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[InstaForex Gertrude]

U.S. Producer Prices Drop, Unemployment Claims Rise

U.S. producer prices dropped for the first time in almost 1-½ years in December amid falling costs for services, which could weigh on expectations that inflation will pick up this year.

Separate data showed that initial claims for jobless benefits rose for the fourth consecutive week to over a three-month peak. Winter and snow in parts of the United States likely kept some workers at home, which accounts for the previous week's rise in unemployment claims.

The U.S. Federal Reserve is projecting three rate hikes for 2018. It raised rates three times in 2017.

According to the Labor Department, its producer price index for final demand dropped 0.1 percent in December. It was the first decline in the PPI since August 2016 and followed two consecutive monthly growth of 0.4 percent.

The PPI increased 2.6 percent from the same period in 2016, after accelerating 3.1 percent in November.

A key gauge of underlying producer price pressures, excluding food, energy and trade services, climbed 0.1 percent in December. The so-called core PPI rose 0.4 percent in November. It increased 2.3 percent in the 12 months through December after rising 2.4 percent in November.

In the separate report, the Labor Department said initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 261,000 for the week ended Jan. 6, the highest level since late September.

Claims have risen since mid-December, though the data tend to be volatile during year-end holidays.

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[InstaForex Gertrude]

New Zealand Food Prices Fall For Fourth Month

New Zealand's food prices declined for the fourth straight month in December, figures from Statistics New Zealand showed Monday.

Food prices dropped 0.8 percent month-over-month in December, faster than the 0.4 percent fall in November.

Grocery food and seasonally cheaper fruit and vegetables were the main factors in the dip in food costs.

After four successive monthly rises, butter prices dropped 4.9 percent.

On a yearly basis, food prices grew at a stable rate of 2.3 percent in December.

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[InstaForex Gertrude]

Asian Stocks Rise on Upbeat Economic Growth Outlook

Asian stocks started 2018 on a strong foot and are on track for a new record peak amid optimism in global growth.

Equity markets from Sydney to Hong Kong gained. U.S. markets are closed on Monday for the Martin Luther King Jr. holiday after the S&P 500 index ended on Friday at an all-time peak.

Japanese shares were advancing even after appreciation in the yen the past week, with Softbank Group benefiting from speculation of a listing for its mobile unit.

Developments in the global economy have been lifting morale in the early part of this year while equities are building on the impressive gains from 2017.

Retail sales fuelled optimism in the American economy and JPMorgan Chase & Co. signaled that the recent tax reduction law will raise profits. A pick up in U.S. core inflation offered another indication that the recovery is gathering pace nine years following the global recession.

Money managers will evaluate progress in corporate America this week with more earnings releases, while results are scheduled across the world from companies in a range of sectors. Growth data from China will also be in focus this week, as well as ongoing negotiations to form a coalition government in Germany.

Meanwhile, the dollar remains weak, pulled down by strong gains in the euro.

The common currency remained near a three-year peak on wagers that central bank stimulus will be pared back further in Europe as its economy mends.

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[InstaForex Gertrude]

BRAZIL: Ibovespa Rises To New Record On Expiring Stock Options

Ibovespa, the benchmark stock index in Brazil, rose 0.51% to 79,752.37 points Monday - a new record settlement - influenced by expiring stock options and data suggesting that the economic recovery in the country gained strength in November. The United States market holiday limited the local trading volume.

Analysts said that the Ibovespa might be pricing a conviction of the former Brazilian President Luiz In?cio Lula da Silva in a trial scheduled for January 24. A court defeat could bar Lula from running for President in October.

"The holiday in the United States removes liquidity from the stock market, but investors are expecting January 24 much more than anything else, and apparently the stakes continue to be at Lula's conviction," said the chief economist of Home Broker Modalmais, Alvaro Bandeira. In the short term, analysts expect Ibovespa to follow a bullish trend. The index remained at record levels even after Brazil's rating downgrade by S&P last week.

