NIESR Expects UK Recovery To Slow Significantly

Trading 09 oct 2020 Commentaire »

UK economic recovery likely lost steam and is set to slow sharply in the fourth quarter of the year, the NIESR said Friday.

The think tank estimates that growth stopped in September and the economy stagnated. Growth is expected to be nearly 15 percent in the third quarter.

ONS data, released earlier on Friday, the UK economy grew by 2.1 percent in August, marking a fourth consecutive monthly increase. The estimates also showed that the UK economy grew by 8.0 percent in the three months to August.

The NIESR's initial forecast for the final quarter of the year is for growth of 1.3 percent.

"However, there is further cause for concern ahead with the likely re-imposition of lockdown measures, the winding down of government support measures, and Brexit uncertainty," NIESR Senior Economist Kemar Whyte said.

"We expect the economy at the end of this year to be some 8.5 percent below its level at the end of 2019."


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Canadian Dollar Extends Gain After Strong Jobs Data

Trading 09 oct 2020 Commentaire »

The Canadian dollar extended its early rally against its major rivals in the European session on Friday, after a data showed that the nation's job growth accelerated in September and the jobless rate fell, signaling an economic recovery from the pandemic crisis.

Data from Statistics Canada showed that employment rose by 378,200 jobs in September following an increase of 245,800 jobs in August.

Economists had expected employment to grow by 150,000 jobs.

The unemployment rate dropped to 9.0 percent in September from 10.2 percent in August. Economists had expected the employment rate to fall by 9.8 percent.

The loonie hit more than a 3-week high of 1.3133 against the greenback, up from a low of 1.3198 hit at 5:45 pm ET. On the upside, immediate resistance is possibly seen near the 1.29 region.

The loonie rose back to 1.5510 against the euro, heading towards more than a 4-week peak of 1.5506 seen earlier in the session. Should the loonie strengthens further, it is likely to test resistance around the 1.52 level.

The CAD/JPY pair hit more than a 3-week high of 80.60. The loonie is poised to challenge resistance around the 82.5 mark.

Data from the Ministry of Internal Affairs and Communications showed that Japan household spending fell 6.9 percent on year in August - coming in at 276,360 yen.

That was in line with expectations following the 7.6 percent annual decline in July.

In contrast, the loonie dropped against the aussie, with the pair trading at 0.9488. The loonie may locate support around the 0.96 level.

Data from the Australian Bureau of Statistics showed that Australia home loans rose a seasonally adjusted 13.6 percent on month in August - coming in at A$16.28 billion.

That was in line with expectations following the 10.7 percent increase in July.


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U.S. Wholesale Inventories Rise Slightly Less Than Expected In August

Trading 09 oct 2020 Commentaire »

Wholesale inventories in the U.S. rose by slightly less than anticipated in the month of August, according to a report released by the Commerce Department on Friday.

The Commerce Department said wholesale inventories climbed by 0.4 percent in August after edging down by 0.2 percent in July. Economists had expected inventories to increase by 0.5 percent.

Inventories of durable goods grew by 0.6 percent in August after slumping by 0.7 percent in July, while inventories of non-durable goods were unchanged after climbing by 0.7 percent.

Meanwhile, the report said wholesale sales jumped by 1.4 percent in August following a 4.8 percent spike in the previous month.

Sales of durable goods surged up by 1.3 percent in August after soaring by 4.4 percent in July, while sales of non-durable goods shot up by 1.6 percent after skyrocketing by 5.2 percent.

With sales climbing by much more than inventories, the inventories/sales ratio for merchant wholesalers edged down to 1.31 in August from 1.32 in July.


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*U.S. Wholesale Inventories Rise 0.4% In August

Trading 09 oct 2020 Commentaire »

U.S. Wholesale Inventories Rise 0.4% In August


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*NIESR Sees Significantly Slower Pace Of UK Recovery In Q4

Trading 09 oct 2020 Commentaire »

NIESR Sees Significantly Slower Pace Of UK Recovery In Q4


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*NIESR Expects UK Economy To Be About 8.5% Below Its End-2019 Level By 2020-end

Trading 09 oct 2020 Commentaire »

NIESR Expects UK Economy To Be About 8.5% Below Its End-2019 Level By 2020-end


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*UK Growth To Stop In September, GDP Forecast 0.0%: NIESR

Trading 09 oct 2020 Commentaire »

UK Growth To Stop In September, GDP Forecast 0.0%: NIESR


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*UK Q3 Growth To Be Around 15%: NIESR

Trading 09 oct 2020 Commentaire »

UK Q3 Growth To Be Around 15%: NIESR


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Dollar Down On Democratic Lead, Stimulus Hopes

Trading 09 oct 2020 Commentaire »

The U.S. dollar depreciated against its most major counterparts in the European session on Friday, as a jump in Democratic presidential candidate Joe Biden's lead over President Donald Trump in several polls and renewed hopes for a U.S. stimulus deal boosted investor sentiment.

