Japan GDP Data On Tap For Thursday

Trading 13 fév 2019 Commentaire »

Japan will on Thursday release preliminary Q4 numbers for gross domestic product, highlighting a modest day for Asia-Pacific economic activity.

GDP is expected to add 0.4 percent on quarter and 1.45 percent on year following declines of 0.6 percent on quarter and 2.5 percent on year in Q3. Nominal GDP is tipped to rise 0.4 percent on quarter after sinking 0.7 percent in the three months prior.

China will see January figures for imports, exports and trade balance. Imports are expected to fall 11.0 percent on year after sliding 7.6 percent in December. Exports are tipped to slide an annual 2.7 percent after falling 4.4 percent in the previous month. The trade surplus is pegged at $32.00 billion, down from $57.06 billion a month earlier.

New Zealand will provide January data for food prices; in December, food prices fell 0.2 percent on month and climbed 1.0 percent on year.

Malaysia will release Q4 numbers for GDP and current account. In the three months prior, GDP was up 1.6 percent on quarter and 4.4 percent on year, while the current account surplus was 3.8 billion ringgit.


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U.S. Dollar Shows Modest Move Back To The Upside

Trading 13 fév 2019 Commentaire »

Following the pullback seen in the previous session, the value of the U.S. dollar has moved back to the upside on Wednesday.

The U.S. dollar is trading at 111.01 yen compared to the 110.48 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1266 compared to yesterday's $1.1326.

The rebound by the dollar comes after a report from the Labor Department showed consumer prices were unchanged for the third straight month in January.

The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.

The Labor Department said the annual rate of consume price growth slowed to 1.6 percent in January from 1.9 percent in December, showing the slowest rate of growth since June of 2017.

Meanwhile, the report said the annual rate of core consumer price growth was unchanged from the two previous months at 2.2 percent.

"Overall, these data support our baseline view of a well-behaved inflationary environment that provides the Fed room to pause before raising rates again," said Gregory Daco, Chief U.S. Economist at Oxford Economics.

He added, "We look for the Fed to pause throughout the first half of the year to assess the economic landscape before likely raising rates again in Q3."

Traders also continued to express optimism about U.S.-China trade talks and lawmakers managing to avoid another government shutdown.


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Treasuries Extend Recent Move To The Downside

Trading 13 fév 2019 Commentaire »

Treasuries moved to the downside over the course of the trading day on Wednesday, extending the pullback seen over the two previous sessions.

Bond prices regained some ground after an early decline but still ended the day firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 2.708 percent.

Continued optimism about avoiding another government shutdown has reduced the appeal of safe havens like bonds, as President Donald Trump said he was "not happy" with a tentative deal reached by lawmakers but did not specifically reject the proposal.

The agreement includes far less money for physical barriers on the border than Trump has demanded, although political observers have suggested the president will likely want to avoid another damaging shutdown.

Trump has argued Democrats will be to blame for another shutdown, although the public may disagree as his controversial border wall remains the key sticking point in negotiations.

Traders also continued to express optimism about U.S.-China trade talks after Trump indicated he is willing to delay raising tariffs on Chinese goods if the two sides are close to a deal.

A report from the South China Morning Post said Chinese President Xi Jinping is scheduled to meet U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin during this week's talks in Beijing.

The meeting with Xi as well as a banquet for the U.S. delegation would be a sign of goodwill to cement a trade deal between the world's two biggest economies, the SCMP said.

On the U.S. economic front, the Labor Department released a report showing consumer prices were unchanged for the third straight month in January.

The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.

The Labor Department said the annual rate of consume price growth slowed to 1.6 percent in January from 1.9 percent in December, showing the slowest rate of growth since June of 2017.

Meanwhile, the report said the annual rate of core consumer price growth was unchanged from the two previous months at 2.2 percent.

"Overall, these data support our baseline view of a well-behaved inflationary environment that provides the Fed room to pause before raising rates again," said Gregory Daco, Chief U.S. Economist at Oxford Economics.

He added, "We look for the Fed to pause throughout the first half of the year to assess the economic landscape before likely raising rates again in Q3."

