Forex Forex News by ForexMart

Trump Calls for Investigation Following Manchester Leaks


US President Donald Trump has already called for an investigation regarding the “Manchester leaks” in order for the US government to determine how top-secret information were able to make their way towards the headlines of news reports, when these sets of information were actually only divulged to the key allies of the British government. Several UK officials have already expressed their dismay and disappointment with regards to this particular matter, among them being UK Prime Minister Theresa May. The bombings in Manchester last Monday night had killed a total of 22 people and has left more than 100 people with injuries. The victims were attending a pop concert before the bombings occurred.

 

Drop in Oil Prices Discontented Investors in its Low Figure


Oil prices declined by 5 percent following the extension of production cuts by Opec causing other oil producing countries to be dismayed who are expecting a bigger reduction. Consequently, crude prices dropped to the highest percentage drop since early March.



During the last OPEC meeting, they reached an agreement to prolong supply cuts constitute of 1.8 million barrels per day until the first quarter ends next year and investors are anticipating around half a million extra barrels to be contracted. However, Saudi Arabia’s energy minister, Khalid Al-Falih said that other ministers find it unnecessary to lessen the output further and nine months is the “optimum” duration.


On the other hand, U.S. shale producers are motivated to provide more supplies because of the cheap cost of oil at $50 bpd. Although, they have to be careful since it could exceed the target increase and bring down further the price, stated by the Texas shale oil producer president David Arrington.

 

Fast Track Economic Recovery of India in the First Quarter


The economy of India is considered as the fastest developing major economy globally in the previous quarter, induced by positive performance in manufacturing and services. For short-term, the demonetization has affected the demand but was able to recover. The forecast for this year ranged between 6.5 and 7.8 while the actual data achieved a 7.1 percent growth from January to March this year. It has significantly risen from last year’s Q1 growth of 7.9 percent.


The upswing in the economic growth was mainly pushed by positive domestic factors taking into account a notable progress of the central bank easing of policy rate into lending rates of financial institutions that made investment appealing to investors. Moreover, the infrastructure spending has substantiated growth and probability for better agricultural output when the monsoon rains become beneficial.


On the other hand, the goods and sales tax (GST) is also anticipated to contribute to the economy as its removal will encourage more businesses in India. This will be implemented on July 1st.

 

The current Money Fall contest has already started on May 29, 2017 and will end on June 2, 2017.


You can register for the next competition which will take place from June 5, 2017 to June 9, 2017.


Note:

Registration for the next competition finishes 1 hour before the contest starts.

 

US Budget Concerns Casts Doubt on Fed Plans


The US Federal Reserve is more than ready to raise its interest rates this coming June, but the possibility of the Congress rattling up the markets by slowing down progress on increasing the debt ceiling of the US economy has cast a shadow of doubt on the Fed’s next scheduled rate hike on September. Prior to this development, the Fed has been saying that they are currently planning to implement two more rate hikes before the year ends, but has now reverted to saying that the third rate hike for year might be in for some delays if the market gets shaken by possible disagreements on fiscal policies.

 

Limited Drop of Sterling in the Global Market Amid U.K. Parliamentary Election



On Friday, the British pound slumped following vague results without a particular party that dominated that election. Hence, investors are trying to weigh on risks including both events in the United States and Europe. As a result, the cable dropped by 2 percent amid the political problem that could hamper the Brexit talks and cause more uncertainty which will begin in more than a week.


Yields on 10-year gilt dropped by 3 basis points to 1.00 percent while the FTSE futures recovered as it gained 0.2 percent bringing hopes up to economic progress. The e-mini futures for the S&P 500 has a lesser impact as it increases by 0.1 percent.


The single currency slid overnight following the announcement of ECB forecast to ease inflation but did not talked to tune down the massive bond-buying campaign pushing bond yields to multi-month lows. Its effect in the global investment market can not be defined as it represents just 2.5 percent of world GDP.

 

The current Money Fall contest has already started on June 12, 2017 and will end on June 16, 2017.

You can register for the next competition which will take place from June 19, 2017 to June 23, 2017


Note:
Registration for the next competition finishes 1 hour before the contest starts.

 

ECB Not Yet to Withdraw Stimulus Program



The European Central Bank decided to loosen its monetary policy on Thursday but indicated that it further needs some support from the central bank amid increasing growth.

Mario Draghi, ECB president, is very cautious in his announcement regarding the withdrawal stimulus.



During the meeting held on Thursday which is accompanied by 25 members of the council, the bank kept its interest rates and bond-purchase stimulus program steady.



The governing council settled small adjustments towards the 19 emerging countries that utilizes the European currency by stating that interest rates could probably move lower. While Draghi issued another significant change as he described that risk to growth is currently “broadly balanced”, the tweak was announced during the April wherein risk are said to "tilted to the downside."



