Forex News from InstaForex

AUSTRALIA RETAIL SALES SINK 4.2% IN DECEMBER

The total value of retail sales in Australia were down a seasonally adjusted 4.2 percent on month in December, the Australian Bureau of Statistics said on Friday - coming in at A$30.324 billion.

That missed expectations for a decline of 2.5 percent following the 7.1 percent jump in November.

Following the November rise, all industries except for Cafes, restaurants and takeaway food services fell.

Household goods retailing led the falls (-9%), following the Black Friday sales, and new product releases, that boosted turnover in November.

Similarly, Other retailing, Department stores, and Clothing, footwear and personal accessory retailing, saw falls after reporting large rises in November.

Food retailing fell 2%, with sales across the Food industry down in Victoria and New South Wales in line with restrictions on Christmas gatherings.

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EUROPEAN ECONOMICS PREVIEW: GERMANY IFO BUSINESS CONFIDENCE DATA DUE

Business confidence from Germany is due on Monday, headlining a light day for the European economic news.

At 3.00 am ET, business confidence from the Czech Republic and industrial production from Austria are due.

At 3.45 am ET, European Central Bank President Christine Lagarde is set to speak at a conference in Frankfurt.

At 4.00 am ET, Germany ifo business confidence survey results are due. Economists forecast the business sentiment index to fall to 91.8 in January from 92.1 in the previous month.

In the meantime, industrial production data is due from Poland. Output is seen rising 8.7 percent on year in December, faster than the 5.4 percent rise seen in November.

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SOUTH KOREA GDP CLIMBS 1.1% ON QUARTER IN Q4

South Korea's gross domestic product expanded a seasonally adjusted 1.1 percent on quarter in the fourth quarter of 2020, the Bank of Korea said in Tuesday's advance estimate.

That beat expectations for an increase of 0.7 percent following the 2.1 percent gain in the previous three months.

On a yearly basis, GDP sank 1.4 percent - exceeding forecasts for a drop of 1.7 percent following the 1.1 percent decline in the three months prior. For all of 2020, GDP was down 1.0 percent.

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AUSTRALIA INFLATION CLIMBS TO 0.9% ON YEAR IN Q4

Consumer prices in Australia were up 0.9 percent on year in the fourth quarter of 2020, the Australian Bureau of Statistics said on Wednesday - exceeding expectations for 0.7 percent, which would have been unchanged from Q3.

On a quarterly basis, inflation also gained 0.9 percent - beating forecasts for 0.7 percent and down from 1.6 percent in the three months prior.

The Reserve Bank of Australia's trimmed mean was up 0.4 percent on quarter and 1.2 percent on year - both matching forecasts and unchanged.
The weighted median rose 0.5 percent on quarter and 1.4 percent on year after rising 0.3 percent on quarter and 1.3 percent on year in the previous three months.

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EUROPEAN ECONOMICS PREVIEW: EUROZONE ECONOMIC CONFIDENCE DATA DUE


Economic confidence from euro area and flash consumer prices from Germany are due on Thursday, headlining a busy day for the European economic news.

At 2.00 am ET, Swiss foreign trade data for December is due. The trade surplus totaled CHF4.45 billion in November.

In the meantime, Statistics Norway releases retail sales and unemployment data. The jobless rate is seen unchanged at 5.2 percent in three months to November.

At 3.00 am ET, the National Institute of Economic Research is slated to issue Swedish economic tendency survey results.

Also, Spain's unemployment data for the fourth quarter is due. The jobless rate is expected to rise to 16.6 percent in the fourth quarter from 16.26 percent in the third quarter.

Half an hour later, Statistics Sweden is scheduled to publish retail sales and unemployment figures for December. Economists expect the jobless rate to climb to 8.4 percent from 7.7 percent in November.

At 4.00 am ET, Italy's Istat publishes business and consumer confidence survey results.

At 5.00 am ET, the European Commission is slated to issue euro area economic sentiment survey results. The economic confidence index is forecast to fall to 89.5 in January from 90.4 in December.

At 8.00 am ET, Destatis releases Germany's flash consumer price data for January. Economists forecast consumer prices to rise 0.7 percent annually, reversing a 0.3 percent drop in December.

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AUSTRALIA PRIVATE SECTOR CREDIT RISES 0.3% IN DECEMBER

Private sector credit in Australia was up 0.3 percent on month in December, the Reserve Bank of Australia said on Friday - accelerating from the 0.1 percent gain in November.

On a yearly basis, credit climbed 1.8 percent - up from 1.7 percent a month earlier.

Housing credit added 0.4 percent on month and 3.5 percent on year, while personal credit fell 0.5 percent on month and 12.3 percent on year and business credit gained 0.2 percent on month and 1.0 percent on year.

