By Katherine Greene
Aug. 5 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 8 a.m. in New York unless stated otherwise.
Anadarko Petroleum Corp. (APC US) fell 3.9 percent to $52.98. The second-largest independent U.S. oil producer reported second-quarter profit of $1.76 a share, missing the average analyst estimate by 0.6 percent after forward contracts fell in value, according to Bloomberg data.
Apple Inc. (AAPL US) climbed 1.3 percent to $155.25. The maker of the iPod music player was rated ``buy'' in new coverage at UBS AG, which said the company's ``core strengths and opportunities'' offer a ``competitive advantage.''
DCT Industrial Trust Inc. (DCT US) slid 3.7 percent to $7.84. The owner of real estate properties cut its annual funds- from-operations forecast and reported second-quarter funds from operations, excluding some charges, of 17 cents a share. Analysts polled by Bloomberg estimated 18 cents a share on average.
Masimo Corp. (MASI US) jumped 7.3 percent to $39.94. The maker of medical devices reported second-quarter profit of 18 cents a share, beating the average analyst estimate by 34 percent, according to Bloomberg data.
Nortel Networks Corp. (NT US) dropped 1.1 percent to $6.12. North America's biggest maker of telephone equipment was cut to ``underperform'' from ``neutral'' at Merrill Lynch & Co., which cited ```deteriorating trends in deferred revenues and new orders.''
Pioneer Natural Resources Co. (PXD US) rose 1 percent to $57.22. The oil and natural-gas producer in North America and Africa boosted its annual production forecast and said second- quarter profit rose on higher output and prices.
Principal Financial Group Inc. (PFG US): The life insurer and marketer of 401(k) plans said it earned 97 cents a share during the second quarter, beating the average analyst estimate by 1.6 percent, according to Bloomberg data. Principal Financial added 1.9 percent to $43.70 in extended trading yesterday.
Rackable Systems Inc. (RACK US) plummeted 20 percent to $10. The maker of high-density computer servers reported a second- quarter loss of 12 cents a share, or 12 times larger than the average loss estimate in a Bloomberg survey of analysts.
Salix Pharmaceuticals Ltd. (SLXP US) fell 7.3 percent to $7.28. The maker of treatments for intestinal disorders forecast a third-quarter loss of 30 cents a share, or 40 percent more than the average analyst estimate.
Syngenta AG American depositary receipts (SYT US) declined 4.1 percent to $53.69. The world's biggest maker of agricultural chemicals fell after falling crop prices raised concerns about pesticide and fertilizer demand.
Syniverse Holdings Inc. (SVR US): The provider of technology services to mobile-phone companies said revenue may be as much as $495 million this year. Analysts polled by Bloomberg estimated $464.8 million on average. Syniverse advanced 9.8 percent to $18.01 in extended trading yesterday.
To contact the reporter on this story: Katherine Greene in New York at kgreene8@bloomberg.net.
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Tuesday, August 5, 2008
Will Cooling Economic Growth Force ECB And RBA To Employ Dovish Rhetoric?
Daily Forex Fundamentals | Written by DailyFX | Aug 05 08 11:31 GMT |
Fundamental Headlines
AUDUSD - Australia's central bank employed dovish rhetoric by holding the benchmark interest rate at 7.25 percent. Governor Glenn Stevens said, 'With demand cooling…a less restrictive stance of monetary policy in the period ahead is increasing.' Indeed, after having advanced the overnight cash rate four times in the past twelve months, slowed economic growth has cooled inflation. In wake of this news, the Australian dollar fell to a three-month low, after traders speculated the RBA will cut rates next month.
GBPUSD - Manufacturing and industrial output showed falls during June, causing investors to bet second quarter gross domestic product could be revised down. Manufacturing fell by 0.5 percent, while production fell by 0.2 percent. The quarterly figures for both indices mark the biggest falls since the first quarter of 2005. Accordingly, the data further suggests that the U.K. economy is slowing, with economists expecting GDP to drop by 0.06 points in the next estimate.
EURUSD - Business activity declined to a 7-year low, with the Euro-Zone Purchasing Managers' Index dropping to 47.9 points. The level below 50 indicates contraction. Only Germany reported an increase in activity in July, but the increase was still less than forecasted. Retail sales also declined, showing a 0.6 percent drop. These signs of economic slow down suggest that the ECB will keep rates on hold when they meet on Thursday.
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Fundamental Headlines
AUDUSD - Australia's central bank employed dovish rhetoric by holding the benchmark interest rate at 7.25 percent. Governor Glenn Stevens said, 'With demand cooling…a less restrictive stance of monetary policy in the period ahead is increasing.' Indeed, after having advanced the overnight cash rate four times in the past twelve months, slowed economic growth has cooled inflation. In wake of this news, the Australian dollar fell to a three-month low, after traders speculated the RBA will cut rates next month.
GBPUSD - Manufacturing and industrial output showed falls during June, causing investors to bet second quarter gross domestic product could be revised down. Manufacturing fell by 0.5 percent, while production fell by 0.2 percent. The quarterly figures for both indices mark the biggest falls since the first quarter of 2005. Accordingly, the data further suggests that the U.K. economy is slowing, with economists expecting GDP to drop by 0.06 points in the next estimate.
EURUSD - Business activity declined to a 7-year low, with the Euro-Zone Purchasing Managers' Index dropping to 47.9 points. The level below 50 indicates contraction. Only Germany reported an increase in activity in July, but the increase was still less than forecasted. Retail sales also declined, showing a 0.6 percent drop. These signs of economic slow down suggest that the ECB will keep rates on hold when they meet on Thursday.
- BP Venture in Russia Hit as CFP Steps Down (link) - Wall Street Journal
- Price Increases Ramp Up, Sounding Inflation Alarm (link) - Wall Street Journal
- Oil Falls as Fears for Growth Intensify (link) - Financial Times
- Bernanke May Sound Tougher on Inflation to Avert Fed Rebellion (link) - Bloomberg
- Northern Rock Gets 3 Billion-Pound British Government Injection (link) - Bloomberg
Disclaimer
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
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Euro Falls Below 1.550 As Services And Consumption Contract
Daily Forex Fundamentals | Written by DailyFX | Aug 05 08 10:25 GMT |
Talking Points
* Japanese Yen: Volatile ahead of FOMC Decision
* Euro: Falls Below 1.550 As Services And Retail Sales Decline
* British Pound: Mixed Data Reverses Earlier Losses
* US Dollar: FOMC Decision on tap
Euro Falls Below 1.550 As Services And Consumption Contract
The Euro fell below the 1.550 handle for the first time since June 24, as short interest built ahead of the retail sales release. The EURUSD had been in a steady decline since the U.S. trading session which accelerated throughout the Asian trading session. The majority of the downward move came before a PMI service final reading confirmed that the sector contracted in July for a second month, with a reading of 48.3 - the lowest since June 2003. Meanwhile, retail sales in the region fell 0.6% in July and 3.1% on an annualized basis.
Consumer consumption and the service industry constitute the majority of GDP, and the weakness in these sectors reinforces the notion that the regions economy is softening. Rising food and gas prices have sapped consumer spending power, which led to a 4.4% decline in food, drinks and tobacco sales, with countries like Spain extending their streaks of negative sales to over five months. Meanwhile, the service sector remained ion contraction despite Germany maintaining expansion. However, Europe's largest economy weakened to 53.1 versus the 53.3 initial reported. The ECB is expected to keep their bench mark rate oh hold at 4.25% at Thursday's policy meeting, but if President Trichet hints at losing focus on price stability, Euro weakness will continue.
After trading lower throughout most of the overnight sessions reaching as low as 1.9530, the pound found support as the PMI service report printed better than expected at 47.4 against 46.6. However, the sector continues to remain in contraction, despite an improvement in outstanding business and easing input and output prices. The decline in prices will be welcomed news for the BOE which has been contending with inflation above their 3% threshold, while the economy inches towards a recession. Indeed, manufacturing fell another 0.2% in June after a 0.5% decline the month prior, and lower than the 0.3% rebound expected. Slowing growth should keep the BoE on hold at Thursday rate decision.
The FOMC policy meeting today will be the focus of all markets, as traders look for cues to whether the central bank is ready to embark on a tightening policy. The general consensus is that the easing cycle has ended for the MPC and that it is just a matter of time before they raise rates. Indeed, the fed fund futures are pricing in a 30% and 40% chance that the central bank will raise rates in September and October respectively. However, the softening labor market and continued weakness in the housing sector is expected to keep the Fed on hold today. Therefore, the Chairman's' comments pertaining to the downside risk of the economy will be the event risk of the day.
DailyFX
Disclaimer
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
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Talking Points
* Japanese Yen: Volatile ahead of FOMC Decision
* Euro: Falls Below 1.550 As Services And Retail Sales Decline
* British Pound: Mixed Data Reverses Earlier Losses
* US Dollar: FOMC Decision on tap
Euro Falls Below 1.550 As Services And Consumption Contract
The Euro fell below the 1.550 handle for the first time since June 24, as short interest built ahead of the retail sales release. The EURUSD had been in a steady decline since the U.S. trading session which accelerated throughout the Asian trading session. The majority of the downward move came before a PMI service final reading confirmed that the sector contracted in July for a second month, with a reading of 48.3 - the lowest since June 2003. Meanwhile, retail sales in the region fell 0.6% in July and 3.1% on an annualized basis.
Consumer consumption and the service industry constitute the majority of GDP, and the weakness in these sectors reinforces the notion that the regions economy is softening. Rising food and gas prices have sapped consumer spending power, which led to a 4.4% decline in food, drinks and tobacco sales, with countries like Spain extending their streaks of negative sales to over five months. Meanwhile, the service sector remained ion contraction despite Germany maintaining expansion. However, Europe's largest economy weakened to 53.1 versus the 53.3 initial reported. The ECB is expected to keep their bench mark rate oh hold at 4.25% at Thursday's policy meeting, but if President Trichet hints at losing focus on price stability, Euro weakness will continue.
After trading lower throughout most of the overnight sessions reaching as low as 1.9530, the pound found support as the PMI service report printed better than expected at 47.4 against 46.6. However, the sector continues to remain in contraction, despite an improvement in outstanding business and easing input and output prices. The decline in prices will be welcomed news for the BOE which has been contending with inflation above their 3% threshold, while the economy inches towards a recession. Indeed, manufacturing fell another 0.2% in June after a 0.5% decline the month prior, and lower than the 0.3% rebound expected. Slowing growth should keep the BoE on hold at Thursday rate decision.
The FOMC policy meeting today will be the focus of all markets, as traders look for cues to whether the central bank is ready to embark on a tightening policy. The general consensus is that the easing cycle has ended for the MPC and that it is just a matter of time before they raise rates. Indeed, the fed fund futures are pricing in a 30% and 40% chance that the central bank will raise rates in September and October respectively. However, the softening labor market and continued weakness in the housing sector is expected to keep the Fed on hold today. Therefore, the Chairman's' comments pertaining to the downside risk of the economy will be the event risk of the day.
DailyFX
Disclaimer
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
Read more...
Asia-Pacific Market Recap: Aussie Bonds Rally Following Dovish RBA Statement
Market Updates | Written by CEP News | Aug 05 08 11:08 GMT |
(CEP News) - After unexpectedly dovish commentary from the Reserve Bank of Australia on Tuesday morning, Asia-Pacific fixed income markets were mixed and equities closed lower with yields on Australian 10-year bonds down 6.5 bps to 6.03% and Japanese 10-year government bonds up 3.6 bps to 1.54%.
As expected, the Reserve Bank of Australia's board decided to leave the cash rate unchanged at 7.25%, however the statement accompanying the decision was dovish, with promises of rate cuts to come.
"Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation," read the statement from the RBA. "On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead."
The statement went on to read, "Nonetheless, with demand slowing, the Board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing."
The RBA last cut interest rates in December 2001, after which the Bank embarked on multiple hiking cycles in an effort to sway strong inflation pressures in the region.
Sydney's S&P ASX 200 closed down 67.30 points to 4820.4. The Japanese Nikkei closed down 18.52 points to 12914.66 and the Hang Seng closed down 565.17 points to 21949.75.
