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Overview of the main economical events of the current day - 20/11/2013
Bernanke Weakened the Dollar
The US dollar fell on Tuesday Vs the euro, Australian dollar and New Zealand dollar; grew Vs the yen and Canadian dollar and almost didn’t change Vs the pound. Fed chairman Bernanke’s speech led to further dollar’s weakening. The euro rose amid German economic sentiment growth up to 4-year high. The yen weakened before BoJ 2-day meeting which will start on Wednesday.
Speaking at the National Economists Club Fed chairman Bernanke said that interest rates would stay low significantly later than the unemployment rate reached 6.5%. After reaching 6.5%, employment, participation rate and other indicators will be of importance. The Fed will slow down bond purchases if the labour market and inflation meet the forecasts – but Bernanke didn’t give any exact terms, everything will depend on coming data.
Bernanke supported recent statements of the future Fed chair Janet Yellen that it is necessary to do everything possible today for a stable economic recovery. According to Bernanke, the Fed will adhere to stimulus policy as long as it will be necessary. Such mild comments had a negative impact on the dollar. On Wednesday the Fed meeting minutes will be published. Most experts expect the Federal Reserve to start decreasing monthly asset purchases not earlier than March, 2014.
The euro strengthened on Tuesday amid German economic sentiment growth up to 4-year high. German ZEW Economic Sentiment grew to 54.6 p. in November from 52.8 p. in October having exceeded expected growth to 54 p. The index turned out the highest since October, 2009. German Economic Sentiment has been high for the last several months, said ZEW president. Current Assessment turned out worse in November; it fell to 28.7 p. from 29.7 p. while it was expected to grow up to 31 p. On Friday there will be a release of IFO Business Climate.
ECB’s Praet supported the euro; he said on Tuesday that euro-zone economic state improved and the recovery was moderate but stable. Vice-President of the ECB Constâncio said that quantitative easing aimed to growth stimulation in the euro-zone was a possibility for the ECB and its introduction wasn’t discussed at the Governing Council on a technical level.
The yen weakened before BoJ 2-day meeting on Wednesday devoted to the discussion of monetary policy parameters. The dollar again rose above 100 yen. Almost three-quarter of economists polled by Bloomberg expect the central bank to expand stimulus programs in the first half of 2014.
Australian dollar grew on Tuesday after the publication of Reserve Bank of Australia meeting minutes which turned out neutral in general. The central bank doesn’t exclude further interest rate decrease but at the same time estimates economic state with large certainty. Australian CB Leading Index grew by 0.3% in September to 123.6 after the decrease by 0.2% in August.
By MasterForex Company
Overview of the main economical events of the current day - 21/11/2013
The Dollar Rose amid FOMC Meeting Minutes
The US dollar rose significantly on Wednesday Vs most major currencies amid the publication of FOMC Meeting Minutes and positive retail sales. The Fed can start QE tapering in the upcoming months already. The euro fell amid strengthened speculations on introduction of negative deposit rates. The pound grew after BoE Meeting Minutes publication but then dropped again.
FOMC Meeting Minutes showed that the Fed’s leaders expect improvement of economic situation in the country which will allow QE tapering in the upcoming months – but they also consider a possibility of tapering before the economic situation improves. The economic effect from the government shutdown was temporary and limited. Besides, unemployment threshold decrease and introduction of inflation threshold were discussed at the meeting.
The dollar was also supported by the statements of certain FOMC members. So, President of the Federal Reserve Bank of New York William Dudley said that despite fiscal problems this year, the economy continues recovering and it will grow at faster rate. Besides, he referred to October Non-Farm Payrolls, which showed the growth of new jobs, and to GDP growth in the third quarter which preliminarily accounted for 2.8%. President of the Federal Reserve Bank of St. Louis James Bullard said that the economy looked better and QE3 tapering would be discussed at the next meeting in December – and a strong employment report in October increases the chances for it.
The US macrostatistics data were mixed. The US retail sales rose more than expected while Existing Home Sales decreased and inflation data in the whole met the expectations. Retail sales rose by 0.4% in October while a growth by 0.1% was forecasted; Sales ex Autos increased by 0.2% while a growth by 0.1% was expected.
