Posts Tagged ‘Euro’

COMMODITY WEEKLY COMMENTARY 13th – 17th September 2010

Silver along with gold once again shoot up last week as international prices tested $20 and $1255 respectively on COMEX division. Each time a rise in gold hits the headlines, it steals the limelight from silver. But this time silver has not only followed rallies in gold, but usually out performed, as can be seen in a fall in the gold/silver ratio. Prices went towards north last week as global stocks tumbled and the euro slipped on renewed fears about the health of the global economy.

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Base metals witnessed see saw movements as highly volatile currency market is rolling the prices in both direction. However, bias remained down side as fresh concerns about the health of the European banking sector fed a wave of risk reduction in the broader market and helped drag red metal (copper) prices away from four-month highs. Energy counter also remained under pressure as investor’s eye U.S economic strength and demand on fuel, while the dollar gains against a basket of foreign currencies amid the jittery sentiment. In other related news the dull hurricane season also limiting the upside in prices. The U.S. National Hurricane Center was monitoring three tropical systems in the Atlantic basin, one approaching the Caribbean Sea and two near Africa’s west coast. The NHC said cloudiness and showers over the Leeward Islands and northeastern Caribbean Sea were associated with Gaston’s remnants, but the system had just a 20 percent chance to become a tropical cyclone.

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Despite holiday’s shortened week, agro commodities witnessed active trading. After a noteworthy decline, oil seeds and edible oil counter was somehow able to cap the downside on the news of better soyameal export amid short covering in overseas market. Crude palm oil was also trading up. On the other hand upside was limited on the absence of fresh demand.

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Favourable weather and better outlook of crop shed the gain of wheat futures. Northward journey of maize futures supported by multi month’s higher prices in CBOT surprised the market players. Spices counter traded with downside bias moreover. Chilli, jeera, turmeric and cardamom were down on lower offtake in physical market. Turmeric futures were in complete grip of bears on lower demand in spot market. It touched multi week lows on NCDEX as well. It was only pepper in spices counter which propped up on fresh buying. Mixed sentiment in guar compelled guarseed to trade in slim spread whereas guargum was rangebound with upside bias.

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Chana continued to witness downtrend following lower demand in the domestic market.

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OUR Websites:  http://www.smcindiaonline.com,http://www.smccapitals.com,
http://www.smctradeonline.comhttp://www.smcwealth.com

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INDIAN RUPEE “SOUL TO A NATION”

We can start exploring this world’s history, present & future by several understanding & discovering symbols. On this eve of Independence, where the whole country is celebrating the Sixty four year of Independence, let’s take a look of how the country’s pride “The Indian Rupee” was designed & came into existence. The Indian rupee (sign: `, code: INR) is the official currency of India. The issuance of the currency is controlled by the Reserve Bank of India.

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The Walkthrough

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On March 5, 2009 the Indian government announced a contest to create a symbol for the rupee. During the Union Budget 2010 Finance Minister Pranab Mukherjee mentioned that proposed symbol would reflect and capture the Indian ethos and culture. Five symbols had been short listed, and the Cabinet selected the definitive symbol created by D Udaya Kumar on 15 July 2010. Kumar’s entry was chosen from 3,000 designs competing for the currency symbol.

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What does it depict?

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The symbol is a taken from the Devanagari ‘j’. It is a perfect blend of Indian and Roman letters — capital ‘R’ and Devanagri ‘Ra’. The parallel lines at the top (with white space between them) make an allusion to the tricolor Indian flag.

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Equality sign symbolizes the relativity of economy and balanced economy.

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Marked Existence

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With approval of new Indian rupee symbol, India has finally joined the privileged club of currencies, which currently has the US dollar, British pound sterling, Euro and Japanese yen. This makes India rupee the 5th currency in the world to have a clear distinguishing identity. The symbol will also be included in the Indian standard – Indian script Code for Information Interchange (ISCII).

