Tag Archives: German Economy

Ukraine Likely To Overshadow ECB Meeting

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: EU ECB Press Conference @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Ukraine Likely To Overshadow ECB Meeting

The crisis in Ukraine along with a hesitant recovery in Europe will most probably overshadow today’s European Central Bank meeting. Economists say the monetary authority for the member states who use the Euro will look to reassure markets that it is ready to add more stimulus measures if the economy takes a turn for the worse. It recently approved a major package of measures including a cut in the main interest rate to a record low 0.15 percent and an offer of more extra-cheap credit to banks and is waiting to see how those work. If further measures are deemed necessary in the future, analysts say the bank could decide to purchase large amounts of financial assets such as government bonds in the open market, a step which can drive rates down further and add newly created money to the economy but the bank is only expected to use it if its current efforts don’t work as expected. One risk factor is a sudden shock to business and investor confidence if the conflict between Russia and Ukraine escalates which could lead the EU and United States to impose new sanctions on Russia, disrupting trade. Uncertainty over what the impact could be on the global economy and markets could make businesses hold off on investing and consumers on spending. Low inflation is another worry for the ECB, at only 0.4 percent in the year to July. ECB President Mario Draghi has indicated that asset purchases are possible in the future and is one of the reasons why the euro has been in retreat over the past couple of months. ECB Press Conference is due today @ 12.30 GMT.

German Industry Output Grows Less Than Expected On Russia

German industrial output grew less than forecast in June as Europe’s largest economy came under pressure from political tensions with Russia. Production, adjusted for seasonal swings, rose 0.3 percent from May, when it declined a revised 1.7 percent. While that’s the first increase in four months, economists predicted a gain of 1.2 percent. Production fell 0.5 percent in June from the previous year when adjusted for working days. The European Union agreed last week on its widest-ranging sanctions yet over Russia’s backing of rebels in eastern Ukraine and the Bundesbank has cited geopolitical tensions as contributing to a probable stagnation of the economy in the second quarter. Factory orders fell the most in more than 2 1/2 years in June and sentiment surveys have plunged in Germany, Russia’s biggest trading partner in Europe. There is pessimism in the markets and it remains to be seen whether this pessimism will become persistent.

Australian Jobless Rate Tops U.S. First Time Since 2007

Australia’s jobless rate jumped to a 12 year high in July, overtaking the U.S. level for the first time since 2007 while sending the local currency falling. The unemployment rate rose to 6.4 percent from 6 percent according to the statistics bureau in Sydney, versus estimates for unemployment to hold steady. The number of people employed fell by 300. Australia appears to be losing its developed-world-beating status as the mining investment boom that powered it through the global financial crisis wanes. The number of full-time jobs increased by 14,500 in July, and part-time employment fell 14,800, today’s report showed. Australia’s participation rate, a measure of the labour force in proportion to the population, climbed to 64.8 percent in July from 64.7 percent a month earlier. The Australian dollar was trading at 92.87 U.S. cents at from 93.43 cents before the data were released.

That sums up today’s highlights! Don’t forget you can find us throughout the day on the social media platforms delivering u-to-the-minute news for traders. We hope you have a profitable day on the markets.

China: Trade Rises Unexpectedly But Analysts Express Caution

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

WHAT WE’RE WATCHING TODAY

China: Trade Rises Unexpectedly But Analysts Express Caution

China’s exports and imports unexpectedly rose in April, helping leaders halt a slowdown in the world’s second-biggest economy. Overseas shipments increased 0.9 percent from a year earlier while imports gained 0.8 percent, leaving a trade surplus of $18.46 billion. China stocks headed for the biggest gain in four weeks as the figures showed increased signs of improving global expansion. Export gains would reduce the urgency for Communist Party leaders to resort to larger-scale stimulus than railway spending and tax breaks, after first-quarter growth slowed to the weakest pace in six periods. The yuan, which is down about 2.8 percent this year against the U.S. dollar, reversed losses after the figures were revealed to advance 0.1 percent. The benchmark Shanghai Composite Index extended gains, rising 1.1 percent.

Analysts point out that while the numbers are positive, the key is that the momentum should be maintained. Some warn against reading too much into one month of data, especially as the country shifts towards domestic consumption and away from investment-led growth. There are also concerns the trade numbers, which are known to be volatile, could be distorted by fake flows of cash pouring into China. The trade figures do, however, provide valuable insight into the extent of impact to the economy in the rebalancing process.

Gold Drops Below $1,300 Following Yellen Comments; U.S. Stocks Fluctuate

Gold held below $1,300 an ounce after the biggest one-day drop in three weeks on speculation that the U.S. Federal Reserve will further reduce monetary stimulus as the economy recovers. Bullion for immediate delivery traded at $1,290.34 an ounce from $1,289.88 yesterday, when prices sank 1.4 percent, the most since April 15. Gold fell 28 percent in 2013 to end a 12-year rally, on expectations the Fed would scale back asset purchases. Chair Janet Yellen yesterday told U.S. lawmakers that the world’s largest economy still needs stimulus even as data supported the outlook for faster expansion this year. The central bank has announced cuts to bond-buying at each of the past four meetings. Gold has rallied 7.4 percent this year in part as tension in Ukraine spurred haven demand.

