Author Archives: Rosemary Barnes

IMF Cuts Global Growth Outlook For 2014

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: U.S. Core Durable Goods @ 12.30 GMT

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IMF Cuts Global Growth Outlook For 2014

The International Monetary Fund has downgraded its global growth forecast for 2014 based on a weaker than expected first quarter, most notably in the U.S. and a less optimistic outlook for several emerging markets. The global economy is expected to expand 3.4 percent this year, a decline of 0.3 percentage points from April’s estimate, but still an improvement from 3.2 percent in 2013.

The IMF cut its 2014 growth outlook for the U.S. by 1.1 percentage points to 1.7 percent on the basis that while a rebound is underway, it is only expected to provide a partial offset to the weak first quarter outcome given a muted recovery in investment. The U.S contracted at an annual pace of 2.9 percent in the first three months of the year, the sharpest decline in five years, owing to a weak housing market, a slower pace of restocking by businesses and lower exports.

Growth in the euro zone is expected to strengthen to 1.1 percent, from a 0.4 percent contraction last year but the recovery will remain uneven across the region, reflecting continued financial fragmentation, impaired private and public sector balance sheets, and high unemployment in some economies. The IMF downgraded its overall growth outlook for emerging markets to 4.6 percent, from an earlier 4.8 percent and down from 4.7 percent in 2013. With somewhat stronger growth expected in some advanced economies next year, the IMF maintained its 2015 global growth forecast of 4.0 percent.

Japan Inflation Slows In June

Japan’s inflation slowed in June, highlighting the task the bank faces in reaching the bank’s target. Consumer prices excluding fresh food rose 3.3 percent from a year earlier after a 3.4 percent gain in May. The increase matched economists’ projections. Kuroda has said inflation will ease in coming months before accelerating later this year toward the BOJ’s 2 percent goal, which strips out the effects of a sales-tax increase in April. As the impact of the yen’s slide on prices fades, some economists say the central bank may add stimulus should price gains drop below 1 percent, a level Kuroda forecast they wouldn’t break. The BOJ estimated the 3 percentage point increase in the sales levy added 2 percentage points to core inflation in May. The yen has strengthened about 3.5 percent against the dollar this year after a 18 percent decline in 2013 raised prices of imported energy and other goods. The Japanese currency rose 0.1 percent to 101.76 while the Topix index of stocks rose 0.4 percent to extend its weekly advance.

Gold Heads For Second Weekly Loss On Strong Data

Gold retained sharp overnight losses to trade near a five-week low on Friday and headed for a second straight week of losses as strong global economic data offset the metal’s safe-haven appeal. Gold’s decline despite tensions in the Middle East and Ukraine does not fare well for prices in the short term, especially as physical demand in Asia is sluggish. Spot gold was little changed at $1,292.10 an ounce after losing nearly 1 percent on Thursday. The metal hit $1,287.46 in the previous session, its lowest since June 19 before recovering slightly. Gold has lost 1.4 percent of its value this week. Gold came under pressure after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8 1/2 years last week, suggesting the labour market recovery was gaining traction.

That sums up today’s highlights! Don’t forget to keep in touch with us via our Facebook, Twitter, Google+ & LinkedIn pages for all the latest trading developments of the day. We hope you have a profitable day on the markets.

Canada Dollar Climbs On Sales; Facebook Earnings Above Expectations

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: U.S. Unemployment Claims @ 14.00 GMT

WHAT WE’RE WATCHING TODAY

Gold Falls Below $1,300 As Equities Gain

Gold broke below the key psychological level of $1,300 an ounce today as safe-haven demand for the metal eased due to rising Asian equities and strong Chinese manufacturing data. Physical demand in the region, however, increased slightly on the lower prices, with premiums in the biggest bullion consumer China edging up on buying interest. Spot gold fell 0.7 percent to $1,295.00 an ounce after dipping 0.2 percent in the previous session. U.S. gold slid about $9 to $1,295.50. Asian stock markets edged higher on Thursday as China’s factory activity expanded at its fastest pace in 18 months in July, bolstering hopes for recovery in the world’s second-biggest economy. Gold had recently seen support build around the $1,300 level on deepening violence in the Middle East and Ukraine that burnished its safe-haven appeal. Bullion could still see some safe-haven bids as Gaza fighting continues. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.6 tonnes to 805.44 tonnes on Wednesday - increasing for a second straight day.