Existing Home Sales fell in October by 3.2% compared with the prior month – to 5.12 million houses at an annual rate while sales decrease by 2.9% - to 5.14 million was forecasted. Home Sales have been falling from more than 3-year high for two months. Consumer Price Index fell by 0.1% in October while no changes were expected – at an annual rate inflation fell to 4-year low of minus 1%.
The euro was traded downwards on Wednesday amid Producer Price Index decrease in Germany at a faster rate than expected – and then slumped to weekly lows Vs the dollar after Bloomberg News announced that the ECB considered introduction of a negative deposit rate at -0.1%. Recently, there aroused speculations on ECB’s introduction of a negative deposit rate, which can make commercial banks extend credits to companies and households more actively.
Earlier this month the ECB governor Draghi announced that the central bank was ready to new measures if it was needed to provide economic growth. Citi experts believe that a move towards negative deposit rates can cause a significant opposition among some ECB leaders. As an option the ECB can take into account other measures. German Bundesbank President Jens Weidmann said on Wednesday that there was no use for the ECB signaling about further softening of monetary policy now as it had just softened it.
The pound updated its monthly high after the publication of BoE Meeting Minutes but then dropped. On one hand, the meeting minutes indicated that acceleration of economic growth in short-term perspective is expected in the UK. Credit availability and the conditions for business spending have improved. The driving forces of growth acceleration are household spending and housing market. On the other hand, risk balance for the growth is shifted to the negative due to the situation in the euro-zone and balance recovery. And economic growth rate seems to decrease within the next 2-3 years.
By MasterForex Company
Overview of the main economical events of the current day - 22/11/2013
German Manufacturing PMI Reached 29-Month High
The US dollar rose on Thursday Vs yen and commodity currencies but fell Vs the euro and the pound. The euro strengthened amid PMI growth in Germany, the largest euro-zone economy. The pound grew after CBI positive report. The yen fell amid the end of BoJ 2-day meeting. Australian dollar had been falling for two days on the back of Chinese manufacturing PMI slowdown.
The US data released on Thursday were positive in general. Unemployment Claims dropped by 21 thousand last week to 7-week low of 323 thousand more than twice exceeding the expected decrease. The indicator that smoothes the volatility of weekly data - 4 Week Average of Initial Jobless Claims – fell to 338.5 thousand from 344 thousand.
The US Flash Markit Manufacturing PMI grew to 8-month high of 54.3 p. in November compared with forecasted 52.6 p. Producer price decrease in October met the forecasts while Producer Price Index Ex Food & Energy increased slightly more than expected. Only Philadelphia Fed Manufacturing Index turned out worse; it fell in November more than forecasted – to 6.5 p. in comparison with 19.8 p. in October while a decrease only to 16 p. was forecasted. New orders, shipments and employment fell significantly.
The euro strengthened on Thursday amid German PMI growth, the largest euro-zone economy. Manufacturing PMI rose to 29-month high 52.5 p. in November from 51.7 p. in October; Services PMI – to 9-month high; PMI Composite – to 10-month high. Meanwhile, the same indexes in France dropped against the expected growth. In euro-zone manufacturing PMI slightly grew having met the expectations – while Services PMI fell. Euro-zone PMI Composite dropped to 3-month low 51.5 p. from 51.9 p. in October. The euro rocketed after the ECB Mario Draghi weakened the expectations of deposit rate decrease. Draghi said that there was "no news" on possible negative deposit rates debates.
The pound grew amid a positive CBI report which showed that CBI Industrial Order Expectations and Production reached the highest level since 1995. CBI Industrial Order Expectations reached +11 in November Vs -4 in October. Industrial output balance amounted to +24 against +9 in October. According to CBI economy director, the data became a new promising sign of manufacturing sector recovery.
The yen fell significantly and USDJPY exceeded level of 101 for the first time since July 10 – after the announcement of 2-day meeting results of BoJ that kept monetary policy line and economic state estimate unchanged. The central bank said that economic recovery was moderate amid exports increase, business spending and public investment. The CB is intended to adhere to the way of quantitative and quality easing of monetary policy further to provide access to the target inflation level of 2% per annum. Yen weakening was supported by Japanese pension fund new plan on risk assets distribution.