Broad money was up 0.6 percent on month and 12.6 percent on year.

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CHINA MANUFACTURING PMI EBBS IN JANUARY - CAIXIN

The manufacturing sector in China continued to expand in January, albeit at a slower pace, the latest survey from Caixin showed on Monday with a seasonally adjusted PMI score of 51.5.

That's down from 53.0, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Chinese goods producers signaled a sustained rise in output during January, to extend the current period of expansion to 11 months. That said, the rate of growth was the least marked since last April and modest. The slowdown coincided with a weaker increase in total new work at the start of the year.

Data indicated this was partly driven by a renewed drop in export orders, which fell for the first time in six months. Survey respondents often cited the resurgence of the COVID-19 virus globally when explaining the reduction.

Stock shortages at suppliers and shipping delays led to a further increase in delivery times for inputs. Furthermore, average vendor performance deteriorated at the steepest rate since last March.

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AUSTRALIA CB HOLDS KEY RATE; LIFTS QE

Australia's central bank left its key interest rate unchanged on Tuesday and raised the size of the asset purchase programme.

The board decided to maintain the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility.

But the board decided to buy an additional A$100 billion of bonds issued by the Australian Government and states and territories when the current bond purchase program is completed in mid April. These additional purchases will be at the current rate of A$5 billion a week.

The bank is not expecting to raise its interest rates until 2024.

Policymakers expect the economic recovery to continue, with the central scenario being for GDP to grow by 3.5 percent over both 2021 and 2022. GDP is expected to return to its end-2019 level by the middle of this year.

Both inflation and wages growth are forecast to pick up, but to do so only gradually, with both remaining below 2 percent over the next couple of years, the board said. In underlying terms, inflation is expected to be 1.25 percent over 2021 and 1.5 percent over 2022.

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EUROPEAN ECONOMICS PREVIEW: EUROZONE FLASH CONSUMER PRICES, FINAL PMI DATA DUE

Flash consumer prices and final composite Purchasing Managers' survey results are due from euro area on Wednesday, headlining a busy day for the European economic news.

At 2.00 am ET, the Turkish Statistical Institute releases consumer and producer price figures for January. Economists expect inflation to rise to 14.68 percent from 14.6 percent in December.

At 3.15 am ET, IHS Markit releases Spain's services PMI data. The index is seen at 45.3 in January, down from 48.0 in December.

At 3.45 am ET, Italy's services PMI data is due. The services index is expected to fall to 39.5 in January from 39.7 a month ago.

Thereafter, final PMI figures are due from France and Germany at 3.50 am and 3.55 am ET, respectively.

At 3.55 am ET, Iceland's central bank is set to announce its interest rate decision.

At 4.00 am ET, IHS Markit publishes euro area composite PMI survey results. The final reading is seen at 47.5 in January, unchanged from flash estimate.

At 4.30 am ET, UK final composite PMI data is due. According to flash estimate, the composite index fell sharply to an eight-month low of 40.6 in January from 50.4 in December.

At 5.00 am ET, Eurostat publishes euro area flash consumer and producer price figures. Economists forecast consumer prices to rise 0.5 percent annually in January, in contrast to a fall of 0.3 percent in December.

Also, at 5.00 am, Italy's Istat releases flash consumer price figures for January. Consumer prices are forecast to drop 0.1 percent annually after easing 0.2 percent in December.

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NEW ZEALAND BUSINESS CONFIDENCE STRENGTHENS IN FEBRUARY

New Zealand business confidence strengthened in February, flash survey data from ANZ showed on Thursday.

The business sentiment index rose to 11.8 in February from 9.4 in December. The own activity outlook index advanced to 22.3 from 21.7 in the previous month.

However, there was a sharp rise in costs, dampening profitability, the survey showed.

Expected costs advanced 14 points in February. Firms are intending to pass the costs on where they can, with a net 49 percent of firms intending to raise their prices.

Inflation expectations lifted too, from 1.65 percent to 1.78 percent, another step closer to the 2 percent central bank's CPI target midpoint.

The profit expectations index slid to 0.5 from 6.8 in the previous survey period. The employment intentions climbed to 10.6 from 8.8. Final data is due on February 25.

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EUROPEAN ECONOMICS PREVIEW: GERMANY FACTORY ORDERS DATA DUE

Factory orders from Germany and Halifax house prices from the UK are due on Friday, headlining a light day for the European economic news.

At 2.00 am ET, Destatis is slated to issue Germany's factory orders for December. Economists forecast orders to fall 1 percent on month, reversing a 2.3 percent rise in November. In the meantime, industrial production data is due from Statistics Norway.

