InvestMacro FX

Source: ForexYard

Ongoing concerns regarding the prospect of Greece defaulting on its debt, as well as fresh worries regarding Portugal’s debt caused the euro to tumble vs. the US dollar in today’s trading. Investors once again reverted back to the safe-haven dollar as it became clear that the euro-zone crisis is far from over. Despite better than expected euro-zone manufacturing indicators, the EUR/USD once again dropped below the 1.3000 level. Although the pair is still well above its recent 17-month low, analysts are quick to warn that further negative European news could bring it down further.

Turning to tomorrow, euro traders will want to pay attention to the German Ifo Business Climate figure at 9:00 GMT. The indicator is forecasted to come in above last month’s, which if true, may help the common currency against some of its main rivals, like the JPY and CHF. At the same time, it will likely take significantly better euro-zone news before the EUR/USD is able to break the 1.3100 resistance level. Additionally, traders will want to note the results of the UK Prelim GDP figure. The results should gauge risk appetite in the markets, with a better than expected number likely to boost the euro.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Jan. 24 (Bloomberg) — Gavin Stacey, chief interest-rate strategist at Barclays Capital in Sydney, talks about Europe’s sovereign debt crisis and its implications for the region’s common currency. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 24 January 2012, 08:30 EST

WHOLESALE MARKET gold prices retreated to roughly where they started the week during Tuesday’s morning session in London, making a 1% drop from yesterday’s 6-week high to $1665 an ounce.

Silver prices slipped to $31.91 an ounce – a 1% drop on Friday’s close – as stocks and commodities also fell following news that Greek debt agreement remains elusive after yesterday’s Brussels finance ministers meeting.

“Key support [for gold prices] sits at the 200-day moving average, currently at $1643,” says the latest report from Scotia Mocatta technical analyst Russell Browne.

“Gold succumbed to profit-taking yesterday,” adds Marc Ground, commodities strategist at Standard Bank.

“The trend has continued into this morning, with the absence of Far East physical demand (due to Lunar New Year holidays) opening up the metal to further downside.”

European finance ministers have backed Greece in calling for private sector holders of Greek debt to take bigger losses.

Private sector Greek bondholders agreed last October to accept 50% losses as part of a bailout deal aimed at reducing Greece’s debt burden from 160% of annual gross domestic product to 120% by 2020. However, leaders now openly acknowledge that Greece’s efforts to reduce its deficit look destined to fail.

“It is obvious that the Greek program is off track,” said Jean-Claude Juncker, chairman of the Eurogroup of single currency finance ministers, following their meeting yesterday.

Greek finance minister Evangelos Venizelos has said he expects talks with private investors over Greek debt restructuring will be finished by February 1. His counterparts in other Eurozone governments meantime confirmed plans for a second Greek bailout of €130 billion should a deal be reached – without which Greece will be unable to repay €14.5 billion of bonds that mature on March 20.

“It seems as if we are far from an agreement,” reckons Yves Maillot, head of investments at French asset management firm Robeco Gestions , which oversees $6.8 billion.

“The problem of solvency of countries remains, along with the question of Greece. The market situation is fragile.”

Euro finance ministers also discussed stricter budget rules for European Union governments as well as the introduction of the European Stability mechanism – the permanent bailout fund now due to replace the temporary European Financial Stability Facility in July, a year earlier than originally scheduled.

Italy’s prime minister Mario Monti, along with International Monetary Fund chief Christine Lagarde, have called for the ESM to have an effective lending ceiling of €1 trillion. Germany, however, insisted it be capped at €500 billion – a proposal with which the Eurogroup agreed yesterday.

“I believe this is an important achievement,” German finance minister Wolfgang Schaeuble said of the meeting’s agreement.

“It demonstrates that the Euro group and the European Union as a whole is capable of taking the necessary steps.”

Germany’s manufacturing sector meantime has expanded this month for the first time since October, according to provisional purchasing managers index data released Tuesday.

Here in the UK, public sector net debt breached £1 trillion for the first time last month – equivalent to 64.2% of GDP – according to the Office for National Statistics.

