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27 Sep 2011
Star Sports, a private UK bookmaker, completed an agreement with Worldspreads to launch a white label financial sports betting platform.
Start Sports was created in 1999 as Star Racing and rebranded to Star Sports in 2009. The bookmaker is targeted at the high-end of the sports betting market by offering a dedicated customer service.
The new arrangement with WorldSpreads will give Star Sports clients access to over 4,000 financial markets, ranging from equities, to commodities, and currencies, completing its fixed odds and sports spread betting offer with financial spread betting.
Commenting on the partnership, Ben Keith, managing director of Star Sports said: “This is an exciting new development for us all… We have every confidence that with our emphasis on exceptional service and WorldSpreads’ leading platform, Star Financials will be every bit as successful as Star Sports has grown to be in just two years.”
Conor Foley, CEO of WorldSpreads, added “We are delighted to form a partnership with one of the country’s most ambitious bookmakers. Star Sports has become a major player on the UK bookmaking scene over the last few years with a strong emphasis on excellent customer service and creative marketing… We believe that our two brands will work well together and we are pleased to extend this opportunity to Star in their ultimate aim to become a one-stop shop for their customers.”
Star Sports follows the steps of the private telephone bookie Fitzdares, which recently made an agreement with Worldspreads for the same kind of partnership. Managing directors of both Fitzdares and Star Sports think it is all about betting and having an appetite for risk, so offering a one-stop shop is a way of improving profitability and income. In the past we have assisted at some failed partnerships, as was the case of Paddy Power, 32 Red and Purple Lounge. All gave up financial spreads and concentrated efforts in their core businesses. At the other end, Inter Trader is an example of success. With a partnership with Capital Spreads, Inter Trader is up and growing each day.
26 Sep 2011
Risk assets continue to trade on shaky footing this week after weekend meetings in Washington failed to inspire confidence for equity markets. The IMF communiqué essentially said that markets have entered into uncharted territory and that central banks will need to show vigilance in order to restart global growth trends. Clear specifics were lacking, however, and markets chose to interpret this lack of direction as a negative. The EUR/USD trades at its lows of 1.3390-1.3540 with the USD/JPY trading at 76.20-76.70.
On Sunday, the German Chancellor (Merkel) made comments saying there is a possibility that we will see an insolvency from on of the Eurozone countries. On the positive side, she did say that the upcoming vote on the EFSF program should pass through the German parliament with a clear majority. This does not mean that we will see the same thing in the rest of the votes in the Eurozone but any agreements at this stage will be viewed as progress and makes the next Greek bailout loans more likely to be paid out (thus avoiding a default).
Also this week, an ECB Council member (Nowotny) suggested that the ECB GDP forecasts for the Eurozone might see further downward revisions. GDP forecasts were cut previously during the September monetary policy meeting, so any further revisions would bring some volatility to regional equity markets.
In Canada, the BoC Governor (Carney) made a statement confirming a cautious bias within the central bank. The statement was relatively ambiguous, however, as he said that Canada is not in need of stimulus injections but he did say that if macro data starts to disappoint to the downside the BoC has some room to lower its base policy rate. Canada’s heavy exposure to US assets has led many analysts to suggest that we will see downside surprises in Canadian economic data, so if these forecasts are correct, the USD/CAD will continue to extend its current rally above parity.
On Saturday, the SNB Chairman (Hildebrand) said that the central bank’s decision to peg the CHF to the Euro will be strongly defended and there have even been recent rumors that the SNB will raise this floor from the 1.20 area that was put in place previously. Swiss export companies have made statements to newspapers saying that the current price floor is too low and that if the current trends are not reversed, annual GDP figures could be significantly lower than market estimates.
Oil prices have made serious declines in recent weeks and prices have broken key support at the psychological 80 level. Daily indicators are oversold but have yet to rollover, so there is nothing to suggest momentum will shift in the near term. A break of current levels targets areas into the low 70s in the longer term, so any rallies are expected to be met with sellers. First resistance comes in at 80.80, followed by 81.70. Support below rests at 77.10.
Trading during the Asian session was relatively quiet as a Japanese holiday thinned transaction volumes. Some optimism was seen after an announcement suggested a communiqué would be released after the latest G20 meeting. Prior to this, no statement was scheduled so markets were expecting some support for conjoined stimulus measures. The Euro saw some lift on the news, moving back to yesterday’s trading ranges.
The optimism was short lived, however, as the actual communiqué did little more than provide general support for ensuring bank liquidity as a lack of bank funding could lead to excessive and undesirable volatility. Clearly, the G20 has concerns for the stability of the financial sector but outright stimulus for stimulating debt-ridden countries was missing from the statement and, as a result, markets reversed their earlier gains. On the positive side, there was an article in the Financial Times which suggested that ECB officials are planning to complete its recapitalization goals for the 16 weakest regional banks that were in danger of failing the stress tests that were conducted last year.
There was not much in the way of macro data to be seen last session, but the Leading Indicators data from Australia did see gains for the month and the S & P did release a statement affirming the country’s credit rating at AAA. The S & P’s reasoning was that the government’s fiscal and monetary policies are sufficiently flexible and that the country’s banking system is protected, for the most part, from the contagion effects of the debt crisis. Some negatives were also cited, however, in that Australia is overly dependent on commodity exports, has high levels of household debt, and has limited long term growth prospects, (given the country’s aging population).
In Singapore, the CPI data for the month of August will be released today and this will give markets an indication of the level of inflationary pressure that remains persistent throughout Asia. Chinese markets will come into focus on the release, as many analysts continue to disagree about whether or not consumer prices have peaked for the year.
