Morning Call by Traders University

The FTSE closed down 102 points yesterday as the bad news regarding the Bank of America caused a large amount of selling worldwide. The 50ema provided support and the closed was 10 points under the significant number of 4,000. Today there are fresh concerns about the banking sector, and currently there are a large amount of first Quarter earnings being released so it’s likely that the markets will remain volatile for the short-term. In New York, the benchmark Dow Jones closed down 289.60 points after falling 200 points on the open finally finishing at 7.841.73, while the broader S&P 500 fell 4.3pc – the US indices worst day since March 5. The Chicago Board Options Exchange Volatility index – known as the “Vix” – which measures the volatility of the S&P500, rose by 15.1pc, its biggest one day gain since January 20. In FX related news yesterday we had AUD PPI q/q significantly lower than forcast at -0.4%. Being a heavy news week this week we have important GBP CPI and RPI y/y figures being released today - both expected to decline. We also have the release of the German ZEW Economic Sentiment which is expected to increase sharply from -3.5 to +1.8; important as a figure above zero is considered optimistic. The ZEW is a leading indicator of economic health as investors and analysts are well informed due to their occaption, and changes in their sentiment can be an early signal of future economic activity.