Yields on three-year Australian bonds were down 18.9 bps to 6.78 and the Australian 90-day March 09 contract was up 2.0 ticks to 93.20.
The Euroyen March 09 contract was up 0.5 ticks to 99.16.
The Australian dollar was down 1.16 cents to 0.9178 against the USD and down 0.64 cents to 0.9570 against the Canadian dollar.
Against the yen, the U.S. dollar was down 0.40 points to 107.87 and the Canadian dollar was down 1.00 point to 103.45.
The euro was down 0.80 cents to 1.5494 USD.
All data taken at 7:05 a.m. EDT.
Generated by CEP Newswires, edited by Stephen Huebl, shuebl@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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(CEP News) - After unexpectedly dovish commentary from the Reserve Bank of Australia on Tuesday morning, Asia-Pacific fixed income markets were mixed and equities closed lower with yields on Australian 10-year bonds down 6.5 bps to 6.03% and Japanese 10-year government bonds up 3.6 bps to 1.54%.
As expected, the Reserve Bank of Australia's board decided to leave the cash rate unchanged at 7.25%, however the statement accompanying the decision was dovish, with promises of rate cuts to come.
"Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation," read the statement from the RBA. "On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead."
The statement went on to read, "Nonetheless, with demand slowing, the Board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing."
The RBA last cut interest rates in December 2001, after which the Bank embarked on multiple hiking cycles in an effort to sway strong inflation pressures in the region.
Sydney's S&P ASX 200 closed down 67.30 points to 4820.4. The Japanese Nikkei closed down 18.52 points to 12914.66 and the Hang Seng closed down 565.17 points to 21949.75.
Yields on three-year Australian bonds were down 18.9 bps to 6.78 and the Australian 90-day March 09 contract was up 2.0 ticks to 93.20.
The Euroyen March 09 contract was up 0.5 ticks to 99.16.
The Australian dollar was down 1.16 cents to 0.9178 against the USD and down 0.64 cents to 0.9570 against the Canadian dollar.
Against the yen, the U.S. dollar was down 0.40 points to 107.87 and the Canadian dollar was down 1.00 point to 103.45.
The euro was down 0.80 cents to 1.5494 USD.
All data taken at 7:05 a.m. EDT.
Generated by CEP Newswires, edited by Stephen Huebl, shuebl@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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CanWest, Saxon Financial, Nortel, Teck: Canadian Equity Preview
By John Kipphoff
Aug. 5 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from the close on Aug. 1 in Toronto.
The Standard & Poor's/TSX Composite Index fell 0.7 percent to 13,592.91. Canadian financial markets were closed on Aug. 4 for the province of Ontario's Civic Day holiday.
CanWest Global Communications Inc. (CGS CN): Canada's biggest media company is considering a plan to go private, with the controlling Asper family buying the shares with the backing of Fairfax Financial Holdings Ltd. (FFH CN), the Globe and Mail reported Aug. 2.
CanWest spokesman John Douglas told Bloomberg News that CanWest doesn't comment on ``pure speculation.'' The shares rose 0.5 percent to C$2.
HudBay Minerals Inc. (HBM CN): The zinc mining company was raised to ``buy'' from ``hold'' by Canaccord Adams analyst Gary Lampard in Toronto. The shares rose 1 percent to C$9.99.
Mullen Group Income Fund (MTL-U CN) was raised to ``outperform'' from ``market perform'' by analyst Jason Granger at BMO Capital Markets in Toronto. The shares rose 5.1 percent to C$20.50.
Nortel Networks Corp. (NT CN): North America's biggest maker of telephone equipment was cut to ``underperform'' from ``neutral'' by Merrill Lynch & Co. analysts led by Vivek Arya in New York, on concern that the company's prospects in 2009 don't justify its share price. The stock fell 15 percent to C$6.66.
Saxon Financial Inc. (SFI CN): The mutual fund management company said that it agreed to be bought by a unit of IGM Financial Inc. (IGM CN) for C$21 ($20.11) a share, or about C$287 million. Saxon, with assets under management of about C$13 billion, will become a part of Mackenzie Financial Corp. once the take-over bid is completed, IGM said in a separate statement carried by Canada Newswire.
Saxon Financial shares rose 0.8 percent to C$12.70. IGM added 2 percent to C$43.60.
Teck Cominco Ltd. (TCK/B CN): Cia. Minera Antamina SA, the operator of the world's largest combined copper and zinc mine, said a study undertaken as part of the mine's expansion showed the site may hold 28 percent more recoverable metal than previously estimated. Teck Cominco co-owns Antamina with BHP Billiton Ltd. and Xstrata Plc. Teck fell 4.3 percent to C$45 on Aug. 1. The company's U.S. shares fell 8.6 percent on Aug. 4 in New York Stock Exchange trading as the price of copper tumbled.
TransCanada Corp. (TRP CN): Canada's largest pipeline company on Aug. 1 won state approval and a $500 million subsidy to proceed with plans to build an estimated $27 billion pipeline that will carry natural gas from Alaska's Arctic region to U.S. markets. The shares fell 0.5 percent to C$39.49.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Aug. 5 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from the close on Aug. 1 in Toronto.
The Standard & Poor's/TSX Composite Index fell 0.7 percent to 13,592.91. Canadian financial markets were closed on Aug. 4 for the province of Ontario's Civic Day holiday.
CanWest Global Communications Inc. (CGS CN): Canada's biggest media company is considering a plan to go private, with the controlling Asper family buying the shares with the backing of Fairfax Financial Holdings Ltd. (FFH CN), the Globe and Mail reported Aug. 2.
CanWest spokesman John Douglas told Bloomberg News that CanWest doesn't comment on ``pure speculation.'' The shares rose 0.5 percent to C$2.
HudBay Minerals Inc. (HBM CN): The zinc mining company was raised to ``buy'' from ``hold'' by Canaccord Adams analyst Gary Lampard in Toronto. The shares rose 1 percent to C$9.99.
Mullen Group Income Fund (MTL-U CN) was raised to ``outperform'' from ``market perform'' by analyst Jason Granger at BMO Capital Markets in Toronto. The shares rose 5.1 percent to C$20.50.
Nortel Networks Corp. (NT CN): North America's biggest maker of telephone equipment was cut to ``underperform'' from ``neutral'' by Merrill Lynch & Co. analysts led by Vivek Arya in New York, on concern that the company's prospects in 2009 don't justify its share price. The stock fell 15 percent to C$6.66.
Saxon Financial Inc. (SFI CN): The mutual fund management company said that it agreed to be bought by a unit of IGM Financial Inc. (IGM CN) for C$21 ($20.11) a share, or about C$287 million. Saxon, with assets under management of about C$13 billion, will become a part of Mackenzie Financial Corp. once the take-over bid is completed, IGM said in a separate statement carried by Canada Newswire.
Saxon Financial shares rose 0.8 percent to C$12.70. IGM added 2 percent to C$43.60.
Teck Cominco Ltd. (TCK/B CN): Cia. Minera Antamina SA, the operator of the world's largest combined copper and zinc mine, said a study undertaken as part of the mine's expansion showed the site may hold 28 percent more recoverable metal than previously estimated. Teck Cominco co-owns Antamina with BHP Billiton Ltd. and Xstrata Plc. Teck fell 4.3 percent to C$45 on Aug. 1. The company's U.S. shares fell 8.6 percent on Aug. 4 in New York Stock Exchange trading as the price of copper tumbled.
TransCanada Corp. (TRP CN): Canada's largest pipeline company on Aug. 1 won state approval and a $500 million subsidy to proceed with plans to build an estimated $27 billion pipeline that will carry natural gas from Alaska's Arctic region to U.S. markets. The shares fell 0.5 percent to C$39.49.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Overnight News Recap: RBA Goes Dovish; Downside UK Ind'l Production, EU Retail Sales
News Recap | Written by CEP News | Aug 05 08 10:38 GMT |
(CEP News) - An unexpectedly dovish statement from the Reserve Bank of Australia was the only major macroeconomic news of Asia's overnight with UK markets being hit by an unexpectedly sharper contraction in industrial production tempered by a rebound in the services PMI and euro zone retail sales coming in on the downside.
As expected, the Reserve Bank of Australia's board decided to leave the cash rate unchanged at 7.25%, however the statement accompanying the decision was dovish, with promises of rate cuts to come.
"Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation. On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead," read the statement from the RBA. "Inflation is likely to remain relatively high in the short term, with the CPI affected by high global oil prices. Looking further ahead, inflation in both CPI and underlying terms is likely to decline over time, given the outlook for demand, provided wages growth remains moderate."
The statement went on to read, "with demand slowing, the Board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing."
Markets had begun pricing in the possibility of a dovish RBA statement ahead of the decision, with an implied market forecast suggesting a 30% chance of a cut at this meeting compared to a 6% chance last week.
On Tuesday, Markit Economics reported that the UK purchasing managers' index for services rebounded slightly and rose to 47.7 in July. Economists had expected a further decline in the index to 46.6 after the PMI slipped to 47.1 in the previous month. However, despite the unexpected increase, the research firm stressed that the index was still below 50, indicating continued contraction of activity in the UK.
According to the Office for National Statistics (ONS), the UK industrial production level fell 1.6% year-over-year in June, deepening the 1.7% decline seen in the previous month. Economists had expected a fall of 1.2% while May's reading was revised down from the -1.6% reported earlier.
Month-over-month, industrial output in the UK fell 0.2% following the 0.9% decline seen in May, revised down from -0.8%. Economists had been more optimistic and had called for a 0.1% increase in production for the month.
Manufacturing output was the only sub-index to see a decline in production on a monthly basis, falling 0.5% compared to the previous month. Conversely, electricity, gas and water supply production led the way in monthly gains, rising 2.2% month-over-month.
According to the HM Treasury in London, the UK government's current level of foreign reserves fell by US$60 million to US$26.28 billion in July. In the month, the government's gross reserves and liabilities had both decreased to $56.2 billion and $29.9 billion respectively.
In an interview with BBC Radio 4 on Tuesday, UK Chancellor of the Exchequer Alistair Darling suggested that a windfall energy tax was not especially practical for the UK and said that he saw "problems" with such an idea. Darling added that he would be aiming to pressure energy companies to help struggling customers, rather than having those firms taxed.
Despite expectations of a 1.3% decline, euro zone retail sales contracted by a full 3.1% in June year-over-year, adding to the 0.1% fall seen in the previous month. May's figure was revised down from the +0.2% initially reported. On a monthly basis, retail sales in the monetary union slipped 0.6% as expected following May's 0.5% gain, revised down from an initial reading of +1.2%.
Following the releases of the individual country purchasing managers indexes, Markit Economics released its services PMI for the euro zone and announced that the index had fallen to 48.3, in line with expectations, from June's 49.1 level. July's reading marks the lowest services PMI level seen since June 2003. The research firm also reported that the euro zone composite PMI declined to 47.8 as expected from June's 49.3 level.
Breaking down the country data, Germany's services PMI had risen to 53.1 for the month. However, economists had expected a stronger gain to 53.3 after the PMI had slipped to 52.1 in June.
Both France and Italy had seen record falls in their respective PMIs. France's services PMI fell to a record low 47.5 in July from 50.1. Meanwhile, Italy's services index had dropped all the way to 45.6 - its lowest in 10 years, down from both the 47.3 reading expected and the 48.5 level seen in June.
Earlier in the day, Markit Economics reported that the Irish services PMI had fallen to 41.4 in July from June's 41.9 level, while the services PMI for Spain had tumbled unexpectedly to 37.1 in July. Economists had expected a further decline to 36.5 after the index slipped to 36.7 in June.
On Tuesday, the Statistical Office of the Slovak Republic reported that retail sales grew 3.1% year-over-year in June, down from both the 7.3% gain expected and the 6.7% increase observed in the previous month.
According to AiG, Australia's performance of services index declined to a reading of 42.8 in July compared to 45.4 in June.
