India GDP Contraction Slows, Economy Enters Recession

Trading 27 Nov 2020 Commentaire »

India's economic contraction slowed sharply in the September quarter, but the economy entered a technical recession due to the impact of the harsh lockdown imposed to curb the spread of the coronavirus, or Covid-19, pandemic.

Gross domestic product fell 7.5 percent year-on-year, data from the statistics ministry showed on Friday.

The pace of decline was much slower than the record 23.9 percent contraction in the June quarter as lockdown restrictions were relaxed in the June quarter.

Economists had forecast an 8.8 percent contraction.

With GDP falling in two consecutive quarters, the economy entered a technical recession for the first time ever. In the same quarter last year, the economy grew 4.4 percent.

In gross value added terms, GDP dropped 7 percent in the September quarter versus a 22.8 percent drop a quarter ago.

Early this month, the Reserve Bank of India said the Indian economy contracted 8.6 percent in the quarter ended September and thus will enter a recession.

In the June quarter, growth in the farm sector remained stable at 3.4 percent. Manufacturing expanded 0.6 percent after a steep contraction of over 23 percent in the previous three months.

Output in the construction sectors and the services industries including trade, financial services, transport, communication and hospitality continued to decline, but at slower rates.

The decline in household spending and investments also slowed.

"Looking ahead, encouraging news on vaccines has brightened the outlook, but weak fiscal support and an impaired banking sector will continue to weigh on India's recovery," Capital Economics economist Shilan Shah said.

"Under these circumstances, monetary policy is likely to remain very loose for the foreseeable future, and we think markets are too hawkish in expecting modest rate hikes in 2022," the economist added.


The material has been provided by InstaForex Company - www.instaforex.com

Finland Q3 Growth Revised Up

Trading 27 Nov 2020 Commentaire »

Finland's economy exited recession in the third quarter and expanded at a faster than expected pace, latest figures from Statistics Finland showed on Friday.

Gross domestic product grew a seasonally adjusted 3.3 percent from the previous quarter, the latest figures showed, versus the initial estimate of 2.6 percent.

The economy grew for the first time since the second quarter of 2019.

On a year-on-year basis, GDP shrunk a working-day adjusted 2.7 percent, which was revised from 4 percent estimated earlier. The sequential contraction in the second quarter was revised to 3.9 percent from 4.5 percent and the annual decline to 6.2 percent from 6.4 percent.

Exports rose 2.6 percent quarterly and imports grew 4.7 percent. Private consumption increased 2.9 percent, while investments decreased 0.3 percent.


The material has been provided by InstaForex Company - www.instaforex.com

Pound Weakens Amid Brexit Concerns

Trading 27 Nov 2020 Commentaire »

The pound dropped against its major rivals in the European session on Friday, as Brexit talks remained deadlocked over issues related to fisheries, state aid and future dispute resolution.

Brexit trade talks will resume in London this weekend, as negotiators are racing to strike a deal before the expiry of the U.K.'s transition period.

Ahead of in-person talks, EU chief negotiator Michel Barnier said that the "same significant divergences persist" between the two sides.

Prime Minister Boris Johnson said that the likelihood of a deal is very much determined by the EU.

Time is running out to strike a post-Brexit trade deal, with both sides calling on the other to compromise on key issues.

The pound depreciated to 1-week lows of 1.2078 against the franc and 0.8955 against the euro, after rising to 1.2132 and 0.8913, respectively in early deals. The pound is seen locating support around 1.175 against the franc and 0.92 against the euro.

The pound weakened to a 2-day low of 1.3311 against the greenback and a 4-day low of 138.61 against the yen, off its prior highs of 1.3382 and 139.28, respectively. The next possible support for the pound is seen around 1.28 against the greenback and 135.00 against the yen.


The material has been provided by InstaForex Company - www.instaforex.com

India Enters Recession In Sep Qtr

Trading 27 Nov 2020 Commentaire »

India's economy entered a recession in the September quarter though the pace of contraction slowed markedly due to the relaxation of lockdown measures, official data revealed Friday. Gross domestic product fell 7.5 percent year-on-year, slower than the record 23.9 percent contraction posted in the June quarter, data from the statistics ministry showed.

With the second consecutive fall in GDP, the economy entered a technical recession. Nonetheless, the pace of fall in GDP was slower than the economists' forecast of -8.8 percent. In the same period last year, GDP was up 4.4 percent.

In gross value added terms, GDP dropped 7 percent in the September quarter versus a 22.8 percent drop a quarter ago.

Early this month, the Reserve Bank of India said the Indian economy contracted 8.6 percent in the quarter ended September.


The material has been provided by InstaForex Company - www.instaforex.com

Taiwan Raises 2020 Growth Forecast

Trading 27 Nov 2020 Commentaire »

Taiwan upgraded its growth outlook for this year as higher overseas demand for technological applications helped the economy to withstand the downturn posed by the coronavirus pandemic.

The economy is forecast to grow 2.54 percent this year, up from the previous projection of 1.56 percent. But the government lowered its outlook for next year to 3.83 percent from 3.92 percent.

