*New Zealand Trade Deficit NZ$861 Million In November

Trading 19 déc 2018 Commentaire »

New Zealand Trade Deficit NZ$861 Million In November


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*New Zealand Exports +7.1% In November; Imports -0.6%

Trading 19 déc 2018 Commentaire »

New Zealand Exports +7.1% In November; Imports -0.6%


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*New Zealand GDP +0.3% On Quarter, +3.0% On Year In Q3

Trading 19 déc 2018 Commentaire »

New Zealand GDP +0.3% On Quarter, +3.0% On Year In Q3


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New Zealand GDP Data Due On Thursday

Trading 19 déc 2018 Commentaire »

New Zealand is scheduled to release a batch of numbers on Thursday, highlighting a busy day for Asia-Pacific economic activity. On tap are Q3 figures for gross domestic product, plus November numbers for imports, exports, trade balance and credit card spending.

GDP is expected to add 0.6 percent on quarter and 2.8 percent on year after rising 1.0 percent on quarter and 2.8 percent in year in the three months prior. In October, credit card spending was down 0.1 percent on month and up 6.3 percent on year.

Imports are expected to be worth NZ$5.80 billion, down from NZ$6.15 billion in October. Exports are pegged at NZ$4.98 billion, up from NZ$4.86 billion in the previous month. The trade balance is predicted to show a deficit of NZ$880 million following the NZ$1.295 billion shortfall a month earlier.

Australia will see November numbers for unemployment. The jobless rate is expected to hold steady at 5.0 percent, with the addition of 20,000 jobs following the gain of 32,800 jobs in October. The participation rate is called steady at 65.6 percent.

The Bank of Japan will wrap up its monetary policy meeting and announce its decision on interest rates; the BoJ is widely expected to keep its benchmark lending rate unchanged at -0.10 percent.

Japan also will see October figures for its all industry activity index, with forecasts suggesting an increase of 2.0 percent following the 0.9 percent drop in September.

Malaysia will provide November data for consumer prices; in October, inflation was up 0.2 percent on month and 0.6 percent on year.

Hong Kong will release November numbers for consumer prices, with forecasts suggesting an increase of 2.5 percent on year - slowing from 2.7 percent in October.

The central bank in Indonesia will conclude its monetary policy meeting and announce its decision on interest rates; the central bank is widely expected to keep its benchmark lending rate unchanged at 6.00 percent.


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Crude Oil Futures End Sharply Higher

Trading 19 déc 2018 Commentaire »

Crude oil futures ended notably higher on Wednesday, despite data showing a much less than expected drop in U.S. crude stockpiles last week.

Oil prices moved higher, due largely to traders squaring off their positions on expiration day of January futures contracts. Crude oil futures for January had plunged more than 7% in the previous session.

Traders were also building up some fresh positions in oil futures after three successive days of weakness that resulted prices falling by over 11%.

Crude oil futures contracts for January expired at $47.20 a barrel, gaining $0.96, or 2.1%, for the session.

Crude Oil futures for February ended up $1.57, or 3.4%, at $48.17 a barrel.

According to data released by the Energy Information Administration today, crude stockpiles in the U.S. dropped by 497,000 barrels in the week ended December 14, much lower than an expected declined of 2.44 million barrels.

Meanwhile, gasoline inventories were up by 1.77 million barrels in the week, much more than an expected increase of 1.2 million barrels, the report from EIA said. Distillates stockpiles dropped by 4.24 million barrels, as against expectations for a 0.57 million barrels increase.

After ten successive weeks of increases, crude stockpiles in the U.S. have now increased for three consecutive weeks, although the drop last week has turned out to be much smaller than anticipated.

Fears about a likely fall in energy demand due to global economic slowdown resulted in crude oil prices falling to about 16-month lows, despite the OPEC and some non OPEC members agreeing on a production cut of 1.2 million barrels per day from January 2019.


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Treasuries Rally Into The Close After Fed Announcement

Trading 19 déc 2018 Commentaire »

After showing a lack of direction throughout much of the session, treasuries showed a strong move to the upside following the Federal Reserve's interest rate decision.

Bond prices initially pulled back following the Fed announcement but rebounded strongly going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.7 basis points to 2.778 percent.

With the steep drop seen late in the trading day, the ten-year yield ended the session at its lowest closing level nearly seven months.

The late-day advance by treasuries came after the Fed announced its widely expected decision to raise interest rates by a quarter point but forecast fewer rate hikes next year.

The central bank said its Federal Open Market Committee decided to raise the target range for the federal funds rate by 25 basis points to 2.25 percent to 2.50 percent.

The Fed's closely watched accompanying statement noted the labor market has continued to strengthen and that economic activity has been rising at a strong rate.

