Tag Archives: ECB

Dollar Pauses After Rally; Euro Close To 3-Month Low

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 @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Dollar Pauses After Rally; Euro Close To 3-Month Low

The dollar hovered near a two-month high against a basket of major currencies today, taking a pause after rallying due to a shake-out of long positions in sterling and a drop in the euro. The dollar index eased 0.1 percent to 80.490, close to Wednesday’s high of 80.581, its highest level since early April. A break above 80.599, the April 4 peak, will take the index back to highs not seen since mid-February. Traders seemed to be at a loss to explain the greenback’s rise apart from pointing to month-end dollar demand. The euro edged up 0.1 percent to $1.3604, holding slightly above a three-month low of $1.3587 set on Wednesday. Expectations of some policy action from the European Central Bank (ECB) have been mounting, a key reason for the recent underperformance in the euro. Many economists expect the ECB to cut its deposit rate into negative territory next week.

Gold Is Sinking…Will It Get Worse?

Gold extended losses to a third straight session on Thursday, hitting 16-week lows on a stronger dollar and weak physical demand in top buyer China. The gold market continues to show more signs of weakness as the precious metal closed at $1,259.30 per ounce, down another $6.20 after Tuesday’s $25 slide. The fact that Wednesday’s drop takes bullion below its second critical support level of $1,262 is troubling some traders as technical pressure could continue to weigh on gold in the days ahead. Gold is seen as looking increasingly weak as geopolitical concerns over Russia and Ukraine subside and that the only motivation to buy gold might be an upward turn in inflation or a war, neither of which seem to be a reality at the moment. In the meantime, Wednesday’s stronger dollar offered no support. The question is being asked by many traders, therefore, is, where does gold go from here?

Apple To Acquire Beats Electronics

Apple has announced that it will acquire headphone maker Beats Electronics for $3 billion.The deal is expected to close in the fiscal fourth quarter. Apple will pay $2.6 billion in cash and another $400 million in equity. It will also continue to use the Beats brand. Beats Electronics is a key vendor in the premium headphone market. Apple reportedly began talks to buy the company in early May. Beats’ profit margins in the headphone market may be substantial. A pair of its high-end headphones sell for as much as $450, but production costs across the brand are said to run to only about $14 a pair. Apple said the deal would add to earnings in fiscal 2015. Beats also recently entered the streaming music business placing it in head-to-head competition with much larger veteran rivals Pandora and Spotify.

That sums up today’s highlights! Keep in touch with all the day’s events on our Facebook, Twitter, Google+ & LinkedIn pages. We hope you have a profitable day on the markets.

Dollar Subdued After U.S. Jobs Data

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

WHAT WE’RE WATCHING TODAY

Dollar Subdued After Jobs Data, Euro Wary Of Bond-Buying Stimulus

Commodity currencies held onto solid gains early today as the dollar and euro fell by the wayside and lost ground to an otherwise soft yen. The U.S. dollar lost favour with investors after the U.S. jobs report failed to live up to the market’s high expectations, whilst the possibility of the European Central Bank launching its own bond-buying stimulus kept euro bulls at bay. Data last Friday showed the world’s biggest economy generated 192,000 jobs last month, just below economists’ estimate of 200,000 but well down from whisper numbers that had made the rounds in the markets. Traders said the dollar’s dip was a reflection of market positioning rather than any true weakness in payrolls. However, the dollar only slightly underperformed the euro, which came under pressure after reports added weight to possible bond-buying stimulus from the ECB. The euro fell to one-week lows against the yen at 141.30. Against the dollar, it stood at $1.3697, having edged off a five-week trough of $1.3672.

Gold Holds Gains On US Jobs Data

Despite the weak jobs report, data on Friday showed that investors had pulled money out of gold, raising the risk that the gains in prices might not last. However, gold held onto gains today following its biggest one-day jump in over three weeks as investor worries about an early U.S. interest rate hike eased when the nonfarm payrolls report failed to meet market expectations. Markets feared that a strong jobs report, which followed a recent string of good economic data, could prompt a tightening of U.S. monetary policy after Federal Reserve Chair Janet Yellen indicated last month that interest rates could rise in the first half of 2015. Low interest rates have been an important factor driving gold prices higher in recent years. Gold remained steady at $1,302.36 an ounce today, after gaining 1.2 percent on Friday - its biggest percentage increase since March 12 and close to a one-week high of $1,306.50 hit in the previous session.

Is Google Planning To Jump Into Wireless?

According to reports, Google is considering launching its own wireless service, likely to commence in some of the U.S cities where the company currently offers Google Fiber. The company had talks with Verizon early in the year about buying wholesale access to its networks, and then presumably selling it straight to consumers. Google previously had similar talks with Sprint. Although Google is poised to move into wireless broadband, its network is still tiny compared to major broadband providers but the company’s penchant for ambitious experiments makes it a definite possibility that it will attempt to penetrate the wireless market. Watch this space….and stock prices!

That sums up today’s highlights! Keep checking in via our social media channels for all the latest financial news and events of the day! We hope you have a profitable day on the markets.

Just A Minute!

