Archive - July, 2012

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The Mayor of London election campaign is in full swing, with radio and television coverage of debates between the incumbent Boris Johnson and his challenger Ken Livingstone. For those unfamiliar with Mayor of London post, it was created in 2000 after the London devolution referendum. The reason for its high profile nature of the post is that London is the bread winner of the UK. It is densely populated and filled with well paid professionals who pay a considerable contribution to the treasur…

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Fears of contagion swept through the European session yesterday, as yields rose on Spanish and Italian bonds and investors found the safety of Gold. The recent positive sentiment towards the US had led to the overhanging issues of Europe been overlooked. However following the disappointing employment figures from the US on Friday combined with bearish data from Europe has led to a reignition of fear. The yield on the Mediterranean Government bonds is close to previous levels that promoted ba…

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China is taking a major step today towards integrating their currency (RMB) into the worlds foreign exchange market. The controlled peg set by their government has been allowed to float within a marginal band against a small basket of currencies around a fixed rate since 2005. The government has announced that they will gradually increase its flexibility and this latest announcement seems to confirm that. The undervaluing of the currency has been said by some to unfairly allowed China to con…

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Economic data released this morning shows that the UK economy has entered a technical recession. This is deemed as two consecutive quarters with negative GDP. Economists has expected slight growth, compared to the actual shrinking of the economy. The Office for National Statistics said that the negative growth was due to a sharp fall in construction output. This is a disappointing release for the Chancellor George Osborne as the shadow of recession covers the country once again.…

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AFTER trading individual equities, retail traders are usually inclined to dabble in trading their indices. So what is an equity index, how are they priced and what are they actually trading? An equity index is a benchmark value of a basket of stocks. Each index will clearly define what its constituents are and how it is calculated. The most popular equity indices receive considerable coverage within the media, especially when they can easily summarise a country’s economy,…

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