China Inflation Data Due On Friday

Trading 08 nov 2018 Commentaire »

China will on Friday release October figures for consumer and producer prices, highlighting a modest day for Asia-Pacific economic activity. In September, consumer prices were up 2.5 percent on year and producer prices were up 3.6 percent.

Australia will provide September numbers for home loans. In August, the number of loans was down 2.1 percent on month, while the value of loans fell 2.7 percent and investment lending slid 1.1 percent.

Japan will see October data for money stock. The M2 stock is expected to hold steady at an annual 2.8 percent, while M3 is tipped to add 2.4 percent - down from 2.5 percent in September.

New Zealand will release October numbers for credit card spending; in September, overall spending was up 1.3 percent and retail spending was up 1.1 percent.

Indonesia will provide Q3 data for current account; in the three months prior, the deficit was $8.03 billion, while the capital account saw a surplus of $3 million and the financial account had a surplus of $4.02 billion.

Malaysia will see September numbers for unemployment, industrial production and manufacturing production. In August, the jobless rate was 3.4 percent, while industrial production added 2.2 percent and manufacturing production climbed 4.3 percent.


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Oil Futures Settle Lower For 9th Straight Session

Trading 08 nov 2018 Commentaire »

Crude oil futures drifted lower on Thursday, extending losses to a ninth straight session, as concerns over rising inventories and economic uncertainty continued to weigh on the commodity.

Oil prices had edged higher earlier in the session amid hopes the OPEC would signal a production cut in 2019 to halt crude's slide.

The latest data from the U.S. Energy Information Administration, released on Wednesday, had showed crude stockpiles in the U.S. to have risen for a seventh consecutive week. More importantly, six of the seven increases turned out to be much more than what analysts had expected.

Although U.S. sanctions on Iranian oil came into effect from November 4, the rise in crude inventories and the U.S. government's decision to grant exemptions to eight countries, including India and China, allowing them to temporarily continue buying Iranian oil, have significantly eased worries about any supply shortage in the market.

Meanwhile, during their forthcoming meeting this Sunday, ministers from the Organization of Petroleum Exporting Countries and its allies are expected to discuss the possibility of cutting production again next year to support oil prices at $70 a barrel.

Crude oil futures for December ended down $1.00, or 1.6%, at $60.67 a barrel, the lowest settlement price in about eight months.

On Wednesday, crude oil futures ended down $0.54, or 0.9%, at $61.67 a barrel.

With today's decline, crude oil futures have shed as much as 21% from early October levels.

Ahead of sanctions on Iranian oil, Saudi Arabia and Russia were increasing oil production to ensure the supply is not disrupted due to loss of Iranian oil post November. U.S. has been increasing output over the past several weeks.

The Trump administration's decision to allow eight countries to continue importing oil from Iran and concerns about likely drop in crude demand in the short term due to the impact of the ongoing U.S.- China trade disputes on the global economy have pushed oil prices down to multi-month lows.


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Fed Leaves Rates Unchanged, Notes Slowdown In Business Investment Growth

Trading 08 nov 2018 Commentaire »

After raising rates by a quarter point at its previous meeting, the Federal Reserve announced its widely anticipated decision to leave interest rates unchanged following a two-day meeting ending on Thursday.

The Fed decided to maintain the target range for the federal funds rate at 2 to 2.25 percent, citing realized and expected labor market conditions and inflation.

The central bank reiterated that it expects further gradual increase in interest rates will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near its 2 percent objective over the medium term.

The Fed's statement was largely unchanged, noting the labor market has continued to strengthen and economic activity has been rising at a strong rate since the previous month.

However, the Fed said the growth of business fixed investment has moderated from its rapid pace earlier in the year after previously describing business fixed investment growth as strong.

With regard to inflation, the Fed said both overall inflation and inflation for items other than food and energy remain near 2 percent on an annual basis.

"Overall, the statement suggests that the Fed is still on track to continue raising interest rates gradually, with the next hike coming at its December meeting," said Michael Pearce, Senior U.S. Economist at Capital Economics. "We anticipate that will be followed by two rate hikes in the first half of 2019."

He added, "By the middle of next year, however, we expect economic growth to slow below its potential pace, which would force the Fed to the sidelines."

CME Group's FedWatch tool currently indicates a more than 70 percent change the Fed will raise rates by a quarter point following a two-day meeting scheduled for December 18th and 19th.