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Adaptability

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Shiro Rekha (Uniqueness), Indian flag (Tri color), Harmonious with other currency symbols, Global and local appeal, Simplicity (High recall value), Familiar and easy to read, Easy to write & design, Easy to recollect and adapt , Blends with numerals, Balanced and Stable form, Unique & Dynamic design, Easy to implement.

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Meaning to a symbol is like Soul to a body. Psychologically, a symbol is an element of communication intended to represent repressed thoughts, feelings, or impulses & by which ideas are transmitted between people sharing a common culture. The symbol of Indian Rupee depicts one heart, one mind, one spirit, in tune with all elements. This symbol truly symbolizes our country, our tradition, our nation’s economy and its currency.

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Five designs that were short-listed by the jury and sent to the Cabinet for its approval. JAI HIND

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OUR Websites:  http://www.smcindiaonline.com,http://www.smccapitals.com,
http://www.smctradeonline.comhttp://www.smcwealth.com

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Commodity Trading :)

As you know we already have discussed about commodity trading but missed some of the points. So here we are discussing those points 🙂

What is a Trend in Commodity Trading?

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When prices are steadily moving higher or lower over a period of time it is considered as a trend. If prices are rising over time it is consider an uptrend. If prices are declining over a period of time then it is considered a downtrend.

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Reason behind following the trend is that prices are more likely to continue in that same direction than reverse. We can put the odds in our favor by trading this way.

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Tips on how to follow the Trend

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We can’t predict how high or low a market is going to move. Therefore, if we are following trends, we can catch some very profitable moves in the commodity markets.

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Two common ways to enter the markets when we spot a trend:

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  • Buy on a pullback. When the market is moving higher for ten days in a row, wait for a 2-3 day where prices decline and then buy.

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  • Buy when the market makes new highs. It is the hardest thing for many traders to do.

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Remember we should trade with the trend of the market to increase our chances of success. 🙂

What is Day Trading?

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Day trading is the process of buying and selling a futures contract(s) within the same day. Day trades can last for a couple minutes or sometimes they are held for most of the trading session. Day trading is not recommended for new futures traders since it takes a lot of knowledge, experience and discipline to day trade futures successfully.

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What are Futures Options?

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Buy or sell a futures contract at a designated strike price is the right of an option not an obligation. We buy options to bet on the price of a futures contract to go higher or lower for trading purposes. There are two main types of options – calls and puts.

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Calls –If we believe the underlying futures price will move higher we can buy a call option. For example, if we expect soybean futures to move higher, we will want to buy a corn call option..

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Puts –If we believe the underlying futures price will move lower we can buy a put option. For example, if we expect corn futures to move lower, we will want to buy a soybean put option.

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Benefits of Online Trading

Trading commodities online is almost a one-stop shop. Most online brokers will have real time quotes, charts, futures news, technical analysis programs and research available for their clients. This has opened the door for online traders to make more of their own trading decisions and implement trading strategies that once were not available to the average retail trader.

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If you are going to day trade commodities and futures, you definitely want to trade online, unless you have someone else managing your account.

SMC Comtrade Limited, a key constituent of SMC Group of Companies, came into existence since the very start of Commodity Exchanges in India. With nationwide presence, it is enabling the retail & corporate investors to diversify their portfolio and enjoy the benefits of trading in MCX, NCDEX & NMCE. Its highly appreciated research team guides the investors in making wise investment decisions for agri-commodities as well as international commodities.

SMC Comex International DMCC (part of SMC Group) is one of the initial, leading & experienced, clearing and broking member of Dubai Gold and Commodities Exchange (DGCX). It offers trading in Gold, Silver, Crude (WTI & Brent), Forex (INR, Euro, Dollar & sterling) and Steel Rebar Contracts.

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We provide various trading solutions to suit clients’ requirements. Our products are tailored to provide convenience to the clients & keep them satisfied. We offer Commodities Trading in offline mode as well as online mode; client can trade at the comfort of his home / office at any time using our platform.

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Which are the most prominent commodity exchanges across the world?