At 2.45 am ET, current account and foreign trade reports are due from France.

At 3.00 am ET, retail sales from the Czech Republic and industrial production from Hungary are due.

Hungary's industrial output is forecast to climb 2.0 percent annually in December, following a 3.5 percent rise in November.

Half an hour later, UK Halifax house price report is due. Monthly house price growth is seen at 0.3 percent in January versus +0.2 percent in December. Also, Statistics Sweden publishes industrial production and orders at 3.30 am.

At 4.00 am ET, Italy's Istat releases retail sales data for December. Sales had dropped 6.9 percent on month in November.

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FITCH MAINTAINS JAPAN'S SOVEREIGN RATINGS

Fitch Ratings maintained the sovereign ratings of Japan with a 'negative' outlook on Monday.

The ratings were retained at 'A' citing the strengths of an advanced and wealthy economy, with correspondingly robust governance standards and public institutions.

Fitch affirmed a 'negative' outlook on Japan's ratings, given continued downside risks to the macroeconomic and fiscal outlook from the coronavirus shock.

The agency expects the large fiscal support to be unwound gradually, but downside risks to growth exacerbate the challenge of placing the debt ratio on a downward path over the medium term.

After a 5.3 percent fall in 2020, Fitch forecast the economy to rebound by 3.5 percent in 2021 and 1.5 percent in 2022, supported by continued overseas demand for Japanese exports, which have recovered over recent months.

Fitch estimated government debt to have jumped to 254.8 percent of GDP in 2020 from 231.2 percent in 2019, the highest pre-pandemic debt ratio among Fitch-rated sovereigns. The debt is forecast to peak at 258.6 percent in 2023.

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EUROPEAN ECONOMICS PREVIEW: GERMAN FOREIGN TRADE DATA DUE

Foreign trade data from Germany is due on Tuesday, headlining a light day for the European economic news.

At 2.00 am ET, Destatis is slated to issue Germany's foreign trade figures. Economists forecast exports to fall 1 percent on month, reversing a 2.2 percent rise in November. Imports are seen easing 1.1 percent after rising 4.7 percent a month ago.

Germany's trade surplus is expected to fall to EUR 15.9 billion from EUR 16.4 billion in November.

At 4.00 am ET, Italy's Istat publishes industrial output data for December. Production is expected to grow 0.3 percent, in contrast to a 1.4 percent drop in November.

At 5.00 am ET, December industrial production report is due from Greece. Production had increased 8.6 percent on a yearly basis in November.

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CHINA CONSUMER PRICES RISE 1.0% ON MONTH IN JANUARY

Consumer prices in China were up 1.0 percent on month in January, the National Bureau of Statistics said on Wednesday - in line with expectations following the 0.7 percent increase in December.

On a yearly basis, consumer prices fell 0.3 percent - shy of expectations for a flat reading following the 0.2 percent gain in the previous month.

The bureau also said that producer prices rose 0.3 percent on year in January - missing forecasts for an increase of 0.4 percent after sinking 0.4 percent a month earlier.

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NEW ZEALAND ELECTRONIC CARD TRANSACTIONS SLIP 0.4% IN JANUARY

The total value of electronic card transactions in New Zealand was down a seasonally adjusted 0.4 percent on month or NZ$24 million in January, Statistics New Zealand said on Thursday - following the 19.2 percent spike in December.

Spending in the core retail industries slipped 0.7 percent on month or NZ$39 million.

On a yearly basis, electronic retail card spending was up 1.9 percent - slowing from 3.5 percent in the previous month.

By industry, the movements were: durables, up NZ$34 million (2.1 percent); motor vehicles (excluding fuel), up NZ$3 million (1.7 percent); fuel, down NZ$1 million (0.3 percent); apparel, down NZ$7 million (2.0 percent); and consumables, down NZ$31 million (1.3 percent).

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NEW ZEALAND FOOD PRICES CLIMB AN UNADJUSTED 1.3% IN JANUARY

Food prices in New Zealand were up an unadjusted 1.3 percent on month in January, Statistics New Zealand said on Friday.

Seasonally adjusted, food prices were flat on month.

In January 2021 compared with December 2020: fruit and vegetable prices rose 1.7 percent (down 1.4 percent after seasonal adjustment); meat, poultry, and fish prices rose 1.1 percent; grocery food prices rose 1.8 percent (up 0.8 percent after seasonal adjustment); non-alcoholic beverage prices rose 2.5 percent; and restaurant meals and ready-to-eat food prices rose 0.3 percent.

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EUROPEAN ECONOMICS PREVIEW: EUROZONE INDUSTRIAL OUTPUT, FOREIGN TRADE DATA DUE

Industrial production and foreign trade figures from euro area are due on Monday, headlining a light day for the European economic news.