Australian dollar fell to its low for almost 2.5 months Vs the dollar after HSBC Flash Manufacturing PMI which fell to 50.4 p. in November against 50.9 p. in October having considerably exceeded expected decrease to 50.8 p. An extra pressure on AUD was put by the speech of RBA governor Stevens who said that Australian dollar was higher the levels which RBA expected for mid-term perspective – and sooner or later the market will return AUD to the right levels. Besides, Stevens warned that currency interventions were still part of RBA’s armory, they are reasonable and acceptable in certain circumstances, and may be effective and useful.
By MasterForex Company
Overview of the main economical events of the current day - 25/11/2013
The Main Events of the Week
The US dollar dropped on Friday Vs the euro and the pound and grew against the yen and commodity currencies continuing the trend of the prior day amid no significant US macrostatistics. The euro grew after the release of positive Business Climate in Germany. IFO Business Climate rose by 1.9 p. to 109.3 p. in November against forecasted growth up to 107.7 p. IFO Current Assessment and Expectations also rose having exceeded the forecast significantly.
Canadian dollar fell on Friday to 3-month low Vs the dollar but then recovered some losses after Canadian report on retail sales which grew by 1% in September having exceeded the expected growth by 0.3%. However, the growth was caused mainly by auto sales increase – sales ex auto didn’t change compared with August. At the same time Canadian inflation data turned out worse: inflation slowed down in October to 0.7% at an annual rate while its decrease only to 0.8% was expected. Inflation data let the central bank keep interest rates at low further.
By the end of the week the US dollar had lost about 0.2% according to the dollar index, decreasing to DX for two weeks in a row. Last week fall happened mainly due to the growth of European currencies. The dollar fell against the Swiss franc (-0.80%), British pound (-0.62%) and the euro (-0.39%). The dollar grew against commodity currencies and the yen. Most of all the US dollar rose against the Australian dollar (+2.10%) and New Zealand dollar (+1.36%). A smaller growth was shown Vs the yen (+1.14%) and Canadian dollar (+0.82%).
The last week of the month, on Monday Pending Home Sales will be released; on Tuesday – Building Permits, Housing Starts (for two months at once – September and October), S&P/Case-Shiller and FHFA Home Price Index and CB Consumer Confidence; on Wednesday – Durable Goods Orders, Chicago PMI and Revised U. of Michigan Consumer Sentiment. Thursday is a day off in the USA and on Friday the activity at the American session may be minimal.
In the euro-zone on Thursday there will be a release of confidence indexes from the European Commission and on Friday – inflation and unemployment. In Germany Gfk Consumer Confidence will be released on Wednesday; on Thursday – labour market and inflation reports; and on Friday – retail sales. In Switzerland GDP for the third quarter will be published on Tuesday. In Japan retail sales report will be released on Thursday and on Friday – a large statistics block of the end of the month: inflation, unemployment and industrial output.
In the UK BBA Mortgage Approvals will be released on Monday; on Wednesday – the Second Estimate GDP for the third quarter; and on Friday - BoE Monetary & Financial Statistics. On Tuesday Inflation Report Hearings will be held where BoE governor Mark Carney and other central bank members will deliver a speech. On Thursday there will be a release of the BOE Financial Stability Report and BoE governor will make a speech.
In Australia Private Capital Expenditure report will be released on Thursday and on Friday - Private Sector Credit report. In New Zealand there will be a release of Trade Balance on Wednesday; on Thursday - ANZ Business Confidence Index and on Friday – Building Permits. In Canada Current Account will be released on Thursday; and on Friday - GDP for September and for the third quarter.
By MasterForex Company
Overview of the main economical events of the current day - 26/11/2013
The ECB Has Room for Interest Rates Decrease
The US dollar was traded upwards on Monday Vs most major currencies amid the yen fall Vs the dollar to almost 6-month low and correctional decrease of European currencies. On Monday there was little significant statistics and the dollar ignored weak housing market data. The pound fell amid weak real estate market data in the UK. The yen and Swiss franc dropped after the nuclear deal with Iran had been reached due to reduced demand for safe-haven currencies.
According to the National Association of Realtors the U.S. Pending Home Sales fell in October to its low from December, 2012. Pending Home Sales Index has been falling for five months and dropped by 0.6% in October while it was expected to rise by 1.3%. Prices and borrowing cost growth has a negative impact on housing market recovery.