Canadian Dollar Climbs On Sales

The Canadian dollar touched the highest level in almost a week after a report showed the nation’s retail sales rose for a second month. The May sales figures followed a report last week that showed consumer prices climbed the fastest in more than two years in June. The dollar strengthened as much as 0.3 percent to C$1.0711 per U.S. dollar, the strongest level since July 18, before trading at C$1.0728 at 5 p.m. in Toronto, up 0.1 percent. One Canadian dollar buys 93.21 U.S. cents. Retail sales increased 0.7 percent to C$42 billion ($39.1 billion) as automobile purchases rose to a record according to Statistics Canada. Economists forecast retail sales would increase 0.6 percent. They gained 1.3 percent the previous month, more than initially reported, Statistics Canada data showed.

Facebook Profit, Sales Above Expectations

Facebook posted a second-quarter profit yesterday that more than doubled while extracting more mobile-advertising dollars from its users. Revenue increased 61% as advertisers continued to pour money into the social network. Mobile-advertising accounted for 62% of advertising revenue in the quarter, up from 59% in the first quarter and 30% a year ago. Facebook is gaining ground on Google in the mobile advertising market, expecting to command 18.4% of mobile-ad dollars this year, up from 9% in 2012. Google’s share is expected to slip to 40% from 50% in that two-year time period. Facebook reported net income of $791 million, or 30 cents a share, up from $333 million, or 13 cents, a year earlier. Revenue rose to $2.91 billion from $1.81 billion. Analysts had projected earnings of 32 cents a share and revenue of $2.81 billion.

That sums up today’s highlights but remember you can check our Facebook, Twitter, Google+ and LinkedIn pages for regular trading news throughout the day. We hope you have a profitable day on the markets.

Facebook Earnings: Favourable Performance Expected To Continue

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Main Trading Event Of The Day: NZD Official Cash Rate @ 17.00 GMT

WHAT WE’RE WATCHING TODAY

Facebook Earnings: Favourable Performance Expected To Continue

Facebook’s Q2 2014 results are due today with expectations high considering the company’s performance in recent quarters. Analysts expect a significant year over year jump in ad revenues driven by higher ad pricing and the number of ad impressions. Although Facebook’s user base growth has slowed down, its revenue growth has accelerated on the back of innovation in ad format and delivery. Mobile will remain the focus, with the the mobile platform’s revenue contribution nudging close to 65%. Market watchers will be looking at how the company performs in international markets which is where the most of its incremental growth will come from in the future. Facebook saw 82% growth in its ad revenue during the first quarter of 2014, which was primarily driven by a 118% increase in its average ad pricing. This eclipsed Q4 2013 ad pricing growth of 92%, which is encouraging considering tougher year-over-year comparison. The growing proportion of feed-based ads was the primary reason behind this success.

In the coming quarters, Facebook is likely to focus on improving its monetisation in international markets. The push comes from the fact that despite harbouring most of the world’s population, Asia, Africa and South America haven’t contributed much to Facebook’s revenues suggesting that Facebook has a tremendous opportunity to increase monetisation in international markets.

Europe Shares Set For Lower Open

European shares are geared up for a lower open today after previous gains amid ongoing geopolitical concerns in Gaza and Ukraine. The FTSE is called down 15 points at 6,780 while the German Dax is seen lower by 22 points at 9,712. The European Union failed to announce any tough sanctions against Russia at a meeting on Tuesday. The U.S. was hoping for stricter penalties to be placed on Russia to push the country into cooperating with an international investigation into the downed Malaysian jet and calming the separatists in the eastern part of Ukraine. EU ministers drafted possible sanctions that could stem access to financial services and technology but they failed to put in place broader penalties.