Annual rates of both overall inflation and core inflation were also said to remain near the Fed's 2 percent target, with indicators of longer-term inflation expectations also little changed.

The Fed also reiterated that further gradual increases in interest rates would be consistent with the FOMC's mandate to foster maximum employment and price stability.

However, eagle-eyed Fed watchers will notice the inclusion of the word "some" in the statement regarding further gradual rate increases.

In another indication the Fed plans to raise rates less than previously anticipated, the central bank's projections point to two rate hikes in 2019 compared to the previous forecast for three.

The Fed's median projection for the federal funds rate in 2019 was reduced to 2.9 percent from the 3.1 percent expected in September.

The median forecasts for rates in both 2020 and 2021 were also lowered to 3.1 percent from 3.4 percent, while the projection for longer run rates was downwardly revised to 2.8 percent from 3.0 percent.

The central bank also lowered its forecasts for real GDP growth in 2018 and 2019 to 3.0 percent and 2.3 percent, respectively. The Fed previously projected 3.1 percent growth in 2018 and 2.5 percent growth in 2019.

While once again calling risks to the economic outlook roughly balanced, the Fed added that it will continue to monitor global economic and financial developments and assess their implications for the economic outlook.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said today's widely anticipated rate hike was tempered by the slight downward revision to Fed officials' projections for additional rate increases in 2019 and beyond.

"Still, with the vote unanimous and the median rate projection for end-2019 revised down by only 20bp, this is hardly the 'dovish hike' that some were anticipating," Ashworth said.

"On balance, we still expect the Fed to hike twice in the first half of next year before a slowdown in GDP growth to below potential forces it to the side lines," he added. "We then expect the Fed to reverse course and cut rates by 75bp in 2020.

Meanwhile, the National Association of Realtors released a report this morning unexpectedly showing a significant increase in existing home sales in November.

NAR said existing home sales surged up by 1.9 percent to an annual rate of 5.32 million in November after jumping by 1.4 percent to a rate of 5.22 million in October. Economists had expected existing home sales to drop by 0.6 percent.

Despite the second consecutive monthly increase, existing home sales in November were down by 7.0 percent compared to the same month a year ago.

Reaction to the Fed announcement may continue to impact trading on Thursday along with reports on weekly jobless claims, leading economic indicators, and Philadelphia-area manufacturing activity.

The Treasury Department is also due to announce the details of next week's auctions of two-year, five-year, and seven-year notes.


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Dollar Recovering After Fed Announcement

Trading 19 déc 2018 Commentaire »

The dollar has been losing ground against its major rivals for most of Wednesday's session, but has recovered much of its lost ground following today's announcement from the Federal Reserve.

As expected, the Fed announced its decision to raise interest rates by a quarter point on Wednesday.

The Fed also reiterated that further gradual increases in interest rates would be consistent with the FOMC's mandate to foster maximum employment and price stability.

However, eagle-eyed Fed watchers will notice the inclusion of the word "some" in the statement regarding further gradual rate increases.

In another indication the Fed plans to raise rates less than previously anticipated, the central bank's projections point to two rate hikes in 2019 compared to the previous forecast for three.

Existing home sales in the U.S. unexpectedly showed a significant increase in the month of November, according to a report released by the National Association of Realtors on Wednesday.

NAR said existing home sales surged up by 1.9 percent to an annual rate of 5.32 million in November after jumping by 1.4 percent to a rate of 5.22 million in October. Economists had expected existing home sales to drop by 0.6 percent.

Italy's Economy Ministry announced Tuesday that an informal agreement had been made with the European Commission over its budget plan.

The deal was reportedly formalized on Wednesday at a meeting of EU commissioners in Brussels. The revised budget agreement will allow Italy to escape disciplinary measures by the EU.

The dollar dropped to a low of $1.1439 against the Euro Wednesday, but has since bounced back to around $1.1375.

Eurozone construction output dropped in October after rising in the previous month, figures from Eurostat showed on Wednesday. Construction output fell 1.6 percent from September, when it grew 2.1 percent.

Germany's business confidence slid to its lowest level in over two years, reports said Tuesday, citing data from the Ifo survey. The Ifo Business Climate Index dropped to 101 from 102 in November. Economists had expected a score of 101.7.

Germany's producer price inflation remained at its highest level in 19 months in November, data from the Federal Statistical Office showed on Wednesday. Producer prices rose 3.3 percent year-on-year in November, same as in October. Economists had expected a 3.1 percent increase.

The buck slid to a low of $1.2679 against the pound sterling Wednesday, but has since rebounded to around $1.2625.