Dallas Fed Manufacturing Activity also turned out worse than expected and fell to 1.9 p. in November compared with 3.6 p. in October. Meanwhile, according to the opinion poll of economists held by Philadelphia Fed, the US economy will grow at faster rates next year, which will lead to labour market strengthening. A faster decrease of unemployment rate will let the Fed accelerate QE tapering.
The pound fell considerably on Monday after the release of the UK weak housing market data. According to the British Bankers' Association BBA Mortgage Approvals fell to 42.8 thousand in October from almost 4-year high of 43.2 thousand in September while its growth up to 45 thousand was expected. The euro was also traded downwards; it was negatively influenced by the statements of some ECB members. ECB Governing Council member Ardo Hansson said that the European central bank still had room to reduce interest rates and it is technically ready to take the deposit rate to the negative zone.
ECB’s Christian Noyer said that interest rates must stay low for an extended period, or even lower if need be, for price stability in the euro-zone. ECB’s Benoît Coeuré announced that inflation drop in the euro-zone continued – although there is a hope that it will not progress to deflation because the economy is recovering.
The yen fell to almost 6-month low against the dollar after reaching a nuclear deal with Iran. On November 24 after 10 years of negotiations in Geneva a deal on partial relief from some economic sanctions against Ian was reached in exchange for a partial shutdown of its nuclear program. Bank of Japan Governor Haruhiko Kuroda marked on Monday a progress on the way to reaching the target inflation level of 2% although he admitted the plan too ambitious considering 15 years of deflation in Japan. Deputy Minister of Finance said that deflation was coming to an end and the economy started recovering.
Canadian dollar reached 4.5-month low Vs dollar on Monday amid oil price decrease after Iranian nuclear program deal that allows weakening some economic sanctions against Iran. Swiss franc also dropped. Swiss National Bank chairman Jordan said on Monday that Swiss franc was still highly valued and the central bank was ready to unlimited currency interventions to defend the franc rate.
By MasterForex Company
Overview of the main economical events of the current day - 27/11/2013
The Dollar Fell amid the U.S. Weak Consumer Confidence
The dollar dropped on Tuesday against most major currencies after weak consumer confidence data which continued falling in November after a sharp decline in October connected with the government shutdown. The pound and the euro were traded upwards; the yen also strengthened a little. Australian and New Zealand dollars continued falling.
CB Consumer Confidence fell to 70.4 p. in November from 72.4 p. in October while it was expected to grow up to 72.9 p. Prior month indicator was revised from 71.2 p. to 72.4 p. The index has been falling for three months and like last month continues staying at low since this April. Expectations fell most of all.
Housing market data that were released before turned out positive in general. Building Permits in the US rose by 6.2% in October Vs prior month and amounted to 1034 thousand at an annual rate, which has become the highest level since June, 2008. Prior month indicator was expected to be at 930 thousand. Building Permits in September rose by 5.2% to 974 thousand also exceeding the expectations. New Housing Starts were not published on Tuesday. Ministry of Commerce referred to the fact that the exact figures couldn’t be collected in time.
S&P/Case-Shiller Home Price Index in 20 largest cities grew by 13.3% in September at an annual rate having exceeded the expected growth by 13%. At the same time FHFA House Price Index rose by 0.3% in September Vs prior month and turned out slightly worse than forecasted growth by 0.4%. Richmond Fed Manufacturing Index rose to 13 p. in November Vs 1 p. in October having significantly exceeded the expected growth to 4 p.
The pound was traded upwards on Tuesday having almost no reaction to BoE Inflation Report and the speech of BoE governor Mark Carney who said about a sharp economic recovery in the UK, about strong employment rate growth and improvement of business confidence. At the same time Carney said again that unemployment decrease to 7% wouldn’t be an automatic trigger for the CB to raise the rate.
The euro also strengthened on the back of Italian Consumer Confidence growth. Consumer Confidence rose to 98.3 p. in November, 2013 from 97.3 p. in October having exceeded the expected growth to 97.5 p. The euro was supported by The People's Bank of China governor’s statement that the European currency is an important part of Chinese reserves. The Australian dollar continued falling after some growth at the beginning of the day caused by the statements of RBA Deputy Governor Philip Lowe who weakened growing expectations of currency interventions – having said that the threshold at which the central bank would make interventions at the currency market was high enough.
