Dollar Loses Ground After Powell Hints At Monetary Easing

Trading 29 fév 2020 Commentaire »

After briefly emerging into positive territory Friday morning after recent losses, the U.S. dollar retreated after the Federal Reserve Chair Jerome Powell said the bank will use their tools and act as appropriate to support the economy.

Powell said today that the coronavirus "poses evolving risks to economic activity."

"The fundamentals of the U.S. economy remain strong," Powell said in a statement released this afternoon. "However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."

The dollar index dropped to 97.96 in late afternoon trades and was last seen at 98.03, down nearly 0.5% from previous close.

Against the Euro, the dollar weakened to $1.1033, from Thursday's close of $1.1002. At its lowest in the session, the dollar was $1.1054, down more than 0.5%.

Against Pound Sterling, the dollar gained about 0.5%, as it strengthened to $1.2824.

The Japanese Yen strengthened to 107.99 a dollar, a long way up from 109.59 yen on Thursday.

The Aussie lost nearly 1% against the dollar at 0.6509. Against the loonie, the dollar was up at 1.3415, while against Swiss franc, it shed about 0.2% at 0.9657.

A report from the Commerce Department showed personal income climbed by 0.6% in January after inching up by a downwardly revised 0.1% in December. Economists had expected personal income to rise by 0.3% compared to the 0.2% uptick originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, also increased by 0.6% in January after edging up by 0.1% in December.

Meanwhile, the Commerce Department said personal spending rose by 0.2% in January after climbing by an upwardly revised 0.4% in December. Personal spending had been expected to rise by 0.3%, matching the increase originally reported for the previous month

Consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of February, revised data from the University of Michigan revealed.

The consumer sentiment index for February was upwardly revised to 101.0 from the preliminary reading of 100.9. Economists had expected the index to be unrevised.

With the unexpected upward revision, the consumer sentiment index for February is a little further above the final January reading of 99.8.

Chicago-area business activity saw only a slight contraction in the month of February, according to a report released by MNI Indicators on Friday.

MNI Indicators said its Chicago business barometer jumped to 49.0 in February from 42.9 in January, although a reading below 50 still indicates a contraction in regional business activity. Economists had expected the index to rise to 45.9.


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Treasuries Show Sharp Increase, Extending Recent Rally

Trading 29 fév 2020 Commentaire »

Treasuries showed another substantial move to the upside during trading on Friday, extending the unrelenting advance seen over the past few sessions.

Bond prices moved higher early in the session and saw further upside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plunged by 17.2 basis points to 1.127 percent.

With the steep drop on the day, the ten-year yield closed lower for the seventh straight session, ending the day at a new record closing low.

Escalating concerns about the coronavirus outbreak continued to increase the appeal of the relative safety of bonds as the disease continues to spread across the globe.

New Zealand and Nigeria are among the countries that have recently confirmed their first coronavirus cases, with the World Health Organization warning that the fast-spreading disease could soon reach most, "if not all" countries around the world.

WHO director-general Tedros Adhanom Ghebreyesus recently said the organization has raised its assessment of the risk of spread and the risk of impact of the coronavirus to "very high."

In addition to the confirmed cases in new countries, the number of cases in countries like China, South Korea and Iran countries to rise.

Reports raising questions about the U.S response to the outbreak added to worries even as President Donald Trump continues to downplay the threat posed to the U.S.

Meanwhile, traders continued to ignore the latest U.S. economic reports, as the data does not reflect the latest developments on the coronavirus front.

News regarding the outbreak is likely to remain in the spotlight next week, potentially even overshadowing the usually closely watched monthly jobs report.


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Oil Prices Crash Again On Virus Jitters, Settle At 14-month Low

Trading 29 fév 2020 Commentaire »

Crude oil prices fell sharply on Friday, extending recent losses, as growing concerns about energy demand due to the impact of the fast-spreading coronavirus on the global economy weighed on the commodity once again.

West Texas Intermediate Crude oil futures for April ended down $2.33, or about 5%, at $44.76 a barrel, the lowest settlement since end December 2018.

On Thursday, WTI crude oil futures ended down $1.64, or 3.4%, at $47.09 a barrel.