For Bandeira, the inflow of foreign investment has offset bad news and helped to sustain Ibovespa's good momentum. However, Rico Investimentos analyst Roberto Indech noted that this week brings some data in Brazil and abroad that may weigh on the stocks.

Meanwhile, the locally traded U.S. dollar turned positive in the final stretch of the trading day. The greenback's performance was influenced by the holiday of Martin Luther King in the United States, which reflected in lower trading volume. As a result, the locally traded currency closed slightly higher (+0.09%), at R$ 3,210.

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[InstaForex Gertrude]

Global Automakers Urge Trump Administration Not to Terminate NAFTA

Major automakers urged the Trump administration not to terminate the North American Free Trade Agreement and hopes that the United States, Canada and Mexico will be able to conclude a modernized and improved trade pact.

Trump has threatened to withdraw from NAFTA, which is heavily utilized by automakers that have production and supply chains spread across the three countries.

Fiat Chrysler Automobiles Chief Executive Sergio Marchionne said he hoped the Trump administration would “retune” some of its trade talk demands.

Marchionne said FCA's truck production shift in part “goes a long way I think in addressing some of President Trump's concerns about the dislocation of production capacity out of the United States.”

That decision reduces the risk those trucks would be hit with a 25 percent tariff if NAFTA unravels.

Ford Motor Co CEO Jim Hackett said NAFTA needs “to be modernized,” adding that of Detroit's Big Three automakers, Ford has the highest percentage of U.S.-built vehicles.

General Motors CEO Mary Barra expressed optimism NAFTA will survive with improvements. Other senior GM executives stood by the company's plans to continue building trucks in Mexico.

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[InstaForex Gertrude]

Singapore NODX Rises Less Than Expected In December

Singapore's non-oil domestic exports increased at a slower-than-expected pace in December, data from the International Enterprise Singapore showed Wednesday.

NODX climbed 3.1 percent year-over-year in December, well below the 9.1 percent spike in November. Economists had expected a 8.6 percent rise for the month.

Exports of electronic products declined 5.3 percent annually in December, reversing a 5.1 percent growth in November.

At the same time, non-electronic NODX rose 6.8 percent after expanding 10.6 percent in the prior month.

On a monthly basis, NODX decreased a seasonally adjusted 5.0 percent in December, following a 8.6 percent gain in

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[InstaForex Gertrude]

UK Inflation Rate Drops to 3%, the First Decline for 6 Months

UK inflation rate has dropped for the first time since June, mainly due to the impact of air fares. The rate fell to three percent in December, pulling back from November's rate of 3.1 percent, a six-year peak.

According to the Office for National Statistics, although airfares increased the previous month, it had a smaller impact than at the same point in 2016.

Inflation fell because the annual December rise in air fares was not as high as the previous year, the rate of price growth for recreational goods, including games and toys, also dropped. These categories are particularly sensitive to a fall in the exchange rate.

The ONS said it was too early to say whether this was the start of a longer-term reduction in the rate of inflation. It also notes that the slowing rate of growth was offset partially by higher tobacco prices, reflecting the duty increases that came into effect following the budget, as well as a rise in petrol and diesel prices.

The Bank of England has said it thinks inflation peaked at the end of 2017 and will fall back to its target of two percent in 2018.

Although the Bank may still look to raise interest rates from 0.5 percent, pushing the cost of borrowing to levels unseen since before the financial crisis, economists said there were still difficult patches ahead for the economy, which may be unsettled by the Brexit negotiations.

In November, the Bank's Monetary Policy Committee (MPC) raised its key interest rate for the first time in more than a decade from 0.25 percent to 0.5 percent.

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[InstaForex Gertrude]

Australia Jobless Rate Climbs To 5.5% In December

The unemployment rate in Australia came in at a seasonally adjusted 5.5 percent in December, the Australian Bureau of Statistics said on Thursday.

That was above forecasts for 5.4 percent, which would have been unchanged from November.

