Forex News from InstaForex

Greece Signals Bailout Snafu amid Ongoing Negotiations

Greek Prime Minister Alexis Tsipras warned that a convention of eurozone leaders may be needed if an accord is not sealed for the country despite ongoing discussions with global lenders on reforms necessary to unlock new bailout funds.

The premier said Wednesday the creditors are prompting delays and playing games with them.

The debt-stricken nation, in a proposed concession tackled Tuesday, would lower its pension expenditures by 1% of gross domestic product in 2019 and its tax threshold in 2020 by a same amount, three officials privy to the matter disclosed.

Sources said the tax measures would be bolstered by a year if the country fails to hit its primary surplus target, excluding interest payments, in 2018.

Meanwhile, eurozone finance ministers will touch on the status of Greek talks Friday at an informal gathering in Malta.

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Australia Construction Sector Slows In March - AiG

The construction sector in Australia continued to expand in March, although at a slower pace, the latest survey from the Australian Industry Group showed on Friday with a Performance of Construction Index score of 51.2.

That's down from 53.1 in February, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, the slowdown was attributed to softness in apartment, commercial and building activity - although house building picked up steam.

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Wall Street Slightly Higher, Investors Focus on Trump-Xi Meeting

U.S. equities finished off session peaks after comments about North Korea while investors focused on upcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping. Trump said he is willing to act alone on North Korea if China does not step up.

The Dow Jones industrial average edged up 0.07 percent at 20,662.95, as Caterpillar led gains while Procter & Gamble was the top decliner. The S&P 500 added 0.19 percent at 2,357.49, as energy led seven sectors up while telecommunications lagged behind. The Nasdaq composite climbed 0.25 percent at 5,878.95. The three major indexes were nearly 0.5 percent higher prior to Trump's comments, which were done as he braced for the key meeting with the Chinese president.

Four of the 11 major S&P sectors closed lower. The energy index was up 0.8 percent as oil prices increased to near one-month peaks. Comcast Corp gave the largest boost to the S&P with its 2.1 percent advance to $38.13 following its announcement of a wireless service.

Investors are cautious ahead of the corporate earnings season next week due to lofty valuations. The S&P 500 index is trading at around 19 times ahead earnings estimates, above its long-term average of 15.

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Moody's: Sharia-Compliant Investment Accounts at Malaysian Banks to Continue Growing

Moody's Investors Service says that the growth of Sharia-compliant investment accounts at Malaysian banks will remain strong over the next 3-5 years, carrying over the trend started in July 2015, as a result of active promotion by the regulator and banks themselves.

"Malaysian banks have strong incentives to promote the growth of such investment accounts because they provide capital benefits and an additional source of funding to grow their assets," says Simon Chen, a Moody's Vice President and Senior Analyst.

"At the same time, concerns exist over the untested state of loss-sharing mechanisms in the accounts, although the regulators have instituted safeguards to protect the banks," adds Chen.

Moody's conclusions are contained in its just-released report on Islamic banks in Malaysia, "Strong Growth of Investment Accounts Supports Bank Capital and Funding, But Risk-Sharing Mechanism Remains Untested."

The robust growth of Sharia-compliant investment accounts in Malaysia began in July 2015 following the implementation of the Islamic Financial Services Act 2013.

Such accounts are defined in the Act as those under which money is paid and accepted for investment in accordance with Sharia principles and on terms that state there is no express or implied obligation to repay the money in full.

Moody's notes that by February 2017, these accounts had grown to MYR74.2 billion, or 13% of total banking system liabilities, and they will become an increasingly important tool in managing business and income growth, as well as capital adequacy.

On the question of risk, a key issue is whether and to what extent loss-sharing mechanisms in the accounts between the banks and investors will be honored in case of actual losses. A significant loss event to test the resilience of this regime has yet to occur.

Our concern is underpinned by our observation that Islamic banks in other Islamic jurisdictions, notably some Gulf Cooperation Council(GCC) countries, in practice do not exercise the contractual loss-absorbing nature of investment accounts.

This situation is perhaps because of customer expectations and out of fear of reputational damage, and can result in Islamic banks bearing much, or all, of the assets risk on behalf of investment account holders.

However, a mitigating feature for Malaysia is that the regulators have put in place safeguards to protect the banks, such as the segregation of the investment accounts from deposits.

Such safeguards will put Malaysian banks on a strong legal footing for upholding the risk-sharing principle behind these investment products when actual losses arise.

