Tag Archives: GBP

Wall Street Ends Down After Record High

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 Core Durable Goods Orders @ 12.30

WHAT WE’RE WATCHING TODAY

Wall Street Ends Down After Record High

U.S. stocks ended lower on Tuesday as concerns about Iraq drove profit-taking after encouraging economic data which had earlier driven shares to a record high. U.S. Treasuries prices gained as investors turned away from equities. The S&P 500 closed down more than half a percent for its sharpest loss since June 12, after setting a fourth record high in five sessions. The stock market was boosted earlier by data showing stronger-than-expected U.S. consumer confidence and an 18.6 percent surge in sales of new homes in May. But shares reversed course and fell more sharply toward the close on concerns about an escalation in the Iraq conflict. The Dow Jones industrial average fell 119.13 points to 16,818.13, the S&P 500 lost 12.63 points to 1,949.98, and the Nasdaq Composite dropped 18.321 points to 4,350.355.

GBP Falls After Less Hawkish BOE

The British pound dropped on Wednesday after comments from Bank of England governor, Mark Carney, cooled expectations for an interest rate hike this year. Surprisingly less hawkish comments from BoE Governor Mark Carney saw the pound dip to a near one-week low of $1.6966, pulling away from a 5 1/2 year peak of $1.7064 set last Wednesday. Carney said Britain’s economy still has plenty of slack to work through and that financial markets underestimate how much uncertainty there is in the economy. The impression he left was a dovish one and left market watchers trying hard to reconcile with his abrupt and hawkish change of policy signalling at a speech earlier this month.

When The World Cup Is On, Stock Markets Go Quiet

With the World Cup well underway, it may come as no surprise that workers everywhere are paying more attention to the games than to their jobs. One way of measuring the global epidemic of distraction is to look at plunges in stock market trading volumes. The European Central Bank analysed data from the 2010 World Cup showing significant drops in trading during all games. The effect was especially pronounced when the traders’ own country was on the field.

Source: Bloomberg

That sums up today’s highlights! Remember to stay in touch via our social media channels for all the latest market news of the day. We hope you have a profitable day on the markets.

Will The Bank Of England Inflation Report Move Sterling?

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.K. BOE Inflation Report @ 09.30 & U.S. PPI @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Will The Bank Of England Inflation Report Move Sterling?

The GBP has had a favourable performance over the past year, but with the Bank of England’s inflation report due today, this could be set to change. Investors will be listening to BoE Governor Mark Carney closely for any indications of an interest rate hike this year against a backdrop of a strengthening British economy. Traders will be focusing on the British pound as the Bank of England’s Quarterly Inflation Report is one of the most important event risks this week. The big question is whether the economic landscape has changed enough for the central bank to take a more active approach to monetary policy.

After years of sluggish growth following the 2008 financial crisis, the U.K. economy has finally landed on its feet and is set to clock up a healthy 3 percent growth rate this year. However, house prices remain a concern, with a 10 percent surge over the past year raising fears of a bubble. As the economy recovers, many industry watchers have speculated that the central bank could raise interest rates from all-time lows of 0.5 percent in a bid to offset inflation. Retail sales growth also remains weak while consumer price growth slowed to 1.6 percent in March from 1.7 percent in February, dampening rate hike expectations.

Nevertheless, analysts remained convinced that the BoE inflation report could give the pound a boost and that it is due a little bounce having lost some ground recently. Major policy changes are not expected to come out of the BoE’s inflation report, with Carney likely to retain an optimistic outlook on the U.K. recovery while acknowledging spare capacity in the economy.

U.S. Retail Sales Slow, But Economic Growth On Track to Accelerate

U.S. retail sales slowed down in April after strong gains in the previous two months but the news appears to have done little to change views that the economy was poised for faster growth this quarter. Retail sales edged up 0.1 percent last month, held back by declines in some sectors including furniture and electronics, possibly due to consumers being more cautious in their spending habits as they await confirmation that the economy is, in fact, poised to accelerate. Retail sales, which account for a third of consumer spending, rose 1.5 percent in March, the biggest gain in four years. That followed a healthy increase in February, reflecting the release of pent-up demand after the severe winter. Economists, who had forecast sales advancing 0.4 percent last month, said a late Easter could have caused difficulties smoothing the data for seasonal fluctuations, causing the sharp swing from March to April. Prices for U.S. Treasury debt rose on the data, while the dollar gained against a basket of currencies. U.S. stocks rose marginally, with the Dow Jones industrial average and Standard & Poor’s 500 index both inching to record levels. Data such as employment as well as manufacturing and services industries surveys have suggested the economy regained strength early in the second quarter.