Carsten Brzeski, analyst at ING-DiBa, allegorize the bank’s statement to a baby’s first step intended to taper the stimulus effort. The financial institution preserved its bond-buying program at 60 billion euros ($67 billion) each month which will last this year or longer.

Moreover, ECB officials were in a stew for the market’s response to the untimely notice that the stimulus will end as the rates will climb higher, undermining the effects.

 

Finland’s Export Data Shows Signs of Recovery



The Bank of Finland forecast data shows the growth of Finland’s economy as exports recuperated gains although it still needed reform to enhance development and stronger public finances. This growth is marked as a big progress following a decade state in hiatus state due to various economic and business problems. The GDP progress is anticipated to improve by 2.1 percent in 2017 which is higher than the former forecast of 1.6 percent in March. In the previous year, the GDP grew by 1.4 percent.


Amid the steady growth of exports, the economic growth still depends on the private consumption and investment and will further progress when the employment condition gets better to support an increase in purchasing power. Hence, the center-right government has lessened expenditures and eased labor laws yet the central bank sees the need other strategies to boost the current and future growth.

 

Fed Implements Rate Hike, Maintains Outlook for Next Hike



The US Federal Reserve has pushed through with its planned interest rate hike for this month while outlining its plans to continue with stricter monetary policies in spite of the country’s weak inflation rates. FOMC officials approved the central bank’s third rate hike within a six-month period and hinted at possibly another rate hike just before the end of 2017. Fed Chair Janet Yellen stated in a press conference following the announcement that the bank’s plans of unwinding its policies might be implemented sooner than later, especially if the country’s economic status meets the expectations of the Fed. Moreover, the central bank is also looking into a three-quarter point rate increase for 2018 just like its previous projection last March.

 

NZ Below Expectation Economic Growth



The New Zealand economy climbed by 0.5 percent in the first quarter of the year but still lower than market expectations as the construction sector weakened. The forecast figure of the central bank is 0.9 percent while the analysts predicted it to attain 0.7 percent, which obviously fell short from both predictions.


Despite positive growth for the milk production and a moderate growth of GDP, these were out shadowed by weak data from the construction sector and the mixed results from the service sector. The construction data declined by 2.1 percent for Q1 that negated the 4.3 percent augmentation in agriculture particularly the milk production.


An economic analyst described this phenomenon to be transient and the economy will advance at estimated of 3.0 to 3.5 percent this year. Also, other sectors are performing well but there is no need for the Reserve Bank of New Zealand (RBNZ) to adjust its cash rate from a record low of 1.75 percent.

 

Calgary Council to Create a $10-million Economic Development Fund



The council of Calgary asked to produce an economic development investment fund (EDIF) that accounts to $10 million during on its meeting scheduled on Monday. Based on the Statistics Canada, there were almost 53, 000 jobs lost in Calgary, a region in Alberta, Canada.

In other countries like North America, the purpose of EDIF is to create diversification and to work out with the economic downswing.



Moreover, the city council released a report regarding the objectives of the said project: (1)Help create the right conditions for growth in the local economy, through efforts to strengthen industries and create new ones; (2) Diversify the local economy; (3) Leverage municipal funds for additional private and public sector investments into the community; (4) Create employment lands and stimulate employment; and (5) Create a return on investment (both direct and indirect).

Councillor Richard Pootmans approves the deal for he believes that investments should be administered within the community because no one else will do this favor for the Calgary.

Pootmans was recognized having a background in economic development prior entering politics.



The 20 percent of the $10-million worth EDIF will be allotted to the 10 cornerstone arts organizations that include the Calgary Folk Music Festival, Theatre Calgary, and The Calgary Philharmonic Orchestra. While the municipal politician would likely consider this idea as he said that, arts is one of the primary factors why people visit their art galleries.



The City administrators further stated that art organizations support the high quality of life in the region with an active metro and the economy is well-diversified.

 

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Positive Economic Feelings of Americans, No Help For Trump, CNBC says



The American economy remains optimistic as shown in the All-America Economic Survey by CNBC, along with some leading components reaching its highest level, however, this optimism does not help the president.



The poll shows that 800 U.S. citizens or 30 percent of the populace believe that the economy is in upbeat as of this moment until the future. It's the highest percentage recorded in the past two successive quarters amid survey's 10-year history.



There are 54 percent who think that house price will surge in 2018 and 44 percent who deems that their earnings will further rose for the following year. The stocks as well demonstrated a positive stance as there were 44 percent assumed that this period is a time for good investment



However, the positive tone of Trump’s economy does not contribute much help towards the approval rating of the state’s leader which showed a 37 percent decline based on the recent survey versus 39 percent result in April. President D. Trump’s approval on the economy is down to 41 percent and 44 percent in April. Moreover, negative factors may arise driven by various groups particularly laborers such as blue collar, independents, and retirees.



