BinaryOptionStrategy Daily Analysis – Massive Earthquake Sends Yen Higher

SamTrader1

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In Asia news of a devastating earthquake in Japan late in the day, sent markets lower. The Nikkei sank 1.7%, while futures kept falling after the close. The Kospi fell 1.3% and the Hang Seng closed 1.6% lower. In China, CPI data showed inflation was at 4.9%, slightly higher than expected. The Shanghai Composite slipped .8%.

European markets eased as European leaders met to address sovereign debt issues. The FTSE slipped .3% to 5829, while the Dax sank a more pronounced 1.2%. Insurers fell, as the earthquake’s monumental damage will cost the industry billions.

The Dow rose 60 points to 12044, and the S&P 500 rose .7% The market’s reaction to the crisis in Japan was muted.

Ann Taylor shares surged 12.7% on strong earnings. Apple launched it’s Ipad 2 on Friday.

Treasuries and Commodities

Bonds fell, as concern mounted that Japan might need to dump treasuries to raise cash. The 10-year note eased 13/32 to yield 3.41%, and 30-year notes dropped 27/32 to yield 4.55%.

Oil prices ended down 1.5% at 101.16, despite protests in Saudi Arabia. Natural gas rallied 1.5%, and gasoline fell 1%, as the energy sector lacked direction.

Gold gained .7%, rising to 1421.80, and silver jumped 2.5% to 35.935. Copper rose .2% to 4.2075.

Agricultural futures were mostly lower, with wheat dropping 2.9%, and corn down 2.7%.

Currencies

The yen swung wildly, initially spiking to 83.25, and then dropping to 81.63, before settling at 81.89. The yen trades relative to the dollar, so a move down indicates a rise in the yen’s value. The massive rebuilding necessary in Japan will require huge amounts of funding, and traders are are betting the huge influx of cash will come from foreign currencies.
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Yen Surges Following Earthquake

The Euro ended down .1%, recovering in the afternoon from a morning selloff. The Pound fell .0120 to 1.6080. The Canadian dollar had a very wide range, jumping from .9690 to .9800 only to reverse down to .9711.

Economic Outlook

Consumer Sentiment fell to a 5-month low, while business sales rose 2% and business inventories roes .9%. Retail Sales rose 1%, as expected by analysts.

The staggering disaster in Japan will remain in focus, and is likely to have a direct impact on the treasury and currency markets.

We wish the very best to the People of Japan, and hope they remain safe.

By, BinaryOptionStrategy.com
 
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