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kenny1703 (< 20)

May 2011

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The Learn About Futures Insider : Japanese Yen

May 27, 2011 – Comments (0)

This Eastern Asian currency is one of the most widely traded currencies in the foreign exchange market, second only to the US Dollar and Euro, according to trading surveys. The official national currency of Japan, the name yen means "round object". The following contract specifications will refer to the Japanese Yen/US Dollar contract from the foreign exchange futures listings from the CME Group.

Contract Size: 12,500,000 Japanese Yen

Price Quote & Tick Size: $.000001 per Japanese yen increments ($12.50/contract). $.0000005 per Japanese yen increments ($6.25/contract) for JPY/USD futures intra-currency spreads executed on the trading floor and electronically, and for AON transactions.

Contract Months: March, June, September, December

Trading Specs: Open outcry is 7:20 a.m.-2:00 p.m. and Globex hours are Sundays: 5:00 p.m. to 4:00 p.m. Central Time (CT) next day. Monday through Friday: 5:00 p.m. to 4:00 p.m. CT the next day, except on Friday - closes at 4:00 p.m. and reopens Sunday at 5:00 p.m. CT.

Daily Price Limit:  Consult exchange.

Trading Symbols: JY, 6J on Globex
http://futurespress.com/imgndoc/laf/5-26-11%20monthly%20yen.jpg
Past performance is not indicative of future results.
***chart courtesy of Gecko Software

Japanese Yen Facts

In the late nineteenth century, Japan embarked on a period of economic expansion. Part of this was built on a base of embracing a free market economy concept from Western contemporaries. The mid to late twentieth century was a period of large overall economic growth in Japan, but that growth slowed in the 1990s following an economic bubble. According to the IMF, Japan is the second largest economy in the world, nearing a nominal GDP of nearly $5 trillion. This data was compiled prior to the recent recessionary period as well as the natural and nuclear disasters, but the significance of the island nation on a global level is still apparent.

The following chart shows the GDP growth as a percent change from the preceding year:
http://futurespress.com/imgndoc/LAF/LAF_Weekly_Japangdp.jpg
Japan has enjoyed lower unemployment rates, around 4 percent, as well as some of the highest worker salaries in the world, according to the Big Mac Index. Well known companies in Japan are Toyota, Canon, Honda, Sony, Nintendo, Nipon Steel, and Mitsubishi. Banking, insurance, retail, and transportation are among the key industries in Japan and roughly three quarters of the GDP is from the service sector.

Exports are also a key component of Japan's economy,  mostly of transportation equipment, motor vehicles, and electronics, and the main export markets are as follows:

United States - 22.8%
European Union - 14.5%
China - 14.3%
South Korea - 7.8%
Taiwan - 6.8%
Hong Kong - 5.6%

Imports, including mainly food, machinery, and fossil fuels, come from China (20.5%), the United States (12.0%), the European Union (10.3%), Saudi Arabia (6.4%), the United Arad Emirates (5.5%), and others.

The Japanese Yen was adopted officially in 1871 and Japan was moved onto the gold standard. After losing a significant portion of value following World War II, the yen was fixed to the US dollar. Abandonment of the Bretton Woods System - monetary management rules among major industrialized states - in 1971 eventually led to the yen being among those currencies allowed to float.

The Bank of Japan - the nation's central bank - sets monetary policies. Updates and information can be found on their official website.  [more]

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The Weekend Financial Review

May 23, 2011 – Comments (0)

