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The markets rebounded yesterday from early losses after the European session closed yet still closed lower as a reminder of the risk in the marketplace.  As European nations scramble to get their budgets under control, there is a essentially a “race against time” taking place as credit downgrades are looming and bond vigilantes are selling causing rates to rise.  The longer it takes to restore market confidence , the worse it is going to become.

But Germany continues to balk at the idea of Euro bonds or any solution that requires more of them.  Yet they continue to thrive despite the overall economic malaise Europe is facing, as evidenced by this morning’s better than expected PMI figures, with manufacturing coming in at 48.1 vs. an expected 47.5 and services coming in at 52.7 vs.

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Both the stock and contract for difference (CFD) markets are exciting markets that give individual investors access to the world’s stock markets with an exciting level of leverage and flexibility. The basic concepts are simple to grasp — when companies perform well, their stock price goes up, and when companies perform poorly, their stock price goes down. Along with stocks, CFDs offer incredible flexibility to investors. Here is some background information on how each of these markets work. The stock market Investors trade stocks — shares of ownership in a company — through stock exchanges. Before the rise of the Internet, stock exchanges were physical trading floors where investors, or their brokers, could get together and negotiate prices for the stocks they were looking to buy and sell. While many of these physical exchanges, like the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE) still exist, new Internet-based stock exchanges, like the NASDAQ, have developed. Full article…

Forex Overnight: USD trading higher The USD is trading higher against the EUR this morning, amid market expectations that data due to be released later in the day would indicate that U.S. non-farm payrolls increased in June. The JPY is trading 0.1% lower against the USD, while it is trading 0.1% higher against the EUR. At 6am, the EUR and GBP are trading 0.2% lower against the USD, at $1.4338 and $1.5947, respectively. The EUR is trading marginally lower against the GBP at £0.8992. The AUD and CAD are trading 0.1% lower against the USD, amid a broad rally in the USD, after yesterday’s robust U.S. private employment data raised expectations of a stronger recovery. UK Stocks: Likely to open higher U.K. markets are likely to open in the positive, with the FTSE 100 expected to open12 to15 points higher. Investors await the Producer Price Index. Bovis Homes Group, SIG, Big Yellow Group and iEnergizer are scheduled to report their results later today.

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Equity markets look to be heading for year-highs again, although little has changed in risk from a sovereign debt perspective in Europe. It may be prudent to pontificate your next move from the beach, if you’re in the Northern hemisphere, and wait for a trend in equity markets to materialize. The last ‘correction’ lower was blamed on Greek default fears and the lack of austerity willingness of the Greek population. Since the massive austerity package was passed in Greek parliament and EMU/EU/IMF agreed on further credit to keep the country above water, the equity markets have rallied again. Has that much fundamentally changed to support such an appreciation? Prices CDS prices indicate the ‘indebted’ status quo remains intact and worrying, see chart 1. Adding further concern is the triad of EU/ECB/IMF starting to run out of ammo. Credit agencies are not convinced the latest attempt is the final solution for Greece and threaten rating Greek debt as defaulted even with the help of the trio. Full article…

This market is quite risk happy as we head into a critical calendar shift in Japan and the end of the quarter for the rest of the world. Is there too much complacency out there or do we have the all clear for risk to rally further? Today we look at all of the critical event risks over the next couple of weeks and check the chart status on the major currencies.

I’ve just finished reading an interesting prediction on the US Dollar by Chris Vermeulen.   In this article, Chris connects his analysis of the Dollar to the stock and bond markets. He shows how everything is connected and seeing charts of the USD, the bond, and stock market one after the other really shows the interaction between all those markets. Even if you’re only into Forex at the moment, it pays to know what’s going on in the other financial markets.   As to the US Dollar, he makes a rather bold prediction. Check it out here:   Is the Dollar going to reverse its trend   <===   Chris doesn’t just talk about Forex and I like how he takes a more complete view on things. I believe that this is an approach that can help you understand more about the market, how it works, and maybe find new ways to judge the future direction of currency pairs.   By the way, he also offers some complimentary technical trading training which you may find useful whether you’re trading Forex, stocks, bonds, or commodities.

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