Asian stock markets were mixed today with investors opting to book profits. U.S. stocks rose on Tuesday, lifting the S&P 500 to a record as Wall Street focused on quarterly earnings and fresh data releases.

Apple Beats Expectations On Strong IPhone Sales

Apple reported its second straight quarter of double-digit percentage growth in iPhone sales yesterday as it heads into a major update of its flagship product. The company sold 35.2 million iPhones in the quarter ended June 28, up 12.7% from the 31.2 million units in the year-ago period. The latest figure was just short of analysts’ projections for sales of 35.9 million iPhones. Strong iPhone sales were driven by demand from Brazil, Russia, India, and China with sales in those countries rising 55%, including a 48% increase in China alone. In the past few years, the June quarter has been the slowest for Apple as the company gears up with new products ahead of the year-end. Apple is counting on an expected new product push of larger iPhones and smart-watches before year-end to revitalise earnings that have flattened after more than a decade of remarkable growth, raising concerns that Apple is losing its innovative touch. Apple’s third quarter profit was $7.75 billion, up 12.3% from $6.9 billion in the year-ago period while earnings per share rose to $1.28 from $1.07. Revenue rose 6% to $37.43 billion from $35.32 billion in the same period a year earlier.

That sums up today’s highlights! Remember to keep in touch via our Facebook, Twitter, Google+ & LinkedIn pages for all the latest news on the days trading activities. We hope you have a profitable day on the markets.

Apple Earnings: Investors Look For Signs Of What’s To Come

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD CPI @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Apple Earnings: Investors Look For Signs Of What’s To Come

With Apple Inc due to report its fiscal third-quarter earnings today, investors will be looking for hints on new market categories and launch dates that the company may be working on. In particular, investors will be specifically interested to see if Apple’s CEO Tim Cook relays any news about a possible smart-watch. Along with the company’s foray into wearables, investors will also be listening for clues about when the company plans to launch the iPhone 6 which would boost Apple’s gross margins. Product timing issues could, however, skew guidance thus sending shares lower. If this happens, investors should use that opportunity to look at buying shares and take advantage of buying on the weakness. The company is expected to post earnings of $1.23 per share on revenue of $37.98 billion in revenue.

Last quarter, Apple reported iPhones sales of 43.7 million, well ahead of the 37 million to 38 million iPhones analysts had expected. Since then the company has seen its share price soar more than 25 percent. Strong earnings results from some of Apple’s suppliers may mean the tech giant could post a positive surprise. For example, Skyworks posted 35 percent revenue growth year over year when it reported earnings last week and that could translate to good news for Apple.

WTI Rises for Second Day; Brent Gains

West Texas Intermediate rose for a second day before stockpile data that may signal the strength of fuel demand in the U.S., the world’s biggest oil consumer. Brent also increased in London. Futures climbed as much as 0.5 percent in New York. Crude inventories probably shrank by 2.8 million barrels last week, according to a Bloomberg News survey before a report from the Energy Information Administration tomorrow. WTI for August delivery, which expires today, gained as much as 56 cents to $105.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract closed at $104.59 yesterday, the highest level since July 1. September crude was up 45 cents at $103.31 at 12:14 p.m. Singapore time. The volume of all futures traded was about 77 percent above the 100-day average. Front-month prices have advanced 6.8 percent this year.