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  1. Chicago Board of Trade (CBOT )

  2. Chicago Mercantile Exchange (CME)

  3. New York Board of Trade (NYBOT)

  4. New York Mercantile Exchange (NYMEX)

  5. London Metal Exchange (LME)

  6. London International Financial Futures Options Exchange (LIFFE)

  7. The Tokyo Commodity Exchange (TOCOM)

  8. Kuala Lumpur Commodity Exchange (KLCE)

  9. Bursa Malaysia Derivatives Exchange.

Stay Tuned for more and more on this :)


However For More latest Industry,Stock Market and Economy News Updates,Click Here

CURRENCY FUTURE – BETTER FUTURE FOR CURRENCY TRADERS

There is good news for currency traders who would like to trade in currency futures. After trading in dollar-rupee futures, now corporate and retail investors will also be able to trade in currencies such as Euro, and Japanese Yen.

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Currently dollar-rupee futures are trading on three recognized exchanges, NSE, MCX Stock Exchange and BSE. But the currency derivative is liquid only on the first two bourses, which have together posted an average daily turnover of around Rs. 18,566 crore in December, up from a couple of thousand crore when the currency futures trading commenced in the second-half of 2008.

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NSE commenced currency futures trading in India on 29th August 2008. It has witnessed healthy growth in the turnover and open interest positions during its first completed month of currency futures trading in India.

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Brief of currency future

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Currency futures contracts are those contracts which allow investors to hedge against foreign exchange risk and traders to speculate on the movement in Currency. Since these contracts are marked-to-market daily, investors can exit from their obligation to buy or sell the currency prior to the contract’s delivery date.

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Major Profitable accounts

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The introduction of new currency pairs will go a long way in helping market participants, especially international traders, hedge against cross-currency Volatility and mitigate risk in export and imports across all major traded currencies and will add depth to the exchange-traded currency futures market.

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Along with the above mentioned participants, Currency futures trading in India has generated huge interest among Indian retail investors and traders.

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There is a strong demand for information gathering about the intricacies of currency futures from small investors and enterprises. For instance, entities that have borrowings in Euro will get one more avenue, apart from the over-the-counter market that is dominated by banks, to hedge them against volatility in the 16-nation common currency.

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Due to the transparent mechanism of execution in currency futures trade, increased participation by corporations and high net worth individuals, too, could be witnessed.

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Contract specification

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As in the case of the dollar-rupee futures, the contract size has been fixed at 1,000 units each for pound and euro, and 100,000 units for the yen, across 12 concurrently available contracts, one for each month.

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The contracts, like the existing dollar futures, would be cash-settled in rupees and the settlement price would be at RBI’s reference rate for all the four currencies.

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However, there are different initial margins (cash) that an investor needs to put up for trading each currency on day one and subsequently though this has not been changed for the dollar.

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The market regulator has also decided to modify the calendar spread margin to be applied on the dollar-rupee contracts.

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All the new contracts would be quoted in rupee terms, while the outstanding positions would be in the respective foreign currency terms.

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The maximum maturity of the contract would be 12 months, while all monthly maturities from 1 to 12 months would be made available.

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The contracts would be settled in cash in rupees.

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The client-level position limit has been capped at 6 per cent of the total open interest position.

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Responses:

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Market participants responded enthusiastically to the inclusion of these new currency pairs. The three new currency pairs clocked Rs. 1,98,761 contracts resulting from 7,762 trades at a total value of Rs. 1,277.13-crore on the NSE on day first, which is approximately comes out to be 9.61 percent of the total turnover in value terms. Out of the three new pairs, euro-rupee (EURINR) was the most traded currency pair clocking 1, 82,013 contracts.

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Total contracts and open interest in EUR/INR and GBP/INR:



First Traders inception of currency futures 🙂

The first trade in the new currency pairs was executed by East India Securities, IndusInd Bank executed the first trade amongst banks. Union Bank was the first PSU bank to trade and execute the single largest trade. ICICI Bank and State Bank also participated actively. This market has now become bigger than the cash segment of the equity market, which recorded average volumes of Rs. 20,000 crore last month.

