Forex News from InstaForex

Euro Little Changed After German PPI

Following the release of German producer prices for November at 2:00 am ET Wednesday, the euro changed little against its major counterparts.

The euro was trading at 127.99 against the yen, 1.1299 against the franc, 0.8995 against the pound and 1.1385 against the greenback around 2:03 am ET.

News are provided by InstaForex
 
Australia Unemployment Rate Climbs To 5.1% In November

The jobless rate in Australia came in at a seasonally adjusted 5.1 percent in November, the Australian Bureau of Statistics said on Thursday.

That exceeded expectations for 5.0 percent, which would have been unchanged from the October reading.

The Australian economy added 37,000 jobs to 12,694,300 last month - blowing away expectations for an increase of 20,000 jobs following the gain of 32,800 in the previous month.

Full-time employment decreased 6,400 to 8,684,600 and part-time employment increased 43,400 to 4,009,600.

Unemployment increased 12,500 to 683,100. Male unemployment increased 11,500 persons and female unemployment increased 1,000 persons.

The participation rate was 65.7 percent, beating forecasts for 65.6 percent - which would have been unchanged from a month earlier.

Monthly hours worked in all jobs decreased 3.3 million hours to 1,759.5 million hours.

The monthly trend underemployment rate increased less than 0.1 pts to 8.4 percent.

The monthly trend underutilization rate remained steady at 13.5 percent. The monthly seasonally adjusted underemployment rate increased 0.2 pts to 8.5 percent.

The monthly seasonally adjusted underutilization rate increased 0.2 pts to 13.6 percent.

News are provided by InstaForex
 
New Zealand December Food Prices Rise Seasonally Adjusted 0.5%

Food prices in New Zealand advanced a seasonally adjusted 0.5 percent on month in December, Statistics New Zealand said on Tuesday.

Unadjusted, food prices were down 0.2 percent last month.

In December, fruit and vegetable prices fell 1.1 percent (down 0.6 percent after seasonal adjustment) on month; meat, poultry, and fish prices rose 0.2 percent; grocery food prices rose 0.1 percent (up 0.5 percent after seasonal adjustment); non-alcoholic beverage prices fell 2.6 percent; and restaurant meals and ready-to-eat food prices rose 0.2 percent.

On a yearly basis, food prices were up 1.0 percent in December.

In December, fruit and vegetable prices decreased 6.1 percent on year; meat, poultry, and fish prices increased 3.8 percent; grocery food prices increased 1.4 percent; non-alcoholic beverage prices decreased 0.2 percent; and restaurant meals and ready-to-eat food prices increased 2.9 percent.

"Overall, getting your five-plus a day servings of fruit and vegetables was cheaper in 2018," consumer prices manager Geraldine Duoba said. "Bad weather in 2017 reduced the supply of many vegetables, pushing up their prices. Growing conditions were mostly more favorable during 2018, boosting supply and lowering prices."

News are provided by InstaForex
 
Dutch Retail Sales Growth At 7-Month High

Dutch retail sales grew the most in seven months during November, mainly driven by non-food sales, figures from the Central Bureau of Statistics showed on Tuesday.

Retail sales rose a working-day adjusted 4.1 percent year-on-year following a 3.3 percent increase in October.

The pace of growth was the fastest since April, when sales rose 5.8 percent.

Food sales rose 2.5 percent and non-food sales increased 3.8 percent, largely led by increased demand for consumer electronics, shoes and leather goods.

Online sales surged nearly 20 percent in November.

News are provided by InstaForex
 
British authorities hold power, Nomura sells EUR / GBP

There is a possibility that British Prime Minister Theresa May will resign within a few days after a devastating vote. Still, Nomura does not believe in tough Brexit, waiting for the stabilization of the political situation in the country and the growth rate of sterling. Thus, currency strategists explained the opening of a short position in EUR / GBP pair from 0.8880.

London representatives of the bank reported that the position of British Prime Minister Theresa May looks quite constructive. Her desire to lengthen the term of Article 50 of the Lisbon Treaty and the intention to begin inter-party negotiations on the country's withdrawal from the group will most likely allow the British government to retain power.

If a vote of no confidence is announced to the government, the pound may drop by 3%.

