Larry1234

Updates Japan strengthens economic ties with Southeast Asia - Japan is reaching out to neighbors in Southeast Asia in an effort to overcome rising tensions with China that are hurting exporters. Japan's Finance Ministry said it will support neighbors' bond markets and help Japanese corporations raise capital in local currencies. Emergency monetary arrangements with Malaysia, Singapore and Thailand, which have lapsed, may be put back into effect. Hiring brings U.S. joblessness down to 4-year low - Unemployment in the U.S. fell to 7.5% in April, a four-year low, as employers hired 165,000 people, the Labor Department said. Between November and April the economy created an average of 208,000 jobs a month, considerably more than the 138,000 monthly average during the previous six months. Iranian inflation reaches 29.8%; IMF expects 1.1% GDP growth - The inflation rate in Iran declined to 29.8% between March 21 and April 20. The International Monetary Fund says it expects inflation to remain high because of a "sharp depreciation of the currency and adverse external conditions." The IMF predicts 1.1% growth in gross domestic product during the next year.

Updates - ECB trims key lending rate to record-low 0.5% Slowdown hits Chinese services sector Initial unemployment claims decline in U.S. Reserve Bank of India reduces key interest rate

This thread is created to discuss important updates on an economy. In this thread, folks are invited to post latest news on the economy which has an impact on the market. The news can be positive or negative to the market.

Please check my thread on china - http://www.traderslaboratory.com/forums/market-analysis/15927-china-bubble.html

As the Eurozone languishes in recession and unemployment reaches record levels, the European Central Bank (ECB) is toying with the idea of lowering interest rates. If it does so, it will be the first rate cut in 10 months. Things are not looking great in the region. Certain countries continue to remain on the edge of bankruptcy saddled with too much debt. As per an article on CNN Money, unemployment levels in Greece and Spain have scaled new peaks of above 27%. What is more, more than half of young workers under the age of 24 are out of work in both nations. Already, interest rates are hovering around zero; the latest rate being 0.75%. So what the ECB expects from an additional rate cut remains a mystery. The Eurozone has structural problems that it needs to address such as too much debt, poor growth and lack of job creation. Short term solutions such as interest rate cuts will hardly solve the problem as the past has shown.

Japan's monetary base soared to a record in April as the central bank's more aggressive quantitative easing program boosts the amount of money flowing through the economy. The central bank aims to roughly double the monetary base over two years by increasing purchases of government debt to end 15 years of nagging deflation. Under its new quantitative and qualitative monetary easing, the BOJ expects the monetary base to reach 200 trillion yen at the end of this year and then rise to 270 trillion yen at the end of 2014. ($1 = 97.3450 Japanese yen)

I guess, except Vegas, it is not Legal in USA . Right ???

Greeks are generally used by Portfolio manager, not by retails traders. Greeks are really useful in mitigating the risk of the portfolio. One of the strategy is Delta Hedge Strategy, which is very common and popular among them.

More Updates Fed is open to increased bond buying if economy falters Japanese monetary base expands to $1.54 trillion Italy and France back shift to growth-oriented policy Yuan strengthens to all-time high against U.S. dollar ECB is expected to reduce key interest rate

I guess spread betting is legal only in European countries, not in USA. Any idea ???

I believe its time to buy gold. But I am not sure about Apple.

I have been trading in options for the past couple of years and have created threads related to options in TL. I have posted basic option strategy. Kindly check my TL threads for more clarification on options.

