Posts Tagged: Economy

The rally between the euro and the dollar reached a two-month low level as the European Central Bank is ready to announce the interest-rate decision after Mario Draghi stated that the crisis has started to affect Germany. Euro was the single currency weakened versus all of the 16 counterparts after Market News International declared that the ECB is unwilling to purchase the government bonds after a decline in the lending costs. The yen improved its position due to the fact that investors sought assets among the re-elected president Obama is trying to prevent the fiscal cliff. Also, the British pound rose against the euro currency as the Bank of England restrained to elevate the asset-purchase program.

Euro dropped 0.3% to $1.2734 reaching the lowest level since the 7th of September. Lee Hardman, the currency strategist at the Bank of Tokyo declared that the following: Draghi’s comments may have encouraged speculation that the ECB may present a more dovish Read more »

First trading day of the week and Asian Stock markets opened slightly lower. The Tokyo Stock Exchange is closed due to Japan holiday today. Hong Kong stocks are climbing slowly. HANG SENG opened at 21,790.20, previous close was 21,875.38. We see that there is a cautious approach to the market as investors look ahead to corporate results and resolutions to debt problems in the eurozone and the United States. Investors also focus on gold mining stocks as gold make new record high every day. Chief commodity analyst at HSBC, James Steel said “The longer the debt talk drags on, the more you would want to own a safe haven like gold. The crude oil market is also rallying quite nicely, and that’s a big element in support for gold”. Some analysts think that gold may rise above $1,700 an ounce within a couple of months, based on charts.

Unfortunately, with no solution to the U.S. debt crisis in Read more »

Asian Stock markets opened slightly lower today. NIKKEI started the day at 9,919.59, previous close was 9,936.12. HANG SENG opened at 21,874.43, previous close was 21,940.20. The stock markets are still under pressure due to ongoing concerns over eurozone fiscal problems and U.S. debt woes. Despite the fact that the outlook of global economy is a bit gloomy, analysts say that the majority of Tokyo shares are still trading at or below their book value. Currency strategist at Tachibana Securities, Kenichi Hirano said “While there are many external factors that are dampening the mood, Japanese stocks are attracting foreign buying with their cheap valuations”. Analysts say that trading may be sluggish ahead of U.S. economic indicators such as the consumer price index, industrial production and a stress test of European banks due later today. Investors are also focusing on corporate earnings. Citigroup is going to release its quarterly results today.

U.S. debt ceiling discussions and rating services’ latest Read more »

Asian Stock markets opened lower today. NIKKEI started the day at 9,929.18, previous close was 9,963.14. HANG SENG opened at 21,900.62, previous close was 21,926.88. Today we see the impacts of Moody’s statement and FED Chairman Ben Bernanke’s speech yesterday. Investors are reducing their positions as concerns about U.S. debt ceiling problems and eurozone debt worries increase. Fund manager at IG Investment, Tim Leung said “There’s uncertainty and confusion about whether we are going to see executives and legislators settle on the debt limit and the Moody’s review suggests that there may be a problem if they cannot reach a deal. There is a definite timeline for the U.S. debt ceiling discussion and also with financing the maturing papers from Italy, so both are risks in people’s mind”.

Asian session started the day with USD weakness. CHF, JPY and gold are making new highs. As the current situation is making investors more cautious, we see that the demand Read more »

Asian Stock markets are almost flat and further sell off seems stopped for now. NIKKEI started the day at 9,891.11, previous close was 9,925.92. HANG SENG opened at 21,800.33, previous close was 21,663.16. For this week, we may see the impact of the yen’s renewed strength and worries about eurozone debt crisis. $/¥ was down to 78.45 today. Senior technical analyst at Mizuho Securities, Yutaka Miura said “People are now used to seeing the dollar dipping below 80 yen, but the question is whether this strong yen trend is temporary or is it one that will last for a while. If it lasts for a week, the Nikkei may fall towards 9,500”. According to the latest report released by Chinese National Bureau of Statistics, China’s gross domestic product expanded at a rate of 9.5% in the April-June quarter and June industrial production improved 15.1%.