The bank estimates that next week traders will focus on what Ms. May can offer as a backup plan.

Many political analysts believe that the British Prime Minister will once again "stand on his feet." May lost in the House of Commons, but "there is no immediate threat to her position." Theresa May will remain in power, as the Democratic Unionist Party and the Conservatives, who voted against her unpopular EU exit deal, will support her.

Note that Ms. May herself contacted, saying that the British government is already busy searching for an acceptable Brexit plan, which would receive the support of parliamentarians.

News are provided by InstaForex
 
Oil reserves in the US for the week decreased by 0.6%, stronger than forecast

According to the Energy Information Administration of the Ministry of Energy, commercial oil reserves in the US (excluding strategic reserves) declined by 2.7 million barrels, or 0.6%, to 437.1 million barrels. Analysts predicted a decline in stocks of only 1.32 million barrels, to 438.38 million barrels.

Oil production in the United States increased by 200 thousand barrels up to 11.9 million barrels per day.

Oil reserves at the country's largest terminal in Cushing decreased by 0.8 million barrels to 41.5 million barrels. Gasoline stocks also showed an increase of 3% (+7.5 million barrels), to 255.6 million barrels. Distillate stocks rose by 2.1% (+3 million barrels), to 143 million barrels.

News are provided by InstaForex
 
China's growth will slow in 2019 and threatens the financial world

China's economy is expected to continue to slow down this year particularly on domestic demand and exports affected by US tariffs. Beijing will most likely have to deploy additional incentive measures.

According to forecasts, China's economic growth will slow to 6.3 percent this year and will be the weakest in 29 years. A significant slowdown in growth in China has already been observed. The resumption of negotiations between the United States and China has increased optimism that Washington may agree to suspend the planned tariff increase, which was originally scheduled to take effect this month. However, a comprehensive agreement to end the dispute seems unlikely, given the number of highly controversial and politically sensitive issues. Even if both sides can conclude a long-term trade deal, it will provide only minor relief to the Chinese economy if Beijing cannot increase domestic investment and demand.

Sources said that China plans to lower its target for economic growth between 6 to 6.5 percent this year. Weak industrial growth and lower consumer spending reduce company profits. Moreover, it also discourages new investment and increases the risk of high job losses. Since earlier growth measures had little impact, we expect Beijing to deploy more incentives in the coming months to prevent a sharp slowdown. More large-scale tax cuts are expected, along with measures to increase consumer demand for products such as household appliances and cars. Both fiscal and monetary policies eased over the past few months and this should begin to spread to the real economy by the second half of this year.

News are provided by InstaForex
 
Euro may strengthen against the dollar to $ 1.22 - CIBC

China's economy is expected to continue to slow down this year particularly on domestic demand and exports affected by US tariffs. Beijing will most likely have to deploy additional incentive measures.

Despite weak eurozone statistics, Canadian Imperial Bank of Commerce (CIBC) analysts remain bullish on the euro.

"Eurozone statistics for the third quarter turned out to be the weakest over the past four years, which apparently explains the uncertain behavior of the single European currency. It is assumed that external trade pressure, as well as political uncertainty in Italy and France, will continue, causing a further slowdown in the pace of recovery in eurozone GDP," representatives of the financial institution said.

"Meanwhile, the situation in the European labor market remains favorable, which ensures a high level of consumer spending, and hence GDP growth. In the third quarter, wages increased by a record value in almost 10 years. At the same time, the unemployment rate fell below 8% for the first time in the last decade," they added.

"Despite the fact that the balance of risks has probably shifted to the negative side, the ECB continues to consider the economic outlook for the eurozone to be rather positive, which will further allow the regulator to carry out, albeit careful, but still raising interest rates. It is possible that this will happen in the second half of the year against the backdrop of consistently high inflation expectations," the experts noted.

According to the CIBC forecast, by the end of this year, the euro against the dollar may rise to $ 1.22.

News are provided by InstaForex
 
IMF lowers global growth forecasts, what to expect financial markets

The International Monetary Fund has reduced its forecasts for global economic growth for 2019 and 2020 due to weakness in Europe and in some emerging markets, and said that trade tensions could destabilize the world economy even more. This is the second decline in three months. The lender also called a more serious than expected slowdown in the Chinese economy and the possible "problem" Brexit risks that could cause turbulence in financial markets. The IMF expects the growth of the world economy in 2019 to be 3.5 percent, and in 2020, 3.6 percent, which is lower by 0.2 and 0.1 percent, respectively, from forecasts in October last year.