The Bank of Japan maintained its unprecedented plan to boost money supply at a policy meeting today, and predicted inflation will almost match its target in two years even after a report highlighted deflation’s grip. BOJ Governor Haruhiko Kuroda’s faith that monetary policy alone will end more than a decade of deflation weighing down the world’s third-largest economy has run up against predictions of failure from former central bankers and ex colleagues from his Finance Ministry days. Policy makers may come under pressure to expand stimulus should prices continue to drop. “It’s unrealistic -- they won’t be able to reach their target in two years, or even in five,” said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo and a former BOJ official. Extra easing may be needed as early as October, when the BOJ releases new price forecasts, he said. Economic growth may be 2.9 percent this fiscal year, followed by gains of 1.4 percent and 1.6 percent, according to today’s forecasts. “We can expect more easing later this year if prices refuse to edge up,” Junko Nishioka, chief economist at Royal Bank of Scotland Group Plc (RBS) in Tokyo and a former BOJ official, said before the bank released its updated economic projections. “It’s imperative for the BOJ to clearly communicate its objectives to maintain expectations that prices will rise.” Matching Forecast The bank earlier this month committed to double the monetary base in two years, exceeding analysts’ estimates, through increased purchases mainly of government bonds, along with exchange-traded funds. The BOJ’s easing is pushing up property prices and is likely to lead to higher rents -- a key consumer-price driver. Prime Minister Shinzo Abe is also using his ties with business leaders to try to pressure companies to raise wages. Last year’s “sharp” price increases for gasoline, kerosene, and other energy-related goods mean Japan’s core consumer-price index will probably remain negative through at least this month. Exchange Rate The yen has retreated more than 3 percent against the dollar since the April 4 announcement of increased monetary easing, and is down about 12 percent this year. A more competitive exchange rate helped Sony Corp. Japan’s biggest television maker, yesterday report its first annual profit in five years. While South Korean officials have highlighted risks to their economy from a sinking yen. Kuroda and Abe’s government have portrayed Japan’s stimulus as a campaign to reflate the domestic economy, rather than to win a more competitive exchange rate. Stock Gain The Nikkei 225 Stock Average has soared 60 percent since mid-November, when it became clear that Abe would win office in ensuing national elections, giving him rein to overhaul the BOJ’s leadership and implement reflationary policies. Japan’s efforts to reflate its economy coincide with a slowing in some of its fellow Asian nations. Singapore today reported that industrial production slumped 4.1 percent in March from a year before. China last week said its gross domestic product rose 7.7 percent in the first quarter, capping the longest streak of expansion below 8 percent in at least 20 years. Elsewhere around the world, a report today may show the U.S. economy expanded at a faster pace in the first quarter. Growth quickened to a 3 percent annual rate from 0.4 percent in the final three months of 2012. Also due are indicators of consumer confidence in France and money supply across the euro area. In the Asia Pacific region, South Korean consumer confidence slipped this month, a report showed in Seoul.

Updates from other Sources Initial unemployment claims approach 5-year low - First-time jobless claims in the U.S. declined to 339,000 last week, close to a five-year low, the Labor Department says. U.K. posts 0.3% economic growth, dodging triple-dip recession U.S. regulator wants market pricing for Libor SSgA ETF focuses on emerging-market inflation-linked bonds

Traders, what strategy should be used in F&O Segment to trade for the month of May ?

Since 2000, Japan has managed to offset its shrinking labor force with increased worker productivity – at a rate higher than most other advanced economies. But, Japan’s productivity gains are soon reaching its limits and the nation must once again find new solutions to maintain economic progress a midst the world’s fastest aging population. A Major Rethink For Japan?s Age-Old Problem? | Economy Watch

Banks expect ECB to reduce main interest rate Report notes high default rate in mortgage-modification program Kuroda: Volatility won't shake BoJ from 2% inflation target Fubon plans 2 yuan-denominated bond funds in Taiwan

Check the below given thread - http://www.traderslaboratory.com/forums/market-analysis/16222-will-quantitative-easing-japans-savior.html#post178843 I have posted about the USD/JPY from long term point of view.