U.S. Stocks Finish Slightly Lower

U.S. stocks slipped yesterday as investors remained cautious about instability in Ukraine and Gaza, though the three major indexes ended well off their lows, a sign that some appetite for riskier assets remained. The S&P 500 fell as much as 0.6 percent, though it recovered most of those losses and closed above its 14-day moving average, suggesting buyers were using weakness to come back into the market. However, nine of the 10 primary S&P 500 sector indexes fell. The S&P energy sector index represented the only positive group, up 0.2 percent. Violence has escalated in the Gaza Strip and while the impact to the U.S. economy is seen as minimal, investors are concerned about the fallout from an extended period of increased violence and the prospect that it could spread to other parts of the Middle East. Market participants also kept watch on the uncertain situation in Ukraine. The Dow Jones industrial average fell 48.45 points or 0.28 percent, to end at 17,051.73. The S&P 500 declined 4.59 points or 0.23 percent, to finish at 1,973.63. The Nasdaq Composite dropped 7.44 points or 0.17 percent, to close at 4,424.70.

That sums up today’s highlights! Don’t forget to keep any eye for updates on today’s tradable events including Apple earnings via our Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.

Google Regarded As Best Placed For Growth

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Main Trading Event Of The Day: German Buba Monthly Report @ 10.00 GMT

WHAT WE’RE WATCHING TODAY

Asia Stocks Mainly Higher On U.S. Earnings Optimism

Most Asian stock markets edged higher today as investors temporarily put aside geopolitical concerns to focus on the generally upbeat flow of U.S. corporate earnings ahead of a series of results due this week. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, with modest increases for most markets across Asia. Spread betters predicted opening gains of 0.1 to 0.2 percent for the FTSE 100, DAX and CAC 40. Several U.S. companies report this week, ranging from Apple to McDonald’s Corp, Coca-Cola Co and Caterpillar Inc. Data showed that of 82 companies in the S&P 500 that had reported earnings through Friday morning, 68 percent beat Wall Street’s expectations. The Dow ended Friday up 0.7 percent, while the S&P 500 gained 1 percent and the Nasdaq 1.6 percent. For the week, the Dow rose 0.9 percent, S&P 500 gained 0.5 percent and the Nasdaq added 0.4 percent.

Dollar Gauge Trades Near Four-Week High In Advance of CPI Data

A gauge of the U.S. dollar was 0.3 percent from a four-week high before tomorrow’s CPI data which economists believe will show consumer-price inflation held at the fastest since October 2012, prompting the case for higher interest rates. The U.S. currency has risen versus all except one of its Group of 10 peers this month as traders boosted bets the Federal Reserve will increase its benchmark rate by the middle of 2015. Analysts say that a stronger CPI number would boost the U.S. dollar as we are seeing this data begin to edge up. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, was little changed at 1,008.44 after advancing to 1,011.12 on July 18, the highest level since June 20. The dollar fell 0.2 percent to $1.3547 per euro after strengthening 0.6 percent last week. The U.S. currency weakened 0.1 percent to 101.22 yen.

Google Regarded As Best Placed For Growth

Google is the best placed of any company to benefit from the shift to mobile, increased local advertising and wearables, according to analysts after the company posted its 18th straight quarter of 20 percent-plus revenue growth. At least seven brokerages raised their target price on the stock on Friday by as much as $75, to a high of $700. The company said on Thursday that second-quarter revenue rose 22 percent to $15.96 billion, beating the average analyst estimate of $15.61 billion. Growth was driven by the company’s core search business, YouTube and product-listing ads, which combined to drive three times the amount of mobile traffic for merchants compared with last year. Google also owns Android, the world’s most-used mobile software. Other online companies such as Facebook and Twitter are also revamping their advertising businesses to take advantage of the shift to mobile devices but Google has established an unusually deep competitive edge its business through scale, aggressive product innovation and substantial investment. Google’s capital investment budget has topped $17 billion over the past five years, and the company has spent about $13 billion on research, according to analysts. Google shares were trading at $604.33 before the bell, after closing at $580.82 on Thursday. Up to Thursday’s close, the stock had risen 26 percent in the past year.

That sums up today’s highlights! Remember you can find us on Facebook, Twitter, Google+ and LinkedIn with regular trading updates. We hope you have a profitable day on the markets.