Meanwhile, U.S. stocks fluctuated as tech stocks tumbled amid Janet Yellen’s comments. The Standard & Poor’s 500 Index rose as optimism that the Federal Reserve will continue to support the U.S. economy overshadowed a drop in Internet stocks led by Yahoo! and Groupon. The S&P 500 gained 0.6 percent to 1,878.21 yesterday, rebounding after briefly dropping below its average trading level for the past 50 days. Nasdaq slipped 0.3 percent. The Dow Jones Industrial Average climbed 117.52 points to 16,518.54. About 7.1 billion shares changed hands on U.S. exchanges, 6.1 percent above the three-month average.

German Industrial Output Unexpectedly Falls As Growth Slows

German industrial output unexpectedly fell for the first time in five months in a sign that expansion in Europe’s largest economy is slowing. Production, adjusted for seasonal swings, declined 0.5 percent from February, when it gained a revised 0.6 percent. Economists predicted an increase of 0.2 percent. Production rose 3 percent in March from the previous year when adjusted for working days. Factory orders in March fell the most since November 2012 and the Bundesbank has warned that expansion will slow “noticeably” after a very strong first quarter. While the country benefits from ultra-low interest rates as it leads the euro-area recovery from its longest-ever recession, growth is threatened by risks including a slowdown in China and rising tension with Russia. Manufacturing declined 0.4 percent, while consumer-goods output rose 0.5 percent, and intermediate goods production slowed 0.9 percent.

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

Just A Minute!

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

Main Trading Events Of The Day: EUR German ZEW Economic Sentiment @ 10.00; USD Building Permits @ 12.30; USD Core CPI m/m @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

U.S. Markets Look To German Stocks As German ZEW Economic Sentiment Awaited

Markets around the world have been becoming more jittery by the Russia/Ukraine crisis and the possibility of slowing economic growth in China. The situation is having a profound impact on U.S. markets with traders up and down Wall Street pointing to a renewed sense of risk aversion and questioning whether or not this is the beginning of that long-awaited correction for U.S. stocks. Slowing growth in China and worries about Russia’s tense relationship with Ukraine continue to fester but many traders have been paying even more attention to what’s happening in continental Europe for signs of what’s ahead for U.S. stocks. In particular, they are looking at Germany’s stock market which has relatively close economic ties to Russia. The two are trading partners, so weakness in Russia’s markets will reverberate through Germany’s markets to a certain degree. In turn, Germany is an important trading partner with the U.S. and there is a very high correlation between the value of the S&P 500 and Germany’s DAX stock index. In other words, the direction of both indexes seems to track each other fairly closely, hence many traders are also keeping a close eye market developments in Germany. While there has been selling pressure on U.S. stocks, some traders note that there isn’t a sense of panic selling. They also note that the current downside pressure isn’t a result of a massive flood of sell orders hitting the market. Rather, it’s been a lack of any real buy orders. With stocks near record highs, caution is still the prevailing sentiment. However, the trading relationship between German and American stocks is perhaps one reason why some traders are taking some profits just in case the global geopolitical or economic situation takes a turn for the worse.

The importance of the German market is once again highlighted in today’s German ZEW Economic Sentiment @ 10.00 GMT. Economic expectations in the euro zone declined in February by 5.4 points to 68.5. Analysts had expected a higher reading of 73.9. The decline in sentiment may attributed to concerns about U.S. economic recovery, and market volatility in emerging markets. Despite the relatively weak reading, ZEW President Clemens Fuest believes this decline in economic expectations is a temporary setback, since the majority of surveyed financial market experts remain optimistic. A further decline to 67.3 is expected.

Markets Eye Housing Data & FOMC For Market Buzz

Economic data and the Federal Reserve are expected to receive most of Wall Street’s attention this week with the big question being whether we are we looking at ongoing weather-related data, or if we are likely to see incremental improvement. Traders will of course be keeping their eyes on the Ukraine but it may come off the trader screen for the next few days, as we head to the FOMC on Wednesday. Reports scheduled for release include the consumer price index, typically scrutinised by analysts and investors for any sign of inflation, along with housing starts and building permits, all for February. The report, along with one on mortgage applications on Wednesday and existing home sales on Thursday, should give investors a clearer view on the health of the housing sector, an important piece of the U.S. economy. The expectations there a little stronger than they have been with the addition of 175,000 jobs in February and separately, a 0.3 percent rise in retail sales last month. The economic reports should begin to answer whether equity investors made the right call in writing off a large number of economic reports as being adversely affected by the weather. On Monday, stocks rallied, with the Dow rebounding from a five-day losing streak, as voting in Crimea passed without violence and after economic report had U.S. manufacturing output jumping the most in six months.

Apple Favorite Brand In Emerging Markets

Apple is the most desirable mobile-phone brand among inhabitants of emerging markets, according to a report. In a study conducted this year, Apple edged out Samsung Electronics, which was the leader in a separate survey last year. Samsung saw a slight decline in its share of developing-market consumers who favour its phones from 32 percent to 29 percent while Apple’s share jumped dramatically from 21 percent to where Samsung was last year. The brand halo for Apple is a good thing, but it won’t help the company overtake Samsung in sales, at least not immediately. Samsung Electronics is the world’s largest maker of smartphones partly because it makes low-margin, cheap handsets in addition to Galaxy products. The bright side for Apple is that the new emerging middle classes may switch to iPhones when they can afford them.

That sums up today’s highlights! Keep an eye on the markets today for important data releases via our Facebook, Twitter, Google+ and LinkedIn pages. We hope you have a profitable day on the markets!

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