In the aftermath of the day's events, the Canadian dollar was down three tenths of a cent, at 0.961 against the USD, after trading as low at 0.959. The euro fell to as low as 1.5487 USD, currently trading down three-quarters of a cent at 1.5502. WTI Crude oil was down $1.55 at $119.03 after trading as low as $117.98.
At around 6 a.m. EDT, China's Sichuan province was once again hit by a strong earthquake, this time of magnitude 6.0. Details have not yet been released.
AU RBA Cash Target 7.25% vs. Exp: 7.25% Prior: 7.25%
IT PMI Services July +45.6 vs. Exp: +47.3 Prior: +48.5
FR PMI Services July Final +47.5 vs. Exp: +47 Prior: +47
DE PMI Services July Final +53.1 vs. Exp: +53.3 Prior: +53.3
EU PMI Services July Final +48.3 vs. Exp: +48.3 Prior: +48.3
EU PMI Composite July Final +47.8 vs. Exp: +47.8 Prior: +47.8
GB Industrial Production (M/M) June -0.2% vs. Exp: +0.1% Revised: -0.9% Prior: -0.8%
GB Industrial Production (Y/Y) June -1.6% vs. Exp: -1.2% Revised: -1.7% Prior: -1.6%
GB Manufacturing Production (M/M) June -0.5% vs. Exp: +0.1% Prior: -0.5%
GB Manufacturing Production (Y/Y) June -1.3% vs. Exp: -0.6% Revised: -0.9% Prior: -0.8%
GB Official Reserves July -$60M vs. Prior: +$462M
GB PMI Services July +47.4 vs. Exp: +46.6 Prior: +47.1
EU Euro-Zone Retail Sales (M/M) July -0.6% vs. Exp: -0.6% Revised: +0.5%
Prior: +1.2%
EU Euro-Zone Retail Sales (Y/Y) June -3.1% vs. Exp: -1.3% Revised: -0.1% Prior: +0.2%
By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, shuebl@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
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(CEP News) - An unexpectedly dovish statement from the Reserve Bank of Australia was the only major macroeconomic news of Asia's overnight with UK markets being hit by an unexpectedly sharper contraction in industrial production tempered by a rebound in the services PMI and euro zone retail sales coming in on the downside.
As expected, the Reserve Bank of Australia's board decided to leave the cash rate unchanged at 7.25%, however the statement accompanying the decision was dovish, with promises of rate cuts to come.
"Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation. On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead," read the statement from the RBA. "Inflation is likely to remain relatively high in the short term, with the CPI affected by high global oil prices. Looking further ahead, inflation in both CPI and underlying terms is likely to decline over time, given the outlook for demand, provided wages growth remains moderate."
The statement went on to read, "with demand slowing, the Board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing."
Markets had begun pricing in the possibility of a dovish RBA statement ahead of the decision, with an implied market forecast suggesting a 30% chance of a cut at this meeting compared to a 6% chance last week.
On Tuesday, Markit Economics reported that the UK purchasing managers' index for services rebounded slightly and rose to 47.7 in July. Economists had expected a further decline in the index to 46.6 after the PMI slipped to 47.1 in the previous month. However, despite the unexpected increase, the research firm stressed that the index was still below 50, indicating continued contraction of activity in the UK.
According to the Office for National Statistics (ONS), the UK industrial production level fell 1.6% year-over-year in June, deepening the 1.7% decline seen in the previous month. Economists had expected a fall of 1.2% while May's reading was revised down from the -1.6% reported earlier.
Month-over-month, industrial output in the UK fell 0.2% following the 0.9% decline seen in May, revised down from -0.8%. Economists had been more optimistic and had called for a 0.1% increase in production for the month.
Manufacturing output was the only sub-index to see a decline in production on a monthly basis, falling 0.5% compared to the previous month. Conversely, electricity, gas and water supply production led the way in monthly gains, rising 2.2% month-over-month.
According to the HM Treasury in London, the UK government's current level of foreign reserves fell by US$60 million to US$26.28 billion in July. In the month, the government's gross reserves and liabilities had both decreased to $56.2 billion and $29.9 billion respectively.
In an interview with BBC Radio 4 on Tuesday, UK Chancellor of the Exchequer Alistair Darling suggested that a windfall energy tax was not especially practical for the UK and said that he saw "problems" with such an idea. Darling added that he would be aiming to pressure energy companies to help struggling customers, rather than having those firms taxed.
Despite expectations of a 1.3% decline, euro zone retail sales contracted by a full 3.1% in June year-over-year, adding to the 0.1% fall seen in the previous month. May's figure was revised down from the +0.2% initially reported. On a monthly basis, retail sales in the monetary union slipped 0.6% as expected following May's 0.5% gain, revised down from an initial reading of +1.2%.
Following the releases of the individual country purchasing managers indexes, Markit Economics released its services PMI for the euro zone and announced that the index had fallen to 48.3, in line with expectations, from June's 49.1 level. July's reading marks the lowest services PMI level seen since June 2003. The research firm also reported that the euro zone composite PMI declined to 47.8 as expected from June's 49.3 level.
Breaking down the country data, Germany's services PMI had risen to 53.1 for the month. However, economists had expected a stronger gain to 53.3 after the PMI had slipped to 52.1 in June.
Both France and Italy had seen record falls in their respective PMIs. France's services PMI fell to a record low 47.5 in July from 50.1. Meanwhile, Italy's services index had dropped all the way to 45.6 - its lowest in 10 years, down from both the 47.3 reading expected and the 48.5 level seen in June.
Earlier in the day, Markit Economics reported that the Irish services PMI had fallen to 41.4 in July from June's 41.9 level, while the services PMI for Spain had tumbled unexpectedly to 37.1 in July. Economists had expected a further decline to 36.5 after the index slipped to 36.7 in June.
On Tuesday, the Statistical Office of the Slovak Republic reported that retail sales grew 3.1% year-over-year in June, down from both the 7.3% gain expected and the 6.7% increase observed in the previous month.
According to AiG, Australia's performance of services index declined to a reading of 42.8 in July compared to 45.4 in June.
In the aftermath of the day's events, the Canadian dollar was down three tenths of a cent, at 0.961 against the USD, after trading as low at 0.959. The euro fell to as low as 1.5487 USD, currently trading down three-quarters of a cent at 1.5502. WTI Crude oil was down $1.55 at $119.03 after trading as low as $117.98.
At around 6 a.m. EDT, China's Sichuan province was once again hit by a strong earthquake, this time of magnitude 6.0. Details have not yet been released.
AU RBA Cash Target 7.25% vs. Exp: 7.25% Prior: 7.25%
IT PMI Services July +45.6 vs. Exp: +47.3 Prior: +48.5
FR PMI Services July Final +47.5 vs. Exp: +47 Prior: +47
DE PMI Services July Final +53.1 vs. Exp: +53.3 Prior: +53.3
EU PMI Services July Final +48.3 vs. Exp: +48.3 Prior: +48.3
EU PMI Composite July Final +47.8 vs. Exp: +47.8 Prior: +47.8
GB Industrial Production (M/M) June -0.2% vs. Exp: +0.1% Revised: -0.9% Prior: -0.8%
GB Industrial Production (Y/Y) June -1.6% vs. Exp: -1.2% Revised: -1.7% Prior: -1.6%
GB Manufacturing Production (M/M) June -0.5% vs. Exp: +0.1% Prior: -0.5%
GB Manufacturing Production (Y/Y) June -1.3% vs. Exp: -0.6% Revised: -0.9% Prior: -0.8%
GB Official Reserves July -$60M vs. Prior: +$462M
GB PMI Services July +47.4 vs. Exp: +46.6 Prior: +47.1
EU Euro-Zone Retail Sales (M/M) July -0.6% vs. Exp: -0.6% Revised: +0.5%
Prior: +1.2%
EU Euro-Zone Retail Sales (Y/Y) June -3.1% vs. Exp: -1.3% Revised: -0.1% Prior: +0.2%
By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, shuebl@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
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Dollar Strength Across The board
Daily Forex Fundamentals | Written by The LFB-Forex.com | Aug 05 08 10:14 GMT |
Overall, the dollar has shown strength during the overnight sessions, as the market expects the FOMC statement to support the stronger dollar and the Fed to switch their view to inflation fighting, something opposite to what the other central banks are doing now. If the Fed follows through with what is expected by the market, more dollar strength will be seen in the following weeks.
The Euro traded lower during the overnight session and the outlook remains to the downside. The pair made a triple bottom on the 4h chart at the 1.5500 area, and if the pair manages to break lower it will trigger a number of short orders. The Euro-zone is starting to miss economic expectations with regularity and this is now starting to be reflected in the market's valuation.
The Pound broke the lower support of the 4h channel yesterday and since then the pair has tumbled an additional 100 pips. As was the case with the RBA, the market expects the Bank of England to switch it's view from inflation to assuring growth, at a time when most of the UK indicators point to a hard lending environment for the economy in the coming quarters
The Aussie moved lower after the RBA changed its objective from fighting inflation to assuring growth. The market saw this coming and initiated two weeks of continued Australian dollar selling. During the overnight sessions, the pair lost 70 pips and found support at the 200-day moving average. The relative strength index is very close to the oversold line.
The Cad managed to break the range it has been trading in for almost half a year. During the overnight session, the pair gained 60 pips, something that happens very rarely. It is very likely the uptrend will continue at a strong pace during the U.S. session as the market expects the FOMC decision.
The Swissy tried to break the high of the previous session and at the same time the 1.0500 resistance area, but the lack of momentum stopped the pair from doing so. The swissy is a very good tool to gauge the dollar's strength, so if the pair does manage to break to the upside, it is very likely the whole market will follow.
The Yen had a quiet Asian session, but the London open sent the pair 60 pips lower almost immediately. The yen is usually correlated with global equity markets, but it seems the yen has lost the correlation lately. Therefore, the yen pulled some very strange moves in the last period.
European Session Wrap Equities in Europe and US Futures higher
Current Futures: Dow +78.00, S&P +9.40, NASDAQ +17.00
European Trade: European shares are trading in positive territory, barely, as important companies are expected to release their earnings today and top analysts' estimates and oil continues its downtrend, reaching a 3 month low. Societe Generale, one of Europe's largest banks reported a 63% decline in profit to 644 million euros after write-downs shed an important part of profits. Air France-KLM Group beat analyst expectations, despite the higher oil prices during the last two quarters. It seems the market valued the two better than expected reports and despite the negative global equities from the past 24 hours, the major European indexes may have the strength to hold in positive territory.
During the Asian session, the Nikkei closed losing 18.52 points (0.14%) to 12,914.66. The Australian S&P/Asx closed the session reaching a two and a half year low, shedding 67.30 points (1.38%) to 4,820.40. In Europe, the Dax has advanced 9.26 points (0.15%) to 6,359.07 while the U.K.'s FTSE gained 6.50 points (0.12%) to 5,326.70
Gold fell as a slump in crude oil to a three-month low added to signs of weakening global economic growth and speculation demand for precious metals used in jewelry will wane. Bullion for immediate delivery fell $13.10 (1.44%) to $894.80
Crude oil fell to $118 a barrel on speculation Tropical Storm Edouard won't damage U.S. Gulf facilities and as concern economic growth will slow prompted investors to sell commodities. Crude oil for September delivery fell $2.09 (1.72%) to $119.32
Previous Asian trade: Asian shares are trading mixed as inflation fears and global slowdown make investors re-price market assets. Inflation is eroding consumers' buying power, while for companies; it is increasing operating costs. In time, inflation will slowly erode the balance sheets of companies, reducing their market value as well as reducing dividends. Commodities have reached multi-month lows, and this lowers commodities stocks. Oil reached a 3-month low, and the index tracking traded metals had a similar decline.
The MSCI Asia-Pacific Index has been trading lower for 3 days in a row. The Nikkei 225 is struggling above the neutral line, gaining 47.45 points (0.37%) to 12,980.63. The S&P/Asx reached a two and a half year low as commodity prices tumbled - Australia's biggest export product. The index tracking the Australian stock market declined 100.00 points (2.05%) to 4,787.70.