Stocks Slip After Malaysian Plane Shot Down

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

MainTrading Event Of The Day: USD Prelim UoM Consumer Sentiment @ 13.55 GMT

WHAT WE’RE WATCHING TODAY

Asian Stocks Slip After Malaysian Plane Shot Down

Asian stocks fell from near a six-year high, after one of its planes was shot down in Ukraine yesterday. The MSCI Asia Pacific Index slipped 0.5 percent by 12:51 p.m. in Tokyo, falling for the first time this week. Malaysian Airline shares tumbled 8.9 percent. Standard & Poor’s 500 Index futures fell 0.1 percent after the U.S. gauge’s biggest drop in three months. Ten-year bond yields in Australia and Japan traded near the lowest in more than a year, while a gauge of credit-default swap prices jumped five basis points. Oil in New York added 0.5 percent. With geopolitical risk in Ukraine and the Middle East, people are concerned the stock market won’t be a safe place to invest and have turned to bonds. European shares are also set for a lower open today with the FTSE called down 25 points at 6,713 and the German Dax by 57 points at 9,696.

Meanwhile, oil prices rose after Israeli Prime Minister Benjamin Netanyahu announced the start of a ground campaign in Gaza. The decision came as a surprise as officials from the Palestinian authority and Israel were believed to be progressing in talks in Egypt aimed at a lasting cease-fire.

Gold Climbs As Plane Crashes

Gold rallied yesterday as a Malaysia Airlines crash in Ukraine near the Russian border revived haven demand. Gold for August delivery rose $17.10, or 1.3%, to settle at $1,316.90 an ounce. Traders also took into consideration a weaker than expected report on U.S. housing starts, although that was offset by a stronger-than-anticipated figure for weekly jobless claims. A day earlier, gold put an end to a three-day losing streak by moving fractionally higher, as traders continued to digest Federal Reserve Chairwoman Janet Yellen’s mostly dovish testimony. Elsewhere in metals trading, October platinum rose by $18.00, or 1.2%, to $1,503.70 an ounce. Bloomberg reported platinum prices were trading at a 13-year high after sanctions imposed on Russia, which is a major producer of the industrial metal.

Google Earnings Miss Expectations

Google reported earnings that missed expectations while revenue topped Wall Street estimates on yesterday. Shares rallied in extended hours trading. The Internet giant reported earnings of $6.08 per share, excluding one-time items, on revenue of $15.96 billion. Analysts had expected the company to report earnings excluding items of $6.24 a share on nearly $15.62 billion in revenue. Revenue for Google increased 22 percent in the second quarter as it saw strong demand for ads on its websites. Analysts had been expecting the Internet giant to discuss falling online ad prices, which remain Google’s biggest source of revenue. Google will account for more than a third of global digital ad spending this year according to Dow Jones.

That sums up today’s highlights! Remember to keep an eye on all the latest economic developments of the day via our Facebook, Twitter, LinkedIn and Google+ pages. We hope you have a profitable day on the markets.

U.S. Unemployment Claims: Increase Expected

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

WHAT WE’RE WATCHING TODAY

Europe Shares Seen Lower Amid Russia Sanctions

European shares are on track for a lower open today as tensions in Ukraine are back into focus. The FTSE is called down 22 points at 6,762 while the German Dax is seen lower by 13 points at 9,846. The U.S. and the European Union announced a fresh round of sanctions against Russia yesterday following the annexation of Crimea back in April and ongoing tensions in the rest of Ukraine. Russian President Vladimir Putin is reported to have said that relations between the U.S. and Russia are in danger of reaching a dead end and could damage U.S. business interests in his country. On Wall Street yesterday, the Dow index posted its 15th record-high close of the year thanks to a rally in tech shares after Intel posted strong third-quarter guidance.