Gross domestic product grew 3.92 percent year-on-year in the third quarter, faster than the 0.35 percent growth in the second quarter, data from the Directorate-General of Budget, Accounting and Statistics showed. The real GDP surged 16.59 percent on a quarter-on-quarter, seasonally-adjusted annualized basis in the third quarter, in contrast to a 2.8 percent fall a quarter ago.

Taiwan's manufacturing activities were less affected by Covid-19 pandemic, the DGBAS said. The capacity expansion in dominant semiconductor manufacturing and demand for new technological applications underpinned exports growth this year.

However, offset by weakened global demand, slumping raw material prices and reducing tourists, real exports of goods and services will grow by 1.08 percent, the agency said.

Meanwhile, the real private consumption is expected to contract 2.52 percent, mainly owing to the impact of Covid-19 on the residents' travel expenditure abroad due to the border controls.

In the meantime, real private fixed capital formation is forecast to grow 1.47 percent, supported by the continuing investment of semiconductor industry and 5G network construction. Consumer prices are forecast to fall 0.26 percent this year, revised downward by 0.07 percentage point, mainly reflecting the converging decline in oil and raw material prices.


The material has been provided by InstaForex Company - www.instaforex.com

USDCAD follows our strategy after the rejection at 1.3150.

Trading 27 Nov 2020 Commentaire »

In our last USDCAD analysis we noted that the rejection and bearish reversal at the 1.3150-1.3130 area would lead to another pull back towards 1.30-1.29 and lower. Price got rejected at the back test of the broken trend line support and is now making new lower lows.

analytics5fc129264760a.jpg

Red line -resistance

Green line- support

Blue line - bullish divergence

USDCAD is trading again below 1.30 making new lower lows. The RSI doesn't follow and is instead providing us a bullish divergence. As we explained before, this is not a reversal signal, but just a warning. However if price continues lower we might see this divergence get canceled. So unless price confirms a reversal we remain bearish. In our last analysis we noted that as long as price is below 1.3150 we remain bearish. Our stop is lowered to 1.310 and if price reaches 1.29 we could lower stop to 1.30.

The material has been provided by InstaForex Company - www.instaforex.com

EURUSD at new weekly highs

Trading 27 Nov 2020 Commentaire »

EURUSD bulls have managed this week to defend 1.18 and they are back stronger pushing price above 1.19. On a weekly basis EURUSD is at new closing highs as price is about to end the week higher than the previous higher close back in August.

analytics5fc1280b04ce7.jpg

Green line - support

Red line resistance

EURUSD has made a double bottom at 1.16 and is making higher highs and higher lows since then. Support is found at the green trend line at 1.1740, but any move below this week's low at 1.18 would be a topping sign and something bulls would like to avoid. Our short-term target for EURUSD is found at 1.22 in order to complete the entire upward wave from March lows at 1.06.

The material has been provided by InstaForex Company - www.instaforex.com

Spain Retail Sales Fall Further In October

Trading 27 Nov 2020 Commentaire »

Spain retail sales declined further in October, albeit at a softer pace, data released by the statistical office INE showed on Friday.

Sales adjusted for calendar effects declined 2.7 percent yearly in October, following a 3.3 percent fall in the previous month.

On an unadjusted basis, retail sales fell 2.4 percent in October, following a 2.2 percent decline in the previous month.

On a month-on-month basis, retail sales rose 0.2 percent in October, after a 0.3 percent decrease in the prior month.

The latest growth was mainly due to the rise in sale of food by 3.0 percent and household equipment by 0.9 percent.


The material has been provided by InstaForex Company - www.instaforex.com

Italy Producer Prices, Consumer Confidence Falls

Trading 27 Nov 2020 Commentaire »

Italy's consumer confidence weakened in November and producer prices continued to decline in October, data from the statistical office Istat showed on Friday.

The consumer confidence decreased to 98.1 in November from 101.7 in October. Economists had expected a score of 99.0.

The economic confidence index fell to 82.8 in November from 92.2 in the previous month.

The business confidence index declined to 90.2 in November from 94.7 in the prior month. Economists had forecast a score of 93.5.

Separate data from the statistical office showed that the producer price index declined 2.5 percent year-on-year in October, following a 3.1 percent fall in September.

On a monthly basis, producer prices increased 0.6 percent in October, following a 0.1 percent rise in the preceding month.

In the domestic market, producer prices rose 0.9 percent month-on-month in October and declined 2.9 percent from a year ago.

Producer prices in the foreign market remained unchanged monthly in October and decreased 0.2 percent annually.


The material has been provided by InstaForex Company - www.instaforex.com

Gold price breaks $1,800

Trading 27 Nov 2020 Commentaire »

Gold is trading below $1,800 and today it made a new lower low at $1,773. In our latest Gold analysis when price was trading near $1,810-20 resistance area by the bearish channel, we noted the bearish flag pattern and that we expect Gold price to move to new lows towards $1,770-50. The upper side of the target range has been reached today.

analytics5fc1273496940.jpg

Blue lines - bearish channel

Gold price is moving lower in a textbook style as price gets rejected at the upper channel boundary resistance and breaks lower towards $1,770. Trend is clearly bearish and no sign of reversal yet. Gold price will most probably continue lower. A bounce towards $1,800 is not out of the question but it would not be something we would bet on.

The material has been provided by InstaForex Company - www.instaforex.com