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EUR/USD Fundamental Analysis: February 28, 2017

The market saw a very dismal durable goods data reading while Trump continues to further delay his long-awaited tax cut policies, thereby contributing to the further dwindling of the value of the US dollar. As a reaction to this particular phenomenon, the EUR/USD pair was able to reach 1.0630 points in a matter of a few hours and seems poised to move further.

However, the US dollar suddenly reverted its losses for no apparent reason at all and this caused the EUR/USD to drop further to 1.0600 before settling at just over 1.0580 points. Some market analysts are crediting this sudden surge in the dollar’s value to Trump’s previous statements regarding the infrastructure increases, a favorite campaign topic of Trump during his candidacy. Previously, there have been rumors swirling around that this infrastructure policies would not come into effect until 2018, but since Trump has already re-discussed this particular proposal, the market has since then been speculating that the increase might be implemented within the year which could help in keeping the buoyancy of the market. The USD has been able to revert its losses as a result but the real determinant here would be the rate statement next month as well as the FOMC rates.

Now that the market is slowly shifting its focus from Trump’s policies towards the move of the Federal Reserve, it is highly likely that the market’s movements will be relying on the Fed’s decision on when they will be implementing the next rate hike.

There are no major releases coming from the eurozone today but the US will be releasing its consumer spending data as well as its Preliminary GDP data today which could bring in added volatility to the USD and affect the EUR/USD pair. The currency pair is expected to continue consolidating with bullish undertones for today.
 
EUR/USD Fundamental Analysis: February 28, 2017

The market saw a very dismal durable goods data reading while Trump continues to further delay his long-awaited tax cut policies, thereby contributing to the further dwindling of the value of the US dollar. As a reaction to this particular phenomenon, the EUR/USD pair was able to reach 1.0630 points in a matter of a few hours and seems poised to move further.

However, the US dollar suddenly reverted its losses for no apparent reason at all and this caused the EUR/USD to drop further to 1.0600 before settling at just over 1.0580 points. Some market analysts are crediting this sudden surge in the dollar’s value to Trump’s previous statements regarding the infrastructure increases, a favorite campaign topic of Trump during his candidacy. Previously, there have been rumors swirling around that this infrastructure policies would not come into effect until 2018, but since Trump has already re-discussed this particular proposal, the market has since then been speculating that the increase might be implemented within the year which could help in keeping the buoyancy of the market. The USD has been able to revert its losses as a result but the real determinant here would be the rate statement next month as well as the FOMC rates.

Now that the market is slowly shifting its focus from Trump’s policies towards the move of the Federal Reserve, it is highly likely that the market’s movements will be relying on the Fed’s decision on when they will be implementing the next rate hike.

There are no major releases coming from the eurozone today but the US will be releasing its consumer spending data as well as its Preliminary GDP data today which could bring in added volatility to the USD and affect the EUR/USD pair. The currency pair is expected to continue consolidating with bullish undertones for today.
 
February 28, 2017


Consumer Confidence of the Eurozone Plummeted

The consumer confidence of UK for this month declined while the British currency weakened. The prices rose and wage growth dwindled which influenced the Britain’s economic powerhouse.

The monthly household sentiment of GfK had a dipped and stayed below zero for the 10th month. The level for major purchases also decreased which implied that British citizens probably controlled their expenditures.

Another assessment by YouGov coupled with the Centre for Economics and Business Research is the job security index which further decline reaching its lowest result three years ago.

After the Brexit referendum, the private consumption as well as the services industry have compelled the economy, however, it set out some signs of economic strain. During the EU exit, the inflation increased as the energy cost climb higher together with the 16 percent cut in the sterling pound.

Furthermore, the growth of credit had a steep decline in December whilst retail sales inched up at its slowest pace since January 2014.
 
February 28, 2017

Steady Economic Growth of Australia as Exports Rises

The Australian economy is assumed to have recovered after surge in demand for exports and increase in spending from consumers and government. It is predicted that GDP report to be released on Wednesday with grow by 0.7 percent in last quarter after a decline of 0.5 percent in previous quarter. Companies’ earnings rallied as much as 20 percent in fourth quarter driven by an almost 50% boost from miners.


Rise in money flow from exports has a big impact to country’s income and its nominal growth. This signals Australian economy to surpass technical recession as it continues to move optimistically.
 
March 7, 2017

Brexit Supporters Push May to Examine EFTA Comeback

UK Prime Minister Theresa May is recently being urged by a panel of Brexit-supporting lawmakers to consider bringing the country back into the European Free Trade Association, a four-country organization which UK left way back in 1972 as a means of a starter to its trade negotiations which immediately follows the Brexit process. UK was one of the founding members of the said organization in 1960 but eventually left the EFTA in order for the country to become part of the European Union. Rejoining the EFTA could mean that the UK would be able to make use of the several free trade agreements created within the said organization.
 