Trading on Thursday is likely to be impacted by reaction to closely watched reports on retail sales and producer price inflation.


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*U.S. Crude Oil Inventories Increase By 3.6 Million Barrels In Week Ended 2/8

Trading 13 fév 2019 Commentaire »

U.S. Crude Oil Inventories Increase By 3.6 Million Barrels In Week Ended 2/8


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Dollar Up As U.S. Inflation Remained Flat; Trump Mulls Signing Spending Deal

Trading 13 fév 2019 Commentaire »

The U.S. dollar drifted higher against its key counterparts in the European session on Wednesday, as a data showed that U.S. consumer inflation remained unchanged in January and on media reports that President Trump is willing to sign a Congressional spending package on a border security agreement to avert another partial government shutdown.

Data from the Labor Department showed that U.S. consumer prices were unchanged for the third straight month in January.

The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.

Sentiment bolstered following media reports that Trump is likely to sign the Congressional deal to keep the government funded and avoid another shutdown.

The White House Press Secretary Sarah Sanders told Fox News that President is considering every option possible to get the full funding needed in order to complete the wall.

Congress faces a deadline on Friday midnight to pass legislation to avert another U.S. government shutdown.

The currency showed mixed trading against its major counterparts in the Asian session. While it dropped against the euro and the pound and it held steady against the franc. The yen advanced.

The greenback added 0.4 percent to a 1-1/2-month high of 110.89 against the yen, from a low of 110.42 seen at 5:15 pm ET. The pair was valued at 110.46 when it closed deals on Tuesday. Next key resistance for the greenback is seen around the 113.00 region.

Data from the Bank of Japan showed that Japan producer prices fell 0.6 percent on month in January - unchanged from the December reading but well shy of expectations for a decline of 0.2 percent.

On a yearly basis, producer prices climbed 0.6 percent - again missing forecasts for 1.0 percent and down from 1.5 percent in the previous month.

The greenback bounced off to 1.0075 against the franc, from a low of 1.0044 touched at 6:45 am ET. The greenback was trading at 1.0065 a franc at yesterday's trading close. On the upside, 1.02 is likely seen as the next resistance level for the greenback.

Having declined to a 5-day low of 1.1341 against the euro at 10:15 pm ET, the greenback bounced off and was trading higher at 1.1297. The pair had finished Tuesday's deals at 1.1324. Continuation of the greenback's uptrend may see it challenging resistance around the 1.11 mark.

Data from Eurostat showed that Eurozone industrial production decreased for a second straight month and at a faster-than-expected pace in December, but the fall was less severe than the previous month's decline.

Industrial production fell 0.9 percent from November, when it decreased 1.7 percent. Economists had expected a 0.4 percent decline.

The greenback briefly pared its early losses against the pound, recovering to 1.2890. This marked a 0.5 percent rise from a 5-day low of 1.2958 seen at 6:45 am ET. Further uptrend may take the greenback to a resistance around the 1.27 region.

Data from the Office for National Statistics showed that U.K. consumer prices rose at the slowest pace in two years in January, weaker than economists' forecast.

The consumer price index rose 1.8 percent year-on-year following a 2.1 percent increase in December. Economists had expected 2 percent inflation.

The greenback was up 0.5 percent at 1.3257 against the loonie, after having dropped to a weekly low of 1.3196 at 10:30 pm ET. The pair was worth 1.3235 at Tuesday's close. The greenback is seen finding resistance around the 1.34 level.

The greenback recovered to 0.7103 against the aussie, up by 0.5 percent from a weekly low of 0.7136 recorded at 11:15 pm ET. At Tuesday's close, the aussie-greenback pair was quoted at 0.7094. The greenback is likely to test resistance around the 0.70 mark, if it extends its rally.

Following a weekly decline to 0.6852 at 12:15 am ET, the greenback reversed its direction and rose back to 0.6805 against the kiwi. The pair had closed Tuesday's trading at 0.6735. The greenback is poised to test resistance around the 0.67 level.