The LFB-Forex.com
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Overall, the dollar has shown strength during the overnight sessions, as the market expects the FOMC statement to support the stronger dollar and the Fed to switch their view to inflation fighting, something opposite to what the other central banks are doing now. If the Fed follows through with what is expected by the market, more dollar strength will be seen in the following weeks.
The Euro traded lower during the overnight session and the outlook remains to the downside. The pair made a triple bottom on the 4h chart at the 1.5500 area, and if the pair manages to break lower it will trigger a number of short orders. The Euro-zone is starting to miss economic expectations with regularity and this is now starting to be reflected in the market's valuation.
The Pound broke the lower support of the 4h channel yesterday and since then the pair has tumbled an additional 100 pips. As was the case with the RBA, the market expects the Bank of England to switch it's view from inflation to assuring growth, at a time when most of the UK indicators point to a hard lending environment for the economy in the coming quarters
The Aussie moved lower after the RBA changed its objective from fighting inflation to assuring growth. The market saw this coming and initiated two weeks of continued Australian dollar selling. During the overnight sessions, the pair lost 70 pips and found support at the 200-day moving average. The relative strength index is very close to the oversold line.
The Cad managed to break the range it has been trading in for almost half a year. During the overnight session, the pair gained 60 pips, something that happens very rarely. It is very likely the uptrend will continue at a strong pace during the U.S. session as the market expects the FOMC decision.
The Swissy tried to break the high of the previous session and at the same time the 1.0500 resistance area, but the lack of momentum stopped the pair from doing so. The swissy is a very good tool to gauge the dollar's strength, so if the pair does manage to break to the upside, it is very likely the whole market will follow.
The Yen had a quiet Asian session, but the London open sent the pair 60 pips lower almost immediately. The yen is usually correlated with global equity markets, but it seems the yen has lost the correlation lately. Therefore, the yen pulled some very strange moves in the last period.
European Session Wrap Equities in Europe and US Futures higher
Current Futures: Dow +78.00, S&P +9.40, NASDAQ +17.00
European Trade: European shares are trading in positive territory, barely, as important companies are expected to release their earnings today and top analysts' estimates and oil continues its downtrend, reaching a 3 month low. Societe Generale, one of Europe's largest banks reported a 63% decline in profit to 644 million euros after write-downs shed an important part of profits. Air France-KLM Group beat analyst expectations, despite the higher oil prices during the last two quarters. It seems the market valued the two better than expected reports and despite the negative global equities from the past 24 hours, the major European indexes may have the strength to hold in positive territory.
During the Asian session, the Nikkei closed losing 18.52 points (0.14%) to 12,914.66. The Australian S&P/Asx closed the session reaching a two and a half year low, shedding 67.30 points (1.38%) to 4,820.40. In Europe, the Dax has advanced 9.26 points (0.15%) to 6,359.07 while the U.K.'s FTSE gained 6.50 points (0.12%) to 5,326.70
Gold fell as a slump in crude oil to a three-month low added to signs of weakening global economic growth and speculation demand for precious metals used in jewelry will wane. Bullion for immediate delivery fell $13.10 (1.44%) to $894.80
Crude oil fell to $118 a barrel on speculation Tropical Storm Edouard won't damage U.S. Gulf facilities and as concern economic growth will slow prompted investors to sell commodities. Crude oil for September delivery fell $2.09 (1.72%) to $119.32
Previous Asian trade: Asian shares are trading mixed as inflation fears and global slowdown make investors re-price market assets. Inflation is eroding consumers' buying power, while for companies; it is increasing operating costs. In time, inflation will slowly erode the balance sheets of companies, reducing their market value as well as reducing dividends. Commodities have reached multi-month lows, and this lowers commodities stocks. Oil reached a 3-month low, and the index tracking traded metals had a similar decline.
The MSCI Asia-Pacific Index has been trading lower for 3 days in a row. The Nikkei 225 is struggling above the neutral line, gaining 47.45 points (0.37%) to 12,980.63. The S&P/Asx reached a two and a half year low as commodity prices tumbled - Australia's biggest export product. The index tracking the Australian stock market declined 100.00 points (2.05%) to 4,787.70.
The LFB-Forex.com
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Technical Entry For GBP/USD
Daily Forex Technicals | Written by The LFB-Forex.com | Aug 05 08 11:10 GMT |
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Technical Entry For GBP/USD
The break of trendline support on the daily chart has worked out well so far, but if you missed it there could be another entry coming up very soon.
If we do see two votes for an increase at Tuesday's FOMC meeting, something that's well within the realm of possibility since two banks voted to increase the discount rate at the June meeting, that's likely to be very supportive of the dollar. Here's a technical entry on the daily GBP/USD chart to use if that does occur.
Two lines of trend support have been drawn on the chart. The first is from January 22 to February 20. The second is from May 14 to June 13.These lines are converging now into what likely will be a strong area of support where it may be possible to see a technical bounce to the upside. Although there are times when we might take a short on a retrace to the upside (which for me represents an improvement in price) I think in this case the best thing to do is to either trade a break or wait for a daily close at some point below. Seeing that will convince me that the market truly believes in a rate increase.
Even with two votes for an increase there are going to be many who will not believe the Fed is signaling an increase, and with good reason. Credit and housing markets still have enormous problems, the Fed just extended the special lending facilities through January 30 2009 and mortgage rates themselves have actually gone up (in part because the market is anticipating a rate increase for later in the year), a deadly situation since demand is so constrained. Yet, as we previously mentioned, the Fed needs to perform that delicate balancing act and since being vigilant on inflation (and supporting the dollar in order to bring oil down) is a component of this, they do need to show the possibility exists for a rate increase.
We'll be parsing the statement very closely, so check back afterwards.
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Forex Brokers Forex Technical Analysis
Daily Forex Technicals | Written by DeltaStock Inc. | Aug 05 08 11:09 GMT |
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EUR/USD
Current level-1.5509
EUR/USD is in an uptrend from recent bottom at 1.5301, that was the final of the prolonged consolidation since 1.5909 (17 March 2008). Technical indicators are slowly rising and trading is situated between the 50- and 200-Day SMA, currently projected at 1.5677 and 1.5181.
With yesterday's high at 1.5629 obviously the consolidation since 1.5519 (30 July) was completed and now the downtrend has been renewed towards 1.5461. Crucial on the upside is 1.5629. Market participants will expect Fed's decision and FOMC's statement later today at 14:15 NYT.
Today's strategy: Stand aside.
| Resistance | Support | ||
| intraday | intraweek | intraday | intraweek |
| 1.5631 | 1.60-sentiment | 1.5461 | 1.5461 |
| 1.5701 | 1.6216 | --- | 1.5301 |
USD/JPY
Current level - 107.72
The pair has finalized its corrective uptrend from 95.75 mid-term bottom with the recent top at 108.59. Trading is situated below the 50- and 200-day SMA, currently projected at 105.81 and 107.25.
Obviously 108.44 is a tough resistance level and we rather prefer the idea, that the pair is entering a larger corrective phase below 108.44 and above 106.06. Yesterday's spike-high has reached precisely our target at 108.37, thus setting a local top at that level, finalizing the rise from 106.59 (25 July). Now a minor downtrend is on the run, targeting 106.61 with an intraday resistance, projected at 108.14.
Today's strategy: Stand aside.
| Resistance | Support | ||
| intraday | intraweek | intraday | intraweek |
| 108.14 | 108.66 | 107.28 | 106.06 |
| 108.66 | 109.51 | 106.61 | 100.00 |
GBP/USD
Current level- 1.9546
The pair is in a broad consolidation above 1.9338 and below 2.0397. Technical indicators are flat on the higher time-frames and trading is situated below the 50- and 200-day SMA, currently projected at 1.9781 and 1.9913.
Last week the pair managed to break below the dynamic support at 1.9817, reaching low today at 1.9683. Only above 1.9634 it will be clear. that a local bottom is in place and the slide from 1.9929 is already over. Outlook remains bearish, with crucial resistance at 1.9719 and target at 1.9443.
Today's strategy : Stand aside.
| Resistance | Support | ||
| intraday | intraweek | intraday | intraweek |
| 1.9861 | 2.0153 | 1.9534 | 1.9443 |
| 1.9971 | 2.0397 | 1.9443 | 1.9192 |
DeltaStock Inc. - Online Forex & Securities Broker
www.deltastock.com
RISK DISCLAIMER: These analyses are for information purposes only. They DO NOT post a BUY or SELL recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Delta Stock’s Analyst Dept. also takes into consideration a number of fundamental and macroeconomic factors, which we believe impact the price moves of the observed instruments. Delta Stock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Delta Stock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to change without notice.
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Policy Switch Undermines AUD
Daily Forex Fundamentals | Written by Investica | Aug 05 08 10:46 GMT |
There is scope for a limited technical Australian dollar recovery, but rallies will quickly attract selling pressure.
The Australian dollar regained some ground in European trading on Monday, but failed to regain the 0.9350 level against the US dollar and dipped back towards 0.93 in New York trading.
The Australian data remained weak with the services PMI index weakening further to 42.8 in July from 45.6 the previous month, reinforcing fears over the economic trends after a strong of weaker releases surrounding the housing sector.
As expected, the Reserve Bank left interest rates on hold at 7.25% following the latest policy meeting, but the bank statement suggested that it would be looking to cut rates within the next few months.
The switch to an easing bias will reinforce negative Australian dollar sentiment in the short term and selling pressure will be fuelled by further losses in commodity prices. Gold prices dipped further below the US$900 per ounce level on Tuesday with industrials unsettled by fears over weaker demand and there was an Australian dollar dip to 0.92 in Europe
Investica
http://www.investica.co.uk
Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.
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There is scope for a limited technical Australian dollar recovery, but rallies will quickly attract selling pressure.
The Australian dollar regained some ground in European trading on Monday, but failed to regain the 0.9350 level against the US dollar and dipped back towards 0.93 in New York trading.
The Australian data remained weak with the services PMI index weakening further to 42.8 in July from 45.6 the previous month, reinforcing fears over the economic trends after a strong of weaker releases surrounding the housing sector.
As expected, the Reserve Bank left interest rates on hold at 7.25% following the latest policy meeting, but the bank statement suggested that it would be looking to cut rates within the next few months.
The switch to an easing bias will reinforce negative Australian dollar sentiment in the short term and selling pressure will be fuelled by further losses in commodity prices. Gold prices dipped further below the US$900 per ounce level on Tuesday with industrials unsettled by fears over weaker demand and there was an Australian dollar dip to 0.92 in Europe
Investica
http://www.investica.co.uk
Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.
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Forex Depth Analysis: AUD/USD
Daily Forex Technicals | Written by Finotec Group | Aug 05 08 11:26 GMT |
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The Greenback Smashes the Aussie on Rates
The continent down under is showing signs of an economic slowdown causing the central bank’s attention to shift toward growth. In the last seven years the only way was up for the Australian interest rate and last night for the Central bank indicated a possible rate cut in the near future for the first time in seven years. The slowdown in the economy is lowering the domestic demand and decreasing the inflationary pressures. On the other hand winds of change are starting to blow from the world biggest economy inferring a possible monetary shift toward the fight against inflation. The US dollar gained dramatically after the Australian rate decision and is holding the momentum ahead of the fed announcement later today.
Technical Point of View:
- Sell on a failure to break the resistance level at 0.92, SL above the 0.9350 resistance level, first target 0.9035 (38.2% Fibonacci), second target 0.8770.
- Buy on a failure to break the 0.9035 support level, SL below 0.8950, first target 0.9110
To strengthen our analysis we will take a look at several oscillators:
The MACD is after a bearish cross when the lines crossed the zero line downward and we are seeing increased pressure on the selling side by the histogram. The momentum and the RSI turned sharp down; the RSI is entering O/S levels. The Bollinger bands are widening indicating there is still room to go.
We can see a clear break of the bearish trend as well
* The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.
Finotec Group Inc.
http://www.finotec.com/
Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.