Folks are invited to discuss about the Japanese economy, their currency and their relationship. I recently came to know that Japan is back in the news because of its Quantitative easing and depreciating currency. Will Quantitative Easing Be Japan's Savior ? Lets discuss . Japan is the fourth-largest economy in the world. Issue - The country remains in a deflationary environment due to a variety of factors. Employment is down, the population is aging, the Yen (Japan’s currency) is weakening, and there is very little immigration into the country. Japan’s New Idea to tackle the issue The new idea is not new at all. More quantitative easing, but this time on a massive scale. The program, recently announced by the new governor of the Bank of Japan, Haruhiko Kuroda, is for a cash infusion of $1.4 trillion by the end of 2014. The hope is that this new round of QE will transform the economy from a deflationary environment to one of 2% inflation. Japan’s version of quantitative easing is 60% larger than the United States. But will it work? Much like in the United States, the armchair politicians and economists are hard at work debating the issue. Some believe that previous quantitative easing proved fruitless so there is no reason to believe that it will work this time. Even if it does work, Japan will be left with even more public debt. Its debt load is currently 214% of GDP with a quarter of the country’s budget going to service that debt. If this round of QE does create inflation, interest rates will rise. Others are supportive of the plan. The IMF’s Christine Lagarde said that the newly announced plan was a step in the right direction. Others applauded the effort as a big solution to a big problem. Impact on Currency Forecasts call for the Yen to continue weakening to 105 against the U.S. dollar by the end of 2013 and 110 in 2014. Market Impact Whether or not QE in the United States aided in the economic recovery will likely be a debate that lasts for decades, but nobody argues that the markets have seen considerable appreciation since the program was announced. Regardless of the reason behind the market rally, investors are betting that Japan’s markets will see the same effect. Actions to be Taken If this new round of QE does for Japanese markets what it has done for U.S. markets, a bullish position on the Japanese economy through equity, bond, or total market ETFs may be warranted. Currency traders may try to take advantage of the weakening Yen in the Forex market. However, investing in international markets is difficult for retail investors due to the relative lack of information available.

Growth in China’s important factory sector slowed in April, a closely watched monthly index released Tuesday showed, adding to concerns that the pace of overall economic growth in China may be faltering. The release is one of the earliest measures of business activity available for April and appears to indicate that an unexpected growth slowdown in the first quarter may be continuing into the second.

More updates - China's weak factory data send Asian-Pacific markets sliding Yield on Italy's 2-year note drops to historic low China sees slowdown in manufacturing expansion Speculation increases about Bernanke departure

Please read my posts related to Gold in the given below thread - http://www.traderslaboratory.com/forums/market-analysis/12054-gold-bullish-bearish-40.html#post178681

Gold has experienced over a 12% drop in recent days, and many investors are worried about what is going on with the gold price. Why is it crashing? Since gold's peak, it is down around 25%, official putting the commodity in bear market territory. Before I answer why gold is crashing, let's look back to gold over the last few years. Rewind back to 2008, when the financial crisis first began. Gold was trading at around $800. At this time, due to what was going on in the global economy, the US Federal Reserve began its controversial policy of Quantitative Easing (QE). Since QE was first implemented five years ago, it has expanded in the US, and been pursued by other central banks. Over this period, the logic for owning gold worked as follows: Due to QE, inflation is going up and paper money will lose its value. Thus, one should own gold, as gold cannot be printed and will therefore be a better store of wealth. And so, gold began its upward run, starting from $800 in 2008 and peaking at over $1800 dollars in 2011. In the space of 3 years, the gold price more than doubled as investors bought the commodity as a safe haven. Even with the most recent fall, gold is still up over 70% in the last five years. Why exactly is gold crashing? There is one major problem with the logic for gold going up over the last few years. I'm talking about inflation. Unlike many predictions, QE has not led to significant increases in inflation. Despite the Fed's many rounds of QE, US inflation is less than 2%. The Euro-zone's inflation rate is also under 2%. Japan, which has some of the loosest monetary policy in the world is actually experiencing deflation. India, despite a much tighter monetary policy and no QE whatsoever, has inflation at 6%. What is more is that most countries have seen a fall in inflation rates over the last couple of years. What this should tell us is that the link between QE and inflation is not as clear as we think. There is no evidence that more QE leads to inflation. So why is gold falling? Well, gold went up because people thought inflation was going to spiral out of control. That hasn't happened, and as a result gold is now retreating Maybe the better question we should ask ourselves is: Where is the inflation?

If there is a bubble in China, the immediate impact on the industries operating in china as a result, demand for commodities (used in industries) will reduce (copper, silver), which leads to a sharp correction in price. I would let us other impacts in my next post. I am in a hurry now.

IMO the bottom line is its very difficult (near to impossible) for an individual investor to earn abnormal positive return based on news based trading compared to big institutions because an individual investor do not have sophisticated technology (others factors also) to take the advantage of the same.