"The trend of global growth is shifting downward. Escalating trade tensions beyond that already included in the forecast remains a key source of risk. Trade policy uncertainties and concerns about escalation and retaliation will lead to a decrease in industrial investment, disruption of supply chains and a slowdown in productivity growth. As a result, worsening corporate profitability prospects may affect financial market sentiment and further weaken economic growth," the IMF said in a statement.

The IMF said that growth in the eurozone will be moderate, falling from 1.8 percent in 2018 to 1.6 percent in 2019, which is 0.3 percentage points lower than predicted three months ago. The IMF also lowered its growth forecast in 2019 for developing countries to 4.5 percent, which is 0.2 percentage points lower than the previous forecast and 4.7 percent in 2018. But it kept its growth forecasts for the USA, 2.5 percent this year and 1.8 percent in 2020, indicating continued growth in domestic demand.

News are provided by InstaForex
 
EUR/USD pair continues to drift south in anticipation of the ECB meeting

In anticipation of the next meeting of the European Central Bank (ECB), which will be held this Thursday, the euro will remain under pressure.

Concerns about the slowdown in the global economy, expectations of the dovish sentiment of the ECB, as well as high demand for safe-haven assets, allowed the "bears" on EUR/USD to continue the attack.

For the second time in three months, the International Monetary Fund (IMF) has worsened the forecast for global GDP growth over the next two years.

In particular, the assessment of the dynamics of Germany's GDP for 2019 was reduced from 1.9% to 1.3% and Italy from 1% to 0.6%. At the same time, the forecast for the US economy remained unchanged, which, apparently, played into the hands of the greenback.

Meanwhile, the EUR/USD bulls are waiting for another test this week. On January 24, the ECB will hold its first meeting this year.

The main intrigue is how "dovish" will be the statements of its chairman, Mario Draghi, at a press conference on Thursday. This time, the ECB will most likely keep its key interest rate at the same level, whether the Finnish Institute refuses to raise the rate in 2019 or even announce the pumping of the banking system with liquidity is not yet clear.

If the comments of the ECB management on the results of the next meeting will have cautious optimism, sales of the euro in anticipation of an important event may turn into purchases based on facts.

News are provided by InstaForex
 
Bank of Japan will continue large-scale incentives

In anticipation of the next meeting of the European Central Bank (ECB), which will be held this Thursday, the euro will remain under pressure.

The Bank of Japan has reduced its inflation forecasts and retained a large-scale incentive program amid growing risks for the economy in the form of trade protectionism and weakening global demand. The trade war between the United States and China, Japan's largest trading partners, is increasing pressure on the third largest economy in the world and undermining politicians' many years of efforts to promote sustainable growth.

As expected, the Bank of Japan has cut its inflation forecasts, reinforcing the view that it will have to continue unprecedented economic support for some time. The regulator noted that despite growing risks such as trade disputes and Brexit, Japan's economy will continue to grow at a moderate pace. However, a recent survey of economists has shown that external factors have increased Japan's chances for a downturn in the fiscal year starting in April, making it harder for the Bank of Japan to achieve a 2 percent inflation target.

The Bank of Japan confirmed its intention to continue buying Japanese government bonds and left the short-term interest rate unchanged at minus 0.1 percent. Many economists believe that the next step of the Bank of Japan will be the normalization of policy. Most expect it to happen in 2020 or later.

News are provided by InstaForex
 
ECB press conference: Highlights of Draghi's comments

The ECB has left its policy unchanged. We give the main comments of the ECB President Mario Draghi at a press conference.

Evaluation but not a policy discussion

"We didn't have to discuss the consequences of the risk balance. Today's meeting was mainly devoted to an assessment: where are we and why are we here, how long will the slowdown take place, will the slowdown worsen or will a lower level wait for us These are the questions that have been asked ".

Muffled inflation:
"General inflation is likely to continue to decline in the coming months. Core inflation remains generally subdued, but pressure on labor costs continues to increase and expand amid a high level of capacity utilization and toughening labor markets."