The US on Monday imposed sanctions on Iran’s third-largest bank, Bank Tejarat. Any firm that deals with it will be locked out of the US financial system. Also on Monday, the European Union banned Iranian oil imports and joined the US in imposing sanctions on Iran’s central bank.

Monday’s actions “will deepen Iran’s financial isolation, make its access to hard currency even more tenuous, and further impair Iran’s ability to finance its illicit nuclear program,” said US Treasury Undersecretary David Cohen.

Earlier this month there were reports that sanctions imposed at the end of last year had led to Iranians buying gold as a currency hedge, and leading to concern among Iranian officials.

Japan meantime is expected to announce its first trade deficit since 1980 on Wednesday, the Wall Street Journal reports. The Yen has risen over 5% against the Dollar since the start of 2011 – and is up around 40% over the last decade.

Yen gold prices have risen by over 200% since January 2002 – compared to a rise in Dollar gold prices of over 450%.

“Gold is negatively correlated with the US Dollar,” says the gold investment statistics commentary from the World Gold Council.

“In periods in which the US Dollar depreciates, gold prices tend to rise.”

The report (which can be downloaded here (free registration required here)) notes however that the relationship is not symmetric, with the negative correlation often weakening when the Dollar is buoyant.

The report also comments that equity volatility rose faster than that of gold during periods of 2011 that saw extreme financial market stress.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By Paul Tracy, DividendOpportunities.com

Just a few weeks ago, we released our newest piece of research — The Top 5 Income Stocks for 2012.

These five high-yield stocks represent our favorite income ideas for the coming year, and they pay dividend yields of 7.0%… 8.8%… even 11.5%.

But there is one of these investments in particular I want to tell you about…

For years now we’ve seen the market rise one day, only to fall the next. Meanwhile, events considered to be “once in a generation” — credit crises, sovereign debt downgrades, and bailouts — are now happening with surprising frequency.

In short, the volatility has been unprecedented. But it doesn’t take a PhD to know that. What’s surprising, however, is how many dividend payers have not only held up in this environment… but have prospered. (I first told you about this phenomenon a couple of weeks ago.)

This includes one of our finds — Stock #4 of our Top 5 Income Stocks for 2012. This stock has simply ignored the turmoil.

I doubt you even know this company exists, despite it being vital to your day-to-day life. It owns pipelines, terminals, and storage facilities throughout the United States. These infrastructure assets ship and store gasoline, diesel, crude oil, and jet fuel. More importantly, the company has a monopoly on these assets — no one can simply come and build another pipeline to compete. That means its business is as steady as it gets.

In return for moving and storing these products, this company earns steady fees… that it then passes on to investors. Since going public in 2001, this company hasn’t missed a dividend, and it has increased the payment more than 35 times.

And if you’re worried about the ups and downs of the broader market, I don’t know if it gets much better than this stock — Magellan Midstream Partners (NYSE: MMP). Year after year it has delivered steady gains:

Keep in mind this chart shows just MMP’s share price. As I said, the company also pays a solid dividend. Right now the yield is about 5.0% based on quarterly distributions of $0.80 per share. In total, over the past decade MMP has returned 530% — an annualized gain of 20%. For comparison, the S&P 500 is up just 3% annually.

Of course, with investing there’s never a surefire thing. There’s no quality a company can possess that will guarantee its success going forward.

But Magellan obviously has a history of beating the market year after year without wild swings. Moreover, the partnership has $575 million in expansion projects underway to improve and expand its pipeline network. So with a steadily growing business, solid dividend, and commitment to returning cash to investors, we believe 2012 is likely to register as another market-beating year for MMP.

All the best,

Paul Tracy
StreetAuthority Co-founder

P.S. — Don’t miss a single issue! Add our address, [email protected], to your Address Book or Safe List. For instructions, go here.

Disclosure: Paul Tracy owns shares of MMP. StreetAuthority owns shares of MMP as part of the company’s various “real money” portfolios. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any “real money” model portfolio.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

Following yesterday’s bullish run for the euro, the currency will attempt to extend its gains in trading today. Investor confidence in the euro steadily increased throughout the day yesterday, as details of a Greek deal to restructure its debt were released. Should confidence in the euro-zone recovery continue, the common currency may be able to prolong its bullish movement in the coming days.