The Australian economy added 34,700 jobs last month to 12,440,800, beating forecasts for an increase of 15,100 following the upwardly revised 63,600 gain in the previous month (originally 61,600).

Full-time employment increased 15,100 to 8,518,900 and part-time employment increased 19,500 to 3,921,800.

Unemployment increased 20,500 to 730,600. The number of unemployed persons looking for full-time work increased 9,900 to 501,800 and the number of unemployed persons only looking for part-time work increased 10,600 to 228,800.

The participation rate climbed to 65.7 percent, exceeding forecasts for 65.5 percent - which would have been unchanged.

Monthly hours worked in all jobs decreased 4.2 million hours (0.2 percent) to 1,736.4 million hours.

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[InstaForex Gertrude]

COLOMBIA: Colcap Trades 0.29% Higher Boosted By Ecopetrol

Colcap, the main index of the Colombian Stock Exchange, rose 0.29% near the end of Monday's trade, moving at 1,555.54 points, boosted by a rally in Ecopetrol's shares, amid higher oil prices, said Marcela Ram?rez, an analyst at Acciones & Valores.

The shares of Ecopetrol (+5.07%), ETB (+1.97%), and Davivienda (+0.98%) rose, while Preferencial Bancolombia (-1.35%) and Cemargos (-1.03%) fell.

The locally traded. U.S. dollar closed at 2,852.45 Colombian pesos, marking a 0.11% rise.

Wilson Tovar, an analyst at Acciones & Valores, noted that the greenback lost ground at the beginning of the week after investors evaluated the impact of the partial closure of the United States government.

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[InstaForex Gertrude]

Canada Wholesale Trade Climbs in November

The value of Canadian wholesale trade increased for the second consecutive month in November on gains across sectors, which includes the food and vehicle industries, according to Statistics Canada data.

Wholesale transactions climbed 0.7 percent on a seasonally adjusted basis in November to 63.55 billion Canadian dollars ($51.01 billion), while volumes increased 0.5 percent. October's sales were revised slightly higher to 1.6 percent from the previously reported 1.5 percent.

On a 12-month basis, wholesale trade in Canada increased 10.8 percent on nominal terms.

Wholesale trade increased in six out of seven sectors in November, accounting for 99 percent of sales and led by a 1.9 percent rise in the food, beverage and tobacco industry.

The motor vehicle sector advanced for the fourth time in five months, climbing 0.7 percent, on higher sales of new vehicle parts and accessories. Canadian auto sales topped the 2 million mark last year for the first time as consumers bought light trucks.

Inventories dropped 1.2 percent, the first decline in eight months amid decreases in the machinery and equipment, and vehicle sectors.

Canada's annual inflation rate is expected to have fallen marginally in December but still remains near the Bank of Canada's 2 percent target. Analysts will watch the three measures of underlying core inflation to gauge how quickly the central bank may raise interest rates again.

The Canadian dollar was trading at C$1.2453 to the greenback, or 80.30 U.S. cents, up 0.3 percent.

The currency traded in a range of C$1.2435 to C$1.2520. Since the beginning of 2018, the range has been C$1.2355 to C$1.2590.

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[InstaForex Gertrude]

Japan December Trade Surplus Y358.971 Billion

Japan posted a merchandise trade surplus of 358.971 billion yen in December, the Ministry of Finance said on Wednesday - down 43.5 percent on year.

The headline figure was shy of expectations for a surplus 520.0 billion yen following the 113.4 billion yen surplus in November.

Exports climbed 9.3 percent on year to 7.302 trillion yen, also missing forecasts for a gain or 9.8 percent and down from 16.2 percent in the previous month.

Exports to Asia advanced 9.9 percent on year to 4.111 trillion yen, while exports to China alone jumped an annual 15.8 percent to 1.507 trillion yen.

Exports to the United States gained 3.0 percent on year to 1.411 trillion yen and exports to the European Union jumped an annual 11.4 percent to 792.213 billion yen.

Imports advanced an annual 14.9 percent to 6.943 trillion yen versus expectations for a gain of 12.4 percent and down from 17.2 percent a month earlier.