The yen strengthened a little on Tuesday from 6-month low Vs the dollar that was reached this week after the publication of Monetary Policy Meeting Minutes which showed that three members of BoJ Policy Board opposed some provisions of central bank inflation report, which was released in October. Member of the Policy Board Kiuchi said on Tuesday that it was unreasonable to plan reaching 2% inflation within 2 years and this target of the central bank towards prices growth was inadequate. It is another sign of disagreement among the leaders of the Bank of Japan.
By MasterForex Company
Overview of the main economical events of the current day - 29/11/2013
The Pound Rose to Its High for 27 Months
The US dollar was traded slightly downwards on Thursday Vs most major currencies amid a day-off in the USA and lack of any macrostatistics in the country. The pound rose amid new measures of the Bank of England on restriction of housing market boom. The euro was traded upwards amid positive inflation growth data in Germany and Spain and euro-zone confidence index.
The pound rose Vs the dollar to its high since August, 2011 after the publication of BoE Financial Stability Report which was introduced by the CB governor Mark Carney. Carney said on Thursday that he planned to reduce the support of mortgage lending in the UK to stimulate the banks to increase small business loans and to prevent the threat of financial stability from housing market. Since the next year concessional loans within the program of Funding for Lending Scheme (FLS) will be available only for small businesses and FLS won’t be able to be used for residential mortgage.
The euro was traded upwards on Thursday amid positive data of euro-zone confidence and inflation growth in Germany and Spain. Economic Sentiment Indicator (ESI) from the European Commission rose in November to its high 98.5 p. since August, 2011 compared with 97.7 p. prior month while a growth only to 98 p. was expected.
German inflation accelerated to 1.3% in November at an annual rate having exceeded the expected growth by 1.2%. Annual inflation in Spain rose to 0.3% in November Vs 0% in October. German weak labour market data were ignored. Unemployment rate in Germany increased by 10 thousand in November while no changes were expected. German Unemployment Rate has been 6.9% for three months in a row, which met the forecasts.
The Swiss franc strengthened after the release of GDP which exceeded the outlook. Swiss GDP for the third quarter increased by 0.5% compared with the prior quarter when there was a growth by the same 0.5% - while a growth only by 0.4% was expected. At an annual rate GDP rose by 1.9% while an increase by 1.8% was expected. Last quarter Swiss economy was supported by demand for its exports in Germany.
Australian dollar stopped falling after an unexpected growth of Private Capital Expenditure. The indicator rocketed by 3.6% in the third quarter compared with the prior period when its growth was only 1.6%. The indicator was expected to decrease by 1.2%. Canadian dollar also slowed down falling before Canadian GDP which is released on Friday.
Current account deficit decreased in Canada in the third quarter less than expected confirming weakness of exports. According to the National Bureau of Statistics of Canada, current account deficit dropped to 15.5 billion of Canadian dollars while it was expected to decrease to 14.4 billion. Raw Materials Price Index (RMPI) fell by 2.3% m/m in October amid the fall of prices for mineral fuel – the indicator was expected to fall only by 2%. The index has been falling for two months in a row showing the lowest decrease since June, 2012.
By MasterForex Company
Overview of the main economical events of the current day - 02/12/2013
The Main Events of the Week
The US dollar was traded differently on Friday, it grew Vs the euro, Swiss franc, yen and Canadian dollar but it fell Vs the pound, Australian and New Zealand dollars. The trades were calm and the currencies were traded at a narrow range amid lowered activity index because of the holidays in the USA. The euro stopped 3-day growth and fell amid an unexpected decrease of German retail sales by 0.8% in October while a growth by 0.5% was expected. Meanwhile, inflation and unemployment data in the euro-zone are better than expected.
Canadian dollar dropped to its low of early October, 2011 Vs the dollar after the release of Canadian GDP that turned out slightly better than expected. Canadian GDP rose by 0.3% m/m in September having exceeded the expected growth by 0.2%. Quarterly growth of economy annualized accounted for 2.7% in Canada Vs the forecast of +2.5% - the economy rose at the fastest rate for two years in the third quarter amid the increase of consumer spending, investment and inventory holdings while the exports decreased. Despite some improvement of economy it is unlikely to make the Bank of Canada to start finishing monetary stimulation earlier than the US Fed.