Another credit risk is liquidity, as similar to customer deposits that are placed with banks and that can be withdrawn on demand, Sharia-complaint investment accounts could also be subject to withdrawals, which may lead to liquidity issues for the banks.

Moreover, investment accounts are more likely to be sourced from retail and corporate customers seeking higher returns for their excess funds. As such, these funds could be more volatile than deposit accounts, which are mainly the cash balances of companies maintained for daily operational purposes and are hence more stable.

However, this liquidity concern is partially mitigated by Malaysia's regulatory requirement for investment accounts and which helps maintain liquidity coverage ratios for individual accounts.

In such instances, the banks need to ensure that investment accounts have sufficient liquidity to overcome outflows in a 30-day period. That said, liquidity coverage ratio compliance would entail additional costs for the originating banks.

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China Moves to Avoid Trade War with America

China will offer concessions aimed at avoiding a trade war with the United States, according to American and Chinese officials engaged in negotiations between the two governments.

Chinese leader Xi Jinping and US President Donald Trump met last week at the latter's beach resort in Florida. Officials said both leaders agreed they need swift trade talks to produce results in 100 days.

Chinese officials said the Asian country is willing to escalate investment ceilings in the bilateral investment treaty, as well as lift a ban on US beef imports and purchase additional grains and other agricultural products.

Trump has not yet divulged if he seeks to push through with the deal, which American mediators hoped would resolve China market access issues in various industries.

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Wall Street Edged Up, Boosted by Energy

U.S. equities closed slightly higher as energy shares counterbalanced losses in financials, while investors looked ahead to the beginning of quarterly corporate earnings season. Geopolitical tensions contributed to the choppy session. U.S. Secretary of State Rex Tillerson said that military strikes against Syria regarding its use of chemical weapons posed as a warning to other nations.

The Dow Jones industrial average inched up 0.01 percent at 20,658.02, as Caterpillar led gains while Merck was the worst performer. The S&P 500 added 0.07 percent at 2,357.16, with energy leading six sectors up while telecommunications lagged behind. The Nasdaq composite climbed 0.5 percent at 5,8880.93.

The S&P energy index advanced 0.8 percent to lead gains, as stocks received a lift from oil which increased 1.61 percent to settle at $53.08 per barrel. Energy firms are seen to deliver great strength with a 600 percent year-over-year earnings increase.

The financial sector fell 0.3 percent. Bank stocks have declined as investors doubt lofty valuations as well as Trump's ability to rapidly introduce simpler regulations and other policies. Citigroup, JPMorgan and Wells Fargo are set to post earnings on Thursday. Investors expect lenders to shed some light on the U.S. banking industry's performance amid a rally in financial shares since the election of U.S. President Donald Trump.

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Wall Street Retreats as Geopolitical Concerns Persist

U.S. equities dropped as investors remained worried about geopolitical developments, which eventually pushed safe-havens higher. Adding to the sour mood, North Korea state media warned of a nuclear attack on the United States once provoked, as a U.S. Navy strike group moved towards the western Pacific.

The Dow Jones industrial average slipped 0.03 percent to 20,651, with Apple leading losses while McDonald's was the best performer. The S&P 500 shed 0.14 percent to 2,353, as technology led seven sectors down while real estate was the top gainer. The Nasdaq composite tumbled 0.24 percent to 5,886.

The CBOE Volatility Index (VIX), considered the best gauge of fear in the market, is up more than seven percent at 15.14. The index has traded over ten percent higher earlier in the session. Investors are counting on strong corporate earnings to help justify pricey valuations.

The financial sector fell 0.3 percent and the technology dropped 0.4 percent. Among shares active on corporate news, United Continental slipped 1.1 percent following a worldwide backlash against the airline as a passenger was reportedly pulled off of one of its flights. Late in the trading session, its chief executive issued an apology.

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Fxwirepro: Eur/krw Hovers Around Key Resistance at 1,218 Mark, Stay Bullish

EUR/KRW is currently trading around 1,217 mark.

Pair made intraday high at 1,218 and low at 1,212 levels.

Intraday bias remains bullish till the time pair holds key support at 1,208 mark.

A daily close below 1,212 will drag the parity down towards key supports around 1,208, 1.200, 1,189, 1,178, 1,163 and 1,154 marks respectively.

Alternatively, a sustained close above 1,212 will take the parity higher towards key resistances around 1,218, 1,228, 1,233, 1,242 and 1,252marks respectively.