Economic News

USD – Greenback Bearish Ahead of Fed Meeting

Following the losses the US dollar took during the European trading session yesterday, investors will be eagerly watching for news out of the two-day Federal Reserve Policy Meeting scheduled to start today. The USD started off the week on a bearish note following an increase in risk taking due to apparent signs of a euro-zone economic recovery. The trend brought the EUR/USD above the 1.3000 for the first time in nearly three-weeks, while the AUD/USD shot up over 100 pips over the course of the day.

Whether the greenback will maintain its downward trend for the rest of the week will largely be determined by the results of the Fed meeting. While the Federal Funds Rate is not expected to go up when the indicator is announced on Wednesday, investors will be watching the meeting closely for clues as to when US interest rates will go up. Should the Fed decide to maintain its current policy of record low interest rates for the near future, traders will likely take it as a sign that the US economy still has a long way to go toward full recovery. Such an event may lead to further losses for the greenback.

EUR – EUR Sees Broad Gains, but Sovereign Debt Fears Remain

Following the gains the euro saw against most of its main currency rivals yesterday, including the British pound, US dollar and Japanese yen, traders will once again by eyeing any news out of the euro-zone for signs regarding the economic recovery. Today, a batch of French and German manufacturing data is likely to offer clues as to the current state of two of Europe’s leading economies. With all indicators forecasted to show at least slight growth over the previous months, the euro may be able to maintain its current trend.

While the long-term outlook for the euro has improved, analysts are quick to warn that the sovereign-debt crisis that has hit much of the EU is far from over. Traders will also want to note that other international news is likely to impact the euro this week. The results of the two-day Federal Reserve meeting, scheduled to start today, will likely generate heavy volatility for the EUR/USD pair. Should the Fed release news that US interest rates will go up in the near future, the euro may see downward movement as a result.

JPY – Yen Takes Heavy Losses against EUR amid Increased Risk Taking

The EUR/JPY pair shot up yesterday, following an increase in risk taking after positive euro-zone news was released. In addition to a significant drop against the euro, the JPY also turned bearish against other riskier assets like the Australian and New Zealand dollars. At the same time, the JPY was able to maintain recent gains against fellow safe-haven currencies like the US dollar.

Turning to today, yen values will likely be determined by the results of a batch of euro-zone news. While the euro-zone recovery is still very fragile, traders seem to be taking every opportunity to shift their assets toward higher yielding currencies, often at the expense of the yen. Should today’s news reinforce the notion that the euro-zone is on its way to recovery, the yen may resume its bearish movement as a result.

Gold – Gold Continues to Move Up Based on Positive EU News

Gold was able to maintain the bullish momentum it started late last week, following the release of positive euro-zone data which boosted risk appetite among investors. Typically, commodities such as gold move up along with riskier, higher yielding currencies like the euro. While the precious metal is up at the moment, analysts are quick to warn that any negative euro-zone news would quickly bring it down.

Today, traders will want to pay attention to a batch of euro-zone news which is likely to affect commodity prices. Positive data is likely to cause gold to extend its current gains. Furthermore, should the Fed signal any positive growth in the US economy at the beginning of their planned two-day meeting, gold prices may increase as a result.

Technical News

EUR/USD

Long term technical indicators are showing this pair in oversold territory, meaning that an upward correction could take place in the coming days. The weekly chart’s Relative Strength Index is currently at 20, while the Williams Percent Range on the same chart has dropped below the -80 level. Going long may be a wise strategy for the pair.

GBP/USD

According to technical indicators on the daily chart, this pair has breached the overbought zone, and could see a downward correction in the near future. A bearish cross has formed on the Stochastic Slow and the Williams Percent Range has gone above -10. Traders may want to go short on this pair.

USD/JPY

Technical indicators on both the daily and weekly charts are showing this pair in neutral territory, meaning that no defined trend is apparent at this time. Traders may want to take a wait and see approach for the pair, as a clearer picture may present itself in the near future.

USD/CHF

The daily chart’s technical indicators are showing that following last week’s bearish movement, the USD/CHF may see an upward correction in the near future. The Stochastic Slow has formed a bullish cross, while the Williams Percent Range is hovering in the oversold zone. Going long may prove to be a wise choice.