By the end of the week the US dollar slightly fell according to the dollar index having lost 0.07% and continued the trend of the prior week: the growth Vs the yen and commodity currencies and decrease Vs European currencies. The dollar dropped against the British pound (-0.81%) and the euro (-0.20%), it almost didn’t change Vs the Swiss franc and grew Vs Japanese yen (+1.12%), Canadian dollar (+0.93%) and New Zealand dollar (+0.68%) and Australian dollar (+0.59%). By the end of November the dollar rose by 0.45% according to the dollar index having shown the growth against the yen and commodity currencies; it decreased to the pound and almost didn’t change Vs the euro and Swiss franc.
This week, the first one of the month, a lot of important data will be released: GDP, Trade Balance, Non-Farm Payrolls, and PMI. There will be meetings of four main central banks: the Reserve Bank of Australia – on Tuesday, Bank of Canada – on Wednesday, Bank of England and ECB – on Thursday. However, the main event of the week will be Non-Farm Payrolls released on Friday which will make clear possible terms of QE3 tapering start. Unemployment rate is expected to fall by 0.1% to 7.2% and 183-185 thousand of new jobs. Strong Non-Farm Payrolls (about 200 thousand) can increase the chances that the Fed will make a step towards QE tapering at the meeting on December already.
In the USA ISM Manufacturing PMI will be released on Monday; on Wednesday - ADP Employment Change, Trade Balance, New Home Sales (for two months) and ISM Services PMI; on Thursday – revised GDP for the third quarter (a revision from 2.8% to 3.1% is expected) and Factory Orders; on Friday – Personal Income and Spending and Preliminary U. of Michigan Consumer Sentiment.
In the euro-zone the Final Manufacturing PMI will be released on Monday and Services PMI – on Wednesday; on Tuesday – Producer Price Index and on Wednesday – Retail Sales and revised GDP for the third quarter. In Germany Factory Orders will be released on Friday. In the UK during the first three days of the week there will be a release of Manufacturing PMI, Construction PMI and Services PMI. Chancellor of the Exchequer George Osborne will make an Autumn Forecast Statement on Thursday and introduce the main provisions of government’s policy for the next year.
In Switzerland industrial output for the third quarter will be released on Wednesday and on Friday – inflation. In Australia Retail Sales and Current Account will be released on Tuesday, on Wednesday – GDP for the third quarter and on Thursday – Trade Balance. In Canada Trade Balance will be released on Wednesday, on Thursday – Building Permits and Ivey PMI; on Friday - Labor Market Data.
By MasterForex Company
Overview of the main economical events of the current day - 03/12/2013
The U.S. Manufacturing PMI Rose Despite Forecasts
The US dollar grew on Monday Vs most major currencies amid the growth of manufacturing PMI in the USA which rose despite the forecasts. The data strengthened the expectations of an earlier QE tapering that puts a lowering pressure on the dollar.
ISM Manufacturing PMI rose unexpectedly in November to 57.3 p. against 56.4 p. in October - despite the expected decrease and it continues to stay at its high of April, 2011. In comparison with October - industrial output, new orders and employment have risen while inventories and prices dropped. Final Manufacturing PMI also turned out better in November than initially estimated 54.3 p. and grew to its high 54.7 p. since January. Construction Spending in the USA rose in October by 0.8% m/m against the expected growth by 0.4%.
The euro dropped on Monday considerably before the ECB meeting which results will be announced on Thursday – although euro-zone PMI in general turned out better than forecasted. Euro-zone final manufacturing PMI grew up to 51.6 p. in November from 51.3 p. in October having slightly exceeded the initial estimates of 51.5 p. However, the PMI of Spain, the fourth euro-zone economy, dropped below 50 p. for the first time for 4 months. French PMI also continues staying below this level.
Euro-zone PMI growth was mainly due to German manufacturing sector: the euro-zone largest economy PMI rose to 52.7 p. in November from 51.7 p. in October. However, according to German Engineering Federation (VDMA) that represents a significant part of medium business companies - German Factory Orders slumped by 10% y/y in October mainly due to demand decrease beyond the euro-zone. Official German Factory Orders will be released on Friday.
