Japan October Nationwide CPI Climbs 1.4% On Year

Trading 22 nov 2018 Commentaire »

Overall nationwide consumer prices in Japan were up 1.4 percent on year in October, the Ministry of Internal Affairs and Communications said on Thursday.

That was in line with expectations and up from 1.2 percent in September.

Core consumer prices, which exclude volatile food prices, advanced an annual 1.0 percent. That was in line with expectations and unchanged from the previous month.

The biggest gains were fuel (4.4 percent), communications (1.9 percent) and culture (1.4 percent).

On a monthly basis, both overall and core inflation picked up 0.2 percent.


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*Japan Overall Nationwide CPI +1.4% On Year In October; Core CPI +1.0%

Trading 22 nov 2018 Commentaire »

Japan Overall Nationwide CPI +1.4% On Year In October; Core CPI +1.0%


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Japan Inflation Data Due On Thursday

Trading 22 nov 2018 Commentaire »

Japan will on Thursday release October numbers for consumer prices, highlighting a light day for Asia-Pacific economic activity.

Overall nationwide inflation is expected to climb 1.4 percent on year, accelerating from 1.2 percent in September. Core CPI, which excludes food prices, is called unchanged at 1.0 percent.

Japan also will see final October figures for machine tool orders; the previous reading suggested a decline of 1.1 percent on year.


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Crude Rebounds After Recent Setback, Ends Notably Higher

Trading 21 nov 2018 Commentaire »

Crude oil prices rose on Wednesday, after having tumbled 6.6% to a 13-month low in the previous session amid concerns about excess supply and slowing global economy.

The positive start was due to a report from the American Petroleum Institute that showed a surprise crude oil inventory draw of 1.5 million barrels last week.

Data released by the U.S. Energy Information Administration this morning showed crude stockpiles to have risen for a ninth-straight-week. Once again, the increase was bigger than what was expected.

The report showed crude oil inventories in the U.S. increased by 4.85 million barrels in the week to November 16, up nearly twice the expected surge.

Gasoline inventories were down by 1.30 million barrels and distillate stockpiles declined marginally by 0.08 million barrels in the week.

Crude oil futures for January ended up $1.20, or about 2.3%, at $54.63 a barrel.

Even as worries about excess supply persisted, oil prices held firm amid speculation that OPEC and non-OPEC producers will consider a supply cut of 1 million to 1.4 million barrels per day, at their forthcoming meeting on December 6 at Vienna.

Still, it is feared that the ongoing U.S.- China trade dispute, if not resolved swiftly, will hurt global economic growth.

The Organization for Economic Co-operation and Development said earlier in the day that global economic growth has peaked and is now slowing as the world faces risks from rising trade tensions and tightening financial conditions, as it trimmed the global growth projection for next year. OECD has cut its global growth projection for next year to 3.5% from 3.7% predicted in May, in its latest Economic Outlook report. The global economy is forecast to expand 3.5% in 2020. The outlook for this year was left unchanged at 3.7%.

"There are few indications at present that the slowdown will be more severe than projected," OECD Chief Economist Laurence Boone said. "But the risks are high enough to raise the alarm and prepare for any storms ahead. Cooperation on fiscal policy at the global and euro level will be needed," he added.

The OECD report also warned that "a much sharper slowdown in Chinese growth would damage global growth significantly, particularly if it were to hit financial market confidence."


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Treasuries Climb Off Worst Levels But Close Modestly Lower

Trading 21 nov 2018 Commentaire »

After trending higher over the past several sessions, treasuries gave back some ground during the trading day on Wednesday.

Bond prices came under pressure in morning trading but climbed well off their worst levels in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of prices, edged up by 1.3 basis points to 3.061 percent.

The modest increase by the ten-year yield came after the slight drop seen on Tuesday pulled the yield down to a two-month closing low.

Profit taking contributed to the pullback by treasuries, as traders cashed in on some of the recent strength among bonds.

A rebound on Wall Street also inspired some traders to move their money out of treasuries, although selling pressure was subdued ahead of the Thanksgiving Day holiday on Thursday.

Disappointing economic data may also have helped limit the downside for treasuries, with a Commerce Department report showing a much steeper than expected drop in durable goods orders in October.

The Commerce Department said durable goods orders plunged by 4.4 percent in October following a revised 0.1 percent dip in September.

Economists had expected orders to slump by 2.5 percent compared to the 0.7 percent increase that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders inched up by 0.1 percent in October after a revised 0.6 percent decrease in September.

Ex-transportation orders had been expected to rise by 0.4 percent compared to the 0.1 percent uptick originally reported for the previous month.