Mid-term inflation:
"Looking into the future, we expect core inflation to grow in the medium term, with the support of our monetary policy measures, continued economic growth, and rising wage growth."

The economic growth:
"The short-term growth momentum is likely to be weaker than previously thought. In the future, growth in the eurozone economy will continue to be supported by favorable financial conditions, further growth in employment and wages, lower energy prices and continued, albeit somewhat slower, expansion of global activity."

Stimulation:
"Significant monetary policy incentives remain necessary to support further increases in domestic price pressure and overall inflation in the medium term. The Board of Governors is ready to use all of its tools, depending on the situation, in order to ensure a constant movement of inflation towards the goal. "

News are provided by InstaForex
 
S & P: The US economy has lost at least $ 6 billion due to the shutter

Analysts at rating agency Standard & Poor's estimate that the US economy lost at least $ 6 billion during the suspension of government work.

S & P Global Rating experts believe that as a result of the shutdown, the US budget lost $ 1.2 billion a week since the suspension of government departments led to a decrease in productivity and a low level of business economic activity.

The shutdown was caused by the reluctance of the US Congress to allocate $ 5.7 billion for primary funding for the construction of a wall between Mexico and the US, while negative consequences, according to S & P experts, have already exceeded the amount requested by President Donald Trump.

Analysts also noted that, despite the resumption of government agencies, the negative effect of the shutdown is likely to affect financial markets and business confidence in the future of the country's economy.

News are provided by InstaForex
 
China's manufacturing sector alarms currency markets

China's manufacturing sector activity in January was likely to shrink for the second month in a row, heightening concerns about the risks associated with a slowdown in China and a threat to the global economy.

Industrial leader Caterpillar has become another major international company that warned of declining demand in China, followed by chip makers and Apple. According to the average forecast of 33 economists, the official index of purchasing managers in China (PMI) in January will drop to 49.3 points from 49.4 points in December. January figures may be the weakest since February 2016. In addition, in front of the big New Year holidays and many businesses just close. Some are closing even earlier than usual, because the protracted trade war with the United States has a negative effect on orders. If Washington and Beijing do not reach a compromise that will ease the pressure on tariffs, many businesses are likely to close down forever.

In any case, weak PMI data increases the likelihood that Beijing can accelerate and intensify policy mitigation and stimulation efforts this year. Nevertheless, there remains a high probability that in the coming months business conditions in China may deteriorate, growth may fall below 6 percent in the first half of the year from 6.4 percent in the fourth quarter and stabilize only at the end of the year. This is confirmed by sources in the government, who report that the authorities are planning to reduce the growth target to 6-6.5 percent this year from 6.5 percent in 2018.

News are provided by InstaForex
 
The pound will continue to try to gain a foothold, and the dollar is waiting for the Fed report

The pound will continue to attempt to strengthen its position after fears of the "problematic" Brexit have declined, and the dollar will weaken on the eve of the Fed meeting.

Last week, the pound reached $ 1.3218, the highest since mid-October, in the hope that London will be able to make a deal with the EU. The deadline set for Brexit, March 29, is likely to be extended, and the main question for the pound is when and how the renewal decision will be made. As for the dollar, the focus is now shifting back to key events that threaten the dollar with more serious consequences, such as the FOMC (Federal Open Market Committee) meeting, US-China trade negotiations, and the US jobs report. The Fed is expected to leave interest rates unchanged.

Markets are waiting for signals about the future of the Fed's policy after recent official comments made it clear that rates of rate hikes this year will be reduced amid growing uncertainty about the state of the US economy, the global economy and fragile financial markets. Experts estimate the likelihood of a rate hike in 2019 as very low, although some still expect two approaches in the second and fourth quarters. The dollar may face pressure if the Fed decides to highlight the negative effects of the closure of the US government in its report.

News are provided by InstaForex
 
The dollar clings to any opportunity for growth, like its Australian colleague

The dollar continued to increase on the eve of the speech of US President Donald Trump, which, according to investors, may indicate progress in trade negotiations between the US and China. In general, a modest recovery in investor risk appetite led to a sharp rise in US government bond yields, but trading in foreign exchange markets was rather weak, as many Asian markets were closed for the New Year holidays. The Australian dollar gained by recovering its recent losses after the Reserve Bank of Australia (RBA) left rates at a record low.

