Tag Archives: fed meeting

Twitter Earnings: Investors Focusing On User Growth

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. CB Consumer Confidence @ 14.00 GMT

WHAT WE’RE WATCHING TODAY

Dollar Touches Highest in Six Weeks Ahead Of Fed Meeting

The U.S. dollar touched its strongest in 6 weeks against a basket of major currencies today as investors await a policy review by the Federal Reserve. The Fed is almost certain to cut its monthly bond-buying program by another $10 billion as it looks to wind up the scheme later in the year, but the focus for markets is on any clues to the timing of the first interest rate hike. The dollar index, which measures the greenback’s value against a basket of major currencies, held steady at 81.029 having risen to 81.084 late last week, its highest level since early February. The euro remained pinned near an eight-month trough of $1.3421 set on Friday. It last traded at $1.3435, little changed on the day. In a sign of the increasingly bearish market sentiment toward the euro, data from a U.S. financial watchdog late last week showed that speculators increased their net short position in the euro to 88,823 contracts in the week to July 22, the most bearish positioning against the single currency since late November 2012.

Fed To Raise Rates Sooner Rather Than Later?

According to some market-watchers, an improving economy could force the Fed to shift into rate hiking gear sooner than it had anticipated. While this is not a majority view, it is one that has been picking up momentum. Others see the Fed holding off on rate hikes until late next year, but then hiking much more aggressively than expected. The Fed meets for two days starting Tuesday and is widely expected to taper back its monthly bond buying program by another $10 billion to $25 billion. While the Fed is not likely to reveal any more about the timing of rate hikes or how it will unwind its more than $4 trillion balance, it is likely to be discussed at this week ‘s meeting. Traders will be watching for clues on Fed timing in its statement, particularly around the Fed’s dual mandates of helping employment and fighting inflation. Fed chair Janet Yellen last said unemployment “remains elevated,” and described inflation as running below its objective of 2 percent. Economists expect the Fed’s more hawkish members to ramp up their calls for ending easy policy, if economic data improves. Amid concerns that the Fed has stayed easy for too long, there are the opposite fears that it is unwinding easing before the economy has picked up real traction, and that higher rates could harm critical parts of the economy, like housing. The economy is still growing at a sluggish speed which could show up Wednesday when second-quarter GDP is released, and economists are forecasting growth of just 2.9 percent. At that pace, it does not show much spring back from the 2.9 percent contraction in the first quarter.

Fed watchers are looking as much to the data this week as the Fed statement for clues on its policy path. The July employment report on Friday is expected to show the economy added more than 200,000 jobs for a sixth month, and the unemployment rate is expected to drop to 6 percent. The Fed has stepped back from its target of 6 percent unemployment as a pivot point for considering rate hikes, but the market remains fixated on the number.

Twitter Earnings: Investors Focusing On User Growth

Twitter is due to report its second-quarter results after the market closes today. A surge in sales is expected but investors are more concerned with seeing signs of growth in the social-network’s user base. The social media giant is forecast to post a loss of a penny a share, compared with a loss of 12 cents a share in the year earlier period. Twitter’s revenue is expected to more than double to $283.4 million from $139.3 million in the year ago quarter. Twitter shares have fallen 8% in the last three months and are down 40% year-to-date, mainly due to investor worries that the company’s user base isn’t growing fast enough, but is reportedly planning to introduce new user metrics to show investors that it has a growing reach even though its base is expanding at a slower rate. It remains to be seen whether it can convince Wall Street that it can create value even without robust growth in monthly active users. Twitter inevitably faces comparisons to social media giant Facebook. Last quarter, Twitter reported that it had 255 million monthly active users, which pales in comparison to Facebook, which just reported 1.3 billion monthly users in the second quarter. Twitter is nonetheless considered a key player in the social networking market.

That sums up today’s highlights! As always, you can stay in touch via our Facebook, Twitter, Google+ & LinkedIn pages for all the latest trading updates. We hope you have a profitable day on the markets.

Will The Fed Jolt The Markets This Week?

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: US Industrial Production @ 13.15 GMT

WHAT WE’RE WATCHING TODAY

Will The Fed Jolt The Markets This Week?