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The beauty of exchange-traded currency futures are that they allow a participant to directly buy or sell the Dollar,Euro,Yen or GBP without having an underlying exposure, so it’s also a view-based market. One can take this opportunity of investing smartly in currency futures and gain by every tick.

Stay Tuned for More updates 🙂

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DOLLAR INDEX “BASKET OF CURRENCIES”

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. It is a leading benchmark for the international value of the US dollar and the world’s most widely recognized, publicly-traded currency index. The U.S. Dollar Index is the creation of the New York Board of Trade (NYBOT). It was established in 1973 for tracking the value of the USD against a basket of currencies, which, at that time, represented the largest trading partners of the United States. The baseline of 100.00 on the USDX was set at its launch in March 1973.

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Updated on………

USDX is updated whenever US Dollar markets open, which is from Sunday evening New York time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York time.

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Composition

It is a weighted geometric mean of the dollar’s value

compared only with:

·Euro (EUR), 57.6% weight                                    

·Japanese yen (JPY), 13.6% weight

·Pound sterling (GBP), 11.9% weight

·Canadian dollar (CAD), 9.1% weight

·Swedish krona (SEK), 4.2% weight and

·Swiss franc (CHF) 3.6% weight.

The importance of the trade weighted average between the currencies represents a more realistic asset value of underlying commodities than the actively traded dollar.

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Monitoring

By using the Dollar Index, investors can take advantage of moves in the value of the US dollar relative to a basket of world currencies or can hedge their portfolio of assets against the risk of a move in the US dollar in a single transaction. The rise and fall of the US dollar is said to be responsible for many movements in stock and commodity markets. When it looks like the US dollar is getting strong then there is a common conclusion that it will leads to weaker commodity prices.

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A Weak Dollar Can Make Commodities More Profitable

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Gone are the days when the simple fundamentals of demand and supply were used to predict prices. As rules of the game have been modified, the long-term trends are sometimes defined trend of dollar index. The increasing presence of index investors in commodities markets precipitated a fundamental process of financialization amongst the commodities markets, through which commodity prices now become the resultant of spillover effects of dollar index. Rising dollar eventually produces lower commodity prices. A falling dollar has the exact opposite effect; it is bullish for commodities. Importantly, as long as the U.S. dollar index continues to trend lower commodity futures markets are likely to continue to see their prices trend generally higher.

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The price of all US Dollar denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. So it’s quite possible, in fact it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the US Dollar. Sometimes that portion is insignificant. But often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing US Dollar value.

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Therefore, in order to determine commodity price trends, one needs to develop a comprehensive and holistic approach between U.S dollar index & commodities.

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Stay Tuned for More updates :)

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Weekly Update of The Market (08th-12th February)

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and  latest global business and industry updates.

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Weekly Update of The Market (08th-12th February)

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After starting the year on a good note & Indices making fresh highs within few weeks many Asian markets have corrected between 7 to 10%.

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The global sell off over sovereign debt problems in Europe and an unexpected rise in jobless claims in US put investors on the defensive mode.

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The anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the Euro & has led strength to US dollar.

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Foreign investors sell off is an outcome of dollar-carry-trade unwinding as when they borrowed the dollar was cheap & now it is recovering.

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Investors viewed the markets in year 2010 with confidence in view of recovery gaining momentum is now shaken over the debt problems, nascent economic recovery & confidence of the governments that stand behind the euro.

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Efforts of China to curb lending preventing overheating in economy also pose a risk to derail the global recovery.

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Back at home, the effect of turmoil in the international market also made government to think its strategy on ambitious disinvestment programme.

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🙂

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Lukewarm response to the NTPC, the much awaited issue managed to get subscription of just 1.2 times on its closing day.

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The maximum bid of 20.87 crore shares was put by Indian institution under the first time adopted French Auction route.

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This has challenged the finance Ministry hopes on the proceeds from disinvestments to make up the sliding revenue & rising expenditure.