Imports from Asia climbed 15.7 percent on year to 3.379 trillion yen, while imports from China alone gained an annual 14.8 percent to 1.704 trillion yen.

Imports from the United States were up 7.5 percent to 699.419 billion yen, while imports from the European Union gained 9.8 percent to 786.388 billion yen.

Also on Wednesday, the latest survey from Nikkei said that the manufacturing sector in Japan continued to expand in January, and at an accelerated rate, with a manufacturing PMI score of 54.4.

That's up from 54.0 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, output expanded at the quickest rate in 47 months, while new orders continued to rise sharply.

Inflationary pressures intensified.

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[InstaForex Gertrude]

BRAZIL: Ibovespa Spikes 3.7% And Sets New Record Following Lula Conviction

Ibovespa, the benchmark stock market index in Brazil, rose 3.72% to 83,680 points Wednesday, a new settlement record amid a R$ 15.69 billion trading volume - nearly twice the average.

The rally was the result of a higher court unanimously upholding former president Lula's conviction for corruption and money laundering, which may reduce the chances of the center-left leader competing in this year's election.

"The markets have reacted positively to Lula's trial. The conviction lessens the likelihood of him becoming a presidential candidate, and this reinforces the expectation that a more centrist candidate be elected," said Guide Investimentos analyst Ign?cio Crespo.

According to chief economist of Gradual Investimentos, Andr? Perfeito, "we will still have many developments in Lula's campaign to become a presidential candidate. Today's episode may have been dramatic, but it is far from definitive."

In the conviction, the three judges increased the former president's prison sentence for 12 years and a month and indicated that he could be arrested after all the resources have been exhausted in TRF4. According to H. Commcor's chief operating officer, Ari Santos, the result was "predictable," but encouraged the markets.

The locally traded U.S. dollar reached minimum levels in the year against the Brazilian after Lula's conviction in the second instance. The greenback fell 2.43%, closing at R$ 3.1600, after reaching the intraday low of R$ 3.1530 (-2.73%).

For Friday, Santos projects that the index may fall into a profit-taking movement. For Crespo, however, the index may remain positive.

"The scenario remains optimistic for Brazil in the short and medium term," says the analyst.

The Ibovespa will remain closed Thursday for a local holiday.

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[InstaForex Gertrude]

UK Employment Notched Record Peaks

Employment in Britain increased in the three months to the end of November, surpassing analysts expectations as pressure on employers to find skilled staff seems to have pushed up wages.

The number of people in work grew by 102,000 compared with the previous three months, bringing the number of people employed to 32.21 million, a fresh record peak. Analysts had forecasted a decline of 13,000.

The jobless rate was 4.3 percent over the three month period.

The employment rate, which measures the proportion of 16- to 64-year-olds in work, reached 75.3 percent, a figure that was higher than for a year earlier and the joint highest since comparable records began in 1971.

The UK labour market has created large numbers of jobs since the financial crisis but has struggled to generate real wage growth. Many of the jobs created have also been part time or self-employed.

However, the latest figures show an increase in the number of full time jobs, with the number of self-employed falling by 82,000.

Average weekly earnings were 2.5 percent higher than the previous year, including bonuses, and 2.4 percent higher excluding bonuses. That compares with 2.5 percent and 2.3 percent respectively during the previous three month period.

The Office for National Statistics, which produces the figures, calculates that this means real earnings dropped by 0.2 percent over the past year, including bonuses, and by 0.5 percent without them.

According to the ONS, the number of job vacancies increased to a record peak of 810,000 in the three months to the end of October.

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[InstaForex Gertrude]

BoJ Minutes: Japan Economy Expected To Continue Expansion

Members of the Bank of Japan's Monetary Policy Board said that Japan's economy is expanding moderately and should continue to do so, minutes from the bank's December 20-21 meeting revealed on Friday.