As the public has split belief, the poll found that quarter of the United States economy is becoming better due to policies adopted by the president. On one side, there are 22 percent who said that his plans worsen the country.

 

Economists Predicted Optimistic Outlook for China’s Economy



According to the most recent poll, Chinese economists have a positive outlook regarding the future of the country’s economy. Forecasts say that the economic growth of China will gain 6.6 percent, this means that aggregate needs of China is extended up to 2034 only in order to take after the United States.



The survey was released by the bi-monthly journal, China Economist last June 14 which shows 131 analysis questionnaires. The study is done quarterly conducted by investment banks, research institutions, and widely-known economists.



Financial experts that came from the western and central regions of China estimated that the country will expand from 6.63 to 6.6 percent which is higher versus its rivals from the east. While the majority of the analyst believes that manufacturing in China will remain unchanged. The survey further indicates the upbeat tone of Chinese economist regarding the Republic’s better performance driven by the government confidence.



There are 35.2 percent of experts that the national debt of the country became much stable rather than of the U.S, considering its debt-to-GDP ratio is almost low and its growth rate in GDP is quite high.



Moreover, there are 91.2 percent economists who support the 100-day action plan designed by US President, Donald Trump as they deemed that the American economy can fully recover along with potential revitalization of the manufacturing sector of the state.

 

U.S. Bond Market Flat Yield Curve Warns the Economy



Federal Reserve authorities are applying more on a hawkish side on the next rate hike signifying less confident prediction for long-term economic growth. The U.S. Treasury yield curve giving a flat yield curve forebodes warning signals on the economy. Buyers will look out for higher yields especially for long-term debts when costs increase.



Dallas Fed president said that the cause of the yield curve is the weakened market growth while the New York Fed president described the reason to be the low offshore inflation and borrowing rates instead of a sluggish economic growth.



However, the flat yield curve could further ease the current financial condition amid the efforts of Fed to tighten its monetary policies but would benefit riskier assets such as stocks that are not easily affected by the strength of the economy. Nevertheless, the Fed cannot manage the whole monetary base since there are still parts under shadow banking which are larger than what the Fed controls in the present as described by a market strategist.

 

The current Money Fall contest has already started on June 26, 2017 and will end on June 30, 2017.


You can register for the next competition which will take place from July 3, 2017 to July 7, 2017


Note:

Registration for the next competition finishes 1 hour before the contest starts.

 

Corporate Sectors Face Risks Despite Economic Advancement in Q2


The economy of China has progress in the second quarter as the corporate profits rose and employed more workers in the recent surveyed but the country still yet to face difficulties. Nevertheless, corporates were able to endure a tighter financing condition amid signs of problems regards to negative cash flow and inventory levels. Commodities sector is strengthening in spite of weak price in the second quarter


This is in line with the latest data and rhetorics of policy makers who tried to control financial risks to prevent the collapse of the economy which would be discussed on the significant political meeting.


The government intervenes with its campaign to control debt risks and steady the financial market since the cash supply was sluggish in the past two decades in May. Notwithstanding, the bank lending remained strong. Companies are starting to sense tighter credit while they presume the deleveraging to be transitory.

 

CBO Speculates US Budget Deficit Could Surge to $693B



The Congressional Budget Office stated via its analysis report last Thursday that the US government is in danger of fully depleting its cash reserves as it scrambles to pay all of its bills before October 2017, particularly if the Congress heightens its federal borrowing price ceiling. The CBO also warned that the country’s deficit could balloon up to $693 billion if not addressed properly. Treasury Secretary Mnuchin has long since been appealing to US policymakers to increase the debt limit without any kind of conditions whatsoever before Congress postpones itself for a summer recession starting this coming July 28. Conversely, the US Treasury Department has been utilizing cash conservation procedures in order to cope with the US government’s accountabilities since last March 2017.

 

EU-Japan Formalize its Partnership on Thursday



Two of largest countries in the world, Japan and the European Union is scheduled to make an agreement and sign a free trade deal on July 6, Thursday. As both nations expect for an unfavorable response when the United States deals with protectionism under the Trump administration.



It was already confirmed on Tuesday that Japan’s Prime Minister Shinzo Abe will go to Brussels to meet with the leaders of EU institutions. The European Council stated that "Leaders are expected to announce a political agreement on the EU-Japan free trade agreement."



This could be considered a brief and final settlement to iron out the entire complications between EU and Japan, the European officials further mentioned on Tuesday that there were still some major issues needed to resolve prior the EU-Japan summit on Thursday.



Since Abe already confirmed his attendance, it only indicates his certainty about the agreement and willing to inscribe his signature as well as to put pressure towards trading negotiators in order to ensure partly an outline of the deal regarding the introduction on each other’s markets. And this includes the European farm produce and Japanese automobiles which are considered the most delicate areas.