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Technical Analysis Daily: USD/JPY
Daily Forex Technicals | Written by iFOREX.bg | Aug 05 08 11:17 GMT |
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USD/JPY 107.77
USD/JPY Open 107.65 High 108.29 Low 107.50 Close 107.46
The US Dollar climbed insignificantly yesterday against the Japanese Yen from Monday's bottom 107.50 to today's top 108.29, which are the first support and resistance levels respectively for the currency couple today. If the positive trend continues, next resistance further up is expected at 108.90, the break of which would open potential rise towards 109.50. In downward direction next support further down is expected at 106.75, followed by 106.00.
Technical resistance levels: 108.30 108.90 109.50
Technical support levels: 107.50 106.75 106.00
Trading range: 107.65 - 108.30
Trend: Upward
Buy at 107.77 SL 107.47 TP 108.17
iFOREX.bg Forecasts and Trading Signals
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Foreign Exchange Market Commentary
Daily Forex Technicals | Written by HY Markets | Aug 05 08 10:34 GMT |
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Foreign Exchange Market Commentary
EUR/USD closed higher on Monday as it consolidated some of last week's decline. Light profit taking tempered early gains and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish hinting that sideways to lower prices are possible near-term. If it extends last week's decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term top has been posted
USD/JPY closed higher on Monday as it extends the rally off July's low. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish hinting that sideways to higher prices are possible near-term. If it extends the rally, the reaction high crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the Dollar.
GBP/USD closed sharply lower on Monday extending last week's decline. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish hinting that sideways to lower prices are possible near-term. If it extends this week's decline, the reaction low crossing is the next downside. Closes above the 20-day moving average crossing would temper the near-term bearish outlook in the market.
USD/CHF closed slightly lower on Monday and below June's low crossing as it extended the decline off July's high. Stochastics and the RSI are oversold but remain neutral to bearish hinting that sideways to lower prices are possible near-term. The low-range close sets the stage for a steady to lower opening on Tuesday. If it extends this week's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted
HY Markets
http://www.hymarkets.com
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Euro-Area Service PMI
Daily Forex Fundamentals | Written by The LFB-Forex.com | Aug 05 08 08:16 GMT |
Actual 48.3, Expected 48.3, Previous 48.3
Release Explanation: Measures the activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, delivery data.The PMI is split into reads on Manufacturing, Service, and Construction industries.
A read over 50 denotes growth. As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports.
The LFB-Forex.com
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Actual 48.3, Expected 48.3, Previous 48.3
Release Explanation: Measures the activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, delivery data.The PMI is split into reads on Manufacturing, Service, and Construction industries.
A read over 50 denotes growth. As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports.
The LFB-Forex.com
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RBA Holds But Signals Cuts
Daily Forex Fundamentals | Written by AC-Markets | Aug 05 08 07:37 GMT |
Market Brief
The Usd was broadly stronger in Asian session as trader position themselves for today's FOMC rate announcement. EurUsd slid from 1.5590 to 1.5524 while UsdJpy took a weaker tone in the Asian afternoon falling to 108.05 from 108.32. AudUsd & NzdUsd continued to be sold off on the back of the RBA comments, dropping to 0.9223 and 0.7259 respectively. Jpy fueled carry trades held a bearish tone with EurJpy pulling back form yesterday 168.78 highs to 167.96. After a busy day of trading crude is current softer down -1..08% to $120.09bll while gold closed below the psychological $900oz lvl now trading at $887.83oz. Asian stock markets are following Wall Street lower with the Hang Seng down -2.23% while European stock futures are looking at a mixed open.
In Australia the RBA held rates at 7.25% as was widely expected. What was unexpected was the absolutely frank talik from the central bank. In today's communication the RBA stated 'with demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing'. We view this transparent comment as an admission that unless we witness and economic miracle in the next 4 week the market should expect a 25bp cut in September. With the market now shifting expectations to a 25bp cut in September and possibility of a 50bp cut in December we expect the Aud to continue to come under selling pressure.
In the Eurozone retail sales, PMI and industrial production will keep the markets busy. We are expecting all three indicators to show weakness and putting pressure on the ECB to act.
In the UK July's CIPS/Markit report on services is likely to verify that activity in the sector is slowing significantly. The index dropped sharply from 49.8 to 47.1 in June, (below the 50 level that theoretically separates contraction from expansion). We expect the GbpUsd to continue its downward market to 1.9300.
The highlight of the trading day will be the FOMC rate announcement. We are expecting the Fed to hold since they were unwilling to move higher in June we doubt conditions warrant have changed for the better. With renewed troubles in the financial markets and weakness in economic data from our perception the window for higher rates has closed. In addition we expect the accompanying statement will be relatively unchanged and will disappoint the market by not taking a more hawkish tone. We still see upside inflation and downside economic risk to be basically balanced. Currently we expect the Fed to hold until 2009.
ACM FOREX
Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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Market Brief
The Usd was broadly stronger in Asian session as trader position themselves for today's FOMC rate announcement. EurUsd slid from 1.5590 to 1.5524 while UsdJpy took a weaker tone in the Asian afternoon falling to 108.05 from 108.32. AudUsd & NzdUsd continued to be sold off on the back of the RBA comments, dropping to 0.9223 and 0.7259 respectively. Jpy fueled carry trades held a bearish tone with EurJpy pulling back form yesterday 168.78 highs to 167.96. After a busy day of trading crude is current softer down -1..08% to $120.09bll while gold closed below the psychological $900oz lvl now trading at $887.83oz. Asian stock markets are following Wall Street lower with the Hang Seng down -2.23% while European stock futures are looking at a mixed open.
In Australia the RBA held rates at 7.25% as was widely expected. What was unexpected was the absolutely frank talik from the central bank. In today's communication the RBA stated 'with demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing'. We view this transparent comment as an admission that unless we witness and economic miracle in the next 4 week the market should expect a 25bp cut in September. With the market now shifting expectations to a 25bp cut in September and possibility of a 50bp cut in December we expect the Aud to continue to come under selling pressure.
In the Eurozone retail sales, PMI and industrial production will keep the markets busy. We are expecting all three indicators to show weakness and putting pressure on the ECB to act.
In the UK July's CIPS/Markit report on services is likely to verify that activity in the sector is slowing significantly. The index dropped sharply from 49.8 to 47.1 in June, (below the 50 level that theoretically separates contraction from expansion). We expect the GbpUsd to continue its downward market to 1.9300.
The highlight of the trading day will be the FOMC rate announcement. We are expecting the Fed to hold since they were unwilling to move higher in June we doubt conditions warrant have changed for the better. With renewed troubles in the financial markets and weakness in economic data from our perception the window for higher rates has closed. In addition we expect the accompanying statement will be relatively unchanged and will disappoint the market by not taking a more hawkish tone. We still see upside inflation and downside economic risk to be basically balanced. Currently we expect the Fed to hold until 2009.
ACM FOREX
Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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Service Industries in U.S. Probably Contracted for Second Month
By Courtney Schlisserman
Aug. 5 (Bloomberg) -- Service industries in the U.S. probably shrank in July for a second straight month, signaling the slowdown in growth broadened, economists said before a report this week.
The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the economy, increased in July to 48.7 from 48.2 a month earlier, according to the median of 72 forecasts in a Bloomberg News survey of economists. A reading of 50 is the dividing line between growth and contraction.
Soaring raw-material costs and slowing sales are prompting companies to trim payrolls and limit spending on new equipment, raising the risk the economic slowdown will worsen. Concern over both growth and inflation will likely induce Federal Reserve policy makers meeting today to keep interest rates unchanged.
``We have weak economic growth,'' said Sam Bullard, an economist at Wachovia Corp. in Charlotte, North Carolina. ``Housing-market and financial-market activity are still pulling down growth.''
The Tempe, Arizona-based institute's report is scheduled to be released at 10 a.m. New York time. Estimates in the Bloomberg News survey ranged from 47 to 52.5.
The Fed's decision is expected to be released around 2:15 p.m. in Washington. Investors anticipate the central bank will hold the overnight lending rate between banks at 2 percent, according futures trading.
Manufacturing Stagnates
A report from the purchasing managers group last week showed manufacturing stagnated in July as orders slumped to the lowest level in almost seven years. A measure of prices paid, reflecting the cost of raw materials, held near a 30-year high.
Job losses have spread beyond manufacturers and builders. Service industries cut 5,000 workers from their payrolls in July, the first decline since March, the Labor Department said Aug. 1. Employers eliminated 51,000 jobs in total, the seventh straight monthly loss, and the unemployment rate rose to a three-year high of 5.7 percent.
IndyMac Bancorp Inc. last month became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash. The company last week filed to liquidate its remaining assets.
Law firm Cadwalader, Wickersham & Taft said July 30 it will fire 96 lawyers in the U.S. and London because of a ``significant slowdown'' in real-estate finance and securitization work. The latest round of cuts will leave the firm with 580 attorneys.
Spending Risks
Weakness in the labor market, smaller wage gains and surging fuel and food costs are making Americans less confident, indicating consumer spending may keep slowing.
Starbucks Corp., the world's largest chain of coffee shops, said July 30 it had its first quarterly loss in 16 years as a public company and that it will shutter more U.S. stores than it opens in 2009. The company said the day before it was cutting 1,000 jobs beyond the 12,000 it had previously announced and would close three-quarters of its 84 stores in Australia within five days.
``Until the economy significantly improves, we're just trying to do what we can to get through this storm and be much stronger,'' Starbucks Chief Executive Officer Howard Schultz said on a conference call with analysts and investors after the earnings report.
Bloomberg Survey
====================================
ISM Non-
Manu
Index
====================================
Date of Release 08/05
Observation Period July
------------------------------------
Median 48.7
Average 48.7
High Forecast 52.5
Low Forecast 47.0
Number of Participants 72
Previous 48.2
------------------------------------
4CAST Ltd. 49.2
Action Economics 49.5
AIG Investments 49.5
Argus Research Corp. 50.5
Banc of America Securitie 49.3
Bank of Tokyo- Mitsubishi 49.4
Bantleon Bank AG 49.0
Barclays Capital 48.5
BBVA 48.0
BMO Capital Markets 48.0
BNP Paribas 47.5
Briefing.com 51.0
CFC Group 47.9
CIBC World Markets 49.0
Citi 50.0
ClearView Economics 48.7
Commerzbank AG 47.8
Credit Suisse 49.5
Daiwa Securities America 50.0
Danske Bank 49.0
DekaBank 49.0
Deutsche Bank Securities 48.0
Dresdner Kleinwort 48.5
DZ Bank 49.0
First Trust Advisors 47.9
Fortis 48.5
FTN Financial 48.0
GCI Capital 47.0
Global Insight Inc. 48.7
Goldman, Sachs & Co. 49.0
H&R Block Financial Advis 49.5
Helaba 48.0
High Frequency Economics 50.0
HSBC Markets 48.0
IDEAglobal 47.0
Informa Global Markets 49.0
ING Financial Markets 47.9
Insight Economics 51.0
Intesa-SanPaulo 48.5
J.P. Morgan Chase 49.0
Janney Montgomery Scott L 50.6
JPMorgan Private Client 48.0
Landesbank Berlin 47.5
Landesbank BW 48.0
Lehman Brothers 48.8
Lloyds TSB 49.5
Maria Fiorini Ramirez Inc 49.0
Merrill Lynch 48.0
MFC Global Investment Man 49.0
Moody's Economy.com 49.0
National Bank Financial 47.0
National City Corporation 52.5
Natixis 47.0
Newedge 48.5
Nomura Securities Intl. 50.4
Nord/LB 49.5
PNC Bank 48.0
Ried, Thunberg & Co. 49.5
Schneider Trading Associa 49.0
Scotia Capital 48.0
Societe Generale 50.0
Stone & McCarthy Research 47.8
TD Securities 48.0
Thomson Financial/IFR 50.1
UBS Securities LLC 47.5
Unicredit MIB 47.5
University of Maryland 48.0
Wachovia Corp. 47.5
Wells Fargo & Co. 49.5
WestLB AG 48.0
Westpac Banking Co. 47.5
Wrightson Associates 48.5
====================================
To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net.
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Aug. 5 (Bloomberg) -- Service industries in the U.S. probably shrank in July for a second straight month, signaling the slowdown in growth broadened, economists said before a report this week.