Seoul shares open up 0.20 pct at 2128.17.

Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart. Current upside movement is short term trend correction only.

South Korea’s March unemployment rate decrease to 3.7 % vs previous 4.0 %.

We prefer to take long position in EUR/KRW around 1,215, stop loss at 1,208 and target of 1,228.

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BoK Holds Key Interest Rate Steady

The Bank of Korea stood pat on its policy rate on Thursday as the household debt continues to rise.

The ruling to leave the seven-day repo rate unchanged at a historic low of 1.25 percent since June 2016 was widely anticipated by economists. South Korea's central bank will issue a new quarterly economic outlook for the current year later in the day, after its previous projections of 2.5 percent growth and 1.8 percent price growth in January.

The central bank may likely extend its rate pause for a longer period of time, as swelling household debt and the Fed's monetary policy tightening further reduce the possibility of further easing in Korea.

A hike in interest rates is also seen to increase the pressure of repayment for many consumers. South Korea's household debt reached 1, 344 trillion won at the end of 2016, a level that the BoK already perceives as restricting domestic consumption.

BoK Gov. Lee Ju-yeol is slated to hold a press conference later in the day and investors are expected to look out for possible implications of increasing geopolitical tensions on the market

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Fxwirepro: Chinese Yuan Strengthens in Early Asia on Robust Trade Balance Data

USD/CNY is currently trading around 6.8744 marks.

It made intraday high at 6.8889 and low at 6.8729 levels.

Intraday bias remains bearish till the time pair holds key resistance at 6.90 mark.

A sustained close above 6.8914 marks will test key resistances at 6.9037, 6.9146, 6.9204, 6.9336, 6.9496, 6.9615, 6.9778 and 6.9883 marks respectively.

Alternatively, a daily close below 6.8914 will drag the parity down towards key supports at 6.8683, 6.8550, 6.8465, 6.8333, 6.8298, 6.8090 and 6.7769 marks respectively.

PBOC sets Yuan mid-point at 6.8651/dollar vs last close 6.8930.

China’s Q1 trade balance +454.94 bln yuan.

China’s Q1 yuan-denominated exports +14.8 pct y/y.

China’s Q1 yuan-denominated imports +31.1 pct y/y.

Positioning is inconclusive at this point, with prices offering no clear cut signal to initiate a long or short trade. We will continue to remain on sidelines for the time being.

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Fxwirepro: South Korean Won Marginally Lower After Trade Balance Data

EUR/KRW is currently trading around 1,204 mark.

Pair made intraday high at 1,204 and low at 1,201 levels.

Intraday bias remains neutral till the time pair holds key support at 1,203 mark.

A daily close below 1,203 will drag the parity down towards key supports around 1.201, 1,194, 1,189, 1,178, 1,163 and 1,154 marks respectively.

Alternatively, a sustained close above 1,203 will take the parity higher towards key resistances around 1,207, 1,211, 1,218, 1,228, 1,233, 1,242 and 1,252marks respectively. Seoul shares open up 0.28 pct at 2140.87.

Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart. Current upside movement is short term trend correction only.

South Korea’s March export growth revised decrease to 13.6 % vs previous 13.7 %.

South Korea’s March import growth revised increase to 27.7 % vs previous 26.9 %.

South Korea’s March trade balance revised decrease to 6.27 bln $ vs previous 6.60 bln $.

We prefer to take long position in EUR/KRW around 1,203, stop loss at 1,200 and target of 1,208/1,211/1,218.

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U.S. Energy Chief Orders Study of Electric Grid to Ensure Power Supplies

U.S. Energy Secretary Rick Perry called for a study of the U.S. electric grid, with the focus on examining whether policies which promote wind and solar energy are further accelerating the retirement of coal and nuclear plants significant to assure stable and reliable power supplies.

The 60-day review follows as regulators try to figure out how they could balance electric reliability with a stack of state policies that are more focused on less stable renewable energy sources. U.S. President Donald Trump has moved to dismantle Obama-era policies which impeded coal-fired power plants. Regulations that Perry claims have reduced jobs and threatened to weaken the grid's performance. Perry's move implies that the administration is looking for ways to maintain coal plants online.

The study comes after the G-7 Energy Ministerial meeting in Rome where a discussion was made for the need to diversify the supply of electricity. German consumers have been bearing the expense for a green transition, as it promptly shuts nuclear plants and embraces renewable power.