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While it looks that PSU disinvestment may not yield desired results on market weakness, the 3G auction i.e. expected to garner Rs. 35,000 crore could be postponed to next fiscal year.

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The fate of some of the IPO’s like NMDC, Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation that are on the disinvestment agenda before March 31, looks tough to sail through, if the stock markets do not rise and big investors do not come back.

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On the contrary, Banks like Bank of Baroda & Indian Bank that were expected to raise money overseas have put now their plans on hold.

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The good news from the external sector continued as the data showed a 9.3% annual increase in exports in December to $14.6 billion, a second consecutive month rise.

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While imports increased by 27.2% from a year earlier to $24.75 billion.

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Food inflation remained at high levels & rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week on the back of rising pulses & potato prices.

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Markets are likely to take a closer view of the advance estimates on economic growth for the current fiscal ending March 2010 scheduled to be released on Monday.

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In the days to come an activity in the sectors like railways, fertiliser, textiles, pharma, education, power and infrastructure may be seen on expected positive policy announcements and budgetary sops.

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It was clearly mentioned last week that world markets are going in downtrend and one should be careful in such a scenario and that one should be moving in cash.

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Now the markets have taken a very sharp fall last week due to rise in Dollar Index and fall in all asset classes.

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🙂

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The coming week might see some counter rally from lower levels.

Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

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If we talk about commodity markets then one can see that strengthening dollar and lack of firm global cues had pressurized commodities prices to move southward.

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Investors are selling riskier assets and putting their money in dollar as a safe haven buying.

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Debt concerns facing Greece, Portugal and Spain coupled with dollar index which is trading above the mark of 80 is most likely to compel commodities to trade lower.

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French and euro zone GDP, USD advance retail sales, USD U. of Michigan Confidence will give further direction to commodities.

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Investors should keep an eye on gold – silver ratio.

It was 58:1 few months back, now reached to 67:1 on MCX, heading towards the level of 70:1.

It is demonstrating more selling in silver.

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🙂

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Stay Tuned for More on weekly updates.

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Economic Indicators – Leading the World Part 2

Hello Friends here we come up with an extension of our previous blog, ECONOMIC INDICATORS… “Leading the World” Part 1.

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Economic Indicators - Leading the World Part 2

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In previous Blog, we had touched upon the aspect like

what are Economic Events & Indicators and important sources of data provider for calculating & determining economic indicators.

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However in this Blog, we would try to know about the classified categories of Economic indicators in details and what is Time Era.

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Classified Categories:

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1. Leading indicators:

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These indicators are to forecast trends of the overall economy.

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The indicators included in the figure are:

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interest rate spread, M2 money supply, average manufacturing work week,

manufacturers’ new orders, S&P 500, average weekly unemployment claims,

vendor performance, housing permits, consumer expectations and

manufacturer’s new orders for non-defense capital goods.

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2. Lagging indicators:

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An indicator to generate transaction signals or to confirm the strength of a given trend.

It is a measurable economic factor, for example, corporate profits or unemployment that changes after the economy has already moved to a new trend.

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3. Coincident indicators:

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It provides information on the current state of the economy.

For example, coincident indicators move up when GDP is growing and down when GDP is shrinking.

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This indicator varies directly with, and at the same time as, the related economic trend.

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The four economic statistics comprising the Index of Coincident Economic indicators are

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– Number of employees on non-agricultural payrolls,

– Personal income less transfer payments,

– Industrial production,

– Manufacturing and

Trade sales.

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Time Era:

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Knowing when each piece of information will be released is important to successful trading.

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The economic calendars are found on many websites.

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These figures helps to decide how to trade using these events, it can help explain unanticipated price actions during those periods.

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These indicators play a vital role in determining the trend or movement of the stock market & the commodities futures.

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It has been seen many times that when a positive data of these indicators like GDP or Industrial Production comes into picture & looks promising,

the trade of currencies like Euro, USD, INR; precious metals like Gold, Silver, base metals of Copper, Zinc, Lead show a positive move & short-term rally immediately.

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Stay Tuned for more and more on this 🙂

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