Binary Options Analysis – Asia Rallies, West Tumbles as World Awaits Bernanke

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Equities

Asian markets rallied, thanks to Wednesday’s US rally. In China, the Shanghai Composite soared 2.9%, and the Hang Seng climbed 1.5%. The Nikkei gained 1.5% to 8772, the Kospi rose .6%, and the ASX 200 jumped 1.1%.

In contrast, European markets tumbled in the late aftenoon, amid rumors of a possible short-selling ban in Germany. The German DAX closed down 1.7%, after falling as much as 2.7% earlier in the session. The FTSE shed 1%, while the CAC40 eased just .7%. Moody’s, Fitch and S&P all reaffirmed their AAA rating for German, rejecting rumors of a pending rating cut.

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A Flurry or Rumors Sends DAX Tumbling

The selling continued in the US, where the major indexes fell 1.5% or more. The Dow dropped 171 points to 11150, the Nasdaq sank 2%, and the S&P 500 lost 1.6%.

Bank of America shares rallied 9.4% after Berkshire Hathaway announced a it wold invest $5 billion in the company. Buffett’s vote of confidence for US banks lifted the sector, with Citibank gaining 4.9%, and Morgan Stanley rising 2.7%.

Apple shares eased just .7%, despite concern over CEO Steve Jobs’ retirement.



Treasuries and Commodities

Oil rose .3% to 85.42, and similarly. natural gas rose .3% to 3.93, despite a rise in supplies.

Gold stabilized after 2 days of steep declines, closing up .3% at 1762.80. Silver rallied 4.1% to 40.78, after falling more than 7% on Wednesday.



Currencies

Currencies continue to trade narrowly ahead of Bernanke’s speech on Friday. Amongst the movers, the Pound fell .4% to 1.6312T, and the Yen lost .3% to 77.31. the Euro settled at 1.4411, little changed from Wednesday. The Australian Dollar, and Swiss Franc also closed little changed.



Economic Outlook

Weekly jobless claims rose to 417K, 12K more than expected, although a strike by Verizon workers was responsible for 8500 claims last week.

Analysts painted a grim picture for the world’s financial outlook. UBS cut its growth forecasts for China, while Merrill Lynch warned that the chance of a US recession is as high as 80%.

Friday’s focal point will be Bernanke’s address from Jackson Hole. Investors will be looking for indications of how the Fed plans on tackling the slowing economy.

Due on Friday are GDP, corporate profits, and Consumer Sentiment.

Earnings are due from Tiffany, Big Lots, and Krispy Kreme Donuts.



Binary Options Trading analysis written by Bradley Welcher
 
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