The Wild Card

NZD/JPY

Following the recent bullish momentum this pair has experienced, technical indicators are now showing that a downward reversal could occur in the near future. The daily chart’s Relative Strength Index and Williams Percent Range are both in overbought territory, while the Stochastic Slow has formed a bearish cross. Forex traders may want to go short in their positions today.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

January 23, 2012:  USD/CHF had broken the support of 0.9400 and went as low as 0.9307 (little below the next support level) and closed at 0.9345 for the last week. The recent low was just above January 4th’s low.

This was the first time since November 6th that USDCHF broke below the 55-day EMA level. On one side this price action makes the short-term outlook a bit negative even though the overall outlook stays bullish and we consider the recent move just as a correction/consolidation but the fact that the currency pair did not break below Jan 6th’s low of 0.9305 raises the question about further downward move. To expect further downward consolidation a break of 0.9305/0.9300 is required. On the downside if a strong break below 0.9305/0.9300 takes place then we would expect a good support in the range of 0.9200/0.9240. A move to 0.9200 will only be considered as the Fibonacci 38.2% retracement of the slow upward move during October 27th, 2011 to January 8th, 2012.

On the upside any strong break over 0.9410 and then a minor resistance near 0.9445 should make USDCHF to resume the upward move to retest 0.9596 and with a break over 0.9600, we would look forward to a move towards 0.9780, which represents the strong resistance during January 11th to February 11th, 2011. Any firm break over that should take the currency pair towards 0.9916 which represents, not only the strong resistance of December 8th, 2010 but will also start bringing in the psychological resistance of 1.0000 or parity.

The above outlook will stay good as long as USDCHF does not break below 0.9200. Such a break would start making our short-term outlook bearish to expect some more downward move towards the 0.9065/0.9090 level and then possibly towards 0.8965.

You may also check daily technical analysis of usd/chf and the weekend usdchf forecast at ForexAbode.com.

The Reserve Bank of India [RBI] held its repo rate at 8.50% and reverse repo rate at 7.50%, but cut the cash reserve ratio [CRR] by 50 basis points to 5.50% from 6.00%.  The RBI said: “In reducing the CRR, the Reserve Bank has attempted to address the structural pressures on liquidity in a way that is not inconsistent with the prevailing monetary stance. In the two previous guidances, it was indicated that the cycle of rate increases had peaked and further actions were likely to reverse the cycle. Based on the current inflation trajectory, including consideration of suppressed inflation, it is premature to begin reducing the policy rate.”

The Bank of Japan held its interest rate at 0-0.10% and made no changes to its 55 trillion yen quantitative easing program.  The Bank said: “Japan’s economic activity has been more or less flat, mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen.  As for domestic demand, business fixed investment has been on a moderate increasing trend and private consumption has remained firm.  On the other hand, exports and production have remained more or less flat, due to the slowdown in overseas economies and the yen’s appreciation as well as the remaining effects of the flooding in Thailand.  Meanwhile, although global financial markets remain under heavy strain, financial conditions in Japan have continued to ease.”

By MoneyMorning.com.au

Here’s a 100 billion reasons why space technology should be on your radar screen -especially if you’re interested in robotics.

According to the journal Nature, the Milky Way Galaxy alone contains at least 100 billion planets.

Now forgive me if I sound excited…but that is huge.

After all, just 20 years ago, astronomers still widely believed that our own tiny solar system contained all of the major planets.

So when I talk about how we are entering an Era of Radical Change, this is exactly what I’m talking about.

It’s not about tiny incremental changes but gigantic shifts in thought.

And here is something else to ponder…

With all of this new data, scientists now believe the universe may contain more than 150 billion galaxies. The math is enough to make your head spin.

All this brings to mind one key point: The odds that we are alone in the universe grow smaller and smaller every day.

That puts us on the cusp of a New Space Race – one that will undoubtedly favour robots.

That’s why I think NASA’s new Spidernaut is such an important piece of technology. It’s an eight-legged robot that looks like it crawled right out of a sci-fi movie.