WTI crude oil futures lost nearly 16% this week, the biggest weekly decline in more than 12 years.

In the month of February 2020, oil futures lost about 13%.

Brent crude futures declined by about 3.2% to $50.75 a barrel, the lowest in about fourteen months.

OPEC and allies are scheduled to meet next week, March 5-6, to consider deepening production cuts to support prices. Currently, the group is producing 1.7 million barrels less per day.

According to the Production Supply Monthly report from the U.S. Energy Information Administration, U.S. oil output fell to 12.78 million barrels per day in December from 12.86 million barrels per day a month earlier.

But then, weekly oil reports from EIA since January this year, have showed a jump in crude production in the U.S, with output rising to a record 13 million barrels per day.

Meanwhile, in news about the coronavirus outbreak, New Zealand and Nigeria have confirmed their first coronavirus cases. The World Health Organization has warned that the fast-spreading disease could soon reach most, "if not all" countries around the world.

WHO director-general Tedros Adhanom Ghebreyesus recently said the organization has raised its assessment of the risk of spread and the risk of impact of the coronavirus to "very high."

In addition to the confirmed cases in new countries, the number of cases in countries like China, South Korea and Iran continue to rise.

According to reports, officials in the northern island of Hokkaido, Japan, declared a state of emergency because of the pace of new infections there. South Korean officials are said to be rushing to test thousands of members of a church at the center of that country's outbreak.


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Gold Futures Tank, Record Worst Single-session Setback In Nearly 7 Years

Trading 29 fév 2020 Commentaire »

Gold prices plunged sharply on Friday, extending losses to a fourth session and recording the biggest single-session drop in terms of percentage, since June 2013.

With riskier assets such as equities nosediving amid growing concerns about the impact of the coronavirus on the global economy, traders appeared to be looking to cash their investments in the safe-haven commodity.

Stock markets across the globe have been witnessing heavy selling in recent sessions, with many of them recording their worst spells in more than a decade, as investors fear a global recession due to the impact of the rapidly spreading coronavirus on several economies.

Gold futures for April ended down $75.80, or about 4.6%, at $1,566.70 an ounce.

On Thursday, Gold futures for April settled lower by $0.60, or about 0.04%, at $1,642.50 an ounce.

Silver futures for May ended down $1.278 at $16.457 an ounce, while Copper futures for May settled at $2.5400 per pound, down $0.0315 from previous close.

A report from the Commerce Department showed personal income climbed by 0.6% in January after inching up by a downwardly revised 0.1% in December. Economists had expected personal income to rise by 0.3% compared to the 0.2% uptick originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, also increased by 0.6% in January after edging up by 0.1% in December.

Meanwhile, the Commerce Department said personal spending rose by 0.2% in January after climbing by an upwardly revised 0.4% in December. Personal spending had been expected to rise by 0.3%, matching the increase originally reported for the previous month

Consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of February, revised data from the University of Michigan revealed.

The consumer sentiment index for February was upwardly revised to 101.0 from the preliminary reading of 100.9. Economists had expected the index to be unrevised.

With the unexpected upward revision, the consumer sentiment index for February is a little further above the final January reading of 99.8.

Chicago-area business activity saw only a slight contraction in the month of February, according to a report released by MNI Indicators on Friday.

MNI Indicators said its Chicago business barometer jumped to 49.0 in February from 42.9 in January, although a reading below 50 still indicates a contraction in regional business activity. Economists had expected the index to rise to 45.9.


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India Economic Growth Slowest In Over 6 Years

Trading 28 fév 2020 Commentaire »

India's economy grew at the slowest pace in more than six years during the three months to December and the outlook does not look promising in the near term amid the coronavirus spreading across the world.

Gross domestic product grew 4.7 percent in the October to December quarter, official data showed Friday. The quarterly growth was largely supported by increased government spending.

The July to September quarter growth figure was significantly revised up to 5.1 percent from 4.5 percent reported earlier. The growth rate for the April to March quarter was also revised higher to 5.6 percent from 5 percent. The statistics ministry reiterated that the full year growth for the fiscal year 2019-20 is estimated at 5.0 percent, in line with the first advance estimate, versus 6.1 percent in 2018-19.

