Turkish Central Bank Cuts Rates Again

Trading 19 fév 2020 Commentaire »

Turkey's central bank cut interest rates for a sixth policy session in a row, citing continued economic recovery and the need to sustain a disinflation path. The Monetary Policy Committee, led by Governor Murat Uysal, slashed the policy rate, which is the one-week repo auction rate, to 10.75 percent from 11.25 percent, the TCMB said in a statement on Wednesday.

The latest reduction was the smallest in the current easing cycle. In January, the bank had cut the rate by 75 basis points.

The central bank had cut the rate by 200 basis points in the previous policy session in December. Prior to that, the rate was lowered by 250 basis points in October, 325 basis points in September and by 425 basis points in July.

"Considering all factors affecting the inflation outlook, the Committee decided to make a more measured cut in the policy rate," the central bank said.

"At this point, the current monetary policy stance remains consistent with the projected disinflation path."

The bank considers sustaining a moderate course in current account balance, which has recently recorded significant improvement, as a crucial element of the macroeconomic policy mix. Rising protectionism, uncertainty regarding global economic policies, geopolitical developments and the recent Covid-19 outbreak in China are closely monitored for their impact on capital flows, international trade and commodity prices, the bank said.


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U.S. Housing Starts Pull Back After Reaching 13-Year High

Trading 19 fév 2020 Commentaire »

A report released by the Commerce Department on Wednesday showed a pullback in new residential construction in the U.S. in the month of January.

The Commerce Department said housing starts slumped by 3.6 percent to an annual rate of 1.567 million in January after soaring by 17.7 percent to a revised rate of 1.626 million in December.

Economists had expected housing starts to tumble by 11.4 percent to a rate of 1.425 million from the 1.608 million originally reported for the previous month.

With the decrease, housing starts pulled back after reaching their highest level since hitting 1.649 million in December of 2006.

Single-family housing starts plunged by 5.9 percent to a rate of 1.010 million in January, which more than offset a 0.7 percent increase in multi-family starts to rate of 557,000.

Meanwhile, the report said building permits spiked by 9.2 percent to an annual rate of 1.551 million in January after sliding by 3.7 percent to a revised rate of 1.420 million in December.

Building permits, an indicator of future housing demand, had been expected to rise by 2.4 percent to a rate of 1.450 million from the 1.416 million originally reported for the previous month.

With the much bigger than expected increase, building permits reached their highest level since hitting 1.596 million in March of 2007.

Single-family authorizations shot up by 6.4 percent to a rate of 987,000 in January, and multi-family permits soared by 14.6 percent to a rate of 564,000.

Compared to the same month a year ago, housing starts in November were up by 21.4 percent, while building permits were up by 17.9 percent.

"Housing starts in January reversed only a small part of their weather-induced December surge, and the underlying data point to solid momentum going forward," said a note from economists at Oxford Economics.

The noted added, "Housing is expected to make a small positive contribution to GDP growth in Q1, which is currently tracking at only 0.4% annualized."

On Tuesday, the National Association of Home Builders released a separate report showing a slight deterioration in homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 74 in February after slipping to 75 in January. Economists had expected the index to come in unchanged.


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Strong Inflation, Rising Shares Lift Canadian Dollar

Trading 19 fév 2020 Commentaire »

The Canadian dollar firmed up against its major counterparts in the European session on Wednesday, as the nation's consumer inflation showed a modest increase in January, while a fall in the rate of new coronavirus cases lifted investor sentiment.

Data from Statistics Canada showed that inflation rose 0.1 percent on a seasonally adjusted monthly basis in January, following a 0.4 percent gain in December

Core inflation, excluding food and energy, remained unchanged at 0.2 percent in January.

The CPI rose 2.4 percent year-on-year in January, up from a 2.2 percent gain in December.

Excluding gasoline, the CPI rose 2.0 percent in January.

Sentiment was underpinned by a fall in the number of new coronavirus cases in China.

Markets also remain hopeful that China will cut its benchmark loan prime rate Thursday to offset the economic damage caused by the coronavirus outbreak.

The loonie extended rally to a 4-week high of 83.81 against the yen from Tuesday's closing value of 82.86. The loonie may find resistance around the 86.5 level.

Data from the Ministry of Finance showed that Japan posted a merchandise trade deficit of 1,312.6 billion yen in January.

That beat estimates for a shortfall of 1,684.8 billion yen following the 154.6 billion yen deficit in December.

The loonie strengthened to 1.3215 against the greenback, a level unseen this year. Against the euro, the loonie hit the highest level since April 2017, at 1.4264. The next likely resistance for the loonie is seen around 1.30 against the greenback and 1.40 against the euro.

The loonie jumped to 0.8830 against the aussie, which was the strongest since June 2010. On the upside, resistance is likely seen near the 0.86 level.

