As the year draws to a close, it gives us an opportunity to summarise 2011 and look ahead to the next year. City Index market experts Joshua Raymond, Sandy Jadeja and Neil Looker analyse the stock indices, commodities and forex markets from a fundamental and technical perspective and give their thoughts on what's likely to be in store for 2012.
Fundamental Outlook for 2012
Joshua Raymond, Chief Market Strategist, City Index
It has been a bearish year for the FTSE 100, with the benchmark UK Index currently looking likely to post a 9% loss on the year after growing 22% in 2009 and 9% in 2010. The 9% fall on the year tells a tale of difficult trading conditions for investors and bearish sentiment, with investors fearful that the world is teetering back on the brink of another recession.
To put this year’s loss on the FTSE into greater perspective, the last 26 years have netted an average yearly growth in the UK’s benchmark Index of 7.48%. During that time, there have only been six bearish years and interestingly enough, 2011 would actually mark the best bearish year for the FTSE 100 over the last six years. Read More
Technical Outlook for 2012
Sandy Jadeja, Chief Technical Analyst, City Index
The year 2011 certainly will leave a mark on investors’ minds as we head into the New Year. The past year has been filled with key events ranging from the MF Global collapse, the death of Steve Jobs, protestors occupying Wall Street, an earthquake and tsunami in Japan and, of course, the European debt crisis.
Taking a look back can help us see where we have come from and potentially help create an opportunity map for paving the way forward. There are no guarantees in this business but looking for high probability trades is a safer way of trading, compared to trading with one eye blindfolded. Read More
Forex Outlook for 2012
Neil Looker, Chief FX Dealer, City Index
The FX markets have ended 2011 broadly within 1-2% of where they started in the major forex pairs such as EUR/USD. But let’s not forget that we have been in elevated risk aversion mode pretty much all year, with the eurozone crisis being firmly in the headlines.
The question now is where do you go in 2012 for growth stability and yield as let’s not forget, this year we have seen the US lose its AAA rating and re-emerge as the most aggressive policy makers in the Central Bank space, with rates on hold until 2013 and unconventional monetary easing (also known as Operation Twist). We can potentially add to this QE3 should the labour market fail to improve.
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