Archive For "May, 2010"

NEW YORK (MarketWatch) — The dollar briefly extended gains versus the euro on Friday after Fitch Ratings downgraded Spain’s long-term foreign and local currency issuer default ratings to AA+ from AAA. “Spain so far has gotten off relatively easy,” said Win Thin, senior currency strategist at Brown Brothers Harriman. “The euro is of course taking it on the chin and has given up all of today’s gains.” The downgrade should remind investors that “the potential and risk is for more bad news to emerge from time to time and roil markets.” The euro bought $1.2320, from $1.2356 in North American trading late Thursday. The dollar index , which tracks the U.S. unit against a basket of six major currencies, rose to 86.503, compared to 86.305 late Thursday.

NEW YORK (MarketWatch) — Corporate bonds have posted small returns in May, especially compared to Treasury debt, and speculative-grade debt has dropped as fears about Europe’s ability to address its large debts fueled a massive shift towards the relative security of government debt and away from assets deemed riskier. Corporate bonds have slipped 0.94%, while high-yield bonds have dropped 3.83%, according to indexes compiled by Bank of America Merrill Lynch. Treasurys of all maturities have returned 1.42% in May. The extra yield that investors demand to hold corporate debt above Treasury yields has jumped in the last month. For investment-grade debt, the yield spread has risen this month to 202 basis points, or 2.02 percentage points, from 1.54 points, according to Bank of America. The speculative-grade yield gap has jumped to 6.99 percentage points from 5.51 points at the end of April. The Vanguard Total Bond Market ETF is up 0.81% this month. The iShares iBoxx $ High Yield Corporate Bond Fund has lost 5.54% and the SPDR Barclays Capital High Yield Bond ETF has declined 6.35%.

The Federal Reserve schedules the first “small value” auctions of term deposits that are expected to eventually grow into a tool for tightening monetary policy.

NEW YORK (MarketWatch) — The euro is falling in May for the sixth straight month versus the dollar, its longest string of monthly losses since spring 2000. The shared currency was first introduced in 1999. The euro is also on track for its biggest monthly drop since January 2009, down to $1.2333 in recent action on Friday, from $1.33 on April 30.

NEW YORK (MarketWatch) — Treasury prices stayed higher and the dollar crept up on Friday after the Federal Reserve said it has scheduled “small value” auctions of term deposits that are expected to eventually grow into a tool for tightening monetary policy. The euro bought $1.2324, from $1.2356 in North American trading late Thursday. The dollar index , which tracks the U.S. unit against a basket of six major currencies, rose to 86.503, compared to 86.305 late Thursday. Yields on 10-year notes , which move inversely to prices, fell 5 basis points to 3.31%.

WASHINGTON (MarketWatch) — The Federal Reserve announced Friday that it has scheduled the first “small value” auctions of term deposits that are expected to eventually grow into a tool for tightening monetary policy. The Fed stressed that the auctions are a matter of “prudent planning” and have no implications for near-term conduct of monetary policy. They may be seen by the markets as another baby-step toward the Fed eventually moving away from ultra-low interest rates. The first auction on June 14 will offer $1 billion of 14-day term deposits, the Fed said. The second auction will offer 28-day term deposits. The third will offer 84-day term deposits. Term deposits, designed like certificates of deposits, are a tool to soak up excess bank reserves. The Fed has signaled it may use large term deposits when it is ready to tighten monetary policy. The amount of term deposits for second and third auctions will be announced at later date. The Fed said it might add two more term deposit auctions later in the summer

Total personal incomes outpace spending in April, a signal that the economy could be on firmer ground, the Commerce Department estimates.

Detecting a trend is not hard if you clear your mind of emotion and look at what the charts are showing you. The easiest way I can explain it is this:

1) Look at the daily chart. Does the price go from the top-left to bottom right of your screen? If yes then we are in a long-term DOWNTREND. Does it go from bottom-left to top-right? If yes then we are in a long-term UPTREND.

2) Look at 4h chart. Does the price go from the top-left to bottom right of your screen? If yes then we are in a medium-term DOWNTREND. Does it go from bottom-left to top-right? If yes then we are in a medium-term UPTREND.

3) Look at 1h chart. Does the price go from the top-left to bottom right of your screen? If yes then we are in a short-term DOWNTREND. Does it go from bottom-left to top-right? If yes then we are in a short-term UPTREND.

If the price ever ends about where it started then the trend is mixed, meaning we are potentially in a range. The more times price bounces between support and resistance in a range the stronger that range is.

Choppy trading marks the final session of what’s been a tumultuous May for the currencies market.

NEW YORK (MarketWatch) — Treasury prices remained lower and the dollar turned back down on Friday after the final May reading from the Reuters/University of Michigan consumer sentiment was revised up to 73.6, helping U.S. stocks pare earlier losses. The euro bought $1.2360, from $1.2356 in North American trading late Thursday. The dollar index , which tracks the U.S. unit against a basket of six major currencies, slipped to 86.280, compared to 86.305 late Thursday. Yields on 10-year notes , which move inversely to prices, fell 3 basis points to 3.33%.