The stock market has developed a downtrending channel after setting a relative high set back on May 2nd. This pattern suggests a move to 1307 on the S&P, although I believe the momentum to the downside should increase rapidly and the channel is likely to fail by a more aggressive bear move over the next couple of weeks. The outlook on the global economy is finally starting to catch up with what I have been discussing for months – the recession’s bailout-induced pause is over and the global economy is in real trouble. Look past Greece and other European nations. Look beyond the Japanese disaster. Early monetary tightening will make the world cringe, and the reversal in those monetary policies will not only destroy investor confidence but will launch the U.S. dollar back into a bull market. The Fed may not have made all the right moves, but not following the bandwagon by raising rates will likely be viewed as a brilliant contrarian move. Bonds remain bullish amid a stock market decline and flight to quality. The dollar should see choppy price action until we break 80 on the index, afterwhich the long term bull trend will be reestablished. The pound, euro, Canadian and Aussie dollars are all bear plays. I would not chase the dollar higher, but remain long term bullish. The yen should see some gains with the BoJ holding steady on rates, indicating the post tsunami rate cuts are over and the economy is stabilizing. The Japanese yen remains a buy regardless of the dollar’s next move and I continue to standby my forecast that:
The Japanese Yen futures will hit 140 before 80 or I will quit writing the Weekend Commodities Review…forever.  [more]

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The Learn About Futures Insider for May 19, 2011: Euro Currency

May 19, 2011 – Comments (0)

Named in 1995, and introduced in 1999, the euro is the official currency of more than half of the member countries of the European Union. According to the International Monetary Fund (IMF), the euro zone may represent the second largest economy in the world, a likely driving force behind the apparent interest in the exchange of this currency. The following contract specifications will refer to the Euro/US Dollar contract from the foreign exchange futures listings from the CME Group.

Contract Size: 125,000 euro

Price Quote & Tick Size: $.0001 per euro increments ($12.50/contract). $.00005 per euro increments ($6.25/contract) for EUR/USD futures intra-currency spreads executed on the trading floor and electronically, and for AON transactions.

Contract Months: March, June, September, December

Trading Specs: Open outcry is 7:20 a.m.-2:00 p.m. and Globex hours are Sundays: 5:00 p.m. - 4:00 p.m. Central Time (CT) next day. Monday - Friday: 5:00 p.m. - 4:00 p.m. CT the next day, except on Friday - closes at 4:00 p.m. and reopens Sunday at 5:00 p.m. CT.

Daily Price Limit:  Consult exchange.

Trading Symbols: EC, 6E on Globex

http://futurespress.com/imgndoc/laf/5-19-11%20ec.jpg
Past performance is not indicative of future results.
***chart courtesy of Gecko Software

Euro Facts

The euro replaced the European Currency Unit on the world financial market in January of 1999; however, the euro banknotes and coins did not enter circulation until three years later. It is divided in a similar fashion to dollars with each euro divided into one hundred cents. To distinguish these cents, the moniker euro-cents is occasionally applied. The euro is currently the sole currency of the following member states of the European Union (EU) and these are collectively referred to as the "eurozone":

*    Austria
*    Belgium
*    Cyprus
*    Estonia
*    Finland
*    France
*    Germany
*    Greece
*    Ireland
*    Italy
*    Luxemburg
*    Malta
*    The Netherlands
*    Portugal
*    Slovakia
*    Slovenia
*    Spain

http://futurespress.com/imgndoc/laf/eurozone_2011.jpg

Other nations have pledged to adopt the euro at some point. To participate in the currency, member states had to meet certain criteria. These criteria included strict debt ratio and inflation parameters, as well as having to have an interest rate close to that of the EU average.

Euro administration and management fall to the European Central Bank (ECB) which is based out of Frankfurt. Like many central banks, the ECB sets monetary policy. The euro is the second most common reserve currency, meaning it is held as part of foreign exchange reserves by many governments and institutions. It is also considered a hard currency, one which is perceived as a reliable store of value and is globally traded. Several countries outside the Eurozone have pegged their currency directly to the euro.

As with many other central banks, the ECB sets interest rates, attempts to maintain price stability, and promote smooth operation for member banks. Key information is frequently updated on the ECB's official website.

The EU is often represented as a single entity in terms of its economy. Many official statistics for this area come from Eurostat, including agricultural, financial, energy, and labor themes. Many of these releases are offered free of charge on their official website.

Among the key economic notes for the EU, it may be important to bear in mind the following:

-    The EU has large coal, oil, and natural gas reserves. The North Sea Oilfields may be of primary interest.
-    The EU is the largest exporter in the world.
-    It is also the second largest importer.
-    Manufacturing makes up roughly 28.4 percent of the GDP and the services sector accounts for 69.4 percent. Agriculture comes in at 2.3 percent.
-    Tourism is an important part of the EU's economy

Key terms for this market include:

EMS - European Monetary System - simplified, this refers to an arrangement in which countries linked their currencies to try to prevent large relative fluctuations.