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Dollar Rising After Fed Maintains Rates

Trading 08 nov 2018 Commentaire »

The dollar is gaining ground against its major rivals Thursday afternoon, after the Federal Reserve left interest rates unchanged. The announcement was in line with the expectations of economists.

Meanwhile, first-time claims for U.S. unemployment benefits showed a slight decrease in the week ended November 3rd, according to a report released by the Labor Department on Thursday. The report said initial jobless claims edged down to 214,000, a decrease of 1,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to dip to 213,000 from the 214,000 originally reported for the previous week.

The dollar climbed to around $1.1380 against the Euro Thursday afternoon, from an early low of $1.1446.

Germany's exports and imports declined unexpectedly in September, official data revealed Thursday.

Exports dropped 0.8 percent month-on-month, reversing a 0.1 percent rise in August. At the same time, imports slid 0.4 percent following August's 2.4 percent decrease.

Economists had forecast a 0.3 percent rise in exports and a 0.8 percent increase in imports.

The trade surplus declined to a seasonally adjusted EUR 17.6 billion from EUR 18.2 billion in the previous month.

France's merchandise trade deficit modestly narrowed in September from the previous month, figures from the French Customs Office showed on Thursday. The trade deficit fell to EUR 5.663 billion from EUR 5.701 billion in August. Economists had forecast a shortfall of EUR 5.83 billion. The deficit was EUR 4.884 billion a year ago.

The buck has risen to around $1.3090 against the pound sterling Thursday afternoon, from an early low of $1.3150.

The greenback dipped to an early low of Y113.546 against the Japanese Yen Thursday, but has since broken out to a 1-month high of Y113.915.

The value of core machine orders in Japan plunged 18.3 percent on month in September, the Cabinet Office said, coming in at 802.2 billion yen. That was well shy of expectations for a decline of 9.0 percent following the 6.8 percent increase in August.

Japan had a current account surplus of 1,821.6 billion yen in September, the Ministry of Finance said on Thursday, down 19.3 percent on year. That exceeded expectations for a surplus of 1,786.5 billion yen and was down from 1,838.4 billion yen in August.

Overall bank lending in Japan was up 2.2 percent on year in October, the Bank of Japan said on Thursday, coming in at 529.471 trillion yen. That follows the 2,3 percent increase in September.

A measure of the public assessment of the Japanese economy rose more-than-expected in October to its highest level in nine months, survey data from the Cabinet Office showed on Thursday. The current conditions index of the Economy Watchers Survey rose to 49.5 from 48.6 in September. Economists had forecast a score of 48.9.


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*Federal Reserve Leaves Interest Rates Unchanged

Trading 08 nov 2018 Commentaire »

Federal Reserve Leaves Interest Rates Unchanged


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Will the Fed succeed in stirring up the gold?

Trading 08 nov 2018 Commentaire »

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Another round of tightening the Fed policy traders are waiting in December. The increase in rates at the end of the September meeting was predictable, the market reaction did not come as a surprise, except for gold.

The stock market declined last month, while yields on Treasury bonds and the dollar rose. The yellow metal, which usually trades in inverse relation to the US currency, settled above the $ 1,200 key mark, starting in August. Experts have different assessments of the dynamics of the precious metal over the past three months. Some are high, others consider it weak, because, for example, in April gold was valued above $ 1,365 per ounce.

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Since the mid-term elections led to a split in Congress, investors suggest that the ideas of Donald Trump may not materialize, and the Fed will have to slow down as part of a tightening policy. This raises the question, can the precious metal resist at around $ 1200 and higher? Probably, yes, if stock markets fall along with the dollar, providing the necessary support.

Stock market

Democrats are unlikely to succeed in seizing control of the Senate in 2020, which means Republicans will be responsible for existing policies that favor business. Yet the action may be under pressure if the Democrats want to investigate Trump's entrepreneurial activity and the alleged deal between Russia and his campaign headquarters. Moreover, they may try to start the impeachment procedure.

Gold without a clear trend

December gold rose in price a little earlier the day before, adding $ 2.40 to $ 1,228.70 an ounce due to a weaker dollar. However, from the point of view of technical analysis, these contracts are subject to sales, and the charts signal the purchase only in the case of return of quotations to the 100-day moving average at $ 1,215.06.

"The market remains extremely volatile, and it is impossible to identify the trend, despite the fact that trading takes place above the 20-day and 100-day moving averages," commodity analysts comment on the situation.

"It's hard to find a driver who can push prices on the spot gold market to the next resistance level around $ 1239-1240," they also write.