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Announcement: Moody's: Japan Economic Momentum Building, on the Back of Rising Exports and expected Fiscal Support

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Moody's Japan K.K. has released its latest issue of Inside Japan, which says that the Japanese economy is showing evidence of incremental progress on reflation, after the government's announcement of a fiscal package in August 2016, and the unveiling of the Bank of Japan's yield curve control framework a month later.

Moody's also says that somewhat stronger external demand has augmented the impact of these measures by the Japanese government (A1 stable) and the Bank of Japan.

Further tangible effects will likely materialize in 2017, as the promised fiscal stimulus is fully implemented. Faster economic growth is positive for the sovereign, because it helps to continue stabilizing the country's high public debt burden, its foremost credit weakness.

Moody's "Inside Japan" bi-annual compendium includes recent key research and commentaries published, as well as a list of recent major rating actions in Japan.

Moody's compendium points out that the yen has weakened considerably since September 2016, providing a boost to exports and corporate profitability. The recovery in external demand — consistent with a pick-up in global trade towards the end of 2016 — has amplified the effect of the weaker yen.

Moody's also says that the near-term risks to Japan's growth outlook are broadly balanced. Moody's expects policy stimulus to provide support to the domestic economy, offsetting downside risks related to potentially more protectionist US trade policy.

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Wall Street Advanced as Dow Ends at Session Peaks

U.S. equities finished higher as the Dow Jones industrial average ended over 180 points up while bank stocks and technology shares advanced. Market focus moved from geopolitical tensions to earnings results, with Goldman Sachs, General Electric and Johnson & Johnson all set to report results later this week.

The Dow Jones industrial average climbed 0.9 percent to 20,636, as Boeing led gains while Exxon Mobil was the top decliner. The S&P 500 rose 0.86 percent at 2,349, with financials leading all 11 sectors up. The Nasdaq composite jumped 0.89 percent at 5,856.

The SPDR S&P Bank ETF (KBE) increased more than half a percent after two Wells Fargo executives purchased $5 million worth of Wells stocks. The SPDR S&P Retail ETF climbed over one percent, led by Rent-A-Center gaining nearly six percent. The S&P 500's technology sector finished higher for the first time in 11 sessions.

Shares of Netflix, which posted results after the bell, jumped 3.0 percent to $147.25 in the regular session but slipped 2.1 percent following the bell. Amazon gained the most on the S&P 500, higher by 2.0 percent to $901.99 after Credit Suisse improved its price target to $1,050 from $900. Credit Suisse also improved its price target on Boeing, which sent its shares 1.9 percent higher to $179.02.

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Wall Street Slips, Weighed Down by Goldman Sachs, J&J

U.S. equities retreated as the S&P 500 dropped for the fourth time in five sessions, pulled down by declines in Goldman Sachs and Johnson & Johnson after their quarterly results. Investors remained cautious due to lingering geopolitical tensions and ahead of the French presidential election.

The Dow Jones industrial average slipped 0.55 percent at 20,523.28, as Goldman Sachs led losses while Coca-Cola outperformed. The S&P 500 fell 0.29 percent at 2,342.19, with health care leading six sectors down while consumer staples being the top gainer. The Nasdaq Composite dropped 0.12 percent at 5,849.47.

Goldman Sachs posted lower-than-expected-first-quarter results across the board, with trading revenue falling short of analysts expectations. Johnson & Johnson also posted mixed quarterly results that sent its shares falling over three percent.

Netflix reported better-than-expected earnings, however, its guidance missed estimates. Bank of America recorded upbeat first-quarter results with nearly every single metric meeting or exceeding analysts expectations.

Healthcare dropped one percent while financials lost 0.8 percent, and were the two worst-performing of the 11 major S&P sectors. Shares of Cardinal Health tumbled 11.5 percent, which also added pressure on healthcare following a weak profit forecast that outweighed a deal to purchase a medical supplies business from Medtronic for $6.1 billion.

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Fxwirepro: Thai Baht Marginally Higher in Early Hours of Asia, Faces Strong Support at 34.24

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USD/THB is currently trading around 34.30 marks.

It made intraday high at 34.35 and low at 34.30 marks.

Intraday bias remains bearish till the time pair holds key resistance at 34.45 mark.

On the top side, key resistances are seen at 34.45, 34.56, 34.67, 34.85, 34.97, 35.11, 35.20, 35.32, 35.42, 35.62, 35.74, 35.84, 35.93, 36.01, 36.08 and 36.39 marks respectively.

