Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Market Pulse: Ignore the bond market at your peril

Tuesday, June 12, 2012 - 04:01

June 12 - European stocks and the euro eke out gains, but Spanish and Italian yields rise. Which market to believe? No contest - bonds every time, says CMC Market's Brenda Kelly. Plus, a technical look at oil.

▲ Hide Transcript

View Transcript

Dressed like for European stalled and the Euro but not the bond market astonished yields near you lifetime highs and actually and the finding links. This is today's market pulse. Saw something of a schizophrenic day for markets today let's hear now from -- but clearly CMC markets. Brenda good to see again let's start with the bond market is telling quite a different story from equities. Which one should we believe. I'll I would say it up to general are very at home particularly in recent times that they could be ridiculous to ignore the bond market senate -- at the moment while we saw a little bit of a spike for Spain certainly aired yesterday -- and very quickly and now we're looking up. A major company possibly for it he would it's fun you climbing above 6% for the first time. And quite a long period of time so it -- that hurt our economy. -- is actually set the scene but the contagion effect -- necessary to be contained to Spain. Spanish yields out within about 1213 basis points of the Euro lifetime high from late last year. So -- presume that and despite some of the speculation no ECB buying today. There wasn't rumor out there have been whispering but it doesn't start it off the actual case and ultimately needs seed them then come back an awful lot lower fencing is quite domestic banks buying them up about it also worrying issue. And when you consider that I think Spanish banks have about 67%. Of all sovereign debt on their books at the moment the two of becoming very intertwined. And he can be pretty much moved us from any sort of SMP at blamed for the time being be taking on the spot I think the Greek elections later this week. So the bond market is telling us species the consents. Why -- still sought and was driving them. Well -- accident right there's always going to be affect them on to -- and a bit of a short covering -- if you went when you would notice and start our incomes of up to today. The main action -- and the defensive sector with a telecommunications and consumer goods sector. The highest parked there -- like -- by the highest step because of a broker upgrade you'll be seeing some of the mining company socket to just settle yesterday seeing a bit about a bad spot today. But we are also seeing some firmer metal prices of well we just feeding in to battle but it's not necessary to risky assets that we're seeing any sort of movement at the moment. Okay to finish up as I mentioned and and -- they had beautiful. Bucket and 125 back about 125. Would you be advising clients to sell into the throw it well we don't give a. -- here just as a matter of -- but second from a technical perspective back a long is that the actually eurodollar remains one -- -- -- 12550. And above about 126 party. I would -- the -- remained the downside for the Euro but you could except I expect a short squeeze up as far as one point six perky but thought resistance I would expect to be contained. Okay Brenda thank you very much have a great day. Finally oil I had of this week's OPEC meeting in Vienna oil prices are lower today. But as this chart shows nymex -- futures still holding above strong technical support to 200 week moving up it's just above eighteen dollars. And depending technical analyst Nicole Elliott's reckons oil prices are likely to remain in the company's remote. But says -- chick does and still hoped to profit. Assume. -- that would -- trade somewhere between 7505. Dollars per barrel. This is -- makes crude prices. Over the next twelve to eighteen months so you go in and out and in announced an in the -- she could make -- has such a 1450%. Return so I do think it's well what day -- got to be braid you've got to stick to your columns you've got to know your entry and exit levels. But I do think -- holding patent is what we can expect. That's all from us -- -- but join right but did you know it's a Saudi everything at this time to take the pulse of the market. I'm Jamie media about this is Reuters.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Market Pulse: Ignore the bond market at your peril

Tuesday, June 12, 2012 - 04:01