The U.S. monthly budget statement for December is scheduled for release in the New York session.


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Gold "probes the soil" and gradually becomes more expensive

Trading 13 fév 2019 Commentaire »

On Wednesday, February 13, gold prices continue to rise gradually just like the day. Experts believe that this was driven because of the euphoria in global stock markets due to optimistic expectations on the US-China trade negotiations. Quotes of the yellow metal hold at $1,300 but can not overcome the $1,315 mark in more than a week, analysts say.

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Last week, the gold market sagged twice to the level of $1,306 per troy ounce, where a correction occurred later. Based on the calculations of analysts, the recovery of the price of gold to the level of $1,330 is impossible unless the support level of $1,299 is overcome. The yellow metal will continue to consolidate in the range of $1,250 to $1,360 per troy ounce and its future price will go up. Fixing above the level of $1360 will lead to a rapid increase in the value of gold to $1,520 and possibly in a few months to $1,690 per troy ounce, experts say.

Recently, a sharp increase in the volume of gold bought higher by central banks of developing countries was recorded on the market of precious metals. Experts explain this by increasing geopolitical tensions and increasing risks of "freezing" assets in the United States and Europe. As a result, government emerging markets are invested in safe assets, which include gold and other precious metals.

The current trend of the yellow metal price demonstrates that some investors are cautious and are not in a hurry to get rid of defensive assets in case of another shutdown by the US authorities or regression in the US-China trade negotiations. According to analysts, gold will continue to consolidate in the short term. They are confident that the likelihood of a price falling below $1,300 at this stage is low, but the prerequisites for overcoming the mark of $1,315 are also not observed.

Analyzing the current situation on the gold market, experts mentioned further strengthening of the yellow metal. On their estimates, the moderately "bullish" medium-term outlook for gold will worsen in the case of negative economic statistics, especially from China and Europe.

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Riksbank Still Signals Rate Hike In H2 2019 And Beyond

Trading 13 fév 2019 Commentaire »

Sweden's central bank left its key interest rate unchanged in February on lower growth and near-target inflation, after raising it in December, and reiterated the rate would be hiked in the second half of the year and beyond. The Executive Board decided to hold the repo rate unchanged at -0.25 percent, the Riksbank said in a statement on Wednesday. The decision was in line with economists' expectations. The quarter-basis point December hike was unexpected and was the first since July 2011. Swedish interest rates entered negative territory in early 2015. The hike was decided in a split vote as Deputy Governor Per Jansson entered a reservation against the decision to raise the repo rate and was not in favor of the repo-rate path.

Per Jansson did not participate in the February policy session due to personal reasons. "The strong economic activity and rising cost pressures both in Sweden and abroad mean that the conditions are good for inflation to remain close to the target in the coming years," Riksbank said. "This outlook has not changed to any great extent since December."

That said, several factors suggest that monetary policy needs to proceed with caution, the central bank added. The trimmed the growth forecast for this year to 1.3 percent from 1.5 percent predicted in December and the outlook for next year to 1.9 percent from 2 percent. The inflation forecast for this year was raised to 2 percent from 1.9 percent, while the projection for next year was left unchanged at 1.8 percent. Even after a hike in the second half of 2019, the bank said the rate needs to be raised at a slow pace, roughly twice a year by 25 basis points each.

"However, there is uncertainty over developments abroad and the strength of domestic demand," the Riksbank said.

The bank's projections showed the repo rate turning positive in 2020 and reaching 0.8 percent in 2021. Repo rate path was unchanged from December. The central bank also stressed on the need to have measures within housing and tax policy to reduce the risks associated with the high debt of Swedish households.


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U.S. Consumer Prices Unchanged For Third Straight Month In January

Trading 13 fév 2019 Commentaire »

Consumer prices in the U.S. were unchanged for the third straight month in January, according to a report released by the Labor Department on Wednesday.

The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.

The unchanged reading on consumer prices came as another steep drop in energy prices was offset by increases in prices for other goods and services.

The report said energy prices plummeted by 3.1 percent in January after tumbling by 2.6 percent in December and 2.8 percent in November.