March 7, 2017

Australia's Interest Rate Remained on Hold

Australia kept its interest rates steady on Tuesday, March 7, because the property prices of Sydney continued to increase its risk which exceeded a much lowered inflation rate. The Governor of Reserve Bank of Australia Philip Lowe concluded together with his board to remain the cash rate at 1.5 percent after a positive growth and optimistic performance in trading for the last three months of 2016.

According to the poll led by Bloomberg, the decision were already projected by all 29 economists.

Moreover, the housing demand in Sydney remained stable since buyers settled a property in the city which further ratcheted up debt records.

The central bank decided to maintain its policy despite of an extremely high house prices which partially stirred by the increasing population size coupled with the absence of family dwellings constructions.

Furthermore, the country’s economy rose by 1.1 percent in Q4 versus the past three months and the 2.4 percent gained from a year ago.
 
March 7, 2017

European stocks pulled down by German data

The European stocks dropped for three days in a row on Tuesday pulled by the decline in shares of Deutsche bank after asking for as much as $8.5 billion cash call. It’s shares declined close to 3 percent as a fresh low for the year.

Worsen by low corporate earnings report and industrial demand in Germany feel by 7.4 percent, the highest fall over the past 8 years, amid the global financial crisis that caused the investors to lose confidence setting the market in a lacklustre environment.

The U.S. futures began to fall slightly during the Wall Street ESc1 DJc1 as investors await for the possible next rate hike that is still uncertain but they are getting ready for it.
 
March 7, 2017

European stocks pulled down by German data

The European stocks dropped for three days in a row on Tuesday pulled by the decline in shares of Deutsche bank after asking for as much as $8.5 billion cash call. It’s shares declined close to 3 percent as a fresh low for the year.

Worsen by low corporate earnings report and industrial demand in Germany feel by 7.4 percent, the highest fall over the past 8 years, amid the global financial crisis that caused the investors to lose confidence setting the market in a lacklustre environment.

The U.S. futures began to fall slightly during the Wall Street ESc1 DJc1 as investors await for the possible next rate hike that is still uncertain but they are getting ready for it.
 
March 8, 2017
Pharma Stocks Drop as Trump Posts Drug Prices Tweet
Pharmaceutical stocks plummeted on Tuesday after Donald Trump plunged back into the drug pricing debacle after the US President tweeted a pledge to minimize the costs of medicinal products for US citizens. As stated in a tweet sent at 9:00 A.M., New York Time, Trump stated that his administration is currently working on a system which will enhance competition in the pharmaceutical industry. Analysts are saying that it is highly curious that Trump’s tweet comes immediately after the House healthcare reform bill, which is indicative of the administration’s efforts on drug and pharmaceutical pricing.
 
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March 8, 2017

Canada’s Economy Lead Over other G7 Countries

The Canadian economy is expected to gain 2.4% this year with equal expectations as of the United States and in the lead of other countries included in the Group of 7. The estimates were based from the Organisation for Economic Co-operation and Development

(OECD) release.

The international organization formerly mentioned about Canada’s possible economic improvement by 2.1 in 2017, which came in better and still appeared to be modest compared with the previous years of recoveries from economic decline.

The Paris-based institution hike up its projections for the selected biggest economies in the world which further includes USA and China, however, its evaluation for the world economy kept steady at 3.3% versus 3% in 2016.

Furthermore, the report mentioned that the US and Canada would likely outstrip other seven major economies which involve Germany as the next highest among the G7 with 1.8% growth in GDP.

For 2018, it is expected that the U.S. economy will earn 2.8% and 2.2% growth for Canada. Moreover, the forecast for the global economic growth is said to be 3.6%.
 
March 8, 2017


Dollar Trimmed Down after a Two-month High

The surge of U.S. dollar decelerated minimally on Wednesday session after reaching a two-month high against a basket of currencies last week. Investors are cautiously waiting on the sidelines as the Friday’s U.S. jobs report is about to be released soon. Moreover, there is a higher chance for a rate hike as the greenback sets in a tight range.

The appreciation of dollar seems like it achieved its limit with the rate hike in March in investors’ mind. Fed deliberating whether there will be a rate hike thrice for this year, this would prompt the central bank to provide hints as the workers’ salaries rise that could bring about inflation.
 
March 8, 2017

Pharma Stocks Drop as Trump Posts Drug Prices Tweet

Pharmaceutical stocks plummeted on Tuesday after Donald Trump plunged back into the drug pricing debacle after the US President tweeted a pledge to minimize the costs of medicinal products for US citizens. As stated in a tweet sent at 9:00 A.M., New York Time, Trump stated that his administration is currently working on a system which will enhance competition in the pharmaceutical industry. Analysts are saying that it is highly curious that Trump’s tweet comes immediately after the House healthcare reform bill, which is indicative of the administration’s efforts on drug and pharmaceutical pricing.
 