U.S. Inflation Data Awaited As Dollar Bulls Await Increase In Consumer Prices

Dollar bulls are expecting U.S. data this week will show consumer prices picked up last month, bringing inflation closer to the Federal Reserve’s 2 percent threshold it has set for considering a rate hike. The U.S. dollar index recovered from a 20-month low of 78.906 set last Thursday after European Central Bank head Mario Draghi warned that the euro’s strength was a serious concern and that the ECB was comfortable with taking more action to support economic growth and raise inflation at its June meeting. The strength of this week’s scheduled U.S. data releases which include the closely-watched April consumer price index (CPI) on Thursday and the bearing it has on Fed rate expectations will decide whether the dollar continues its turnaround. Consensus forecasts show April’s core CPI up 1.7 percent from a year earlier, unchanged from the prior month’s reading. Sentiment regarding whether the dollar will extend gains or weakens appears to be evenly split between dollar bulls and bears. Dollar bears maintain inflation remains low and highlight the Fed’s preferred gauge of inflation - the price index for personal consumption expenditures - which has run below 2 percent for 23 consecutive months. Fed Chair Janet Yellen warned last week about the risks posed to the recovery from the U.S. housing market slowdown, suggesting that the Fed may be in no hurry to raise rates.

That sums up today’s highlights! Keep posted with all the latest news and analyst updates via our Facebook, Twitter, Google+ and LinkedIn pages.

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 of what’s happening in the markets:

Main Trading Events Of The Day: Several today including EUR CPI Flash Estimate y/y @ 10.00, USD Prelim GDP q/q @13.30 & GBP BOE Gov Carney Speaks @15.30 GMT

WHAT WE’RE WATCHING TODAY

Big Cuts Anticipated In U.S. Fourth-Quarter GDP Growth

The U.S. government looks set to slash its estimate of fourth-quarter growth as exports and restocking by businesses were less robust than previously thought. Gross domestic product growth will probably be lowered to a 2.5 percent annual rate, down from the 3.2 percent pace reported last month. If economists’ forecasts are correct, today’s revision will leave GDP just above the economy’s potential growth trend of between a 2 percent and 2.3 percent pace. Trade is expected to account for a large chunk of the revision. A report earlier this month showed exports fell in December, leading to a bigger trade deficit in the fourth quarter than the government had assumed. Economists expect trade’s contribution will be cut down to about 1.0 percentage point. Inventories, previously reported to have risen by $127.2 billion in the fourth quarter, are also likely to be revised down. The reported increase in the stocks of unsold goods in the fourth quarter was the largest in nearly 16 years but economists expect the contribution to growth from inventories, which the government put at 0.42 percentage point a month ago, could be revised to just about two-tenths of a percentage point.

Downward revisions are also expected to consumer spending after data showed weak retail sales in November and December. Consumer spending had been estimated expanding at a 3.3 percent rate in the fourth quarter, the fastest in three years. This could be lowered to a pace of about 3 percent. As a result, final domestic demand is likely to be revised weaker than the 1.4 percent rate previously reported. Government spending is likely to be revised downward, but the impact will probably be offset by upward revisions to investment in residential construction, nonresidential structures and business spending on equipment.

Currency News

The dollar fell against Japanese yen on Friday, after the release of a set of stronger than expected economic data. The dollar USD/JPY slid to ¥101.81 from ¥102.17 late Thursday. Japanese government data released Friday morning showed the jobless rate held steady at 3.7%, while factory output in January climbed 4% from the previous month. Meanwhile, the core consumer price index rose 1.3% last month from a year earlier, beating the 1.2% projections and marking the eighth straight month of gains for the core CPI. This indicates that the economy may be close to winning its decades-long fight with deflation. However, compared to December, the core CPI slipped 0.3%, sparking some concerns that momentum is easing.

The GBP meanwhile, firmed against the dollar after Federal Reserve Chair Janet Yellen told U.S. legislators monetary authorities were concerned with soft economic indicators though monetary policy remains on course for now. Disappointing weekly jobless claims numbers also softened the dollar. In U.S. trading on Thursday, GBP/USD was trading at 1.6680, up 0.06%, up from a session low of 1.6617 and off a high of 1.6698. More GBP news; BOE Governor Mark Carney speaks @ 15:30 GMT at a financial symposium in Frankfurt. Remarks which are more hawkish than expected will be bullish for the pound.

Will Google’s Project Ara Go On Sale Next Year?

