . Japanese bonds rose this week as industrial production fell due to natural disaster and central bank cut the forecast of economic growth for year ending March 2012 . Thursday Japanese 10-year yield decreases to one month low level .

Which way Malaysia’s Klse is going ?

KLSE’s move is not clear now, it is doing side-based movements. Some technical indicators are indicating that it is not in  a overbought condition. It is moving with 50 day EMA. This is important to see that whether it breaks 50 day EMA.
It’s 100 days EMA is at 1510 level, is acting as good support. If it breaks the 100 day EMA then it will find solid support at 1480, which it has not able to break in last 6 months. But it looks to me that if it comes in 1480 level then it will make a bearish pattern. As you can see it in the chart. Though the pattern has not completed but there is a probability.
Now I want to compare the movement of KLSE with JKSE. JKSE’s movement in April was better in the upside.  As we can see in the chart that JKSE is carrying its up move since mid February 2011. But when I see the KLSE’s chart it is completely different picture.

Who is going to downgrade these Rating Agencies for life ?

Seeking to shape our destiny and determine the future of our children, somewhere I read that Greek prime minister said this in a Government website about the Rating Agencies.
Now if I go back in past, If I am not wrong, S&P, Moody’s, Fitch all maintained at least their “A” ratings on Lehman Brothers and AIG, up until mid-September of 2008. What happened next ? Lehman Brothers declared bankruptcy in 15th September 2008 and probably, U.S. government provided first bail-out to AIG in 17th September, 2008.

Remember year 2007, when Sub-Prime market and related Mortgage market collapsed in U.S. These rating agencies issued big ratings on those instruments which are later considered as Junk. Most of these Agencies have done same thing with Bear Stearns. What about Enron – rating agencies have waited months to say anything about it. There are lots of individual evidences though I do not have much data. One of my friend from U.S. suggested me if I need more then what about –  Wachovia Bank, C…

Rising Australian Dollar (AUD), is it a proud moment for Australia ?

Australian Dollar  is rising at an faster rate and now it is in all time high against the US$. If we look at the chart we can see that during the end part of 2008 it had started the run and it is still going. Though at $1.00 level it has faced some resistance but now it is in the highest level. If I am right AUD was freely floated around 1983 since then this is the highest level and it may go further.
Now Euro and Japanese YEN also rise lot, but if we compare them with AUD, then we can see that AUD is far ahead of them. To some extent Japan also depends on export. so in this scenario they have lot of commons. Commodity market is big for Australia, especially the export that it does in China & other Emerging nations is rising with the increase in manufacturing and production activities in these countries. This demand of commodities also helps to push up the price of the AUD. As moneys are coming so it will naturally push up the prices. Now due to rise in prices there will be rise in …

After Greenspan’s Housing bubble , now it may be Bernanke’s Treasury bubble ?

Few days ago IMF report said that U.S. need to tackle urgently the deficit in government finances. Now it is made-in USA, Standard & Poor, warned that credit rating of Government Debt could be cut by it. As such it down grades it’s out look from Stable to Negative, increasing the chance that rating could be cut within the next 2 years.

S&P’s concern was that two main political parties will not be able to agree on plans to reduce the increasing U.S. deficit. S&P also revised it’s outlook for 5 big insurance companies of U.S. to negative from stable. As we can  see some countries with their debt figuresNot only the problematic countries of Euro Area but U.S.Japan &  U.K. are also in or may be in future will be in trouble.

Week ended 15th April,2011 – Markets this week .

Inflation, downgrade in economic forecast and never-ending debt problem were the topics this week. IMF cut it’s forecast of economic growth in US ( 2.8% from 3% ) and Japan ( 1.4% from 1.6% ) this week. Japanese government also downgraded it’s assessment about the economy. This negative opinions about the economies were due, as I told many times in past. China’s quarterly trade deficit ( $1.02bn ) in 7 years, is clearly reflecting that why China is concentrating in domestic demands during couple of months.  Though for the month of march, 2011 they have reported a trade surplus of $140bn.

INDEX 15th-Apr-2011 4/8/2011-4/15/2011 4/1/2011-4/8/2011

DOW 12341 -0.31% 0.03% FTSE 5996 -0.97% 0.76% CAC 3974 -2.14% 0.17% DAX 7178 -0.54% 0.52% NIKKEI 9591 -1.81% 0.61% HANG SENG 24008 -1.59% 2.49%