The pound updated its annual height Vs the dollar but then dropped. The UK Manufacturing PMI rose to its high since February, 2011 continuing the growth for the eighth consequent month. Manufacturing PMI rose to 58.4 p. in November from the revised reading of 56.5 p, in October. Industrial output and new orders rose to the highest levels for almost 19 years, employment growth also accelerated.
The yen continued falling and USDJPY rose above 103 for the first time since May 23 – after Bank of Japan governor Kuroda had said that the central bank would follow mild policy until inflation reached 2% and extra measures would be taken if needed. According to former Ministry of Finance official Eisuke Sakakibara, also known as “Mr. Yen”, the yen will drop to 108 per dollar in 2014. The Government Pension Investment Fund, whose assets rose last quarter to a record 124 trillion yen ($1.2 trillion), should follow an expert panel’s proposal to boost foreign holdings to as much as 35%, from 23%, according to Sakakibara.
Australian dollar was growing in the first half of the day after the release of stronger than expected Chinese manufacturing PMI on Sunday, but then it fell. NBS Manufacturing PMI amounted to 51.4 p. in November without any changes compared with October and exceeding the forecast. The index has been at its high of 1.5 year for two months. HSBC Final Manufacturing PMI fell in November from 50.9 p. to 50.8 p. having exceeded the estimates of 50.5 p.
New Zealand dollar rose on Monday amid Chinese positive data and Terms of Trade Index of New Zealand that reached 40-year high. According to the Bureau of Statistics of New Zealand Terms of Trade Index rose by 7.5% in the third quarter compared with the second quarter having considerably exceeded the expected growth by 2.9%. The growth of Terms of Trade Index to its high since 1973 was favored by the growth of exports prices for dairy products.
By MasterForex Company
Overview of the main economical events of the current day - 04/12/2013
The UK Construction PMI Grew to its High for More than 6 Years
The US dollar was traded downwards on Tuesday Vs most major currencies amid no significant macrostatistics in the USA. The pound strengthened on the back of the UK Construction PMI growth to its high since August, 2007. The yen rose amid fixed long positions on USD/JPY and stock markets decrease.
IBD/TIPP Economic Optimism rose by 1.7 p. in December or by 4.1% to 43.1 p. compared with 41.4 p. in November. The index has been growing for two months already after the decrease to 2-year low. The index is a good leading indicator for U. of Michigan Consumer Sentiment that will be released later.
ISM New York index in November rose by more than 10 points to 69.5 p. In October the index was 53.9. November index has become the highest since October, 2010. ISM New York index which mainly refers to non-manufacturing companies is released a day before the national ISM nonmanufacturing report.
The British pound strengthened on Tuesday amid the UK Construction PMI growth to its high of August, 2007. The UK construction PMI rose to 62.6 p. in November from 59.4 p. in October signaling a strong increase in the construction sector. The index above 50 p. indicates activity growth in the sector. The index has been above 50 p. for seven months in a row.
The euro also followed the pound and rose amid unemployment decrease in Spain in November for the first time for 4 months. Spanish Unemployment rate in November fell by 2.5 thousand in comparison with the prior month when it grew by 87 thousand – while unemployment rate was expected to grow by 50 thousand. The decrease has become the first one for November in the country’s history and probably it is a signal that the bottom of unemployment crisis in Spain has passed.
At the same time producer price index in the euro-zone was worse than expected and has fallen in October for the third month in a row, which may strengthen the concerns that a low inflation can threaten a fragile recovery in Europe. Producer price index fell in October by 0.5% in comparison with the prior month while a decrease only by 0.2% was expected. At an annual rate the prices dropped by 1.4% Vs the expected decrease by 1%.
Australian dollar fell after the Reserve Bank of Australia on Tuesday left the interest rates unchanged for the 4th consequent month but then it grew. RBA governor Glenn Stevens said that Australian dollar rate was still unreasonably high and there was a need of currency devaluation for a balanced growth of economy. The AUD was supported by retail sales data which grew by 0.5% m/m in October having exceeded the expected growth by 0.4%. At the same time current account deficit in Australia turned out higher in the third quarter than forecasted.
The yen rose amid the decrease of stock markets and fixation of long positions on USD/JPY within the upcoming annual heights. Another factor was the decrease of the world stock markets, which has increased the demand for safe assets. Dow Jones Industrial Average dropped by 0.6% on Tuesday, which has become the lowest decrease for almost a month.
By MasterForex Company