Today we see EUR, GBP and AUD trying to recover against USD. Yesterday Moody’s Read more »

Asian Stock markets are sliding on concerns over the eurozone debt crisis may spread to Spain and Italy. NIKKEI started the day at 9,943.32, previous close was 10,069.53. HANG SENG opened at 21,973.98, previous close was 22,347.23. Fund manager at Chibagin Asset Management, Hiroaki Osakabe said “Financial stocks had been gradually rising ahead of earnings reports by their Wall Street peers and that’s why problems in the EU are hurting them a bit more then they would have normally”.

Fear of contagion is not the only reason making investors anxious. Also the current situation of the U.S. economy is frightening investors, especially stalled negotiations over the U.S. debt ceiling. In fact the U.S. hit the debt ceiling on May 16 but since then has used spending and accounting adjustments to continue operating without impact on government obligations. President Barack Obama said “I am prepared to take on significant heat from my party to get something done and I Read more »

Asian Stock markets opened lower today as the U.S. jobs data soured investor sentiment. The Nikkei average also weakened by profit taking on gains made last weeks. NIKKEI started the day at 10,069.01, previous close was 10,137.73. HANG SENG opened at 22,542.91, previous close was 22,726.43. Investors had high expectations for the U.S. employment data, but they were disappointed as U.S. unemployment unexpectedly increased. Now investors’ focus turns to Japanese and U.S. corporate earnings. Trading volume today is low in the Nikkei ahead of U.S. earnings reports. Currency strategist at Mizuho Asset Management, Takashi Aoki said “The argument has been that, although the job market is weak, earnings have been good, so it will be a shock if we get negative news in the earnings department, as well”. It seems that investors are cautious and they want to see outcome of earning reports this week before they decide on their next step.

Even though the latest report showed Read more »

After better than expected U.S. data, Asian Stock markets open higher today. NIKKEI started the day at 10,205.71, previous close was 10,071.14. HANG SENG opened at 22,784.50, previous close was 22,530.18. The Nikkei index traded at four month high today on hopes that the recent slowdown in economy is temporary. Fund manager at Chibagin Asset Management, Hiroaki Osakabe said “The Nikkei’s comeback is quite remarkable and faster than I had expected. Macroeconomic data from the U.S., which was really poor in mid- and late June has recovered quickly and that’s helping the Nikkei”. Investors think that if the U.S. jobs figures, which will be released today, don’t disappoint then the Nikkei may rally higher. Japan Ministry of Finance released its Current Account report today. According to the report, Japan’s current account surplus narrowed less than economists forecast in May. Japan’s current account surplus fell 51.7%. Data also showed that Japan’s exports fell in May and the trade balance Read more »

Ahead of the U.S. jobs data Asian Stock markets are going flat today. NIKKEI started the day at 10,047.15, previous close was 10,082.48. HANG SENG opened at 22,621.31, previous close was 22,517.55. Even though some investors are taking profits on gains after seven days rally, analysts think that the 10,000 line will hold. Senior technical analyst at Mizuho Securities, Yutaka Miura said “Investors are expected to stay on the sidelines today after taking profits because they want to see the U.S. jobs data this Friday”. Another supportive factor for the Nikkei is that Japanese companies are recovering faster than expected. According to the latest report released today, Core Machinery Orders increased 3.0%.

Asian session is rather calm compared to yesterday. There is no sign of strength from EUR, GBP and CAD against USD. China rate hike, rating downgrade for Portugal fueled investors concerns yesterday and major currencies, except CHF and JPY, fell against USD. As a result, the Read more »

Asian Stock markets are almost flat today. NIKKEI started the day at 9,987.25, previous close was 9,972.46. HANG SENG opened at 22,623.74, previous close was 22,747.95. General Manager at SMBC Nikko Securities, Hiroichi Nishi, said “There have been concerns about the European economy for a while, so this is nothing new”. Anyhow, it seems that passing 10.000 line will not be easy while ongoing concern over eurozone fiscal problems are still causing anxiety. We expect that the market may be sluggish until U.S Jobs data is released.

Asian session started with major currencies’ strength against USD. Yesterday most of the major currencies fell against USD after Moody’s Investors Service downgraded Portugal’s long term government bond ratings to Ba2 from Baa1 and assigned a negative outlook. For now 1.4400 support seems strong as the FX market focused on ECB’s interest rate statement tomorrow. There are very important economic news releases on Thursday and Friday, so we expect high volatility.

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