Economic data also helped to boost sentiment. The Federal Reserve’s Beige Book found the economy expanding at a modest to moderate pace with consumer spending up in all of the Fed’s districts. Another report had U.S. factory output increasing for a fifth month in June. U.S. Federal Reserve Chair Janet Yellen also concluded a second day of congressional testimony, where she faced a multitude of questions from lawmakers about legislation to make the Fed more accountable.

U.S. Unemployment Claims: Increase Expected

The last few months have seen moderately higher increases in non-farm payrolls. On the plus side, there’s been a marked increase in the monthly change, with the net gain running above the 200,000 mark for five straight months through June, the first run of 200,000 plus increases for five consecutive months in nearly 15 years.

Whether the latest run of strength is a genuine sign that the economy’s finally poised to create new jobs on a sustained basis or just another temporary bout of short-term noise that will again give way to the modest increases of recent history, remains to be seen. Watch for today’s weekly numbers on new filings for unemployment benefits. Last week’s report showed that claims fell to 304,000 for the week to July 5 - close to a seven year low. But the data was for the July 4 holiday week and so the latest numbers may be misleading. The consensus prediction is for a slight rise to 310,000. If the prediction holds, it will provide fresh support for thinking that modest improvement in the labour market is still in force.

U.S. Unemployment Claims today @ 12.30 GMT

Tech Stocks: Google Set To Be A Trillion Dollar Company

Google has the potential to hit a trillion-dollar market cap in the next 10 years, according to one technology investing leader who expects the search engine giant to join Facebook in gobbling up smaller companies and continuing to grow rapidly. The rise of the first trillion-dollar companies was one of a handful of big ideas entertained during a recent tech-focused panel where it was noted that companies that can make it easier to make videos will do well. Big things are also predicted for digital currencies, although not necessarily bitcoin, which is the most prominent name now but has faced price volatility, theft and scandal over the past year. Other providers will come along with at least half a dozen multi-billion dollar digital currency companies expected to emerge.

That sums up today’s highlights! Remember to keep in touch for all the latest tradable events of the day. Find us on Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.

Yellen’s Comments Send Gold Lower

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD PPI @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Yellen’s Comments Send Gold Lower

As Janet Yellen testified before the Senate Banking Committee yesterday, gold sank 1 percent in 10 minutes, taking the metal back below $1,300 for the first time in nearly a month. Rather than being the victim of a massive bearish trade, the metal seems to have was reacted to a slightly less dovish outlook from the Fed chair than some gold holders were expecting or hoping for. This could signal that higher rates will come sooner rather than later which is anti-inflationary, and presents competition for gold.

Several traders still noted the oddity of gold moving so quickly on comments that didn’t surprise many people. At 10:55 a.m. EDT, about 7,600 gold contract traded, which means that nearly $1 billion in nominal gold value changed hands in that minute. This boost in volume led to speculation that gold futures fell because someone “dumped” $2.3 billion worth of the futures. Other analysts however believe the explanation was simply down to Yellen’s comments which caused one trader to sell gold, the sale of which triggered stops around the $1,300 level.

Spot gold edged up slightly to $1,296.35 an ounce, after losing 3.3 percent in the last two sessions the metal’s biggest two-day loss since October. With the break below $1,300 an ounce and technical weakness, further losses for gold may be likely.

Japan: Demand Exceeds Supply for First Time Since 2008

Demand has overtaken supply in the Japan for the first time in six years, adding to inflationary pressure in the world’s third-biggest economy. The Bank of Japan’s measure swung to 0.6 percent in the first quarter from negative readings back as far as 2008. The change followed six straight quarters of economic growth that closed a shortfall between demand and supply that had put downward pressure on prices. BOJ Governor Haruhiko Kuroda has said he expects the elimination of this output gap, together with rising inflation expectations, to help drive consumer price gains toward the central bank’s 2 percent target. Whether this will actually lead the way to stable inflation, given lackluster growth in wages remains to be seen and companies are still cautious.

