Investors’ worries over Spain once again controlled the week’s sentiment, with a continual ebb and flow depending on the news outcome. While Spain’s government is still holding out on an official request for financial aid from the E.U., ECB and IMF – collectively, the “Troika” – they have made inroads toward that day, with the presentation on Thursday of the 2013 budget and accompanying reforms. Markets viewed the budget in a positive light, and policy leaders praised the Rajoy government’s efforts for new necessary reforms as above and beyond the minimum requirements.
Spanish citizens were less enthused, however, and showed their displeasure with protests on the streets of Madrid. Spain’s key region, Catalonia, expressed their discontent to an even higher degree by announcing upcoming elections during which a secession vote will take place. Members of the Spanish government strongly voiced their opposition to Catalonia’s impending referendum and declared it unconstitutional. The region’s president Artur Mas’ has said that he would push for a referendum irrespective of its constitutionality.
Over the weekend, stress test results for Spain’s banks were released and while they were within the expected and acceptable limits, the government has said that they would not ask for the full amount. According to the results, some €59.3 billion is necessary for Spain’s banks to ride out the economic downtrend. As part of the bailout, the Troika had agreed to fund as much as €100 billion to the ailing banking sector, but the Spanish government has said that they will ask for only €40.0 billion.
Later today, Moody’s credit ratings agency is expected to announce their decision on Spanish debt, with a majority of analysts expecting a downgrade to below investment grade level. Spain’s borrowing costs have consistently been at high levels, though the stress test results helped to bring yields on 5-year debt down to 4.93%, but analysts don’t expect too much support in the near term unless and until the Spanish government officially seeks assistance which would trigger the ECB asset-purchase program.
The Social Trading Community at eToro
This week we look at OpenBook trader skanand9673 from India, a relatively new trader who is already included on the 3-month rankings board in position #27. As of this writing, the guru has 590 followers and 245 copiers. The high risk trader has a max drawdown of 9.8%, average exposure of 68.9% and profitable weeks ratio of 76.9% while realized equity is over 300% for the period and at 121.8% for the last month. With the exception of a brief and unprofitable foray into the EUR/USD pair early on in the trader’s history, the trader is now by and large a commodities trader, with 37.9% of the portfolio allocated to gold and 62.1% allocated to silver. The trader’s gold allocation has gained 6.7% while silver has earned 3.6%. Over the past three months, the trader has executed 222 trades, going long 98.5% of the time, no doubt taking into consideration the likely rise in commodity prices given the expected flood of liquidity from the world’s major central banks.
OpenBook trader aniindra7116 from Singapore is another high-risk commodities trader; like the previous guru, the trader is listed on the 3-month rankings board in position #42 with a max drawdown of 10.2%, average exposure of 14.9% and profitable weeks ratio of 76.9%. The trader’s realized equity was 6% for last week, 91.4% for last month more than 300% over the 3 and 6-month periods; out to 12-months the trader’s realized equity was reported at a still respectable 86.1%. The trader has had a 100% allocation in gold over the last quarter, which gained 26.6%; of the 107 trades executed, 83.2% were buys with an average hold time of 1½ days. As of this writing, the trader has 310 followers and 97 copiers, and is another good choice for those traders looking to diversify their own portfolios with established and successful commodities traders.
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