NASA plans to use these robots to help construct a new generation of space-science platforms that are so large and fragile they’ll have to be built in orbit.

As it turns out, spiders are really nimble creatures. NASA designed the prototype arachnid robot to have the grace and weight distribution of real spiders.

If the technology works as planned, these giant spider robots would crawl across a “web” of space tethers so as not to damage delicate equipment.

Now how cool is that?

It all goes to show you that despite the soft global economy and budget cuts, we’ve actually never had more interest in space exploration.

But this time it’s not just the United States and Russia. Indeed, China, India and Japan are also funding major programs.

For its part, the United States plans to land on asteroids as early as 2016 using a robotic arm to scoop up samples that the spacecraft will bring home to earth.

We also will send a manned mission to Mars, where the plan is to build at least some type of base. It’s why NASA launched a new robotic vehicle last November expected to land on Mars in August. Roughly the size of an SUV, the robot has 10 “eyes,” a six-foot robotic arm, and is nuclear powered.

At the same time, we have a new generation of space entrepreneurs. That’s why I keep track of Microsoft Corp. (Nasdaq: MSFT) co-founder Paul Allen and Sir Richard Branson of Virgin Galactic and their space tourism companies.

Don’t get me wrong. While I find the prospects for commercial space travel exciting, my experience tells me investors will have a much better chance to make money on robotics.

First of all…here on earth, airlines struggle to break even. Several have gone bankrupt.

So if an airline can’t cope with the high costs of jet fuel, how can a company launching rockets for a limited number of tourists be any more profitable?

It just doesn’t make sense.

As for robots, these businesses manage to touch the entire technology supply chain. From software to artificial intelligence to sensors to chips, robots employ all of these things.

So, even if we can’t find a robot company that justifies a direct investment, we will find numerous opportunities with key suppliers. That’s why I think the future of space travel is actually going to ride on robotics.

But don’t take my word for it…

Just ask the senior execs at Google Inc. (Nasdaq: GOOG). They obviously believe in the future of spacebots.

In fact, Google will award $30 million to the first team that can land a robotic vehicle on the moon.

To take home the prize, the bot must travel more than 1,600 feet on the surface, then send hi-def images and video back to earth.

It’s called the Lunar X Prize, and twenty-six privately funded teams are now vying for the reward. And don’t think for a minute this is some kind of gimmick.

After all, it was the Ansari X Prize that provided a huge amount of support for the New Space Race and upcoming commercial travel. And that prize was worth only $10 million!

And remember, when it comes to actually working in hazardous environments like other planets, nothing beats a bot. It doesn’t need oxygen, food, or coffee breaks. It doesn’t get homesick for its loved ones.

Also consider that new technology promises to keep robots steeped in the latest tech changes, greatly expanding their life spans.

For instance, reprogrammable chips will provide instant upgrades so the robotic hardware lasts longer. We’ll beam software patches via satellite so robot “brains” remain rich in new knowledge.

And robots will give us incredible economies of scale…

In the near future, we’ll have automated factories in space or on other planets building the robots needed for exploration, experiments, mining, and helping humans.

An arm of the Pentagon known as DARPA wants to recycle dead satellites worth some $300 billion. To do so, it also is pushing advanced robotics.

Thus, the federal government and private industry agree on one key fact about the future – to conquer outer space, they need to invest heavily in robotics.

So, keep your eye on space technology. Eventually, it will earn robotics investors rich returns.

Michael Robinson
Defence and Technology Specialist, Money Morning (USA)

Publisher’s Note: This article originally appeared in Money Morning USA

From the Archives…

Are ASX Energy Index Stocks Worth The Risk?
2012-01-20 – Aaron Tyrrell

Why the World Bank Wants Your Money
2012-01-19 – Kris Sayce

Could $50 Billion In Unpaid Credit Card Debt Drag Aussie Bank Stocks To A Record Low?
2012-01-18 – Aaron Tyrrell

The US-China Power Struggle… and What it Could Mean For Oil and Australian Energy Stocks
2012-01-17 – Dr. Alex Cowie

How Global Oil Supplies Could Fall 40% Overnight
2012-01-16 – Dr. Alex Cowie

100 Billion Reasons To Invest In Space Technology and Robotics