Monday, September 10, 2012

Today's Major Market Move: Cypriot Stock Market Gains 17% in a Single Day

Being the hardest hit economy in the EU and having seen the biggest decline in benchmark equity index in recent times, Cyprus comes up quite frequently as the subject of our Major Market Move posts. We are going to add to that tally again today where the Cypriot stock market made a staggering one day gain of 17%. That's the equivalent of a 2000+ point move in the DJIA. The next largest gainer was in Greece which could manage a measly 6.1%. Here's the top 10 performing benchmark equity indexes for Monday's session:

Click here to go to the live table.
It was less than 2 weeks ago when we featured the Cypriot stock market in our Major Market Move post for having a monthly gain of 21%. If a trader is looking for volatility, Cyprus is the place to go. However even with today's huge one day gain, stocks there still have a lot of ground to make up. Here's the year to date chart of the benchmark General Market CSE Index:

Click here to go to the live chart.

Saturday, September 8, 2012

Today's Major Market Move: Belizean Dollar Weakens 4.2% Against US Dollar for the Week

The Belizean Dollar, which is officially pegged to the US Dollar at 2:1, had in fact been gradually strengthening over the course of 2012. The USDBZD cross got as high as 1.88 in recent weeks.

Click here to go to the live chart.
The difficulty in maintaining the peg and the wild gyrations at the right edge of the chart are the result of this news tidbit (courtesy of the Financial Post):
Belize is offering bondholders 20 cents on the dollar in a debt restructuring, worse than what Argentina gave creditors following its 2001 default, according to Bank of Nova Scotia and Citigroup Inc.
What is ironic is that in the face of the debt restructuring, the currency had been strengthening. Then the recent news of the low bond offer has caused some wild fluctuations and the 4.2% drop over the past week. We unfortunately don't have a Belizean equity index we're tracking. It would be interesting to also observe how stocks are performing during this tumultuous period.

Sunday, September 2, 2012

Today's Major Market Move: Hungarian Forint Strengthens 7% Against US Dollar Year to Date

It's been a volatile year for the Hungarian Forint as well as for the currencies of many of the "fringe" EU countries (look here for a post where we mention the full list of fringe EU countries). 2012 started off very optimistically when the USDHUF cross dropped by 11% in the first 2 months. Then Europe hit a rough patch in May and the Forint quickly gave up all that ground and then some. Now the currency has reversed course once again and is back on a strengthening trend. Here's the line chart of the USDHUF cross in percentage terms going back to January 1st:

Click here to go to the live chart.

After all of the gyrations, the Forint currently stands as the second best performing currency in 2012 (6.9%), just after the Chilean Peso (7.2%). Here's the top ten strengthening currencies relative to the US Dollar in 2012:

Click here to go to the live table.
The Hungarian Central bank took advantage of the recent improvement in the currency by cutting rates by a quarter point on August 28th. This is the cause of the mini-correction on the right edge of the first chart when the USDHUF dropped from 9% to 6% over a couple of days. Here are some more details on the cut courtesy of the Financial Times:
In its statement, the monetary policy council conceded that inflation was running above target due to higher than expected food and fuel prices, and tax increases. But with the economy weakening and “technically in recession” after contracting in each of the first two quarters of 2012, domestic demand is likely to fall further. 
If we check on Hungarian equities, we don't see any obvious indications of trouble ahead. Like the Forint, the Hungarian stock market has been improving (albeit in a choppy fashion) since the beginning of June. The central bank of Hungary must be seeing some signs of rough sailing ahead that don't appear to be obvious to the rest of the markets. Here's the line chart of the benchmark Hungarian Traded Index in percentage terms for 2012:

Click here to go to the live chart.