EFSF - European Financial Stability Facility - a creation aimed at providing loans to Eurozone countries facing financial crises following the global economic downturn.

Key Uses

Besides the obvious implications and uses for currency, the euro has investing applications as well. As a financial instrument, euro futures are often used as a means to hedge currency exchange risk. Since the euro is such a huge part of international trade, this can be a significant market for other businesses as well.

Key Concerns
Several factors within a nation can have a significant effect on the currency exchange rates and the relative importance of each is the subject of debate, however, it is important to be aware of some of the key fundamentals.

Inflation: It is generally believed that countries with consistently lower inflation exhibit a rising currency value while countries with higher inflation may see currency depreciation.

Interest Rates: High interest rates may attract foreign investors and that can lead to an exchange rate increase while the opposite scenario is possible in a country with low interest rates.

Overall Economic Conditions: Everything from a country's balance of trade to the size of their deficit or surplus can serve as a barometer of the condition of the country and the likelihood of default. Investors look for countries with stronger economic foundations and the better the economic foundation of one country versus another may increase the value of the country's currency.

Perception: The so called "flight to quality" exists within foreign currencies as investors will often seek what they perceive as "safe haven" currencies during times of political or economical instability.

_______________________________________________________________________________________
Disclaimer:  There is a substantial risk of loss in http://www.pitguru.com and it is not suitable for all investors.  Losses can exceed your account size and/or margin requirements.  Commodities trading can be extremely risky and is not for everyone.  Some trading strategies have unlimited risk.  Educate yourself on the risks and rewards of such investing prior to trading.  Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise).  Past results are by no means indicative of potential future returns.  Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Options DO NOT necessarily move lock step with the underlying futures contract.  Information provided is compiled by sources believed to be reliable.  Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been cancelled or rescheduled.  Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.  [more]

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The Learn About Futures Insider for May 12, 2011: Canadian Dollar

May 12, 2011 – Comments (0)

In 1858, the Province of Canada debuted a Canadian dollar and pegged it at par with the U.S. dollar. Following the Uniform Currency Act in April of 1871, various provincial currencies were replaced by the common Canadian dollar. Since then, the Canadian dollar has be changed to a floating currency, and - according to the Bank for International Settlements - become the seventh most-traded currency in the world. The following contract specifications will refer to the Canadian Dollar/US Dollar contract from the foreign exchange futures listings on CME Group.

Contract Size: 100,000 Canadian dollars

Price Quote & Tick Size: $.0001 per Canadian dollar increments ($10.00/contract). $.00005 per Canadian dollar increments ($5.00/contract) for CAD/USD futures intra-currency spreads executed on the trading floor and electronically, and for AON transactions.

Contract Months: March, June, September, December

Trading Specs: Open outcry is 7:20 a.m.-2:00 p.m. and Globex hours are Sundays: 5:00 p.m. - 4:00 p.m. Central Time (CT) next day. Monday - Friday: 5:00 p.m. - 4:00 p.m. CT the next day, except on Friday - closes at 4:00 p.m. and reopens Sunday at 5:00 p.m. CT.

Daily Price Limit:  Consult exchange.
http://media.barchart.com/cm/articles/cache/1d27eebecb666f0af0b8b4371a70d8a7.jpg
Past performance is not indicative of future results.
***chart courtesy of Gecko Software

Canadian Dollar Facts
The Canadian dollar replaced earlier currencies like the Canadian Pound, Nova Scotian dollar, the British Columbia dollar, and others. Notable milestones for the currency include:

-The gold standard was abolished in April 1933, following temporary abandonment during the First World War.
-During the Second World War, the exchange rate between the U.S. and Canadian dollars was fixed at 1:1, 1 Canadian $ = 1 U.S. dollar.
-This exchange was brought back to parity in 1946.
-The Canadian dollar was allowed to float in 1950, but was again pegged to the U.S. dollar until being allowed to float in 1970.