"The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target," the minutes said

At the meeting, the central bank decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

It also voted to maintain its aggressive monetary easing, as inflation remains well below the 2 percent target. The bank will hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion.

The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

"The year-on-year rate of change in the CPI for all items less fresh food was in the range of 0.5-1.0 percent, while the rate of change for all items less fresh food and energy remained slightly positive," the minutes said.

The board also noted that inflation expectations are in a weakening phase, although prices are expected to maintain an upward trend over the longer term.

The bank added that private consumption has been increasing moderately and business fixed investment continued an increasing trend with corporate profits and business sentiment improving.

"With regard to the outlook, the year-on-year rate of change in the CPI (all items less fresh food) was likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium- to long-term inflation expectations," the minutes said.

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[InstaForex Gertrude]

Japan Inflation Steady in December

Japan's key price gauge increased at the same pace in December as in November, highlighting challenges for the Bank of Japan as it attempts to get faster inflation toward its ambitious 2 percent target.

The core consumer price index, which excludes fresh food prices but leaves in fuel costs, reached a year-on-year rise of 0.9 percent in December, according to Japan's Statistics Bureau. That brought core inflation to 0.5 percent for the whole of 2017.

The recent stability for the core inflation rate was supported by year-on-year growth of 5.2 percent in the cost of fuel, light and water and 1.6 percent growth in the cost of medical care.

Headline inflation increased one percent year on year, up from 0.6 percent in November, while core-core inflation - excluding both fresh food and fuel and energy costs - was unchanged from November with a growth of 0.3 percent.

The continued weakness supports the outlook that the BOJ will keep its stimulus program unchanged.

Some BOJ board members are already starting to get nervous about keeping policy loose for a prolonged period, claiming they saw room to hike rates or slow purchases of risky assets if the recovery continues, minutes of the December rate review showed.

Japan's economy grew for the seventh consecutive quarter in July-September, its longest uninterrupted stretch of expansion since 1994, on booming exports and an acceleration in consumption.

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[InstaForex Gertrude]

Aussie Rally Brings Out the Bears

The Australian dollar's recent rally in 18 months is bringing out the bears.

The Aussie is on track to go into reverse as the Federal Reserve keeps hiking interest rates, while the Reserve Bank of Australia leaves borrowing costs at a record low, according to James Athey at Aberdeen Standard Investments in London, who is adding to his short positions.

Schroder Investment Management Australia Ltd., which is also short, said the Aussie is likely to trade closer to 70 U.S. cents than 80 cents in 12 months.

The Australian dollar has increased for seven consecutive weeks as the U.S. dollar has dropped while growing prices for commodities like iron ore have supported the outlook for Australia's exports.

Aberdeen and Schroder expect the RBA to likely leave its benchmark at 1.5 percent this year as debt-laden households struggle with stagnant wages and inflation at the lower end of the central bank's 2-to-3-percent target. Swaps traders are placing wagers that policy makers will tighten in the second half of 2018.

The Aussie rose to 81.36 U.S. cents on Friday, the highest since May 2015. It was little changed Monday at 81.14 cents.

Options traders are the most bearish on the Aussie among developed-market currencies, six-month risk reversals show. The premium investors paid for options giving the right to sell the Aussie against the U.S. dollar, over those to buy, was about 47 basis points. The gauge of bearishness has dropped from 165 basis points a year ago.

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[InstaForex Gertrude]

Singapore Producer Prices Fall In December

Singapore's producer prices declined for the first time in one year in December, figures from the Department of Statistics showed Monday.

The manufactured product price index dropped 0.6 percent year-over-year in December, reversing a 2.9 percent rise in November.

Producer prices climbed 3.8 percent in the whole year 2017, in contrast to a 5.5 percent decrease in 2016.

The domestic supply price index rose 0.6 percent annually in December, while it edged down 0.2 percent from a month ago.

On a monthly basis, producer prices increased 0.8 percent in December, extending the 1.1 percent rise in November.

Data also revealed that import prices slid 0.5 percent yearly in December, following a 4.1 percent climb in the preceding month.