A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly edged higher in the week ended November 17th.

The report said initial jobless claims rose to 224,000, an increase of 3,000 from the previous week's upwardly revised level of 221,000.

Economists had expected jobless claims to slip to 215,000 from the 216,000 originally reported for the previous week.

Meanwhile, the National Association of Realtors released a report showing a bigger than expected rebound in existing home sales in the month of October.

NAR said existing home sales surged up by 1.4 percent to an annual rate of 5.22 million in October after plunging by 3.4 percent to a rate of 5.15 million in September. Economists had expected existing home sales to jump by 1.0 percent.

Following the Thanksgiving Day holiday, trading activity is likely to remain subdued on Friday ahead of an early close by the bond markets. A lack of major U.S. economic news is likely to help keep traders on the sidelines.


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Dollar Little Changed Ahead Of Thanksgiving Holiday

Trading 21 nov 2018 Commentaire »

The dollar is turning in a mixed performance against its major rivals Wednesday afternoon, but remains little changed overall. Trading activity has been relatively subdued ahead of Thursday's Thanksgiving holiday. Investors were confronted by a high volume of U.S. economic data this morning.

A report released by the Commerce Department on Wednesday showed a much steeper than expected drop in new orders for U.S. durable goods in the month of October, with the sharp decline largely reflecting a substantial decrease in orders for transportation equipment.

The Commerce Department said durable goods orders plunged by 4.4 percent in October following a revised 0.1 percent dip in September. Economists had expected orders to slump by 2.5 percent compared to the 0.7 percent increase that had been reported for the previous month.

A day earlier than usual due to the Thanksgiving Day holiday on Thursday, the Labor Department released a report on Wednesday showing first-time claims for U.S. unemployment benefits unexpectedly edged higher in the week ended November 17th.

The report said initial jobless claims rose to 224,000, an increase of 3,000 from the previous week's upwardly revised level of 221,000. Economists had expected jobless claims to slip to 215,000 from the 216,000 originally reported for the previous week.

After reporting six straight months of decreases, the National Association of Realtors released a report on Wednesday showing existing home sales in the U.S. rebounded by more than anticipated in the month October.

NAR said existing home sales surged up by 1.4 percent to an annual rate of 5.22 million in October after plunging by 3.4 percent to a rate of 5.15 million in September. Economists had expected existing home sales to jump by 1.0 percent.

Consumer sentiment in the U.S. unexpectedly deteriorated by more than initially estimated in the month of November, according to a report released by the University of Michigan on Wednesday. The report said the consumer sentiment index for November was downwardly revised to 97.5 from the preliminary reading of 98.3.

Economists had expected the consumer sentiment index to be unrevised at 98.3, which was still down slightly from 98.6 in October.

Pointing to a slowdown in the pace of U.S. economic growth, the Conference Board released a report on Wednesday showing only a slight uptick by its index of leading economic indicators in the month of October.

The Conference Board said its leading economic index inched up by 0.1 percent in October after climbing by an upwardly revised 0.6 percent in September. The modest increase by the index matched economist estimates.

According to a media report, the Italian government is likely to make compromise with the European Union on certain aspects of its budget.

Investors heaved a sigh of relief after newspaper La Stampa reported that Italian Deputy Premier Matteo Salvini might be open to budget revisions.

The report said that Salvini was willing to reduce the planned spending on a citizen's income and the unwinding of a previous pension reform. Meanwhile, the European Commission has warned Italy of financial sanctions over its budget.

The dollar dropped to a low of $1.4249 against the Euro Wednesday, but has since bounced back to around $1.1385.

The buck slid to an early low of $1.2819 against the pound sterling Wednesday, but has since rebounded to around $1.2775.

The UK budget deficit in October far exceeded expectations and was the biggest for the month in three years, raising the likelihood of the government missing its borrowing target for the fiscal year, official data showed on Wednesday.

The public sector net borrowing, or PSNB, excluding state banks was GBP 8.8 billion in October, which was the highest for the month since 2015, the Office for National Statistics said. Economists had forecast a deficit of GBP 6.1 billion. In September, the deficit was GBP 2.84 billion and the shortfall was GBP 7.23 billion in October 2017.

The greenback has risen to around Y113.065 against the Japanese Yen this afternoon, from an early low of Y112.698.


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Gold Futures Settle Higher As Dollar Slips

Trading 21 nov 2018 Commentaire »

Gold prices edged higher on Wednesday, as the dollar weakened against some major currencies. Traders were largely refraining from making big moves ahead of Thanksgiving holiday.