The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the economy, increased in July to 48.7 from 48.2 a month earlier, according to the median of 72 forecasts in a Bloomberg News survey of economists. A reading of 50 is the dividing line between growth and contraction.
Soaring raw-material costs and slowing sales are prompting companies to trim payrolls and limit spending on new equipment, raising the risk the economic slowdown will worsen. Concern over both growth and inflation will likely induce Federal Reserve policy makers meeting today to keep interest rates unchanged.
``We have weak economic growth,'' said Sam Bullard, an economist at Wachovia Corp. in Charlotte, North Carolina. ``Housing-market and financial-market activity are still pulling down growth.''
The Tempe, Arizona-based institute's report is scheduled to be released at 10 a.m. New York time. Estimates in the Bloomberg News survey ranged from 47 to 52.5.
The Fed's decision is expected to be released around 2:15 p.m. in Washington. Investors anticipate the central bank will hold the overnight lending rate between banks at 2 percent, according futures trading.
Manufacturing Stagnates
A report from the purchasing managers group last week showed manufacturing stagnated in July as orders slumped to the lowest level in almost seven years. A measure of prices paid, reflecting the cost of raw materials, held near a 30-year high.
Job losses have spread beyond manufacturers and builders. Service industries cut 5,000 workers from their payrolls in July, the first decline since March, the Labor Department said Aug. 1. Employers eliminated 51,000 jobs in total, the seventh straight monthly loss, and the unemployment rate rose to a three-year high of 5.7 percent.
IndyMac Bancorp Inc. last month became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash. The company last week filed to liquidate its remaining assets.
Law firm Cadwalader, Wickersham & Taft said July 30 it will fire 96 lawyers in the U.S. and London because of a ``significant slowdown'' in real-estate finance and securitization work. The latest round of cuts will leave the firm with 580 attorneys.
Spending Risks
Weakness in the labor market, smaller wage gains and surging fuel and food costs are making Americans less confident, indicating consumer spending may keep slowing.
Starbucks Corp., the world's largest chain of coffee shops, said July 30 it had its first quarterly loss in 16 years as a public company and that it will shutter more U.S. stores than it opens in 2009. The company said the day before it was cutting 1,000 jobs beyond the 12,000 it had previously announced and would close three-quarters of its 84 stores in Australia within five days.
``Until the economy significantly improves, we're just trying to do what we can to get through this storm and be much stronger,'' Starbucks Chief Executive Officer Howard Schultz said on a conference call with analysts and investors after the earnings report.
Bloomberg Survey
====================================
ISM Non-
Manu
Index
====================================
Date of Release 08/05
Observation Period July
------------------------------------
Median 48.7
Average 48.7
High Forecast 52.5
Low Forecast 47.0
Number of Participants 72
Previous 48.2
------------------------------------
4CAST Ltd. 49.2
Action Economics 49.5
AIG Investments 49.5
Argus Research Corp. 50.5
Banc of America Securitie 49.3
Bank of Tokyo- Mitsubishi 49.4
Bantleon Bank AG 49.0
Barclays Capital 48.5
BBVA 48.0
BMO Capital Markets 48.0
BNP Paribas 47.5
Briefing.com 51.0
CFC Group 47.9
CIBC World Markets 49.0
Citi 50.0
ClearView Economics 48.7
Commerzbank AG 47.8
Credit Suisse 49.5
Daiwa Securities America 50.0
Danske Bank 49.0
DekaBank 49.0
Deutsche Bank Securities 48.0
Dresdner Kleinwort 48.5
DZ Bank 49.0
First Trust Advisors 47.9
Fortis 48.5
FTN Financial 48.0
GCI Capital 47.0
Global Insight Inc. 48.7
Goldman, Sachs & Co. 49.0
H&R Block Financial Advis 49.5
Helaba 48.0
High Frequency Economics 50.0
HSBC Markets 48.0
IDEAglobal 47.0
Informa Global Markets 49.0
ING Financial Markets 47.9
Insight Economics 51.0
Intesa-SanPaulo 48.5
J.P. Morgan Chase 49.0
Janney Montgomery Scott L 50.6
JPMorgan Private Client 48.0
Landesbank Berlin 47.5
Landesbank BW 48.0
Lehman Brothers 48.8
Lloyds TSB 49.5
Maria Fiorini Ramirez Inc 49.0
Merrill Lynch 48.0
MFC Global Investment Man 49.0
Moody's Economy.com 49.0
National Bank Financial 47.0
National City Corporation 52.5
Natixis 47.0
Newedge 48.5
Nomura Securities Intl. 50.4
Nord/LB 49.5
PNC Bank 48.0
Ried, Thunberg & Co. 49.5
Schneider Trading Associa 49.0
Scotia Capital 48.0
Societe Generale 50.0
Stone & McCarthy Research 47.8
TD Securities 48.0
Thomson Financial/IFR 50.1
UBS Securities LLC 47.5
Unicredit MIB 47.5
University of Maryland 48.0
Wachovia Corp. 47.5
Wells Fargo & Co. 49.5
WestLB AG 48.0
Westpac Banking Co. 47.5
Wrightson Associates 48.5
====================================
To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net.
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FOMC and Expectation
Daily Forex Fundamentals | Written by Crown Forex | Aug 05 08 07:34 GMT |
Major Market Mover: FOMC and Expectation
Clotting together and that's what the feds needed at the mean time, after the worst Credit Crisis since the great depression, the feds are tumbling in the middle and this time an insider conflict is taking place between policy makers some with an extreme hawkish stance and other still concerned about the downside risk to growth.
Steady is most likely what the decision will be today, holding rates at 2.00% believing that those levels are the most suitable rates in order to handle the slump that is acting on the housing market in addition to the credit crisis taking place in financial markets.
Though growth picked up in the second quarter from the revised 0.9% to 1.9%, on a higher spending due to the rebates that was distributed in late April into June, giving US citizens more cash to spend just to revive the money movement in the States, but what came to make the situation worse is the increasing risk to price stability, resulting to a dispute between policy makers.
The PCE excluding food and energy inclined to 0.3% from the previous 0.2%, presenting that inflation in the states is rallying up and needing some action in order to be contained, the surging oil and food prices along with low dollar prices had its affect in the spur of those inflationary levels. A rate hike is needed but when is the right time is the question??? Markets are waiting for some hints from Mr. Bernanke, to see if a rate hike would be taking place till the end of the year or not.
Yet markets are waiting for Mr. Bernanke to see what he will add in his statement, if inflation was remarked clearly in the report, markets participants will understand a rate hike will be taken as soon as October, just to restrain the rising consumer prices that are creating more fears to the Americans.
Nevertheless, lower demand on commodities is finally easing oil prices down, giving a break to markets participants and policy makers to just think what are the right steps to be taken; low oil prices means inflation is going to ease up especially in August, taking gasoline prices from the all time high levels that were recorded which is deteriorating the overall personal income.
The three committee members are undermining the effect of a rate hike; as if it was taken really the situation would worsen, because boosting the dollar form a hike would along with rising commodity prices would create lot of instability, with exports getting curbed from high dollar as we all have been noticing that the high exports levels in the past period was the main driver to the reasonably fair growth levels, and an aid made by the feds again by the fiscal policy would continue to widen the treasury deficit giving the government less space to spend more just to keep the economy ongoing.
Moving to the ISM Non-Manufacturing; investors are still unwilling to invest in the services in the United States and a reading falling in contraction 48.7 is what markets expects later today, the non stopping uncertainties along with the feds hard work to restore back confidence did not help yet.
With attention heading toward inflation, the US dollar was boosted against the Euro, pushing it to trade at 1.5520 levels; markets believe that a rate hike is needed before the end of the year but is that really the suitable decision to be taken or not???
My reader don’t expect much of Mr. Bernanke today, because high expectations will be let down of a extreme hawkish statement, growth is still taken into consideration and the downside revision taking place to growth reading are still concerning the feds
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
Read more...
Major Market Mover: FOMC and Expectation
Clotting together and that's what the feds needed at the mean time, after the worst Credit Crisis since the great depression, the feds are tumbling in the middle and this time an insider conflict is taking place between policy makers some with an extreme hawkish stance and other still concerned about the downside risk to growth.
Steady is most likely what the decision will be today, holding rates at 2.00% believing that those levels are the most suitable rates in order to handle the slump that is acting on the housing market in addition to the credit crisis taking place in financial markets.
Though growth picked up in the second quarter from the revised 0.9% to 1.9%, on a higher spending due to the rebates that was distributed in late April into June, giving US citizens more cash to spend just to revive the money movement in the States, but what came to make the situation worse is the increasing risk to price stability, resulting to a dispute between policy makers.
The PCE excluding food and energy inclined to 0.3% from the previous 0.2%, presenting that inflation in the states is rallying up and needing some action in order to be contained, the surging oil and food prices along with low dollar prices had its affect in the spur of those inflationary levels. A rate hike is needed but when is the right time is the question??? Markets are waiting for some hints from Mr. Bernanke, to see if a rate hike would be taking place till the end of the year or not.
Yet markets are waiting for Mr. Bernanke to see what he will add in his statement, if inflation was remarked clearly in the report, markets participants will understand a rate hike will be taken as soon as October, just to restrain the rising consumer prices that are creating more fears to the Americans.
Nevertheless, lower demand on commodities is finally easing oil prices down, giving a break to markets participants and policy makers to just think what are the right steps to be taken; low oil prices means inflation is going to ease up especially in August, taking gasoline prices from the all time high levels that were recorded which is deteriorating the overall personal income.
The three committee members are undermining the effect of a rate hike; as if it was taken really the situation would worsen, because boosting the dollar form a hike would along with rising commodity prices would create lot of instability, with exports getting curbed from high dollar as we all have been noticing that the high exports levels in the past period was the main driver to the reasonably fair growth levels, and an aid made by the feds again by the fiscal policy would continue to widen the treasury deficit giving the government less space to spend more just to keep the economy ongoing.
Moving to the ISM Non-Manufacturing; investors are still unwilling to invest in the services in the United States and a reading falling in contraction 48.7 is what markets expects later today, the non stopping uncertainties along with the feds hard work to restore back confidence did not help yet.
With attention heading toward inflation, the US dollar was boosted against the Euro, pushing it to trade at 1.5520 levels; markets believe that a rate hike is needed before the end of the year but is that really the suitable decision to be taken or not???
My reader don’t expect much of Mr. Bernanke today, because high expectations will be let down of a extreme hawkish statement, growth is still taken into consideration and the downside revision taking place to growth reading are still concerning the feds
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
Read more...
Philippine July Inflation Accelerates to 16-Year High
By Karl Lester M. Yap
Aug. 5 (Bloomberg) -- Philippine inflation accelerated to the fastest pace in more than 16 years in July, increasing pressure on the central bank to raise interest rates for a third month in August.
Consumer prices rose 12.2 percent from a year earlier, the National Statistics Office said in Manila today. That's more than the 11.9 percent median estimate in a Bloomberg News survey of 16 economists and the central bank's forecast of 11.2 percent to 12 percent.
Bangko Sentral ng Pilipinas Governor Amando Tetangco, who has raised interest rates twice this year to fight inflation even as economic growth slows, said today the central bank will maintain a ``tight'' monetary policy. The peso rose on optimism higher interest rates will lure investment.
``The central bank is doing the right thing,'' said Fitz Aclan, who helps manage about $6 billion in equities and fixed- income assets at Manila-based Banco de Oro Unibank Inc. ``Its all about inflation expectations and what we're seeing right now is that inflation numbers will gradually taper off.''
Inflation will peak early in the fourth quarter as oil prices ease, Tetangco said in a mobile-phone text message today. The central bank, which next meets to decide on monetary policy on Aug. 28, raised the overnight borrowing rate by half a percentage point to 5.75 percent on July 17, the biggest increase since 2000.
``Monetary policy will continue to be appropriately tight until we see a more benign outlook and manageable inflation expectations,'' Tetangco said.
Peso, Bonds
The Philippine peso gained the most in two weeks today, and five-year government bond yields dropped to the lowest in more than two months.
