Monday, March 31, 2014

Japanese data industrial production drop

Japan’s industrial production fell in February, undershooting all forecasts, as the first sales-tax increase since 1997 risks stalling recovery in the world’s third-biggest economy. Output fell 2.3% from the previous month, the steepest drop in eight months, and the trade ministry said in Tokyo today. The median estimate of 28 economists was for a 0.3% gain. A separate gauge of manufacturing fell in March for a second straight month. While the weakness partly reflected disruptions from heavy snowfall, the data showed manufacturers are bracing for a slump in demand following tomorrow’s sales-tax increase. Inventories fell for a seventh straight month, lessening the likelihood of even sharper output cuts as the higher consumption levy pushes the economy into a one-quarter contraction in April-June.
The 3 percentage-point increase in the sales tax is forecast to cause the economy to shrink at an annualized 3.5 percent in the second quarter, before a rebounding grow 2.1 percent in the following three months, according to a separate Bloomberg survey. Prime Minister Shinzo Abe gave the go-ahead for the sales tax increase to help deal with the world’s biggest debt burden, even as he pushes reflationary policies to spur growth and end 15 years of deflation.
Yen weakened against the greenback as Russia and the U.S. sought a diplomatic solution to the crisis in Ukraine, reducing demand for havens. The yen pared its biggest quarterly gain since the three months through September 2012 after U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov met yesterday. Japan’s currency weakened 0.4% to 103.22, cutting its advance this quarter to 2%.

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Friday, March 28, 2014

Gold drop to six weeks low

Gold drops recording another low at $1,286.94 per ounce, as the U.S. economy grew more rapidly in the fourth quarter than previously estimated and applications for jobless benefits unexpectedly fell in the week ended 21st of March were 15K lower than forecasts and 10K lower than ht previous week at 311K, the lowest since the 5th of December 2013.

Gold facing more pressure to proof the yellow heaven, as Fed Chair Janet Yellen said last week that interest rates could start increasing six months after the Fed ends its asset-purchasing program. Gold traded at a high of $1,298.85 per ounce on the early morning before the drop of $10 to record the low of $1,286.94.

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Thursday, March 27, 2014

WTI rising amid shrinking Cushing supplies

U.S. futures were little changed after rising 1.1% yesterday to close above $100 a barrel for the first time in a week. Supplies at Cushing, Oklahoma, the delivery point for WTI crude oil, shrank for the eighth week to the lowest in two years, the Energy Information Administration said. Gasoline demand exceeded 9 million barrels a day for the first time this year. Cushing stockpiles decreased by 1.33 million barrels to 28.5 million in the week ended March 21, according to the Energy Department’s statistical unit. Stockpiles started falling in January after the southern link of TransCanada Corp.’s Keystone XL pipeline to the Texas Gulf Coast opened, easing a bottleneck from the storage hub. Total U.S. crude inventories expanded by 6.62 million barrels to 382.5 million, the EIA said, compared with a projected increase of 2.5 million. Gasoline consumption rose 5.8% last week to 9.002 million barrels a day, the highest level since December 20, EIA data show. Supplies of the motor fuel fell by 5.1 million barrels to 217.2 million.
Regarding the Libyan matter, with an output capacity of 1.5 million barrels a day, is producing only 171K barrels a day as ports and fields remain shut amid political unrest. The government is negotiating with protesters about restarting the Sharara oilfield, the country’s second-largest, Elharari said. WTI for May delivery was at $100.25 a barrel, down 1 cent, in electronic trading. The contract gained $1.07 yesterday to the highest settlement since March 19. The volume of all futures traded was about 47% below the 100-day average. Prices are up 1.8% this year.

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Monday, March 24, 2014

Bird-eye on the Federal interest rates

Fed is about to hike the interest rates next spring, Yellen said last week. On March 19th, the Federal Reserve dropped a pledge tying borrowing costs to a 6.5% unemployment rate and made clear it would rely on a wide range of measures in deciding when to raise interest rates. The Fed also announced a further $10 billion reduction in its monthly bond purchases to $55 Billions. Interest Rate in the United States averaged 6.08% from 1971 until 2014, reaching an all time high of 20% in May of 1981 and a record low of 0.25% in December of 2008. In the United States, the authority for interest rate decisions is divided between the Board of Governors of the Federal Reserve and the Federal Open Market Committee. The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate.

Wednesday, March 19, 2014

Much higher than expected data

Sterling gained amid the higher than foretasted data released today, the main element was the unemployment figures. The unemployment claims declined by 34.6K, 11.3K larger than the forecasts. This figure was the largest in three months, and the third improvement result in a row. Other report showed 105K increase in the total quarterly average employment, but the annually adjusted unemployment rate remains at 7.2%. Annually adjusted growth in the average weekly earnings including bonuses was 1.4%, 0.9% higher than the previous release. The average earning excluding the bonuses was 0.7% higher than the report before reaching 1.3%. 
Offsetting yesterday’s drop, Cable gained 0.3% against the greenback reaching 1.6645, rising from 1.6595.

Tuesday, March 18, 2014

Gold drops from Six months high

Gold retreats for the second day from the six months high amid the vote of Crimea, 60% of Crimea’s population voted for the independence from Ukraine, and they added their wellness to be a part of Russia. This morning, the Russian president Vladimir Putin declared the Russian situation and their respect for the Crimean wellness to be included in the Russian lands a day after the U.S. and European Union imposed limited sanctions on some people linked to the annexation of the Ukrainian territory. Gold extended a decline from a six-month high as speculation that the Federal Reserve will continue cutting stimulus curbed demand for the precious metal as a store of wealth. Silver fell. Gold advanced 13% this year as turmoil in Ukraine and signs of slowing economic growth increased demand for haven assets. Prices rebounded from the biggest annual slump since 1981 even as the U.S. central bank started to scale back asset purchases. Data released on Monday showed U.S. industrial output rose in February by the most in six months. The Fed begins a two-day meeting today (Tuesday, March 18th).

Breaking the level of $1,360.00 per ounce, bullion for immediate delivery declined by 3.0% during the last two days from the six months high of $1,387.6 per ounce to be traded at $1,357.70. Futures for April delivery declined by 2.5% to $1,358.00 per ounce, just before the two days Fed meeting begins.

Tuesday, March 11, 2014

Sterling three months performance summery

Sterling lost about 0.8%during the last two days as the modest data released during the last week, today we had the manufacturing production growth rate, which released at 0.4%, the same level for the second month. Pound is the best performer for this year, gained about 0.9%in January and 0.6% in February, reaching the two and half years high against the greenback at 1.6822.
But, it declined during March to lose 0.8% to 1.6590, as investors was waiting for much stronger data from the U.K. economy and its policy makers, especially for their Minutes of the monetary policy committee meeting, which held in 5th and 6th of march this year.

Wednesday, March 5, 2014

Aussie gains as data beats the forecasts

Aussie gains for the fourth day against the greenback cousin as the reported data were higher and more likable than forecasts. A report was released by the Australian bureau of statistics yesterday showed a growth in the Building approvals surged during the month of January by 6.8%, which gave the Australian dollar a strong push targeting the level of 0.8960. The biggest jump was today, when another report was released y the same agency shows 0.8% growth in quarterly GDP measure for the fourth quarter in 2013, 0.1% higher than the expectations and 0.2% over the last release.

The kangaroo currency jumped by 0.2% during the Asian trades, just after the GDP report. Hitting the level of 0.8996, the highest in a week, rising from 0.8956 and supported at 0.8955 on 38.2% retracement level.