Stocks: Microsoft: Job Cuts Imminent

Microsoft is planning its biggest round of job cuts in five years after CEO Satya Nadella said last week that he was preparing to make sweeping changes at Microsoft. The reductions will probably be in engineering, marketing and areas of overlap with Nokia. The restructuring which may be unveiled as soon as this week may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, according to sources. Nadella commented that Microsoft would have to become more focused and efficient as he issued his first company mission statement, calling for greater emphasis on mobile devices, cloud-computing and productivity software as consumers and businesses buy fewer personal computers to check e-mail, browse the Web and access data and software. Traders will be watching for news of Microsoft’s job cuts and the possibility of trading opportunities.

That sums up today’s highlights! Find us throughout the day on Facebook, Twitter, Google+ and LinkedIn for all the latest trading news. We hope you have a profitable day on the markets.

Dollar Holds Gains In Advance Of Yellen Testimony

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD Fed Chair Yellen Testifies @ 14.00 GMT

WHAT WE’RE WATCHING TODAY

Dollar Holds Gains In Advance Of Yellen Testimony

The dollar remained higher against the yen following its biggest one-day advance in a week as Federal Reserve Chair Janet Yellen is due to testify before U.S. lawmakers. A gauge of the U.S. currency advanced surrounding bets that Yellen will provide additional clues as to when the central bank will raise interest rates for the first time since 2006. The yen was little changed as the Bank of Japan maintained record monetary stimulus.

Yellen is likely to emphasise the need to keep interest rates near zero for a considerable period even after a report this month showed unemployment fell to an almost six-year low. She may also say that while the jobless rate has fallen faster than the Fed expected, the presence of part-time and discouraged workers and long-term unemployed represents a reservoir of potential supply and accounts for wages not growing rapidly at all, which will probably justify the message that the Federal Reserve is in no rush to begin to raise interest rates. Regarding the inflation outlook, while unemployment fell to 6.1 percent last month and inflation has risen closer to the Fed’s 2 percent target, analysts believe there is still too much uncertainty for her to change the tone materially.

The dollar rose 0.1 percent to 101.59 yen at 1:52 p.m. after strengthening 0.2 percent yesterday, the most since July 3. The U.S. currency was unchanged at $1.3619 per euro. The yen traded at 138.37 per euro from 138.28 yesterday. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 of its major counterparts, climbed less than 0.1 percent to 1,007.13.

Gold Retains Sharp Losses Trading Close To 4-Week Low

Gold was trading near its lowest level in almost four weeks on Tuesday, as sharp overnight losses triggered by profit-taking and stronger global equities dented the metal’s safe-haven appeal. Spot gold was little changed at $1,306.75 an ounce after sliding more than 2 percent on Monday - its biggest daily drop since December. Gold touched a low of $1,302.90 in the previous session, its weakest since June 19. Gold had climbed to a near four-month high of $1,345 last week as financial troubles at Portugal’s top bank rekindled fears of another euro zone banking crisis, although those fears have now subsided. Investors will be monitoring Federal Reserve Chair Janet Yellen’s testimony in a U.S. Senate committee later today for signs of when the U.S. central bank would begin increasing interest rates. They will also be watching developments in the Middle East and Ukraine for any escalation in violence that would create fresh safe-haven demand for gold amid reports that Moscow is once more building up its troops on its joint Ukraine border.