Prices for gasoline continued to lead the way lower, plunging by 5.5 percent in January following a 5.8 percent nosedive in December.

Excluding the slump in energy prices as well as a modest increase in food prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.

The report showed a substantial increase in prices for apparel, which spiked by 1.1 percent in January after coming in unchanged in December.

Higher prices for shelter, medical care, recreation, and household furnishings and operations also contributed to the continued increase in core prices.

The Labor Department said the annual rate of consume price growth slowed to 1.6 percent in January from 1.9 percent in December, showing the slowest rate of growth since June of 2017.

Meanwhile, the report said the annual rate of core consumer price growth was unchanged from the two previous months at 2.2 percent.

"Overall, these data support our baseline view of a well-behaved inflationary environment that provides the Fed room to pause before raising rates again," said Gregory Daco, Chief U.S. Economist at Oxford Economics.

He added, "We look for the Fed to pause throughout the first half of the year to assess the economic landscape before likely raising rates again in Q3."

On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of January.

Producer prices are expected to inch up by 0.1 percent, while core producer prices are expected to rise by 0.2 percent.


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UK Consumer Price Inflation Slides To 2-year Low

Trading 13 fév 2019 Commentaire »

UK consumer prices rose at the slowest pace in two years in January led by lower oil prices, and fell below the Bank of England's target, while core inflation remained steady.

The consumer price index rose 1.8 percent year-on-year following a 2.1 percent increase in December, figures from the Office for National Statistics showed Wednesday. Economists had expected 2 percent inflation. "The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year," ONS Head of Inflation Mike Hardie said. Headline inflation was the slowest since January 2017, when prices rose at the same pace. Inflation peaked at 3.1 percent in November 2017.

Core inflation was steady at 1.9 percent at the start of the year, in line with economists' expectations.

Even if inflation continues to remain below 2 percent in the coming few months, in sync with the central bank's projections, economists does not rule out a rate hike this year. The Bank of England is set to stay focused on the decade-high wage growth and the impact of Brexit. While leaving rates and bond purchases unchanged last week, the bank hinted at the need for a gradual and limited tightening of monetary policy in the medium term, to return inflation to the target. The UK is set to leave the European Union on March 29, but Prime Minister Theresa May is yet to figure out how this is going to happen - whether the country would leave the bloc with some deal on trade and other crucial matters or quit without any arrangements.

The central bank's analysis has projected that inflation could hit 6.5 percent as the pound dives in a no-deal or disorderly Brexit.

BoE Governor Mark Carney also predicted that food prices could jump as much as 10 percent if there is a 25 percent slump in the pound due to a no-deal Brexit.

"The outlook for interest rates is still solely dependent on Brexit and that means policymakers will remain on the sidelines for the time being," ING economist James Smith said.

Meanwhile, households have reined in their spending despite the decade-high wage growth and slowing inflation. A survey by IHS Markit and digital payment solutions provider Visa showed on Wednesday that household spending declined fell for a fourth straight month in January. Consumer expenditure dropped 1.3 percent year-on-year, marking the worst fall since April 2018, led by a further decline in high street spending. ONS data also showed that input price inflation eased to 2.9 percent from a revised 3.2 percent. In contrast, economists had expected a faster rate of 3.8 percent. Input price inflation slowed for the fourth consecutive month and the latest was the lowest since June 2016. The core input price inflation slowed to 4.6 percent from 4.7 percent. Output price inflation eased to 2.1 percent from a revised 2.4 percent in December, which was slightly slower than the 2.2 percent economists had predicted. The core output price inflation was steady at 2.4 percent in January.

Another report from ONS showed that UK house price inflation slowed to 2.5 percent in December from 2.7 percent in November, in line with economists' expectations. The latest house price growth figure was the lowest since July 2013, when it was 2.3 percent.


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U.S. Consumer Prices Unchanged In January

Trading 13 fév 2019 Commentaire »

Consumer prices in the U.S. were unchanged for the third straight month in January, according to a report released by the Labor Department on Wednesday.

The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.


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