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

Main Trading Events Of The Day: ECB President Draghi Speaks @ 15.30; BOE Gov Carney Speaks & Inflation Report @10.30 GMT

Earnings Reports: N/A

WHAT WE’RE WATCHING TODAY

Stocks Rise Along With Gold On Yellen’s Comments

U.S. stocks surged with the Dow Jones Industrial Average rising triple digits and the Nasdaq Composite turning positive for the year, as Federal Reserve Chair Janet Yellen reassured Wall Street that the Fed would continue the central bank’s policy of providing monetary stimulus to bolster the economy and expected “a great deal of continuity” with the monetary policies of her predecessor, Ben Bernanke. The House voted to suspend the nation’s borrowing limit until March 2015, without any policy conditions. This was a positive move for the markets because previous debates on U.S. government spending have weighed on global markets in the past, in particular, the budget impasse late last year that resulted in a government shutdown. Asian markets also moved higher after Yellen suggested that there would be no major change in the central bank’s policy, while stronger-than-expected trade data pushed Hong Kong higher. Gold bullion also gained again in trading today following Yellen’s testimony. The Fed is now buying $65 billion in bonds each month to stimulate the economy, down $20 billion from its 2013 pace. Many gold bugs predict inflation will follow the central bank’s accumulation of a $4.1 trillion balance sheet.

ECB’s Draghi Speaks; Will Deflation Be On The Agenda?

ECB President Draghi will deliver the keynote address at a conference in Brussels today. Euro-zone industrial output fell a seasonally adjusted 0.3 percent in December compared with a gain of 1.8 percent in the previous month. All eyes will be on Mario Draghi and any indications about economic measures that the ECB is likely to impose in order to beat deflation. The ECB may soon have to roll out the heavy artillery, in the form of an asset purchase program similar to those in the U.S., U.K. and Japan to fight the specter of deflation. Despite substantial progress over the past year, the euro-area economy remains vulnerable. Spare capacity and weak growth, along with relative price cuts by countries trying to restore competitiveness, is putting severe downward pressure on inflation. Bank of England Governor Mark Carney also releases an inflation report today where he will seek to cement investor expectations that the next increase in interest rates is some time away when he presents an updated version of his forward-guidance policy. Yields suggest Carney has convinced traders that there is enough slack in the economy to maintain the benchmark rate at a record 0.5 percent this year.

Will Apple’s Sapphire-Screen iPhone Be Here Soon?

The latest rumours surfacing about Apple’s plans to manufacture sapphire are the most credible foundation yet for speculation that the iPhone will one day soon boast the most scratch-resistant screen on the planet. It’s not yet clear if the next-generation iPhone would get such a sapphire screen, or if the world will have to wait until 2015, presumably for an “iPhone 6s” model. Some are even claiming that it will be the iWatch that will be the first Apple device to be equipped with the scratch-resistant material. If the latest sapphire tech rumour is true, Apple’s exclusive manufacturing partner, GT Advanced Technologies, is gearing up its Arizona manufacturing facility with enough furnaces to forge as many as 200 million iPhone displays. The price of sapphire will inevitably result in driving up the retail price tag of the iPhone. A price increase could be detrimental to Apple as the iPhone already has a premium price tag. One to watch!

That sums up today’s highlights! Keep checking in for all the latest trading news via Facebook, Twitter & Google+. We hope you have a profitable day on the markets!

Can Mario Draghi Celebrate Euro Victory Yet?

If there’s one man that can celebrate a fresh start in the new year, that certainly seems to be Mario Draghi.

The European Central Bank president had taken a bold stance during a London speech in July 2012 when he declared that he would do “whatever it takes” to save the Euro. Despite disbelief and opposition, even from within Euro-zone member states such as, most notably, Germany, Draghi seems to have proven himself good for his word.

The crisis that brought the purpose of the euro into questions and had many questioning its survival, appears to have been dissipated. Draghi has been praised even by some of his harshest critics, such as Nobel-laureate Paul Krugman and economist Nouriel Roubini for revitalizing the euro.

Krugman, in fact, admitted that “Draghi did the most of it,” and said it was “pretty clear that the ECB has been decisive in alleviating the European situation.”

So where can positive results be seen? Ireland put bonds for sale this week for the time after exiting the IMF’s support programme of three years. Portugal and maybe even Greece are expected to be able to follow suit soon enough. In Spain, moreover, yields on 10-year government debt fell the most since 2009. The Stoxx Euro 600 Index climbed to its highest peak in nearly five years, while the euro advanced the most against the dollar in nearly three years.

Reduced budget cuts and increased retail sales data this week seem to signal the beginning of the end for the longest recession in the short history of the euro. And just to prove wrong anyone who predicted that the euro would spit up now, Latvia joined the currency moving it from a 17- to an 18-nation shared currency.

Euro Down the Drain

The euro fell to the lowest lever in a fortnight against the dollar and the yen as signs of economic weakness in the euro region incited speculation the European Central Bank will cut interest rates.

As data forecast to show that manufacturing decreased in France, one of the eurozone’s largest economies, the euro extended its biggest drop in more that a year against the USD as data showed yesterday that manufacturing expanded in the U.S. Reports yesterday indicated a slowing inflation in the euro region as unemployment reached record-high levels.