Export prices declined 2.4 percent in December over the prior year, after a 0.8 percent rise in November.

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[InstaForex Gertrude]

European Economics Preview: Eurozone GDP Data Due

Quarterly national accounts and economic confidence from euro area are due on Tuesday, headlining a light day for the European economic news.

At 1.30 am ET, France's GDP data is due. The economy is expected to grow 0.6 percent in the fourth quarter. At 2.00 am ET, Swiss foreign trade data for December is due.

At 3.00 am ET, GDP from Spain and unemployment from Hungary are due. Spain's GDP is forecast to grow 0.7 percent sequentially in the fourth quarter, slower than the 0.8 percent increase seen in the third quarter.

At 4.00 am ET, Italy's business and consumer confidence survey results are due. The consumer sentiment index is forecast to rise marginally to 116.7 in January from 116.6 in the previous month.

At 4.30 am ET, the Bank of England is set to issue mortgage approvals data. The number of mortgages approved in December is seen at 63,500 compared to 65,100 in November.

At 5.00 am ET, Eurostat is scheduled to issue euro area GDP data. The currency bloc is forecast to grow 0.6 percent sequentially in the fourth quarter.

In the meantime, European Commission publishes economic confidence survey data. Economists forecast the economic sentiment index to rise to 116.2 in January from 116.0 in December.

At 8.00 am ET, Germany's flash consumer price data is due. Inflation is seen at 1.7 percent in January, the same rate as seen in December.

In the meantime, Hungary's central bank announces its interest rate decision. The bank is expected to keep its key rate unchanged at 0.90 percent.

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[InstaForex Gertrude]

COLOMBIA: Colcap Trades 1.34% Lower Due To Ecopetrol's Underperformance

Colcap, the main index of the Colombian Stock Exchange, fell 1.34% to 1,576.89 points near to the closing of Tuesday's session, due to the fall in Ecopetrol's shares.

Erika Baquero, an analyst at Alianza Valores, noted that the state-owned oil company was influenced by the decline in oil prices abroad.

The shares of Canacol (+0.20%) are rising, while Ecopetrol (-3.06%), Promigas (-3.04%), Sura (-1.73%), and Avianca (-1.37%) trade lower.

The locally traded U.S. dollar closed at 2,851.15 Colombian pesos, marking a 0.47% rise due to the drop in oil prices abroad.

Ramses Pestanapalmett, an analyst at Ultraserfinco, noted that the commodity falls due to the increase in exploratory activities in the United States and Canada, which values the U.S. currency against emerging currencies such as the Colombian peso.

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[InstaForex Gertrude]

German Inflation Slowed in January

German inflation slowed in January, propelled by a weaker rise in energy prices, data showed, lending support to the European Central Bank's cautious approach to reducing its monetary stimulus only gradually.

Consumer price inflation slowed to 1.4 percent on the year in January, according to preliminary data from the Federal Statistics Office.

The rate follows a month-on-month drop of one percent from December 2017, on an EU-harmonised basis, Destatis added, and implies that the rising euro is damping down prices.

ECB chief Mario Draghi recently pushed back on rate hike speculations, arguing there was almost no chance of a move this year, even as some investors were betting on a hike as early as December.

For the month, consumer prices dropped 1.0 percent, below the 0.7 percent decline expected by analysts.

Lower energy inflation made the largest contribution to the weaker headline figure while food inflation picked up, the office said.

According to Carsten Brzeski, chief economist for Germany at ING, the figures “should ease the recent hysteria in markets about a possible inflation surge and changes to the ECB's monetary policy stance”.

The statistics office did not provide a preliminary reading for German core inflation.

However, Commerzbank analyst Marco Wagner said that core inflation probably remained unchanged in January and that he expected this key measure to rise in the coming months.

The German government expects national consumer price inflation to slow to 1.7 percent this year from 1.8 percent in 2017, despite raising its 2018 growth forecast to 2.4 percent from 1.9 percent previously, a government document showed.

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