The fate of gold can be decided by the Fed, or rather its position. The final statement after the meeting on Thursday may contain tips on what the regulator plans to take in December.

According to the data on Wednesday, futures on federal funds estimate the probability of tightening the policy next month at a little more than 72%. However, the decline of 10 points over the past month suggests that the precious metal has a chance to survive in such a "hawk" climate.

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The trade dispute between the United States and China may be resolved on the sidelines of the G20 summit

Trading 08 nov 2018 Commentaire »

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China wants to solve problems with the United States through negotiations, but America must respect the development path chosen by China, said country's President Xi Jinping on the eve of a meeting with the US leader in Argentina.

China and the States have already exchanged rates of hundreds of billions of dollars, and Donald Trump is threatening new ones. The Trump administration also accused China of interfering in US policy, aggression in the South China Sea, and in Taiwan. Nevertheless, Trump and Xi are planning to meet on the sidelines of the G20 summit, which is being held in Argentina, for talks, since both countries, despite differences, are trying to bring trade ties back on track.

"China and the United States should correctly evaluate each other's strategic intentions, and although China is ready to solve problems at the negotiations, the United States should respect the development path chosen by China and our legitimate interests," Xi said.

Earlier, the head of the diplomatic mission of China, Wang Yi said that Xi and Trump reached "an important consensus on the healthy and stable development of bilateral relations" in a telephone conversation last week, and their meeting at the G20 summit will be "crucial in resolving a bilateral dispute. Wang added that China is ready to work with the United States to "eliminate violations, restore confidence and fully prepare for the meeting."

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Hungary Inflation At 6-year High

Trading 08 nov 2018 Commentaire »

Hungary's consumer price inflation accelerated further in October to its highest level in almost six years, preliminary data from the Hungarian Central Statistical Office showed on Thursday. The consumer price index rose 3.8 percent year-on-year following a 3.6 percent increase in September. Economists had expected the rate to remain unchanged at 3.6 percent.

The importance of this reading is that it is well above the central bank's expectation of 3.3 percent, ING Bank economist Peter Virovacz said. In the past three months, inflation overshot the National Bank of Hungary's forecast by 0.23ppt on average, he observed. "Today's data won't trigger any prompt move by the central bank," Virovacz said. "However, it is definitely likely to raise some eyebrows as the NBH's underlying inflationary measures has also been ticking higher recently."

Core inflation, which excludes energy and fresh food, was 2.6 percent in October, which faster than the 2.2 percent in September. Compared to the previous month, the CPI climbed 0.5 percent, which was faster than the 0.3 percent increase economists had predicted. The core CPI rose 0.3 percent from the previous month.


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The fall of the euro will continue, and the dollar will grow, and this is why

Trading 08 nov 2018 Commentaire »

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The euro is likely to continue falling. There is no good news for the single currency, and the EC has also reduced growth forecasts in Italy, reinforcing investors' concerns about the debt of the third largest economy in the eurozone.

The Italian economy is expected to slow down growth over the next two years, which threatens to increase the budget deficit and supports the Commission's view that the draft budget for 2019 in Italy violates EU budget rules. A new forecast sent the euro down. It is worth noting that before that the currency was able to partially compensate for the losses, but this did not last long.

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The weakness of the euro strengthens the dollar rebound, the election results were in line with expectations and mean that the Fed will continue to raise interest rates. The dollar will continue its rise in the medium term under the sigh of relief in the markets after the results of elections in the United States. Now, the attention has shifted to the meeting of the Federal Reserve System. In the coming weeks and months, the market will have to make its own conclusion about what will happen to the US economy and how far the Fed will go, based on Trump's fiscal and trade policy under the new conditions in Congress. Already, it is safe to say that positive salary data, price data, and the labor market will provide additional support for the dollar.

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Tesla has appointed a new chairman of the board of directors, the company’s shares are growing

Trading 08 nov 2018 Commentaire »

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The newly appointed chairman of the board of directors of the manufacturer of electric vehicles Tesla was Robin Denholm, who previously headed the finances of Telstra Corp. Ltd, Australia's largest telecommunications operator.

The founder and CEO of Tesla, Elon Musk, resigned as part of an agreement with the United States Securities and Exchange Commission (SEC).

The transition period will last for six months, during which E. Musk will help the new manager to take over Tesla's management, since R. Denholm has to work out his contract at Telstra.

At today's auction, as of 14:44 London time, the value of Tesla shares rose by 2.08%, reaching $ 348.16, the price maximum since mid-August this year.

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