Asian central banks have raised interest rates this year as they grapple with rising prices that threaten expansion in the world's fastest growing region. The Reserve Bank of India on July 29 raised its benchmark repurchase rate by half a point to 9 percent, more than economists forecast.
Bank Indonesia boosted borrowing costs for a fourth straight month today. Thailand raised its benchmark for the first time in two years last month.
``Bangko Sentral now has to walk the hawkish talk,'' said Vishnu Varathan, an economist at Forecast Singapore Pte, before the inflation report. ``It's almost certain to hike rates again if it doesn't want to be seen as a laggard in the region.''
The central bank last month increased its 2008 inflation estimate to a range of 9 percent to 11 percent, from a previous prediction of 7 percent to 9 percent, citing a weak peso and higher food, transportation and energy costs.
Domestic oil prices have gained 36 percent this year as crude rose to records, fanning transportation costs and wages. The cost of rice, the staple food of the more than 91 million Filipinos, jumped 53 percent in the 12 months to June in the country as world prices soared.
To contact the reporter for this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.
Read more...
Aug. 5 (Bloomberg) -- Philippine inflation accelerated to the fastest pace in more than 16 years in July, increasing pressure on the central bank to raise interest rates for a third month in August.
Consumer prices rose 12.2 percent from a year earlier, the National Statistics Office said in Manila today. That's more than the 11.9 percent median estimate in a Bloomberg News survey of 16 economists and the central bank's forecast of 11.2 percent to 12 percent.
Bangko Sentral ng Pilipinas Governor Amando Tetangco, who has raised interest rates twice this year to fight inflation even as economic growth slows, said today the central bank will maintain a ``tight'' monetary policy. The peso rose on optimism higher interest rates will lure investment.
``The central bank is doing the right thing,'' said Fitz Aclan, who helps manage about $6 billion in equities and fixed- income assets at Manila-based Banco de Oro Unibank Inc. ``Its all about inflation expectations and what we're seeing right now is that inflation numbers will gradually taper off.''
Inflation will peak early in the fourth quarter as oil prices ease, Tetangco said in a mobile-phone text message today. The central bank, which next meets to decide on monetary policy on Aug. 28, raised the overnight borrowing rate by half a percentage point to 5.75 percent on July 17, the biggest increase since 2000.
``Monetary policy will continue to be appropriately tight until we see a more benign outlook and manageable inflation expectations,'' Tetangco said.
Peso, Bonds
The Philippine peso gained the most in two weeks today, and five-year government bond yields dropped to the lowest in more than two months.
Asian central banks have raised interest rates this year as they grapple with rising prices that threaten expansion in the world's fastest growing region. The Reserve Bank of India on July 29 raised its benchmark repurchase rate by half a point to 9 percent, more than economists forecast.
Bank Indonesia boosted borrowing costs for a fourth straight month today. Thailand raised its benchmark for the first time in two years last month.
``Bangko Sentral now has to walk the hawkish talk,'' said Vishnu Varathan, an economist at Forecast Singapore Pte, before the inflation report. ``It's almost certain to hike rates again if it doesn't want to be seen as a laggard in the region.''
The central bank last month increased its 2008 inflation estimate to a range of 9 percent to 11 percent, from a previous prediction of 7 percent to 9 percent, citing a weak peso and higher food, transportation and energy costs.
Domestic oil prices have gained 36 percent this year as crude rose to records, fanning transportation costs and wages. The cost of rice, the staple food of the more than 91 million Filipinos, jumped 53 percent in the 12 months to June in the country as world prices soared.
To contact the reporter for this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.
Read more...
Indonesia Raises Rate a Fourth Time to Tame Inflation
By Aloysius Unditu and Arijit Ghosh
Aug. 5 (Bloomberg) -- Indonesia's central bank raised its benchmark interest rate for a fourth straight meeting to tame inflation running at the fastest pace in almost two years.
Governor Boediono and his seven colleagues increased the policy rate by a quarter point to 9 percent, Bank Indonesia said in a statement in Jakarta today. That matched the forecast of 20 of 22 economists in a Bloomberg News survey.
Asian central banks from Pakistan to the Philippines are raising borrowing costs as soaring fuel and food costs fan inflation across the region. Boediono, governor for less than three months, needs to get runaway prices under control to help the 50 percent of Indonesia's 243 million people who survive on less than $2 a day.
``Indonesia may hold its monetary policy tightening cycle longer than the rest of Asia,'' said Christy Tan, a currency strategist at Bank of America Corp. in Singapore. ``The signals they are sending that they will hike in a measured manner are a way to manage and anchor inflation expectations going forward.''
Consumer prices in Indonesia jumped 11.9 percent in July, beating estimates for an 11.2 percent gain, the Central Statistics Bureau reported last week. Food costs increased 19.9 percent, the most in more than a decade.
Indonesia's wholesale-price inflation accelerated to 34.7 percent in June, the Central Statistics Bureau said today. That's the fastest pace in nine years.
`All Instruments'
Boediono last week said Bank Indonesia would use ``all instruments'' at its disposal to tame price pressures in Southeast Asia's largest economy. The central bank aims to bring inflation down to between 6.5 percent and 7.5 percent in 2009 from a range of 11.5 percent to 12.5 percent this year.
``The high risk of inflationary pressures was the main consideration'' in raising rates, Bank Indonesia said in a statement today. Monetary policy is also equipped ``with instruments such as the control of rupiah volatility and the absorption of market liquidity through market operations.''
Bank Indonesia has increased its key rate by one percentage point since it started raising borrowing costs in May. Today's move may also help manage price expectations as the world's most populous Muslim nation prepares to celebrate Id-ul-Fitr following the fasting month of Ramadan that begins in September.
President Susilo Bambang Yudhoyono's government raised fuel prices by about 30 percent in May to reduce its burden of capping pump costs. That made it more expensive to transport food, steel and cement across the 18,000 islands that make Indonesia the world's largest archipelago.
Stronger Currency
Bank Indonesia in May was the first central bank in Southeast Asia after Vietnam to raise borrowing costs this year. Vietnam increased its benchmark rate in January. India on July 29 raised its policy rate by a more-than-expected half point as inflation accelerated to the fastest pace since 1995.
The appreciation of the rupiah, the second-best performing among Asia's 10 most-traded currencies outside Japan in the past month, helped Bank Indonesia today avoid a half-point increase in rates.
``To reduce the negative impact on growth we will use all available instruments in our arsenal including exchange-rate policy,'' Bank Indonesia Deputy Governor Hartadi Sarwono said on July 24. ``This will reduce excessive increase of interest rates. This also explains why we prefer gradual rate increases.''
To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Aloysius Unditu in Jakarta at aunditu@bloomberg.net
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Aug. 5 (Bloomberg) -- Indonesia's central bank raised its benchmark interest rate for a fourth straight meeting to tame inflation running at the fastest pace in almost two years.
Governor Boediono and his seven colleagues increased the policy rate by a quarter point to 9 percent, Bank Indonesia said in a statement in Jakarta today. That matched the forecast of 20 of 22 economists in a Bloomberg News survey.
Asian central banks from Pakistan to the Philippines are raising borrowing costs as soaring fuel and food costs fan inflation across the region. Boediono, governor for less than three months, needs to get runaway prices under control to help the 50 percent of Indonesia's 243 million people who survive on less than $2 a day.
``Indonesia may hold its monetary policy tightening cycle longer than the rest of Asia,'' said Christy Tan, a currency strategist at Bank of America Corp. in Singapore. ``The signals they are sending that they will hike in a measured manner are a way to manage and anchor inflation expectations going forward.''
Consumer prices in Indonesia jumped 11.9 percent in July, beating estimates for an 11.2 percent gain, the Central Statistics Bureau reported last week. Food costs increased 19.9 percent, the most in more than a decade.
Indonesia's wholesale-price inflation accelerated to 34.7 percent in June, the Central Statistics Bureau said today. That's the fastest pace in nine years.
`All Instruments'
Boediono last week said Bank Indonesia would use ``all instruments'' at its disposal to tame price pressures in Southeast Asia's largest economy. The central bank aims to bring inflation down to between 6.5 percent and 7.5 percent in 2009 from a range of 11.5 percent to 12.5 percent this year.
``The high risk of inflationary pressures was the main consideration'' in raising rates, Bank Indonesia said in a statement today. Monetary policy is also equipped ``with instruments such as the control of rupiah volatility and the absorption of market liquidity through market operations.''
Bank Indonesia has increased its key rate by one percentage point since it started raising borrowing costs in May. Today's move may also help manage price expectations as the world's most populous Muslim nation prepares to celebrate Id-ul-Fitr following the fasting month of Ramadan that begins in September.
President Susilo Bambang Yudhoyono's government raised fuel prices by about 30 percent in May to reduce its burden of capping pump costs. That made it more expensive to transport food, steel and cement across the 18,000 islands that make Indonesia the world's largest archipelago.
Stronger Currency
Bank Indonesia in May was the first central bank in Southeast Asia after Vietnam to raise borrowing costs this year. Vietnam increased its benchmark rate in January. India on July 29 raised its policy rate by a more-than-expected half point as inflation accelerated to the fastest pace since 1995.
The appreciation of the rupiah, the second-best performing among Asia's 10 most-traded currencies outside Japan in the past month, helped Bank Indonesia today avoid a half-point increase in rates.
``To reduce the negative impact on growth we will use all available instruments in our arsenal including exchange-rate policy,'' Bank Indonesia Deputy Governor Hartadi Sarwono said on July 24. ``This will reduce excessive increase of interest rates. This also explains why we prefer gradual rate increases.''
To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Aloysius Unditu in Jakarta at aunditu@bloomberg.net
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Australia Signals First Rate Reduction in Seven Years
By Jacob Greber
Aug. 5 (Bloomberg) -- Australia's central bank signaled it may cut borrowing costs for the first time in almost seven years as slowing economic growth cools inflation.
``With demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing,'' Governor Glenn Stevens said today in Sydney after keeping the overnight cash rate target at 7.25 percent. He has raised the rate four times in the past 12 months.
The Australian dollar fell to a three-month low after traders bet Stevens, 50, will cut rates as soon as next month as the economy slows, forcing companies including Qantas Airways Ltd. and Starbucks Corp. to fire workers. Retail sales, consumer confidence and house prices have all fallen since the Reserve Bank last raised the benchmark in March.
``They've gone from neutral and moved to a very clear easing bias,'' said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. ``There is a real acknowledgement that financial conditions are too tight.''
The Australian dollar dropped to 92.22 U.S. cents at 4:32 p.m. from 92.72 immediately before today's decision. The two- year government bond yield fell 22 basis points to 5.97 percent. A basis point is 0.01 percentage point.
The currency has fallen almost 6 percent against the U.S. dollar since hitting a 25-year-high 98.49 U.S. cents on July 16.
Bank Stocks
Stevens could join other central bankers around the world who have cut borrowing costs to cushion their economies from slower growth. New Zealand cut its key rate last month for the first time in five years. Australia's benchmark is 5.25 percentage points higher than the Federal Reserve's rate.
Australia's benchmark S&P/ASX 200 Index pared losses as Commonwealth Bank of Australia Ltd., the nation's biggest mortgage lender, led a rally by banks after Stevens' announcement. The index was 1.4 percent lower at the 4:10 p.m. close in Sydney, recovering from a 2.6 percent slump, its weakest level in 2 1/2 years.
``The Reserve Bank is pretty much indicating it's ready to cut rates, and banks are the first to turn when it looks like stimulation is coming,'' said Prasad Patkar, who helps manage $1.8 billion at Platypus Asset Management in Sydney.
The Reserve Bank has raised the benchmark rate 12 times since its last cut in December 2001 to curb inflation that has accelerated to 4.5 percent. It aims to keep annual price gains between 2 percent and 3 percent on average.
Inflation Outlook
Stevens said today the bank expects inflation will slow to below 3 percent during 2010.
``It is looking more likely that demand will remain subdued and economic growth will be fairly slow over the period ahead,'' he said.
Australia's $1 trillion economy, in its 17th year of growth, expanded at the slowest quarterly pace in almost two years in the three months through March.