Looking ahead, the Federal Reserve will release minutes from its January 28-29 meeting at 2:00 pm ET.


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Eurozone Current Account Surplus Grows

Trading 19 fév 2020 Commentaire »

Euro area current account surolus grew in December after dropping in the previous month and the surplus for the full year 2019 was largely unchanged from a year ago, preliminary figures from the European Central Bank showed on Wednesday.

The current account surplus rose to EUR 332.561 billion from EUR 32.420 billion in November.

The surplus in the trade in goods was EUR 31 billion and that in services was EUR 6 billion. The primary income surplus was EUR 5 billion. These were partly offset by a EUR 10 billion deficit for secondary income.

For the whole of 2019, the current account surplus was EUR 362 billion or 3.1 percent of euro area GDP compared to a surplus of EUR 359 billion or 3.1 percent of euro area GDP in 2018.


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U.S. Producer Prices Climb 0.5% In January, Much More Than Expected

Trading 19 fév 2020 Commentaire »

Producer prices in the U.S. increased by much more than anticipated in the month of January, according to a report released by the Labor Department on Wednesday.

The Labor Department said it producer price index for final demand climbed by 0.5 percent in January after rising by 0.2 percent in December. Economists had expected producer prices to inch up by 0.1 percent.

The bigger than expected increase in producer prices came even though energy prices slid by 0.7 percent in January after jumping by 1.5 percent in December.

Excluding the pullback in energy prices and a modest increase in food prices, core producer prices still rose by 0.5 percent in January compared to economist estimates for a 0.2 percent uptick.

A jump in prices for services contributed to the stronger than expected price growth, with prices for final demand services surging up by 0.7 percent in January after coming in unchanged in December.

The Labor Department said forty percent of the January increase in prices for services can be traced to margins for apparel, jewelry, footwear, and accessories retailing, which spiked by 10.3 percent.

Michael Pearce, Senior U.S. Economist at Capital Economics, noted hospital inpatient services prices also climbed by 0.9 percent, reflecting a larger annual rise in Medicare payments mandated by the federal government.

"With both of those factors transitory, it seems unlikely that January's rise represents a real turnaround in underlying price pressures in the service sector," Pearce said.

With the much bigger than expected monthly increase, the annual rate of producer price growth accelerated to 2.1 percent in January from 1.3 percent in December.

Core producer prices in January were up by 1.7 percent compared to the same month a year ago, which also reflects a significant acceleration from the 1.1 percent growth in the previous month.

"The jump in Medicare hospital payments will feed through into the Fed's preferred PCE consumer price measure, but it should still remain well below the 2% target, which means that interest rates are going to remain at or below current levels for many years to come," Pearce said.

Last Thursday, the Labor Department released a separate report showing a modest increase in U.S. consumer prices in the month of January, with higher prices for food and shelter offsetting a steep drop in gasoline prices.

The Labor Department said its consumer price index inched up by 0.1 percent in January after rising by 0.2 percent in December. Economists had expected prices to increase by 0.2 percent.

The uptick in consumer prices was primarily due to an increase in shelter costs, which climbed by 0.4 percent in January.

Prices for food and for medical care services also rose during the month, more than offsetting a 1.6 percent nosedive in gasoline prices.

Core consumer prices, which exclude food and energy prices, rose by 0.2 percent in January after ticking up by 0.1 percent in the previous month. The increase in core prices matched economist estimates.

Compared to the same month a year ago, consumer prices were up by 2.5 percent in January, reflecting the biggest annual increase since October of 2018.

The report said core consumer prices in January were up by 2.3 percent year-over-year, the same rate of growth as reported in the previous three months.


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*Yen Extends Fall To 4-week Of 83.81 Against Canadian Dollar

Trading 19 fév 2020 Commentaire »

Yen Extends Fall To 4-week Of 83.81 Against Canadian Dollar


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*Yen Extends Drop To 70.72 Against NZ Dollar

Trading 19 fév 2020 Commentaire »

Yen Extends Drop To 70.72 Against NZ Dollar


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*Yen Extend Slide To 6-day Lows Of 119.39 Vs Euro, 112.42 Vs Franc

Trading 19 fév 2020 Commentaire »

Yen Extend Slide To 6-day Lows Of 119.39 Vs Euro, 112.42 Vs Franc


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*Yen Extends Decline To 5-day Low Of 73.98 Versus Australian Dollar

Trading 19 fév 2020 Commentaire »

Yen Extends Decline To 5-day Low Of 73.98 Versus Australian Dollar


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*Yen Extends Decline To 9-month Low Of 110.52 Against U.S. Dollar

Trading 19 fév 2020 Commentaire »

Yen Extends Decline To 9-month Low Of 110.52 Against U.S. Dollar


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