Binary Options Analysis – Banking Shares Tumble in Europe and US

SamTrader1

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Equities

Asian markets rose moderately in response to the Fed’s commitment to keep interest rates stable for a two year period. The Nikkei rose 1.1% to 9039, the Kospi gained .3%, and the ASX 200 rallied 2.6%. In China, the Shanghai Composite climbed .9%, while the Hang Seng jumped 2.3%.

The upbeat sentiment did not reach the West, where yet another heavy wave of selling battered equities. In Europe, the CAC40 tumbled 5.5%, the DAX dropped 5.1 and the FTSE declined 3.1% in a broad selloff, led by banks. Shares in French banking giant Societe Generale closed down 15% amid negative rumors over the banks financial health, dropping as much as 21% at one point. Moody’s reiterated its AAA rating of France, amid rumors that the country might be the next to have its perfect rating slashed.

US market dropped more than 4%, as fears over Eurropean debt crossed the Atlantic. The Dow plunged 520 points to 10720,the S&P 500 dropped 4.4% to 1121, and the Nasdaq slid 4.1%. The VIX soared past 40 as investor fear escalated rapidly.

Financial shares fell sharply, as Bank of America was downgraded by two separate firms. Bank of America fell 10.9%, Goldman Sachs dropped 10.1%, and Citigroup fell 10.5%,



Treasuries and Commodities

An auction of 10-year notes has a solid bid-to-cover ratio of 3.22 and a high yield of 2.14%.

The flight to safety continued, boosting Treasuries. The benchmark 10-year note gained 1 11/32 to yield 2.10%, and 30-year notes surged 2 12/32 to yield 3.50%.

Oil inventories unexpectedly dropped, boosting the energy sector. Crude oil gained 2.7% to 81.47, and gasoline futures jumped 3.5% to 2.76.

Gold continued its rapid advance, closing up $49 to 1792. Silver rallied 3.9% to 39.36, while copper fell 2.1% to 3.8875.

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Gold Soars, Touching $1800 an ounce



Currencies

The US Dollar benefited from global investor fear, as the Euro fell 1.4% to 1.4191, and the Pound dropped 1.2% to 1.6139. The Australian Dollar and Canadian Dollar, both fell 1.7%, as investors fled the risk-trade. The safe havens closed mixed, as the Yen gained .6% to 76.82, while the Swiss Franc decline .7% to .7266, following Tuesday’s rout.



Economic Outlook

Wholesale Inventories rose less than expected, a positive sign for the economy. Weekly mortgage applications picked up, thanks to a steep drop in interest rates.

Thursday’s reports will include international trade, and weekly jobless claims.

Earnings are due from Nvidia, Kohl’s, Anheuser Busch, and Nordstrom.



Binary Options Trading analysis written by Bradley Welcher
 
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