Alternatively, a daily close below 34.35 will drag the parity down towards key supports around 34.24 and 34.01 marks respectively.

Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart.

We prefer to take short position in USD/THB only below 34.24, stop loss at 34.44 and target of 34.01.

News are provided byInstaForex.
 
New Zealand’s Consumer Price Inflation Accelerates Above Expectations in Q1 2017

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New Zealand’s consumer price index rose 2.2 percent year-on-year in the first quarter of this year, showed Statistics New Zealand. This is the highest annual rise since the first quarter of September 2011. It is above market expectations of 2 percent. Statistics New Zealand senior manager Jason Attewell stated that increasing prices of petrol along with the annual increase in tax of cigarette and tobacco lifted inflation.

Prices related to housing continued to rise in the quarter, rising 3.3 percent year-on-year. Meanwhile, transport prices were up 3.5 percent, the second largest contribution to the inflation, with petrol partly countered by declines in other private transport services. Stripping out cigarettes, petrol and tobacco, the consumer price index rose 1.5 percent year-on-year in the March quarter.

On a quarter-on-quarter basis, the consumer price index was up 1 percent in the first quarter after a 0.4 percent rise in the fourth quarter of 2016. This is above the market expectations of a rise of 0.8 percent. Adjusting for seasonal effects, consumer price inflation rose 1 percent.

“Higher prices for cigarettes and tobacco, petrol, and fruit were partly offset by lower prices for international air transport, and package holidays,” added Attewell.

Prices for tobacco and cigarette upwardly contributed the most to inflation on a quarter-on-quarter basis, noted Statistics New Zealand.

News are provided byInstaForex.
 
Creditors' Experts to Finalize Greece Accord Next Week: Official

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Experts representing global lenders will return to Greece to work out the provisions of an agreement for the country next week, according to an EU official.

Greece and its creditors agreed on April 7 on major aspects of reforms to secure new financing and concurred these experts would return to the nation the soonest possible time to finalize the deal.

However, Europe's official on economics Pierre Moscovici said technical reasons caused the delay. He added they would discussion the completion of the said pact in Washington, on the sidelines of the yearly IMF gathering.

The Greek government's spokesperson had mentioned the institution may fund the nation's bailout scheme with a minimal amount for around one year, although the matter was still being discussed between the country and its lenders.

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Fxwirepro: Eur/krw Rejects Key Resistance at 1,224 Mark, Consistent Close Below 1,217 Targets 1,201 Mark

EUR/KRW is currently trading around 1,220 mark.

Pair made intraday high at 1,220 and low at 1,216 levels. Intraday bias remains neutral till the time pair holds key support at 1,217 mark.

A daily close below 1,217 will drag the parity down towards key supports around 1,208, 1,200, 1,194, 1,189, 1,178, 1,163 and 1,154 marks respectively.

Alternatively, a sustained close above 1,217 will take the parity higher towards key resistances around 1,224, 1,228, 1,233, 1,242 and 1,252marks respectively.

Seoul shares open up 0.56 pct at 2161.24.

Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart. Current upside movement is short term trend correction only.

We prefer to take short position in EUR/KRW only below 1,217, stop loss at 1,224 and target of 1,201.

News are provided by InstaForex
 
Canadian Retail Sales Likely to have dropped Sequentially in February, says Td Economics

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The Canadian retail sales is likely to have eased in February, following a growth in January. According to a TD Economics research report, total retail sales are expected to have fallen 0.4 percent sequentially, whereas excluding auto it is likely to have dropped 0.5 percent month-on-month. Subdued prices for gasoline might be a considerable headwind for nominal consumer spending, whereas a wider drop in seasonally adjusted consumer prices might result in a moderate outperformance in volumes. In January, retail sales had expanded 2.2 percent sequentially, whereas ex-auto sales had risen 1.7 percent.

In spite of the 3.8 percent rise in motor vehicle sales last month, a pullback is unlikely. Meanwhile, industry reports indicate towards a moderate growth that might lead to a new monthly record. A surge in home sales might stimulate demand for furnishings and furniture. Outside these industries, a more disappointing performance is expected, but might downplay any adverse implications for the Canadian central bank amid increased worries regarding imbalances and a desire to witness a more balanced growth profile, noted TD Economics.

Moreover, the Bank of Canada is not expected to be greatly concerned with a moderate slowdown in February because of the real retail sales strength last month, which might be a mainstay for the quarter, added TD Economics.

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