At 2.00 am ET, GDP data from Denmark and foreign trade data from Norway are due.

At 3.00 am ET, December construction output data is due from Hungary. Production had increased 5 percent annually in November.

At 4.00 am ET, consumer prices data is due from Poland. Inflation is forecast to remain unchanged at 2.4 percent in January.

At 5.00 am ET, Eurostat is scheduled to issue euro area foreign trade and industrial output figures for December. Economists forecast production to fall 1 percent on month, reversing a 2.5 percent rise in November.

The euro area foreign trade surplus is seen at EUR 25.3 billion in December versus EUR 25.8 billion in the previous month.

In the meantime, January consumer price data is due from Greece. Consumer prices are forecast to drop 2.3 percent annually in December.

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RBA MINUTES ON TAP FOR TUESDAY

The Reserve Bank of Australia will on Tuesday release the minutes from its Feb. 2 monetary policy meeting, highlighting a light day for Asia-Pacific economic activity.

At the meeting, the RBA decided to maintain the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility.

The board also decided to buy an additional A$100 billion of bonds issued by the Australian Government and states and territories when the current bond purchase program is completed in mid-April. These additional purchases will be at the current rate of A$5 billion a week.

Japan will see December results for its tertiary industry index; in November, the index was up 0.7 percent on month.

Finally, the markets in Taiwan and China remain closed for the Lunar New Year holiday.

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MicroStrategy decides to buy more Bitcoin

The bitcoin exchange rate is trading near the level of $50,000 per coin and is not even going to stop there. Ether is also not far from its highs, but it is still correcting and is now near the level of $1,745. At the moment, there are no discussions on any fall of the two largest cryptocurrencies. This is pretty logical, considering the latest news. For the past two weeks, everyone has been talking about Elon Musk's posts on Twitter and Tesla's decision to buy $1.5 billion worth of Bitcoin. These events led the cue ball to the cost of $50,000 per coin. However, further messages began to arrive, saying that the oldest banks, payment systems, and some other companies were already ready to join the cue ball hype. Since bitcoin and ether are already traded on the Chicago Mercantile Exchange, the popularization of the cryptocurrency segment is in full swing. In the future, bitcoin is going to be used as payment for goods and services. Apple already provides its users with the ability to store cryptocurrencies on their phone. But at the same time, there is still a huge number of skeptics of bitcoin and other tokens remaining in the world. While they criticize the cue ball, the coin continues to break value records. Despite this, many believe that the "bubble" is inflating again and will soon burst. The problem is that bitcoin itself is worthless, so it doesn't have any fair value. It can cost as much as you want, just like other cryptocurrencies. Its price is formed solely on the basis of supply and demand. And supply and demand are formed from the hype. To put it simply, the more people join the general mainstream in order to make money on the rise, the more expensive the cryptocurrency becomes. But this does not mean that it becomes more useful or more scarce. Just yesterday, it became known that MicroStrategy is going to raise $600 million of borrowed funds to buy more bitcoins. According to approximate estimates, the company's account already has about 72,000 coins, which is equal to 3.6 billion in dollar terms. The company has invested in bitcoin throughout 2020 and is now referred to as the "corporate sponsor" of bitcoin. The company, whose main activity is not actually related to investments in cryptocurrencies, but to business analytics, has risen in price by 580% during 2020 alone, due to its activity on the purchase of the number 1 cryptocurrency. Now, MicroStrategy is going to issue 600 million bonds for sale with a maturity in 2027. We also stand by the opinion that the "bubble" is inflated and will burst sooner or later. But while it is still growing, it is possible to make good money on it.

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EUROPEAN ECONOMICS PREVIEW: ECB MINUTES DUE

The minutes of the policy-setting meeting of the European Central Bank is due on Thursday, headlining a light day for the European economic news.

At 2.00 am ET, January foreign trade data is due from Switzerland. The trade surplus totaled CHF 3.05 billion in December.

At 3.30 am ET, Statistics Sweden is scheduled to issue consumer price data for January. Inflation is forecast to rise to 1.5 percent from 0.5 percent in December. At 4.00 am ET, industrial production and producer price figures are due from Poland. Production is expected to rise 0.6 percent on year in January, slower than the 11.2 percent increase in December.

At 6.00 am ET, Turkey's central bank announces its interest rate decision. The bank is expected to hold its one-week repo rate at 17.00 percent.

At 7.30 am ET, the ECB releases the account of the monetary policy meeting of the governing council held on January 20 and 21. At the meeting, policymakers had decided to leave its key interest rates and asset purchases unchanged, and reaffirmed its willingness to adjust the policy tools when needed.

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