The Federal Reserve is expected to announce another $10 billion monthly reduction in quantitative easing in this week’s FOMC statement with the focus being on the Fed’s economic assessment, which could end up realigning investor expectations about when the Fed is likely to hike rates. In its last statement, the FOMC noted that growth in economic activity had picked up after having slowed sharply during the winter, but added that the labour market indicators were mixed and the unemployment rate remained elevated. However, the outlook has improved with the last two employment reports showing monthly non-farm payrolls growth of 282,000 and 217,000. And after a severely weak first quarter, several economists are looking forward to Q2 GDP growth around 4 percent. While the Fed is unlikely to alter its tapering plans or tweak its forward guidance, its new economic projections could still prompt speculation that the first interest rate hike may come earlier than mid-2015. Analysts are concerned that these new Fed jitters could crop up just as the market is running into geopolitical concerns surrounding the situation in Iraq and its impact on crude oil.

Asia Stocks Lower As Yen Gains On Iraq Conflict

Japanese stocks fell today as concerns over Iraq resulted in a stronger yen. The escalating conflict in Iraq continued to pressure market sentiment, pushing the cost of oil higher and sending investors toward the yen, Asia’s safe-haven currency. The yen edged a touch higher in Asian trade, with the U.S. dollar last at ¥101.84, compared with ¥102.04 on Friday. The stronger yen translated into falls for the Nikkei Average which was last down 0.7%. Australia’s S&P/ASX 200 lost 0.2%, as mining stocks dropped amid declining prices for spot iron ore, which fell 0.7% on Friday to a 21-month low. Concerns over the use of iron to finance deals and allegations of fraud involving commodities stored in China continue to rattle the market. In China, markets were mixed with Hong Kong’s Hang Seng Index down 0.2% and the Shanghai Composite was flat. Trading got off to a quiet start today, ahead of the U.S. Federal Reserve’s upcoming policy meeting. Scheduled to conclude on Wednesday, the meeting will provide a monetary-policy update for the world’s largest economy.

Russia/Ukraine Gas Deadline Passes As Talks Fail

A deadline for Ukraine to pay Russia its gas bill passed today after talks between the two sides failed to reach agreement. Russia will now switch to an advance payment system for supplying its eastern European neighbor, meaning that gas resources which also supply parts of wider Europe could potentially be shut off at any point. Russia has previously said that Kiev owes $1.95 billion for gas that has already been delivered. Under previous President Viktor Yanukovych, Ukraine had been paying a reduced price for the amount of gas that it was buying from Russia. However, after fierce street battles, a change of government in Kiev and the annexation of Crimea by Russia, Moscow ramped up the prices it charged to Ukraine. After several rounds of talks, with a representative from the European Union trying to help both sides reach a compromise, no clear solution has been found.

That sums up today’s highlights! Stay in touch throughout the day via our social media channels for all the latest market updates. We hope you have a profitable day on the markets.

Just A Minute!

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

Main Trading Events Of The Day: Several today including USD Core Durable Goods Orders m/m & Unemployment Claims @ 13.30 and Fed Chair Yellen Testifies @ 15.00 GMT

WHAT WE’RE WATCHING TODAY

Yellen Testifies As Weekly Jobless Claims Expected To Hold Steady

Yellen testifies before the Senate Banking Committee today with more focus expected to be on banking regulation and “too big to fail” institutions as well as the batch of bad housing data which appears to be signaling a more structural problem than just the weather effect. It is anticipated that Yellen will veer away from providing much more insight into what she thinks may be going on in the economy. The Fed has said it will consider altering short-term rates when unemployment reaches 6.5 percent - it was at 6.6 percent in January, hence there is now a problem in that it communicated a specific rate that might soon be overtaken. Fed Chair Yellen Testifies @ 15.00 GMT.

Besides Yellen’s testimony, markets will be watching durable goods orders and jobless claims, both at 13:30 GMT. American manufacturers have experienced a slowdown in orders over the past few months and the trend is likely to reflected in January’s report on durable goods. Analysts forecast a 2.5% drop in new orders for durable goods following a preliminary 4.2% decline in December.

Weekly jobless claims are forecast to hold steady at around 335,000. The number of people applying for jobless benefits has clung to a narrow range lately, suggesting little improvement or deterioration in the nation’s labour market.

