Monday, September 30, 2013

After more than 17 Years, U.S. on the way to do it again “Shutdown”?!

After more than 17 Years, U.S. on the way to do it again “Shutdown”?!

 “The shutdown is not a political problem, it is like a "last man standing game" inside the congress. And that will be totally paid from American health and salaries” - Quoted

Although the biggest camps - Republicans and Democrats - say they don’t want a shutdown, though neither side is budging from their positions to avoid one. Republicans want to delay President Barack Obama’s Affordable Care Act for a year and make other changes to the health law. The Democrats want not to let that happen whatever are the consequences.
Between these and those side of U.S. government stands poised that the first partial shutdown in 17 years, after a weekend with no signs of negotiations or compromise from either the House or Senate to avert it.
The fallout would be far-reaching: national parks and Internal Revenue Service call centers probably would close. And those wanting to renew passports would have to wait and the backlog of veterans’ disability claims could increase, in other words everything in U.S. will shut down but police, national defenses, medical operations, and social security programs.                                                                         
And here are some consequences of the shutdown …                                                       
Hanging in the balance are 0.8 Million out of 2.1 Million federal workers who would be sent home if Congress fails to pass a stop gap spending bill before funding expires Social Security and Medicare are entitlements, and as such, the spending is mandatory, So cheques will still go out. But there could be delays if a lack of funds for worker salaries means a reduced workforce at their respective agencies. Also, new applications are likely not to be processed until the government reopens. In the 1996 shutdown, more than 10,000 Medicare applicants were turned away daily, according to the Committee for a Responsible Federal Budget (CFRB).
During the shutdowns of 1995 and 1996, some Social Security employees were allowed to work, which kept benefits flowing to existing Social Security, disability, and black lung beneficiaries, according to the Congressional Research Service (CRS). But over time, more workers were brought back to process new claims and respond to other requests (such as from people who needed a Social Security card to work).

And the main point “Salaries”, back to the serious business of a shutdown. Federal workers placed on furlough will not get paid during a shutdown. After past shutdowns, Congress has voted to pay furloughed workers retroactively, but this time employee advocates aren’t so sure, given public (and some legislators’) attitudes toward the federal government.

Friday, September 27, 2013

Japan: Inflation rate and long term market growth.

Japan: Inflation rate and long term market growth.

First of all, what is the Inflation. Inflation is a raise in prices levels at all, services, consumption goods, or commodities.
In other words it is a reduction in purchasing power and that will reflect on exchange prices in the market “as higher is the inflation rate, as lower is the exchange price for direct currencies and higher for the indirect” and that is fact.

Note: Yen usually shown as indirect currency (Yen/ Dollar) and (Yen/ Euro)  

Consumer price inflation in Japan rose to an annual rate of 0.8 percent in September, its highest level in almost five years, as the effects of a weaker yen pushed up the cost of fuel and electricity especially during this time of its nuclear reactor shut time for maintenance from September 15, leaving Japan without atomic power for the first time since July 2012, and more dependent on imported fuel.
The headline figure is likely to be viewed with some satisfaction by policy makers trying to overturn more than a decade of deflation in Japan, which they claim has sapped companies’ willingness to invest while weighing on household consumption, and furniture at national level, and increase domestic export to expand in the second biggest economy and to create an attractive environment for foreign investments. At least that is what decision makers hope, after all that long deflation age.

Although inputs costs will get higher and wages rates too, decision makers still hope to work as planned.

Japanese national core report released today with higher inflation rate and consumption goods prices with rate of 0.8 percent, 0.1 percent higher than before which gave a push for the Yen in morning to hit 98.98 Yen/U.S Dollar, and 133.48 Yen/Euro.

Germany: Necessary Expansion Against The Need To Keep The Union

Germany: necessary expansion against the need to keep the union

The largest economy in the Euro area is the most effective in the Euro currency position .This economy has one of the most complex conflict history has ever known, which is how to expand and extend exportations, with low inflation rate or with the lowest inflation rate between the industrial economies.