PMI data from both Germany and the Eurozone were released, and fell short of market expectations. The data is significant, as it suggests that the regions largest manufacturer (Germany) could fall back into contractionary territory next month. If this does turn out to be the case, we will start to see more analysts argue for ECB rate cuts before the end of 2011. In the U.K., the CBI orders report came in at -9, as markets continue to argue about the possibility that we will see new QE stimulus fro the BoE. All of this data sent the Euro and Pound back to levels seen at the beginning of this year on broad Dollar-based safe haven buying.
In Canada, retail sales missed estimates, coming in at 0.6% on a monthly basis but this data was somewhat balanced when the weekly U.S. jobless claims came in moderately better at 423,000 (though the data remains at historically elevated levels). US equity markets saw major losses for the second day in a row as the Dow fell 3.5% and the S & P 500 was seen lower by 3.2%. The Nasdaq followed with a drop of -3.25%. Short term bias will be dictated to any headlines made by the IMF/G20 meetings and any lack of stimulus plans or governmental support will likely lead to further losses.
22 Sep 2011
The Federal Reserve announced a plan to implement Operation Twist yesterday (a plan to drive down interest rates on 10 year treasury bonds) but markets were relatively unimpressed as investors were apparently looking for a more far reaching strategy even with the large size of asset purchases (400$ worth of long term treasuries) the plan is set to make. The plan will be funded by sales of short term bonds which will occur before the middle of next year.
As expected, there was internal dissent within the Fed, as Kocherlakota, Plosser and Fisher voted against the plan, so from this we can that the FOMC has not shifted to an entirely accommodative bias. The accompanying statement suggested that additional policy moves are possible if and when the time is appropriate. The main question going forward is whether or not this move by the FOMC will be followed by other central banks as the global economy continues its attempts to restart growth trends.
Macro data today will come in the form of European PMI data and we will have a meeting in New York with the UN General Assembly. Canadian retail sales will also be released, with markets expecting a decline of -0.3% for the month of July. CPI data from August surprised markets by rising 0.3% for the monthly figure creating a yearly figure of 3.1%. (Core prices were seen at 0.4% monthly and 1.9% yearly). IMF meetings are scheduled for later this week and this is where is the majority of market attention will be focused.
In an aim to help distressed European banks, the ECB made a statement saying that collateral requirements will be reduced and that they will begin accepting debt that isn’t normally traded in regulated markets (previously, the limits for this type of debt was set at 10%). The EUR/USD pushed lower to 1.3520-1.3600 with the USD/JPY looking similar at 76.40-76.95.
Yesterday, second quarter GDP in New Zealand disappointed expectations, showing a rise of 0.1% on a quarterly basis for June and the figures for March were revised to 0.9%. The figures support recent suggestions from the central bank that rate hikes will not be necessary in the near term as the continued strength of the NZD is keeping inflation levels contained. The growth data is moderate so there doesn’t appear to be any clear reason for the RBNZ to surprise markets and add volatility to an already uncertain economic climate.
The USD/CAD has pushed out of its recent range, where prices were confined between 0.9740 and 0.9975. This upper end is now expected to become resistance turned support and likely to hold prices in the near term. The recent rally has broken some key long term downtrend lines on the weekly charts, so we will need to a downside break of the previous range before we can expect a test of the critical monthly lows at 0.9420. Resistance overhead is relatively thin at this point so the bullish bias targets areas just below 1.04.
Market attention will shift from the Eurozone to the FOMC policy meeting today as the Fed rate decision and accompanying statement will be released. There is a certain amount of dissent amongst the FOMC board members, so the possibility exists for some surprises in the Fed’s final statement. Most analysts side with the argument that the Fed will pursue no new accommodation measures and instead choose to remain “data-dependent” given the Eurozone debt crisis and the possibility that any new strategies could bring high levels of volatility to financial markets.
In Europe, the Greek Finance Minister made comments suggesting that the next tranche of bailout funds will be paid out and that an agreement with the Troika can be reached. In England, the BoE minutes from the previous meeting will be released today and the possibility for a growing consensus could be seen in terms of adding additional QE stimulus to the economy. The EUR/USD remains at its range lows of 1.3740-1.3590 while the USD/JPY also trades heavy at 76.40-76.70.
The IMF has also been making headlines these past few days arguing that since global growth is seen slowing for the rest of the year, the ECB should lower interest rates as a means for countering the regions debt problems. The IMF forecast for global growth is now at 4% (versus the previous forecast of 4.3%).
The effects of Standard and Poor’s downgrading of Italian debt (by one level from A+ to A) has had a relatively muted effect on markets as many argue that the downgrade has only come from one of the major ratings agencies and is not yet reflective of an analyst consensus.
Macro data showed that the German ZEW missed estimates, with the current situation index coming in at +43.6 (+45 was expected) but the economic sentiment figure came in slightly better at -43.3 (against estimates of -45). These are the lowest levels we have seen in the ZEW survey since 2008, so it is going to take some time before the market starts to view any increases in a favorable light.
In Australia, the Leading Index was slightly positive at 0.5% for the monthly figure and 3.1% for the yearly figure. In New Zealand, the second quarter current account deficit dropped to 920 million New Zealand Dollars. Markets were relatively unaffected by the data, however, as sentiment and headlines continue to be the main drivers. Additional macro data today will be seen with the Canadian CPI, with markets looking for a rise in inflationary pressures to 2.9%.
In Norway, the central bank (Norges Bank) will hold its policy meeting today, with markets expecting rates to be held steady at 2.25%. External uncertainties are likely to be the main reason for the bank’s neutral bias but there could be some additional rhetoric relating to the value of the Norwegian currency, which has recently seen an increase in safe haven buying activity.