March 10, 2017

Nigeria Launched Recovery Plan for Economic Growth

The government of Nigeria has introduced its master plan to take off the recession with hopes of reaching 7.0% increase after three years, however, experts deemed that the target seems high to hit. The detailed outline of the plan was released on Monday including the possible programme of the oil giant in Western Africa to recover from the worst economic depression in 25 years.

John Ashbourne, an economist at the consultancy Capital Economics, said that one of the main considerations written in the document is the African Development Bank and World Bank to lend some money to the country since these banks provide borrowing plans.

The objective of the recovery plan is to diversify the economy by utilizing major industries inclusive of agriculture and energy as well as expanding production for oil up to 2.5 million barrels a day (BPD). As of this writing, the production arrives at 1.9 million bpd. The administration further initiated extensive projects for infrastructure aiming to improve transport system throughout the entire nation. Part of the goal is to improve the Gross Domestic Product with a 4.6% average until the year 2020 as the forecasted growth is at 7.0%.

Moreover, the global prices for oil have seen declined following the cut in revenue due to the Nigerian economy dependence from crude products. The naira established a weaker position and triggered inflation to beef up by 20%.
 
March 10, 2017

Next Visit of Vietnam’s PM to U.S. to Strengthen Ties

Prime Minister Nguyen Xuan Phuc aims to maintain its trading ties with the United States under the new administration while Vietnam likes to maintain U.S. being their leading partner. The prime minister’s next visit would strengthen ties between the two countries with Vietnam being the top potential beneficiary of the Trans-Pacific Partnership free trade agreement, known that Trump is against the continuation of this trade deal.


Their last official state meeting was in 2008 as he strengthened the security measure in problems regarding territorial claims with their neighboring country China. Their latest meetup was when both leaders attended the U.S.-ASEAN summit in February last year.
 
March 10, 2017

South Korean President Park Geun-hye Impeached amid Corruption Probe

A South Korean court has unanimously ruled for South Korean president Park Geun-hye’s impeachment following a corruption probe which has led to possibly one of the largest political scandals in the country’s history. The ruling states that the now former president must immediately vacate her luxurious Blue House residence in Seoul and has rendered the former president literally powerless. The impeachment must also immediately be followed by a presidential election within 60 days, and as of the moment, key opposition figures are leading in the country’s polls.
 
March 13, 2017

Brexit Dissenter Kristin Forbes to Resign from BoE Post

Kristin Forbes, one of the most vocal dissenters in the Bank of England’s nine-member Monetary Policy Committee, has decided to leave the UK central bank for good. Prior to this particular announcement, Forbes was constantly being tagged as a possible candidate for positions in the Federal Reserve since the UK-based financial analyst is an American citizen. Forbes has been known in the financial industry for her “dives” into obscure topics which have caused the central bank to rethink its stances on various situations. Just recently, Forbes has again made headlines by blatantly opposing the Brexit referendum last year.
 
March 13, 2017

Canada’s Partnership with Ivanhoe Cambridge and LOGOS to Invest in Indonesia and Singapore

The biggest pension fund managers in Canada settled an agreement with a real estate logistics operator, LOGOS and Ivanhoé Cambridge to have a venture with Asian countries Singapore and Indonesia.

This investment was constituted due to the increase of e-commerce together with the development of the middle-classes around the Southeast Asian market.

Based on the Reuters’ report, the Canada Pension Plan Investment Board (CPPIB) have its initial commitment worth US$200 million intended to achieve the 48% of LOGOS Singapore Logistics Venture (LSLV). Moreover, the Board is assumed to cater US$100 million for the LOGOS Indonesia Logistics Venture (LILV) for reaching 48% stake. The Canadian corporation mentioned that this partnership is considered as the primary step towards direct real estate investments within the two nations. Aside from the two aforementioned countries, LOGOS also have business in China and Australia.
 
March 13, 2017

Ford’s Lincoln Aims to Manufacture SUVs in China

Lincoln automobiles under Ford Motors Co’s plans to advance its entry to China and was doing some analysis on whether to manufacture cars locally. It aims to produce luxury SUVs in China by late 2019 with a bigger target of 80 stores by the end of the year from the former figure of 60 compared to the previous year of 65 Lincoln chain stores.


This move is aligned with the goals of competing with U.S. and German rivals as part of the world’s biggest auto market hereby prompted to design a car models particularly SUVs, to match the Chinese preference. Currently, the Lincoln automobiles are imported to China which a boost in sales as high as 180 percent in the previous year.
 
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