According to the Bank of Canada, the all-time high and low for the U.S. dollar/Canadian dollar exchange are:

October 1950 - present

Low
Date:    01/21/02
$1 CAN =     0.6179 US

High
Date:    11/07/07
$1 CAN =     1.1030 US

Monetary policies for the currency are determined by the Bank of Canada; however, the inflation-control target is set jointly by the Bank and the federal government. Exchange rates and changes can be found on their official website.

http://futurespress.com/imgndoc/LAF/LAF_Weekly_CanadaInterestRate.jpg[/IMG]
The relationship between the currencies of the U.S. and Canada are relevant since over 80 percent of exports from Canada are destined for the U.S. and over 50 percent of imports into Canada are from the U.S.

The service industry is the primary employment sector, but Canada's logging and oil industries are important to the overall economy. They are a net exporter of energy and are home to the Athabasca Oil Sands - one of the world's largest know oil reserves. Alberta is also home to important natural gas resources.

Agricultural products are also important and the Canadian prairies are among the world's top producers of wheat, canola, and other grains.

Other natural resources like mining contribute to the economy - Canada is the world's largest producer of zinc and uranium and also sits among the leaders in gold, nickel, aluminum, and lead production.

Manufacturing in Canada includes automobiles and aviation equipment. Some of these manufacturers are branches of larger U.S. or Japanese companies.

Canada has often posted low unemployment and large government surpluses although the recent global economic conditions have likely affected both of these numbers. According to official Bank of Canada releases, the GDP was projected to grow through this year per the following illustration:

http://media.barchart.com/cm/articles/cache/67eb15fd03916e752ec9193a302e232e.jpg
Inflation projections can be illustrated in the following:

http://media.barchart.com/cm/articles/cache/a9976720365b944d35a82aebe51e4b4d.jpg
 
Canada is a member of the Organisation for Economic Co-operation and Development (OECD) and a member of the G8.

Reports relevant to the overall economic condition of Canada are available through Statistics Canada and their official website.

Key terms for this market include:  [more]

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The Learn About Futures Insider: Oats

May 05, 2011 – Comments (1)

This cereal grain has a rich history of cultivation and has been used for both human and animal consumption for centuries. The CME Group futures contract - to which the following specifications will refer - provides a means for participants to engage in possible fair price discovery, attempt to manage or hedge price risk, and evaluate possible supply and demand trends.

Contract Size: 5,000 Bushels

Price Quote & Tick Size: Cents per bushel; minimum fluctuation is � cent per bushel ($12.50 per contract)

Contract Months: March, May, July, September, December

Trading Specs: Trades open outcry and Globex (electronic) per the following schedule:
Electronic: 6:00 pm - 7:15 am and 9:30 am - 1:15 pm Central Time, Sunday - Friday
Open Auction: 9:30 a.m. - 1:15 p.m. Central Time, Mon-Fri.

Daily Price Limit:  $0.20 per bushel expandable to $0.30 and then to $0.45 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.

Trading Symbols: Open Outcry - O; Electronic - ZO

http://media.barchart.com/cm/articles/cache/aafb7c65e2f9ff56d3967f13cbc11ba1.png
Past performance is not indicative of future results.
***chart courtesy of Gecko Software

Oat Facts
At least thirteen species make up the classification tables for oats, but the one most cultivated is the common oat - all 146 varieties of it. Early civilizations believed oats were contaminated wheat, but cultivation moved forward once it was recognized as a separate grain. Oats have a higher tolerance level for rain than other major grains, and require fewer hot summer days. These attributes likely contributed to the widespread cultivation of oats across more temperate growing regions.

The following chart illustrates production:
 
http://futurespress.com/imgndoc/laf/5-5-11%20production.jpg
*Data courtesy of USDA

Imports and exports for the most recent marketing year are as follows:

http://media.barchart.com/cm/articles/cache/cbd8e3dab56f168753bc0592bb822874.jpg
*Data courtesy of USDA
 
http://media.barchart.com/cm/articles/cache/abd1059789801c000148c9020d8cc151.jpg  [more]

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