Recent comments from the Federal Reserve chairman Jerome Powell and Vice Chairman Richard Clarida about growth and interest rates weighed on the dollar. While Powell warned of slowing demand abroad and fading fiscal stimulus at home and spoke about the impact of past rate hikes on the economy, Clarida said rates were currently near neutral levels. These comments suggest there may be a pause in monetary tightening next year.

Slightly fading hopes about a deal between the U.S. and China too prompted traders to pick up the yellow metal.

The Dollar Index was down by about 0.16% at 96.58.

Gold futures for December ended up $6.80, or 0.6%, at $1,228.00 an ounce, the highest settlement in about two weeks. On Tuesday, gold futures ended down $4.10, or 0.3%, at $1,221.20 an ounce, snapping a four-day winning streak.

Silver futures for December settled at $14.502 an ounce, up $0.233 over previous close. Copper futures for December ended up $ 0.280, at $2.7945 per pound.

As stocks recovered amid reports the Italian government would compromise with the European Union on certain aspects of its budget, the greenback slid a bit today. It was reported earlier in the day that the Italian Deputy Premier Matteo Salvini was willing to reduce the planned spending on a citizen's income and the unwinding of a previous pension reform.

However, subsequent reports suggest that the European Commission has rejected Italy's revised budget proposals and made a recommendation to adopt a disciplinary procedure against the country for excessive debt.

In U.S. economic news, a report from the Commerce Department said durable goods orders plunged by 4.4% in October following a revised 0.1% dip in September. Economists had expected orders to slump by 2.5% compared to the 0.7% increase that had been reported for the previous month.

According to a report from the Labor Department, first-time claims for U.S. unemployment benefits unexpectedly edged higher in the week ended November 17th. The report said initial jobless claims rose to 224,000, an increase of 3,000 from the previous week's upwardly revised level of 221,000. Economists had expected jobless claims to slip to 215,000 from the 216,000 originally reported for the previous week.

Meanwhile, existing home sales were up 1.4% to an annual rate of 5.22 million in October, after plunging by 3.4% to a rate of 5.15 million in September. Economists had expected existing home sales to jump by 1%.


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Treasury Announces Details Of Next Week's Long-Term Securities Auctions

Trading 21 nov 2018 Commentaire »

On Wednesday, the Treasury Department announced the details of next week's auctions of two-year, five-year and seven-year notes.

The Treasury said it plans to sell $39 billion worth of two-year notes next Monday, $40 billion worth of five-year notes next Tuesday and $32 billion worth of seven-year notes next Wednesday.


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EC: Italy’s budget for 2019 does not comply with EU Stability and Growth Pact standards

Trading 21 nov 2018 Commentaire »

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Valdis Dombrovskis, Vice President of the European Commission for Euro, Financial Stability and Social Dialogue, said that the EC opens the so-called excessive budget deficit procedure for Italy since the draft budget of the country for 2019 does not meet the requirements of the Stability and Growth Pact.According to the terms of the Covenant, the budget deficit should not exceed 3% of the country's GDP, and the public debt - 60% of GDP. The draft Italian budget deficit for the next year goes against this rule, so the EC will develop an action plan to normalize certain budgetary indicators of the country.

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Uptick By U.S. Leading Economic Index Matches Estimates

Trading 21 nov 2018 Commentaire »

Pointing to a slowdown in the pace of U.S. economic growth, the Conference Board released a report on Wednesday showing only a slight uptick by its index of leading economic indicators in the month of October.

The Conference Board said its leading economic index inched up by 0.1 percent in October after climbing by an upwardly revised 0.6 percent in September. The modest increase by the index matched economist estimates.

"The index still points to robust economic growth in early 2019, but the rapid pace of growth may already have peaked," said Ataman Ozyildirim, Director of Economic Research and Global Research Chair at the Conference Board.

He added, "While near term economic growth should remain strong, longer term growth is likely to moderate to about 2.5 percent by mid to late 2019."

The modest increase by the headline index came as positive contributions from improving consumer expectations for business conditions, the yield spread and the Leading Credit Index were partly offset by negative contributions from stock prices and average weekly jobless claims.

The report also said the coincident economic index rose by 0.2 percent in October after edging up by 0.1 percent in September. The continued increase reflected positive contributions from all four indicators that make up the index.

The lagging economic index also climbed by 0.4 percent in October after dipping by 0.2 percent in the previous month.

The rebound reflected positive contributions from the duration of unemployment, the average prime rate charged by banks, the change in consumer prices for services, and the ratio of consumer installment credit outstanding to personal income.


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