The dollar was near a two-week high against a basket of its major peers before Fed Chair Yellen speaks today amid prospects the central bank will continue to scale down its bond purchases while gold extended a decline from the highest level in 17 weeks as U.S. housing data that beat estimates supported expectations the Federal Rerserve will keep to its plan to reduce stimulus.

Oil Prices Ease Ahead Of Yellen Testimony

Oil prices eased in Asian trade Thursday as investors await a testimony by the US central bank chief for fresh clues on the state of the world’s biggest economy. “Despite the fact we saw a bit of a rally last night, crude is really still within the range of the last couple of days,” said Ric Spooner, chief analyst at CMC Markets in Sydney. “There’s a chance we’ll see it lose a bit ground from here in the short term.”

New York’s main contract, West Texas Intermediate (WTI) for April delivery, was down 23 cents at $102.36 in mid-morning Asian trade, while Brent North Sea crude for April was 15 cents lower at $109.37. Equity markets as well as oil prices were boosted after Yellen’s inaugural testimony to House representatives on February 11 when she said the bank would continue its market-friendly, low-interest rate policies. The US Department of Energy’s weekly petroleum stockpiles report Wednesday showed commercial crude oil supplies rose only 100,000 barrels last week, one-eighth of what analysts expected.

Google Denies $10 Billion Bid For WhatsApp

Google has reportedly denied rumours that it approached WhatsApp for an acquisition before Facebook grasped the opportunity. It was rumoured that Google had offered a reported 10 billion dollars, almost half of Facebook’s 19 billion dollars for WhatsApp, according to reports. Although, there had not been any formal bid from Google, it doesn’t necessarily mean that the search giant wasn’t interested in a deal as media reports had earlier pointed out that WhatsApp was asking Google for 1 billion dollars. There were also indications that Google CEO, Larry Page met with WhatsApp co-founder and CEO Jan Koum in an attempt to convince him not to hook up with Facebook CEO Mark Zuckerberg. Usually, there’s no smoke without fire, so even if these ‘rumours’ were to a lesser or greater extent false, it will be interesting to observe Google’s moves towards other messaging apps in the market.

That sums up today’s highlights. Keep an eye on all upcoming important trading events via Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets!

Bullion Declining As Fed Hints At Recovery

Gold declined for a third day, trimming its monthly gain, as the U.S. Federal Reserve spoke of willingness to scale back its monetary stimulus, should economy improve. Silver platinum, and palladium have also experienced drops.

Gold for immediate delivery fell as much as 0.7 percent to $1,335.30 an ounce. Prices, however, are still up 0.5 percent this month after the 16-day U.S. shutdown hurt the country’s economy and investors anticipate that the Fed won’t slow down the pace of asset purchases until next year.

More specifically the central bank announced yesterday that it will maintain its $85 billion monthly bond purchases, while noting that it could see signs of “underlying strength” in the economy.

Fed Meeting to Boost or Burst the Dollar?

The U.S. dollar has reached a one-week high against many major currencies ahead of the Fed’s official decision regarding the economic stimulus as investors seem to be abandoning their bearish tendencies towards the currency.

Following the the 16-day government shutdown earlier this month that resulted in a decision to raise the nation’s debt ceiling and the anticipated decision that the Fed would therefore extend its quantitative easing programme into at least the first quarter of next year, investors eagerly sold their greenbacks pushing the currency’s value into a deep low.

Although the dollar weakened after every single Fed meeting this year, with the exception of June’s meetings, the market seemed more positive toward the dollar this week. With investors having already reacted to the anticipated continuation of the economic stimulus, no further surprises are expected from this 29-30 October Fed meeting, the result of which will be announced at 6 p.m. GMT today.

Only last Friday the dollar had plunged to a nine-month low with its index recording 78.998, but on Wednesday it shot up to 79.692, its highest point since 22nd October. Yesterday the currency closed at 79.648, recording a 0.1 percent rise from its previous position.

Some analysts, moreover, believe that the rise the dollar experienced the last few days has been driven by investors closing short positions they had opened earlier this month, rather than a real change of sentiment in the market.

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