Now all the attention is focused on the appeal of Trump, which was postponed due to the closure of the US government. Markets do not rule out more optimistic comments on US trade policy, after the closure of the Trump government is likely to seek political victories. This should be positive for the current risk-friendly environment (reliable US data, but cautious by the Fed) and can support the currencies of developing countries against the dollar.

The Aussie strengthened by 0.3 percent, to $0.7247. The currency was trading in negative territory for most of the session, after weak retail sales data in December, but it moved up after the RBA kept rates on hold. It will be difficult for the Australian dollar to overcome the dollar mark of 0.7300, given the outlook for market rates, which are still priced with a high probability of weakening this year.

News are provided by InstaForex
 
Bank of England downgraded forecasts for economic growth due to Brexit

The management of the Bank of England at a meeting on Thursday, February 7, unanimously voted to keep the key rate at 0.75. Regulatory officials said the UK economy slowed down late last year and early this year.

Representatives of the Bank of England said that the country's economy in 2019 could show the slowest GDP growth in 10 years due to the uncertainty around Brexit, as well as a slowdown in global growth.

At the same time, representatives of the regulator said that they would return to raising interest rates in the event of the implementation of a soft scenario of a country's exit from the EU.

In addition, the Bank of England downgraded the growth forecast for the country's economy in 2019 from 1.7% to 1.2%. The growth forecast for 2020 was also lowered - from 1.7% to 1.5%.

News are provided by InstaForex
 
Oil trades in different directions on conflicting factors

The price of Brent crude is showing mixed trends at the beginning of a new trading week. Quotes of the asset vary over a wide range of $61.30-62.30 per barrel. Market participants regain data on the growth in the number of drilling rigs in the United States and follow the news on trade negotiations between the United States and China.

Markets are awaiting the outcome of trade negotiations between Washington and Beijing, the next round of which is scheduled for February 14-15. Doubts that trade disputes will finally be resolved put pressure on the course of oil. An additional negative came from the report of oil and gas service company Baker Hughes, which reflected an increase in the number of active drilling rigs by 7– to 854 units.

At the same time, oil received some support following the words of OPEC President and the Minister of Energy of the United Arab Emirates (UAE) Suhail Al-Mazrui that the oil market will be balanced in the first quarter of this year.

News are provided by InstaForex
 
New Zealand Holds Official Cash Rate Steady At 1.75%

The Reserve Bank of New Zealand on Wednesday kept its Official Cash Rate at the record low of 1.75 percent for the 15th straight meeting.

The decision was in line with expectations following a 0.25 percent rate cut in November 2016.

The central bank has pared a collective 0.50 percent from its benchmark in the last 25 months, lowering the rate in six of the last 22 meetings after six straight sessions with no change.

GDP growth is expected to pick up through 2019 and the OCR is expected to be unchanged through this year and into 2020, RBNZ Governor Adrian Orr noted.

"Trading-partner growth is expected to further moderate in 2019 and global commodity prices have already softened, reducing the tailwind that New Zealand economic activity has benefited from," Orr said. "The risk of a sharper downturn in trading-partner growth has also heightened over recent months."

Core consumer prices are expected to gradually rise to the mid-point of the central bank's target range at 2 percent - although inflation could rise faster if cost increases are passed on.

"There are upside and downside risks to this outlook," Orr said. "A more pronounced global downturn could weigh on domestic demand, but inflation could rise faster if firms pass on cost increases to prices to a greater extent."

He added that the direction of the next move could be up or down.

"We will keep the OCR at an expansionary level for a considerable period to contribute to maximizing sustainable employment and maintaining low and stable inflation," Orr said.


News are provided by InstaForex
 
Euro Rises Following German GDP Data

Destatis has published German preliminary GDP data for the fourth quarter and wholesale price index for January at 2:00 am ET Thursday.

After these data, the euro rose against its major rivals.

The euro was trading at 125.39 against the yen, 1.1381 against the franc, 1.1294 against the greenback and 0.8768 against the pound around 2:01 am ET.

News are provided by InstaForex
 
You must log in or register to reply here.
Back
Top