Financial Spread Betting Update 30th May 2011

This week’s financial spread betting update is now available and can be read by clicking here.

With today being a Bank Holiday in the UK and Memorial Day in the US the markets are closed so the focus remains on what has been happening over the last few weeks.

We wrote last week about the inverse relationship between the dollar and commodities and stocks and said that moves in the dollar will impact commodities in particular and to a lesser extent stocks. We also wrote that in spite of the dollar rally that lasted 2-3 weeks, there was still a huge net short dollar position of some $20.1 billion. The past week saw new dollar weakness as the short-term counter trend rally fizzled out, and this for the most part benefited commodities.

We also wrote about the battle between “risk off” over “risk on” and that currently “risk off” is winning and is benefiting the Treasury markets. The past week has seen yields continue to fall, reaching new lows for the year and prices rising. This has followed from reduced inflation expectations, as the recent economic data has been poor, casting the so-called recovery in to doubt and possibly pointing to a double dip. With the end of quantitative easing ahead and the Greek debt restructuring debate, traders have lots to think about.

This week’s financial spread betting update begins with:

The week ahead is a shortened trading week due to the Bank Holiday in the UK and the Memorial Day Holiday in the US. The coming week promises to be an interesting one as there are a couple of key levels to be tested that could lead to a reaction one way or the other. The dollar has resumed long term weakness and this has been to the benefit of commodities..…

Good trading

Phil Seaton

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