Inflation rate was 1.5 percent in August and 1.9 in July, too low for the biggest economy in the Euro especially when the trading surplus is more than 7 percent of its all gross domestic production, it is very high percentage of surplus when considering the capacity of this economy less than 75 percent of its capacity used in the production while market expansion needed and inflation favored specially with the small consumption.

Why don’t do that and expand its market? Is Germany has a morale commitment with the Euro to keep it alive?
The answer is “No!” more than 70 percent of its all exports are inside the European Union (53 percent of its full capacity) and that’s why Germany tries to hold it on, but for how long? No one knows.

In the meantime, Euro’s all over inflation rate, due to the inflation in Greek, Italy, and Spain, Germany is the only one who has to hold it down due to British economical separation from this union.

Today we have "German Prelim CPI, monthly report"; to see what the actual inflation rate is for this month, which expected to be 0 percent.

For further details about Euro news subscribe to our daily Newsletter.

Thursday, September 26, 2013

The Countdown to the Debt Crises.

The Countdown to the Debt Crises.


On 25th of September, the conflict about the debt ceiling and the hard fight about it sounded like a countdown to the next debt crises.

Analysis shows that congress must do something about the debt ceiling by mid-October or early November, otherwise there will be a problem meeting governmental obligations. This situation would lead to one of two options. The first one is, cutting down the governmental expenditures, and/or shutting some governmental sectors except for police and health care insurance.

The second option is to cancel the greatest American project in Obama’s first presidential period “Obamacare”, and that is exactly what Republicans want.

But if wanted or not, congress must raise the debt ceiling within the next 25 days to avoid another debt crises within this month but that may work at a certain level, In 2011, when Republicans launched the nation's first-ever debt-ceiling crisis, it was painful on the U.S. economy, the U.S. political system, and global markets for months. Just having the debate – partnering the fact that a "fight" existed at all - did severe damage to the nation, even though the ceiling itself was not breached.
But still the questions are, what will happen within the next three weeks, and what will happen after these three weeks?

Unemployment claims

Unemployment Claims
Unemployment claims is one of the most effective reports in the market.It shows the strength of the employment in U.S. market and  the total paid people from the social security each week.
Last week was worst than a week before but still better than expected, two weeks ago jobless claims got 6-Year low with 292K workers filed unemployment claims, and the last week it was 309K which is better than 331K as expected.
Analysts’ expectations show an increase in unemployment claims to 319K; once this level reached another burden will be on U.S. government shoulders over and over as most of unemployed worried about unemployment benefits delay.

As traders, all of this variation in claims numbers can give us a strong indication about U.S. economy and internal market weakness, conflicts, and inflation levels which can affect traded currencies and commodities prices at the end of day.
For Further Economic Analysis visit :



Friday, September 13, 2013

What are Future Contracts?

Future contracts obligate the seller to deliver a commodity or other financial instrument to the buyer at an agreed upon date in the future.

Every contract must have a buyer and a seller and they must be standardized in order to facilitate trading on a futures exchange. Traders publically set a price for subsequent delivery within a specified time period and place. Exchange specifies major terms and conditions of the contract, except for the price. The buyer and seller of the contract make equal and offsetting commitments.  These commitments are legally binding, but can be offset.  Most futures contracts do not result in delivery and some do not permit delivery. For ICM Brokers, delivery is not permitted.

Futures contracts were traditionally used to trade commodities like sugar and coffee. It’s an obvious fact that futures market has become an important economic tool to determine prices based on today's and tomorrows estimated amount of supply and demand. Futures market prices depend on a continuous flow of information from around the world and thus require a high amount of transparency. Factors such as weather, war, debt default, refugee displacement, land reclamation and deforestation can all have a major effect on supply and demand and, as a result, the present and future price of a commodity. This kind of information and the way people absorb it constantly changes the price of a commodity. This process is known as price discovery. Futures markets are also a place for people to reduce risk when making purchases. Risks are reduced because the price is pre-set, therefore letting participants know how much they will need to buy or sell. 

This helps reduce the ultimate cost to the retail buyer because with less risk there is less of a chance that manufacturers will jack up prices to make up for profit losses in the cash market. 

For Further details about Future Contracts that ICMB provides, please visit our website:

Monday, September 2, 2013

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