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.

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.

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.

Today's Major Market Move: Cocoa Futures Gain Close to 9% for the Week

It's been an up week for most commodities with 22 out of the 27 front month commodity futures that we track in positive territory. The top gainer since last Sunday has been cocoa futures which have posted an 8.9% gain.

Click here to go to the live table.

This week's move has pushed front month cocoa futures to a new high in 2012 however prices are still well below the high reached in the year prior.

Click here to go to the live chart.

The last time we wrote about cocoa futures was near the 2011 lows back in December and prices have been stuck in a channel since then, until this week. According to this blurb from Bloomberg (Bloomblurb? Blurbberg?), anticipated lower output from the Ivory Coast is one motivating factor for the current move.

Today's Major Market Move: Cypriot Stocks Down 21% Month to Date

While the rest of Europe appears to be stabilizing (at least as far as the stock markets are concerned), Cyprus remains the odd man out. Stock markets across Europe have seen decent gains for the month of August while Cypriot equities have gotten hammered to the tune of a 21% decline. Even Cyprus' typically conjoined twin Greece has managed to break the correlation (for this month at least) with Greek stocks gaining 6.8%. Here's the bottom 10 performing benchmark equity indexes for the month of August:

Click here to go to the live table.

This is a warning for those with squeemish stomachs or heart problems, this next chart is not pretty. Here we have  the General Market Index CSE (Cypriot benchmark equity index) going back to the beginning of 2011. It's reached yet another new low.

Click here to go to the live chart.

We expect that this news regarding continued losses by Cyprus' largest bank has contributed to the most recent decline (courtesy of Bloomberg):

Bank of Cyprus Pcl, the island’s largest lender, said its first-half loss widened by 25 percent after increasing provisions for bad loans and reducing the value of Greek government bonds.

The net loss in the six months to June 30 widened to 134 million euros ($167.5 million) from a loss of 107 million euros in the same period of 2011, according to an e-mailed statement today from the Nicosia-based lender.

Bank of Cyprus, which sought aid from the Cypriot government in June to meet capital requirements, said the capital shortfall was defined by the European Banking Association on June 30 at about 730 million euros. 

It appears that a scapegoat for the bank's poor performance has been found (ht to 4-traders.com).

Bank of Cyprus announces that the Chairman of the Board of Directors, Mr Theodoros Aristodemou, has submitted today his resignation from the position of Chairman and member of the Board of Directors of Bank of Cyprus.

Today's Major Market Move: OJ Furtures Decline 3.5% in Today's Session

It was rough day in the commodities complex today (at least for the longs) with 22 out of 29 front month commodity futures contracts in negative territory. The biggest decline was seen in FCOJ futures which dropped 3.5%, followed by natural gas and oat futures which both experienced a 3.2% decline. Here's the list of the top 10 decliners in Monday's session:

Click here to go to the live table.

We wrote about the remarkable spike and subsequent retrace in FCOJ futures back in April. The market got way out in front of itself on the initial reports of the possible ban of Brazilian imports, and the momentum of the retrace has pushed the prices another 23% lower from where they were in April.

Click here to go to the live chart.

Prices remain at depressed levels despite this being the middle of hurricane season which by most accounts runs in the US from June 1st to November 30th.

Today's Major Market Move: Egyptian Stock Market Up 44% for the Year

The Egyptian stock market continues to digest the prospects for growth in Mubarak-less future, the sentiment over the last two months has been decidedly positive. The benchmark EGX 30 Index, after a nice rebound over the past 2 months, is now up 44% for the year.

Click here to go to the live chart.

The Egyptian economy is in the process of recovering from the regime change and associated turmoil that occurred in the first half of last year. Egypt possessed one of the worst performing equity markets in 2011 so even with a strong 2011, investors have a lot of ground to make up. Much of the market's current optimism hangs on successful completion of an IMF loan agreement. Discussions have been going on since January and an agreement won't be finalized until at least November, but the latest reports have had a positive tone (courtesy of 4-traders.com):

 On August 22, Christine Lagarde, the IMF's managing director, was in Cairo where she met with President Mohamed Morsi and other Egyptian government officials.  At the end of her meetings, she announced that the new government has officially requested an IMF program and that the Fund will respond as quickly as possible to this request.  A Fund mission will visit Cairo in September to hold discussions, and the parties plan to reach agreement in November.

The Egyptian pound has remained stable throughout 2012 but we know that the Egyptian central bank has been an active participant in the currency markets to bolster their currency (the following chart shows the EGX 30 Index alongside the USD / Egyptian pound cross in % terms):

Click here to go to the live chart.

We were unable to locate a resource to indicate how much existing firepower (foreign reserves) the central bank had remaining in their battle to support the pound but one thing we know for sure is that it is a finite amount.