European Shares Set For Pullback; Yellen In Focus

European shares are on track for a slightly lower open today, pulling back slightly from yesterday’s gains as investors remain cautious before earnings season and Federal Reserve Chair Janet Yellen’s testimony today. The FTSE is called down 5 points at 6,741 while the German Dax is seen lower by 8 points at 9,775. Stocks in Europe saw healthy gains in the previous session as earnings from U.S. bank Citigroup and merger activity surrounding pharma firm Shire sent bourses higher. However, investors look set to hold off before any more buying with a number of data due on Tuesday. June inflation data is out for the U.K., while Germany also receives its widely watched ZEW economic index. Central bank policy makers are also set for meetings today. In addition to Yellen’s two-day testimony, Bank of England Governor Mark Carney is due in front of U.K. lawmakers for a financial stability discussion. Both appearances will be an opportunity for investors to gauge the future direction of monetary policy in each country with both expected to start raising benchmark interest rates in the not-too-distant future. Elsewhere, U.K. Prime Minister David Cameron is expected to announce wide-ranging changes to the lineup of its decision-making body called the Cabinet. Foreign Secretary William Hague is currently the biggest name set to be given a new role in the reshuffle.

That sums up today’s highlights! It’s a busy day on the financial markets so remember to keep posted via our Facebook, Twitter, Google+ and LinkedIn pages. We hope you have a profitable day on the markets.

ECB Interest Rates Too Low For Germany; Draghi Speaks

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: EUR ECB President Draghi Speaks @ 17.00 GMT

WHAT WE’RE WATCHING TODAY

ECB Interest Rates Too Low For Germany; Draghi Speaks

Bundesbank chief Jens Weidmann is reported to have said that the European Central Bank should tighten policy as soon as it can and that its interest rates are too low for Germany, as he referred to tensions in the united front the bank has presented since its major policy shift in June. Weidmann pointed out that many savers in Germany were unhappy with low interest rates but said these were aimed at supporting investment and consumption. The ECB cut interest rates to record lows last month as part of a package of measures to jump-start a sluggish euro zone economy, where inflation is running far below the central bank’s target. The German economy is nonetheless still outperforming other countries in the bloc. Weidmann added that if the Bundesbank were autonomous, Germany would benefit from a tighter rather than a looser monetary policy and warned about the risks of leaving policy loose for too long.

At the monthly news conference, Draghi said risks to the euro zone economic recovery remained primarily negative and left the door open to a possible asset-buying program by the ECB, which Weidmann has cautioned against in all but exceptional circumstances. Weidmann put the onus on governments to act, urging them to shape up their economies and consolidate their budgets as the euro zone recovers from the debt crisis that took it to the brink of break-up. The euro was steady at $1.3604, having wobbled on either side of $1.3600 in the past week. European Central Bank President Mario Draghi is scheduled to give an introductory statement at the quarterly hearing before the Committee on Economic and Monetary Affairs of the European Parliament later in the day.

ECB President Draghi speaks today @ 17.00 GMT.

U.S. Dollar Firms In Subdued Trade; Market Awaits Yellen

The dollar edged up slightly against the yen today as investors awaited events this week including Federal Reserve Chair Janet Yellen’s congressional testimony for cues on the outlook for U.S. monetary policy. Investors also awaited a policy review by the Bank of Japan on Tuesday, though the central bank was widely expected to maintain its policy and its broader economic outlook. The BOJ next week may trim its economic growth forecast for the current year, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April, though the change would not tip any policy changes to come. The dollar index edged slightly higher to 80.217, nudging away from a two-month low of 79.740 on July 1. Speculators increased their bullish bets on the U.S. dollar in the latest week, with the value of the dollar’s net long position rising to $10.34 billion in the week through July 8. The total value of positions rose from $8.65 billion the previous week when it was the smallest net long on the dollar in five weeks.

Stock Watch: Guardians Could Open Galaxy Of Riches For Disney

When Disney bought Marvel for $4.2 billion in 2009, its stock sank following news of the acquisition. Analysts warned Disney’s superheroes would have to fight extra hard to win box office dollars. However, under the guidance of Marvel Studios’ President Kevin Feige, the team has been taking more risks and a more character-driven approach to storytelling. So far, it’s paying off. At the time, Disney also inked a landmark deal with Netflix to stream four new and original Marvel series on the platform, starting from 2016. So far, this year has been strong for the Disney/Marvel duo with its latest release, Captain America, dominating at the box office on its opening weekend.

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