Google’s Project Ara modular smartphones could arrive early next year, according to reports. A team within the company, which is developing the project to make smartphones composed of small, swappable pieces of hardware reportedly plans to finish a functioning prototype within weeks and begin preparation on a version for consumer sales beginning in the first quarter of 2015.

The central idea of Project Ara is to help smartphone users take handset customisation beyond ringtones, wallpaper, and body colours to the devices’ very form and function. An endoskeleton, or structural frame, would hold the smartphone modules of the owner’s choice. Google is pushing for the endoskeleton to cost $50. It will come only with Wi-Fi and no cellular connection. Users could then build up the phone how they like with various modules, like a camera, high-speed processor, speakers, and more. Developers will also be encouraged to make modules for its ambitious new phones. It will be interesting to watch developments unfold over the coming months while keeping an eye on price of Google stock.

That sums up today’s highlights! 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: N/A. U.S. markets closed today due to holiday.

Earnings Reports: Coca Cola Co. coming up tomorrow.

WHAT WE’RE WATCHING TODAY

Dollar Falls; U.K. Pound Climbs amid Increasing House Prices

The dollar lost ground against most major rivals on Friday amid mixed U.S. data on industrial production and consumer sentiment. Investors began the year expecting the economy to accelerate, but data has disappointed to the downside, with weather being a key factor. Now investors are pondering over whether to downgrade their expectations or muddle through what could just be a soft patch that eases off in the spring. The currency market’s reaction to data has been muted, given expectations that the indicators won’t impact the Federal Reserve’s decision to wind down its bond-buying stimulus program. Strengthening currencies elsewhere in the world also pushed the dollar weaker whilst other market participants suggested that it was the weak data which had taken on an increased significance in the market, stressing that it’s impossible to ignore the coincidence of U.S. dollar weakness with the sudden slump in top of the line U.S. economic data.

The British pound, meanwhile, reached the highest since November 2009 after a report revealed that U.K. house prices rose the most since October 2012. The report showed that asking prices for U.K homes rose 3.3 percent this month from January, when they gained 1 percent, adding overall to the stronger U.K. story. Analysts say that there is no obvious reason to sell the pound, apart from the fact that it’s probably getting a little stretched on the charts. The pound has surged 1.6 percent in the past week, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has fallen 1 percent, the biggest decliner.

Asian Shares Rise But Japan Stocks Affected By Disappointing Growth

Asian shares rose on Monday as worries about emerging markets continued to ebb, sucking the safe-haven support out of the U.S. dollar while giving commodities a lift. Several Asian currencies all gained ground as sentiment improved and dealers reported an influx of funds to many emerging markets. The Indonesian rupiah did especially well with the dollar down 4 percent in as many days. The lower dollar in turn tends to be positive for commodities priced in that currency, helping spur gold to a fresh three-month peak at $1,329.55. Japanese stocks, meanwhile, were weighed by the release of disappointing growth numbers. Data showing Japan’s economy grew just 0.3 percent in the fourth quarter of last year, compared with the previous quarter, confounding forecasts of a 0.7 percent gain. The disappointing result will keep pressure on the Bank of Japan to support the economy once an increase in the sales tax goes through in April. The central bank’s latest policy meeting ends on Tuesday and the markets will be keen to see what it makes of the growth figures.

Who’s Winning The Smartphone Wars?

Many believe this is now a two-horse race, but which is the stronger platform? Both have a high degree of momentum but since Android has more manufacturers it has recently become more widely acknowledged for its growth. Apple’s strength is the relationship with developers as well as the piece of hardware that they have put out which is a compelling device that a lot of people want to use. Almost a billion smartphones shipped globally last year, and Google’s Android OS was the big winner except in the U.S., where its share fell by about 2 percentage points and Apple’s iOS gained 6 points. It will be interesting for traders to see how this plays out.

Source: Bloomberg

That sums up today’s highlights! We hope you have a profitable day on the markets.

Pound-Less Scotland Could Face Euro-Like Troubles

On September 18, Scotland will vote in a referendum on whether the country should end its three-century-long union with England. An independent Scotland may no longer be the distant dream of Scottish right-wingers, but is it a realistic prospect? The SNP are encouraging Scots to vote for independence on the grounds of keeping the pound but will the UK allow an independent Scotland to share it? British Prime Minister David Cameron voiced his opinion on the matter last week, urging Scots to stay in the union, a view which is also shared by Oren Laurent. In this article, Oren gives his views on why this would be the most beneficial solution. Read more…

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