The euro dropped 0.3 percent to $1.3548 this morning after reaching $1.3540, its weakest point since 17th October. Yesterday the currency sank 1.11 percent, the most since June 2012. The 17-country currency slipped 0.7 percent to 132.73 yen after touching 132.61, the lowest since 11th October.

The European Union’s statistics office reported yesterday that the euro area’s annual consumer-price declined to 0.7 percent last month, the least since November 2009, from 1.1 percent in September.
Other data showed yesterday that unemployment in the eurozone reached a record 12.2 percent in September.

The European Central Bank said there’s a “subdued outlook” for price growth in the region, and October marks the ninth consecutive month the rate has remained below the 2 percent ceiling. The next meeting of European policy makers will take place on 7th November.

Forecasts published yesterday anticipate the ECB will cut its refinancing rate to 0.25 percent in December from the currennt 0.5 percent. The below-than-forecast CPI numbers have raised concerned over the outlook for inflation in the region and the ECV’s response.

No End in Sight for Eurozone Recession

The ailing Eurozone is now officially in its longest ever recession, once again prompting speculations about the single currency’s future. Signs of crisis are clearly visible as nine out of 17 eurozone nations are in recession with Francois Hollande’s France joining the list of economic underachievers.

The GDP of 17 eurozone countries shrank by 0.2 per cent in the beginning of 2013. The European powerhouse Germany only grew by 0.1 per cent in the first quarter while France’s economy shrank by 0.2 per cent for the second quarter in a row. The country’s unemployment rate is expected to rise from the current 10.6 per cent. President Hollande is now the most unpopular president in French history, even surpassing his predecessor Nicolas Sarkozy who was widely disliked.

The shoddy data was followed by Pew Research Centre’s report according to which public support for the European Union fell from 60 per cent to 45 per cent. Pew’s research confirmed the perilous situation of the European project which is already being buried in many European countries. For instance, Spain’s dire situation is likely to continue and even worsen while the austerity policies enacted by many nations do not seem to work or stimulate growth.

Portugal, Ireland to Avoid Disaster

Portugal and Ireland, two debt-ridden Eurozone economies will likely receive more time to repay their loans after a meeting between euro ministers in Dublin on Friday. The news was welcomed by both countries which have struggled tremendously with ailing recoveries after massive debt-crises. Both countries look to receive an additional seven years to pay back their debts and make a healthy and robust return to the financial markets.

The finance ministers would be wise to discuss the potentially catastrophic consequences of the bloated and bigger-than-expected Cyprus bailout package which could derail the small island nation and even lead to mass exodus. Such worries became more realistic after ti was rumored that Cyprus needs to cough up an additional 6 billion euros to cover the expenses thus increasing the total amount to 23 billion euros. The figure is higher than the size of the whole Cypriot economy.

Bailout Friday

Eurozone ministers meet in Dublin on Friday to discuss Cyprus bailout and the possibility of extending rescue package repayment dates for Ireland and Portugal. The first item on the agenda is Cyprus as ministers are readying for heated deliberations over the bailout conditions in exchange for the 10bn euros from the Eurozone and the International Monetary Fund. Nicosia is eagerly waiting for the first payment of 75 million euros, due in May, to pay for public sector wages. Discussions in Dublin will also revolve around the recent estimate according to which the restructuring of Cypriot banks will throw the country into a deep recession for at least two years.

Springtime for Hollande?

The French president Francois Hollande’s arguably disastrous policies have put France in the same category of failing economies as Greece, Spain and Italy. Recent reports from Brussels suggest that France is on a collision course with Germany and other countries that advocate for fiscal responsibility. A report released by the European Commission on Wednesday used harsh language to describe France’s financial situation.

“France’s public sector indebtedness represents a vulnerability, not only for the country itself, but also for the euro area as a whole,” said the EC report.

The report also stated that “the resilience of the country to external shocks is diminishing and its medium-term growth prospects are increasingly hampered by longstanding imbalances.”

EC went as far as to threaten France with sanctions if it fails to change course. The two protagonists in the unravelling Eurozone play, Germany’s Angela Merkel and Hollande have been at odds since Hollande was elected president. Their economic policies and visions differ fundamentally, as Merkel has emphasised fiscal responsibility, while Hollande has sworn in the name of big government policies to revive the French economy. If one is to look at all the relevant variables measuring a country’s economic health, Merkel has succeeded while Hollande – who is now extremely unpopular in France – is heading towards a massive failure.

Spain Continues to Disappoint

Reports this morning suggest that Spain is in the throes of an ever-deepening financial crisis. The country’s industrial production took another dive, falling by 6.5 per cent in February compared to the corresponding month in 2012. Earlier this morning, during a speech to the country’s parliament, Spain’s Prime Minister, Mariano Rajoy appealed the eurozone for solidarity. He asked that all countries take part in attempts to bring the region back from the verge of an economic abyss. Meanwhile, data from Italy and Spain also looked weak, while France’s industrial production only dropped by 2.8 per cent year-on-year in February.

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