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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Commodity prices may add pressure to Asian markets

Article By: ,  Financial Analyst
December 14, 2011 11:09 AM

Continuing decline in commodity prices and weak leads from both the US and Europe may cause another down day in Asian markets today.

The S&P500 was 1.1% lower having fallen around 3.5% over the past few trading sessions. There doesn’t seem to be much chance of a Christmas rally this year as traders lighten up on trading volumes and take time away from what has been a very turbulent market.

In commodities, copper continues to decline, down another 4.8% overnight and breaking through the U$3.30/lb support level.

Gold is also lower, down to US$1574/oz. it might find some support at current levels but is definitely starting to look vulnerable.

In the currency market, the EUR/USD broke through 1.30 overnight and was last trading at 1.2985. The U.S. dollar currency index is back above 80, perhaps a sign of things to come in 2012.  Traders will be mindful of movements in the dollar and the impact this has on all other markets, including commodities like gold and silver which are essentially a currency play.

Markets are also closely watching the situation in India – one of the important BRIC pillars. Prime Minister Manmohan Singh predicts GDP will grow by 7.5% in the year ending March 31, 2012 while inflation will cool to between 6-7%.

His comments might be perceived as being a little too optimistic. Once the global economy recovers, he hopes for GDP to rise to 8.5%-9% trend growth but exactly when that will happen remains the big question in traders’ minds. Until then, policy response will be closely watched, as is the case in China.

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