UK consumer price inflation slowed in November to its lowest level in twenty months, in line with economists' expectations, helped by falling petrol prices.

The consumer price index rose 2.3 percent year-on-year following a 2.4 percent increase in October, data from the Office for National Statistics showed on Wednesday. The latest inflation rate was the lowest since March 2017, when inflation was at the same level.

The greenback fell to a low of Y112.088 against the Japanese Yen Wednesday, but has since risen to around Y112.400.

Japan posted a merchandise trade deficit of 737.3 billion yen in November, the Ministry of Finance said on Wednesday. That missed forecasts for a deficit of 630.0 billion yen following the 450.1 billion yen shortfall in October.


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*Fed Chairman Jerome Powell Holding Post-Meeting Press Conference

Trading 19 déc 2018 Commentaire »

Fed Chairman Jerome Powell Holding Post-Meeting Press Conference


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Fed Raises Interest Rates But Forecasts Fewer Rate Hikes Next Year

Trading 19 déc 2018 Commentaire »

In a widely expected move, the Federal Reserve announced its decision to raise interest rates by a quarter point on Wednesday.

The central bank said its Federal Open Market Committee decided to raise the target range for the federal funds rate by 25 basis points to 2.25 percent to 2.50 percent.

The Fed's closely watched accompanying statement noted the labor market has continued to strengthen and that economic activity has been rising at a strong rate.

Annual rates of both overall inflation and core inflation were also said to remain near the Fed's 2 percent target, with indicators of longer-term inflation expectations also little changed.

The Fed also reiterated that further gradual increases in interest rates would be consistent with the FOMC's mandate to foster maximum employment and price stability.

However, eagle-eyed Fed watchers will notice the inclusion of the word "some" in the statement regarding further gradual rate increases.

In another indication the Fed plans to raise rates less than previously anticipated, the central bank's projections point to two rate hikes in 2019 compared to the previous forecast for three.

The Fed's median projection for the federal funds rate in 2019 was reduced to 2.9 percent from the 3.1 percent expected in September.

The central bank also lowered its forecasts for real GDP growth in 2018 and 2019 to 3.0 percent and 2.3 percent, respectively. The Fed previously projected 3.1 percent growth in 2018 and 2.5 percent growth in 2019.

While once again calling risks to the economic outlook roughly balanced, the Fed added that it will continue to monitor global economic and financial developments and assess their implications for the economic outlook.


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Gold Futures Settle Higher Ahead Of Fed Rate Decision

Trading 19 déc 2018 Commentaire »

After retreating from near 6-month highs earlier in the session, gold futures rebounded and settled higher on Wednesday, as the dollar softened with investors betting on dovish comments by the Federal Reserve later in the day.

The dollar index was hovering around 96.10, losing about 0.5% , after having dropped to a low of 96.00 earlier in the day.

The Federal Reserve, which is expected to raise interest rate by 25 basis points, is likely to sound dovish with regard to its stance on future rate increases. Recent comments by the Fed Chair Jerome Powell and a couple of Fed officials suggest the central bank might well pause monetary tightening sometime in the coming year. Earlier, the Fed was hinting at three increases in 2019.

Recent disappointing economic data, low inflation, and concerns about the ongoing trade dispute between the U.S. and China may also prompt the central bank to soften its stance on rate hikes.

On the trade war front, reports suggest the U.S. and China will hold a series of trade talks in January in order to strike a preliminary deal to resolve the issues.

Meanwhile, Italy's populist government has reportedly reached an informal agreement with the European Union on the country's disputed 2019 budget following discussions with senior officials in Brussels.

Gold futures for February surged to $1,262.10 an ounce before settling with a gain of $2.80, or 0.2%, at $1,256.40 an ounce, the highest settlement since 10 July 2018. On Tuesday, gold futures settled at $1,253.60 an ounce, gaining $1.80 or 0.1%, for the session.

Silver futures for March settled at $14.818 an ounce, up $0.117 from Tuesday's close of $14.701 an ounce.

Copper futures for March settled at $2.716 per pound, up $0.051 from previous close.

U.S. President Donald Trump, who has been criticizing the Fed for its views on interest rates, once again urged it to refrain from its gradual pace of raising rates.

"Don't let the market become any more illiquid than it already is," Trump told the Fed in a post on Twitter on Tuesday. "Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!"

In economic news today, a report from the National Association of Realtors showed a significant increase in existing home sales in November.

NAR said existing home sales surged up by 1.9% to an annual rate of 5.32 million in November after jumping by 1.4% to a rate of 5.22 million in October. Economists had expected existing home sales to drop by 0.6%.

Despite the second consecutive monthly increase, existing home sales in November were down by 7% compared to the same month a year ago.


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