Weekly Review and OpenBook Roundup

(eToro Blog) As far as economic data points and market moving events go, it was a relatively quiet week around the globe, but two underlying stresses continue to worry investors and drive sentiment, specifically Spain and China.

Regarding Spain, there is lingering and growing doubt that the government will be able to meet the target debt reductions that the European Union has imposed on it, despite the fact that they have also been given not just extra time but a smaller target. Earlier in the week, the government announced still more steps that it intended to take in an effort to meet the target, much to the chagrin of the Spanish public. They included rises in consumption taxes and cuts in social services among others. In a clear display of displeasure over the country’s austerity measures, yesterday several hundred coal miners staged a demonstration in Madrid that was supported by thousands more unhappy onlookers. The government has acknowledged that their hands are essentially tied in this regard but their efforts and words haven’t been enough to change investors’ sentiment; the Spanish bond auction this week saw yields on benchmark debt still holding close to the 7% threshold. Comparatively, the yield on Italy’s 10-year bonds was at 5.82% while the yield on Germany’s 10-year bunds dropped to 1.127%.

China’s government is also displeased with the turn of events and has been regularly tweaking policy to ensure that their economy does not stagnate any further. Even after their benchmark rate cut last week, the government still loudly hints that they will move more aggressively to keep the economy from further decline. Growth estimates were recently lowered, and there is the strong possibility that this weekend’s GDP release will be significantly weaker than anticipated. But some of the government’s efforts are already beginning to pay off; the Peoples Bank of China reported that loan growth among China’s banks beat estimates, with 919.8 billion Yuan loaned in June against expectations of 910 billion Yuan. Analysts know that Beijing must walk a tightrope when it comes to tweaking as they are desperate to avoid high inflation like that which was triggered by too aggressive easing after the fiscal crisis several years ago. However, recently released input and consumer inflation data which was below forecasts, suggests that so far, Beijing has made all the right moves.

On OpenBook, we look at trader Gibleh from Australia who has, as of this writing, 22 followers and 6 copiers. The trader can be found listed atop the 3-month rankings board with a 98.6% win ratio, 69.6% profit days ratio and 19.8% gain over 3-months. The trader’s portfolio had earned a 25% profit over the last week, and 33.8% over the last month and 22.4% for the last six months. Not too surprisingly, the trader has a relatively high allocation in commodities; over the past three months, 76.5% of the trader’s portfolio was allocated to silver and gold, which gained 2.8% and 2.5%, respectively over the period. The trader has since increased the allocation in gold to 90.6% for a gain of 3%.

OpenBook trader webtolearn is listed atop the 6-month rankings board with an 86.2% win ratio, 58.7% profit days ratio and 3.1% gain. The trader, who is from Switzerland, has 4 copiers and 60 followers, had primarily traded currency pairs but had a tiny (yet profitable) allocation in gold as well. Over the past six months, the small 0.6% allocation in the EUR/GBP has returned 6.6%, the highest in the portfolio while over the same period, the largest allocation at 53.3% was to the EUR/USD pair which gained 2.7%. Trades in the USD/USD and EUR/JPY were in the red over the 6-month period. The trader had been tweaking his portfolio, and at three months all currency pairs except the EUR/JPY were profitable. But the tweaking continued and over the past month, the trader has reallocated his portfolio to maximize profits. Now, all four pairs traded – the AUD/USD, EUR/USD, GBP/USD, and EUR/JPY – are in the green with gains of 12%, 8.1%, 1.9% and 1.3%, respectively. In fact, the trader has a page of green when looking at his aggregate stats; last week the portfolio earned a 2% profit, for last month it was a 6.3% profit, and for last quarter it was 7.5% profit and at 6-months and beyond 3.1%. The trader seems to have found his groove and is clearly one who merits watching.

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