Earlier this month, the Reserve Bank of India projected the GDP growth for 2020-21 at 6.0 percent versus the government's forecast of 6-6.5 percent.

The bank expects private consumption to rise, especially in rural areas, to recover on the back of improved harvest prospects.

In January, the International Monetary Fund cut the global growth forecasts for this year and next, mainly due to the weaker-than-expected expansion in India.

The global lender slashed India's growth forecast for 2020 by 1.2 percentage point to 5.8 percent, and the outlook for next year was lowered by 0.9 percentage point to 6.5 percent. Growth was estimated at 4.8 percent in 2019.

The improvement in growth is expected to be supported by monetary and fiscal stimulus as well as subdued oil prices, the IMF said.


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U.S. Consumer Sentiment Improves Slightly More Than Initially Estimated

Trading 28 fév 2020 Commentaire »

Consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of February, revised data from the University of Michigan revealed on Friday.

The consumer sentiment index for February was upwardly revised to 101.0 from the preliminary reading of 100.9. Economists had expected the index to be unrevised.

With the unexpected upward revision, the consumer sentiment index for February is a little further above the final January reading of 99.8.

Just 8 percent of consumers mentioned the coronavirus in February as a whole, although mentions spiked to 20 percent amid the sell-off on Wall Street on Monday and Tuesday, the last days of the February survey.

"While too few cases were conducted to attach any statistical significance to the findings, it is nonetheless true that the domestic spread of the virus could have a significant impact on consumer spending," said Surveys of Consumers chief economist Richard Curtin.

He added, "Importantly, the early indications suggested only a very modest impact as the Sentiment Index among consumers who mentioned the coronavirus was still quite high (just over 90.0)."

The report said the index of consumer expectations climbed to 92.1 in February from 90.5 in January and the current economic conditions index inched up to 114.8 from 114.4.

On the inflation front, one-year inflation expectations edged down to 2.4 percent in February from 2.5 percent in January, while five-year inflation expectations fell to 2.3 percent from 2.5 percent.


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Chicago Business Barometer Indicates Modest Contraction In February

Trading 28 fév 2020 Commentaire »

Chicago-area business activity saw only a slight contraction in the month of February, according to a report released by MNI Indicators on Friday.

MNI Indicators said its Chicago business barometer jumped to 49.0 in February from 42.9 in January, although a reading below 50 still indicates a contraction in regional business activity. Economists had expected the index to rise to 45.9.

The bigger than expected increase by the headline index came as the production index shifted back into expansion, surging up to an eight-month high of 51.0 in February from 42.7 in January.

The new orders also index also showed a significant increase, climbing to a six-month high of 49.1 in February from 41.5 in the previous month.

On the other hand, the report said the employment index slipped to 44.5 in February from 46.9 in January, hitting its lowest level since last July.

MNI Indicators said the prices index also fell to 52.9 in February from 56.1, indicating prices at the factory gate cooled for the second straight month.


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*U.S. Consumer Sentiment Index For February Upwardly Revised To 101.0

Trading 28 fév 2020 Commentaire »

U.S. Consumer Sentiment Index For February Upwardly Revised To 101.0


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Belgium Economic Growth Steady At 0.4%

Trading 28 fév 2020 Commentaire »

Belgium's economy expanded at a stable rate in the fourth quarter, figures from the National Bank of Belgium showed on Friday.

Gross domestic product grew 0.4 percent from the third quarter, when the economy expanded at the same pace. The economy grew 0.3 percent in the second quarter and stagnated in the first three months of 2019.

Household consumption rose 0.5 percent and their investments increased 1.3 percent. Public expenditure grew 1.1 percent, but its investment expenditure shrunk 7.3 percent.

Business investment rose 0.9 percent. Exports of goods and services climbed 0.6 percent, while imports increased 0.9 percent. Thus, net exports made a negative contribution of -0.2 percentage points to economic growth.

On a year-on-year basis, GDP rose 1.2 percent following a 1.6 percent in the previous three months. In 2019, the economy grew 1.4 percent versus 1.5 percent expansion in the previous year.


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*Chicago Business Barometer Jumps To 49.0 In February

Trading 28 fév 2020 Commentaire »

Chicago Business Barometer Jumps To 49.0 In February


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