Reuters/Ipsos opinion polls showed Biden ahead by 10 percentage points over Trump.

Growing hopes for a Democratic victory in the November election and the prospect of significant further stimulus reduced the demand for the safe-haven currency.

The Trump administration indicated on Thursday night that it was open to a broader coronavirus stimulus package - one that includes support for airlines, state and local government aid, and jobless benefits.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks over the coronavirus aid plan, after Trump abruptly called off negotiations earlier this week.

Better-than-expected China services PMI also aided sentiment.

The Caixin composite services Purchasing Managers' Index for China rose to 54.8 in September from 54.0 in August, marking the fifth consecutive increase in service sector output. The expansion was underpinned by a sustained rise in total new business.

The greenback eased back to 105.83 against the yen, on track to pierce a 2-day low of 105.81 seen in the Asian session. The dollar is seen finding support around the 104.00 mark.

The greenback fell to 0.9122 against the franc, which was its weakest level since September 21. Next key support for the greenback is likely seen around the 0.90 level.

The greenback declined to more than a 2-week low of 1.1809 against the euro, versus Thursday's closing quote of 1.1758. The greenback is likely to face support around the 1.20 region, if it drops again.

Reversing from its early highs of 1.3196 against the loonie, 0.7167 against the aussie and 0.6575 against the kiwi, the greenback dropped to a 3-week low of 1.3160, 3-day lows of 0.7195 and 0.6623, respectively. The next possible support for the greenback is seen around 1.29 against the loonie, 0.75 against the aussie and 0.68 against the kiwi.

In contrast, the greenback rebounded from a 3-day low of 1.2973 against the pound and was trading at 1.2922. If the dollar strengthens further, 1.28 is seen as its next resistance level.

Data from the Office for National Statistics showed that the UK economy grew at a moderate pace in August as lockdown measures continued to ease.

Gross domestic product climbed 2.1 percent on month, slower than the 6.4 percent expansion seen in July.

U.S. wholesale inventories for August will be released in the New York session.


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Pound rises breaking resistance $1.30, loonie steadily declines

Trading 09 oct 2020 Commentaire »

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By the end of the week, market tensions eased, and negotiations between Democrats and Republicans over stimulus for the US economy resumed. Moreover, Donald Trump announced the readiness of the White House to support citizens by increasing unemployment benefits. Risk appetite improved, the dollar fell, which contributed to the short-term growth of the GBP / USD pair. The data on GDP and industrial production for August opens new thoughts for the UK.

The volume of production declined again by 6.4% in annual terms, a month earlier the decline was noted at 7.8%. This decrease in the country's indicator has been recorded for the 15th month, but the rate of decline is slowing down, which, in principle, is a positive factor for the pound.

Market players are now awaiting comments from the Bank of England, which should give a hint of how much the indicators will affect the market.

Sterling could get additional support from the bullish rally in the energy market. The benchmark crude oil is trading at a 3-week high due to declining supplies of hydrocarbons in Europe and the US.

If you pay attention to the technical side, you will notice that since the beginning of October, the GBP / USD rate has been moving between the support and resistance lines. This serves as the basis for creating a short-term growing channel. Now the price of the pound is moving upward. Most likely, the GBP / USD pair will continue to rise and overtake the resistance line at 1.3070.

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The fall of the USD / CAD pair is associated with the recent activity of the greenback. It should be noted that in the first half of September, the pair was moving steadily along the support zone of 1.3180. Later, after a strong jump, it tested the resistance zone 1.3340.

This week the USD / CAD rate has returned to a strong support level again. It is unlikely that after such a strong fall and the softening of Trump's position on the allocation of the stimulus package in the US economy, the pair will continue to fall lower. A rebound to 1.3220, and maybe even higher, is likely to happen.

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In addition, as the Governor of the Bank of Canada, Tiff Macklem said yesterday, the country's regulator continues to assess risks and does not intend to abandon the current soft monetary policy. This is a negative factor for the Canadian dollar. The fact is that low rates and quantitative easing contribute to the weakening of the loonie.

The energy market is another area where additional pressure may come in the event of a fall in oil prices. Despite the fact that the quotes of the benchmark brands are trading at rather strong levels, prices are still tending to decline. Loonie is responding to oil as the Canadian economy continues to be a commodity economy. The lion's share of the country's budget is formed from the receipt of export earnings to the sale of hydrocarbons.

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