Since the central bank's previous meeting on July 1, reports have shown consumer confidence slumped in July to the lowest level in 16 years, retail sales fell 1 percent in June, and lending to consumers and businesses rose at the slowest annual pace since 2002. House prices fell in the second quarter for the first time in almost three years.
Qantas, Australia's largest airline, said last month it will fire 1,500 workers. Starbucks, the world's largest chain of coffee shops, said July 29 it will close three-quarters of its 84 Australian stores, part of a plan to cut 12,000 jobs globally.
Unemployment Rises
The jobless rate, which fell to a 34-year low of 3.9 percent in February, probably rose to 4.3 percent last month from 4.2 percent in June, according to the median estimate of 24 economists surveyed by Bloomberg. The government will publish the jobs report on Aug. 7.
Investors have increased bets the central bank will cut borrowing costs, according to a Credit Suisse Group index based on trading in interest-rate swaps.
Stevens will lower the benchmark rate by 91 basis points, or 0.91 percentage point, in the next 12 months, the index showed at 4:31 p.m. in Sydney. At the start of July, traders forecast 19 basis points of gains.
Stevens may also cut the rate in to unwind the impact of higher mortgage costs on households.
The nation's five largest lenders, including Commonwealth Bank, have added an average 105 basis points to mortgage rates in 2008 as the global credit squeeze drove up funding costs. The central bank has added a total of 50 basis points in that time.
The increases have added A$250 ($231) to monthly payments on an average A$250,000 home loan, according to the Real Estate Institute. Households spent 38 percent of their incomes on mortgage payments in the March quarter, the most in the 22 years that the institute has measured affordability.
``The tightening in financial conditions, in conjunction with other factors, including rising fuel costs, and lower asset values, has restrained demand,'' Stevens said.
Today's decision was forecast by all 24 economists surveyed by Bloomberg News.
To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net
Read more...
Aug. 5 (Bloomberg) -- Australia's central bank signaled it may cut borrowing costs for the first time in almost seven years as slowing economic growth cools inflation.
``With demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing,'' Governor Glenn Stevens said today in Sydney after keeping the overnight cash rate target at 7.25 percent. He has raised the rate four times in the past 12 months.
The Australian dollar fell to a three-month low after traders bet Stevens, 50, will cut rates as soon as next month as the economy slows, forcing companies including Qantas Airways Ltd. and Starbucks Corp. to fire workers. Retail sales, consumer confidence and house prices have all fallen since the Reserve Bank last raised the benchmark in March.
``They've gone from neutral and moved to a very clear easing bias,'' said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. ``There is a real acknowledgement that financial conditions are too tight.''
The Australian dollar dropped to 92.22 U.S. cents at 4:32 p.m. from 92.72 immediately before today's decision. The two- year government bond yield fell 22 basis points to 5.97 percent. A basis point is 0.01 percentage point.
The currency has fallen almost 6 percent against the U.S. dollar since hitting a 25-year-high 98.49 U.S. cents on July 16.
Bank Stocks
Stevens could join other central bankers around the world who have cut borrowing costs to cushion their economies from slower growth. New Zealand cut its key rate last month for the first time in five years. Australia's benchmark is 5.25 percentage points higher than the Federal Reserve's rate.
Australia's benchmark S&P/ASX 200 Index pared losses as Commonwealth Bank of Australia Ltd., the nation's biggest mortgage lender, led a rally by banks after Stevens' announcement. The index was 1.4 percent lower at the 4:10 p.m. close in Sydney, recovering from a 2.6 percent slump, its weakest level in 2 1/2 years.
``The Reserve Bank is pretty much indicating it's ready to cut rates, and banks are the first to turn when it looks like stimulation is coming,'' said Prasad Patkar, who helps manage $1.8 billion at Platypus Asset Management in Sydney.
The Reserve Bank has raised the benchmark rate 12 times since its last cut in December 2001 to curb inflation that has accelerated to 4.5 percent. It aims to keep annual price gains between 2 percent and 3 percent on average.
Inflation Outlook
Stevens said today the bank expects inflation will slow to below 3 percent during 2010.
``It is looking more likely that demand will remain subdued and economic growth will be fairly slow over the period ahead,'' he said.
Australia's $1 trillion economy, in its 17th year of growth, expanded at the slowest quarterly pace in almost two years in the three months through March.
Since the central bank's previous meeting on July 1, reports have shown consumer confidence slumped in July to the lowest level in 16 years, retail sales fell 1 percent in June, and lending to consumers and businesses rose at the slowest annual pace since 2002. House prices fell in the second quarter for the first time in almost three years.
Qantas, Australia's largest airline, said last month it will fire 1,500 workers. Starbucks, the world's largest chain of coffee shops, said July 29 it will close three-quarters of its 84 Australian stores, part of a plan to cut 12,000 jobs globally.
Unemployment Rises
The jobless rate, which fell to a 34-year low of 3.9 percent in February, probably rose to 4.3 percent last month from 4.2 percent in June, according to the median estimate of 24 economists surveyed by Bloomberg. The government will publish the jobs report on Aug. 7.
Investors have increased bets the central bank will cut borrowing costs, according to a Credit Suisse Group index based on trading in interest-rate swaps.
Stevens will lower the benchmark rate by 91 basis points, or 0.91 percentage point, in the next 12 months, the index showed at 4:31 p.m. in Sydney. At the start of July, traders forecast 19 basis points of gains.
Stevens may also cut the rate in to unwind the impact of higher mortgage costs on households.
The nation's five largest lenders, including Commonwealth Bank, have added an average 105 basis points to mortgage rates in 2008 as the global credit squeeze drove up funding costs. The central bank has added a total of 50 basis points in that time.
The increases have added A$250 ($231) to monthly payments on an average A$250,000 home loan, according to the Real Estate Institute. Households spent 38 percent of their incomes on mortgage payments in the March quarter, the most in the 22 years that the institute has measured affordability.
``The tightening in financial conditions, in conjunction with other factors, including rising fuel costs, and lower asset values, has restrained demand,'' Stevens said.
Today's decision was forecast by all 24 economists surveyed by Bloomberg News.
To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net
Read more...
TrustPower Says Transmission Pricing May Stall Power Projects
By Gavin Evans
Aug. 5 (Bloomberg) -- TrustPower Ltd., operator of New Zealand's largest wind farm, said NZ$1.3 billion ($940 million) of wind and hydro-electric power projects it plans are unlikely to go ahead without a change in transmission pricing.
TrustPower has approval to build a 200-megawatt wind farm near Dunedin on the South Island and was today granted approval to build a 72-megawatt hydro project near Blenheim. Neither project, nor two others awaiting approval, are likely to proceed because of costs charged to South Island generators, TrustPower spokesman Graeme Purches said.
New Zealand, a signatory to the Kyoto Protocol on climate change, gets about 70 percent of its power from wind, hydro- electric and geothermal generators and wants to increase that to 90 percent by 2025 to reduce emissions. Almost two-thirds of proposed new wind capacity is on the South Island.
``The best opportunities to build sustainable energy are on the South Island, other than geothermal,'' Purches said. The government wants ``sustainable energy, but they won't give us transmission pricing to make it happen.''
TrustPower fell 5 cents, or 0.7 percent, to NZ$7.70 at 4 p.m. in Wellington. The Tauranga-based company is awaiting planning approval for a NZ$440 million, 240-megawatt wind farm near Gore, and a NZ$185 million dam on the South Island's west coast.
New Zealand's two major islands are linked by a set of high-voltage cables. They were laid more than 40 years ago to carry cheaper power from the nation's South Island dams to the more-populous North Island.
Regulator Ruling
In 2006, the Electricity Commission changed the pricing of transmissions through the link, imposing those costs only on South Island-based generators TrustPower, Contact Energy Ltd. and Meridian Energy Ltd.
The commission said the link gave these companies access to higher prices on the North Island. The pricing change would also encourage construction of power stations near the biggest cities and factories on the North Island, reducing spending on transmission and the waste of electricity as it is sent north.
All other transmission costs in New Zealand are pooled and passed on to consumers. The South Island generators were charged NZ$89.1 million for the link in the year ended March. They will share the NZ$672 million cost to increase its capacity to 1,000 megawatts by 2012.
Government-owned Meridian, operator of the nation's largest dams, went to court in 2005 in an unsuccessful bid to overturn the commission's pricing change.
``It's still an issue for us,'' spokesman Alan Seay said today.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
Read more...
Aug. 5 (Bloomberg) -- TrustPower Ltd., operator of New Zealand's largest wind farm, said NZ$1.3 billion ($940 million) of wind and hydro-electric power projects it plans are unlikely to go ahead without a change in transmission pricing.
TrustPower has approval to build a 200-megawatt wind farm near Dunedin on the South Island and was today granted approval to build a 72-megawatt hydro project near Blenheim. Neither project, nor two others awaiting approval, are likely to proceed because of costs charged to South Island generators, TrustPower spokesman Graeme Purches said.
New Zealand, a signatory to the Kyoto Protocol on climate change, gets about 70 percent of its power from wind, hydro- electric and geothermal generators and wants to increase that to 90 percent by 2025 to reduce emissions. Almost two-thirds of proposed new wind capacity is on the South Island.
``The best opportunities to build sustainable energy are on the South Island, other than geothermal,'' Purches said. The government wants ``sustainable energy, but they won't give us transmission pricing to make it happen.''
TrustPower fell 5 cents, or 0.7 percent, to NZ$7.70 at 4 p.m. in Wellington. The Tauranga-based company is awaiting planning approval for a NZ$440 million, 240-megawatt wind farm near Gore, and a NZ$185 million dam on the South Island's west coast.
New Zealand's two major islands are linked by a set of high-voltage cables. They were laid more than 40 years ago to carry cheaper power from the nation's South Island dams to the more-populous North Island.
Regulator Ruling
In 2006, the Electricity Commission changed the pricing of transmissions through the link, imposing those costs only on South Island-based generators TrustPower, Contact Energy Ltd. and Meridian Energy Ltd.
The commission said the link gave these companies access to higher prices on the North Island. The pricing change would also encourage construction of power stations near the biggest cities and factories on the North Island, reducing spending on transmission and the waste of electricity as it is sent north.
All other transmission costs in New Zealand are pooled and passed on to consumers. The South Island generators were charged NZ$89.1 million for the link in the year ended March. They will share the NZ$672 million cost to increase its capacity to 1,000 megawatts by 2012.
Government-owned Meridian, operator of the nation's largest dams, went to court in 2005 in an unsuccessful bid to overturn the commission's pricing change.
``It's still an issue for us,'' spokesman Alan Seay said today.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
Read more...
Tropical Storm Edouard Strengthens on Path for Texas
By Brian K. Sullivan and Aaron Sheldrick
Aug. 5 (Bloomberg) -- Tropical Storm Edouard strengthened as it headed for Galveston, Texas, the biggest petroleum port in the U.S., prompting evacuations of some oil and gas rigs in the Gulf of Mexico.
The storm had maximum sustained winds of about 60 miles (97 kilometers) per hour at 1 a.m. Houston time, from 45 mph yesterday, the National Hurricane Center in Miami said in an advisory on its Web site. The system was 120 miles east of Galveston and moving west-northwest at 10 mph.
``Edouard is forecast to strengthen,'' the center's bulletin said. ``It is expected to be near hurricane strength by the time it reaches the coastline later today.''
Edouard may affect about 5.4 million residents of Texas and Louisiana, according to a Census Bureau report. Texas Governor Rick Perry yesterday issued a disaster declaration covering 17 counties and activated 1,200 National Guard personnel as a precaution. In neighboring Louisiana, Governor Bobby Jindal declared a state of emergency.
Crude oil fell to a three-month low as traders bet the storm would miss most offshore facilities. Six rigs and 23 production platforms were evacuated in the Gulf, according to the U.S. Interior Department.
Hurricanes Katrina and Rita, both of which reached Category 5 with wind speeds of more than 155 mph over the Gulf before hitting land as weaker storms, devastated New Orleans and the U.S. Gulf coast's oil output and refineries in 2005, roiling oil and natural-gas markets. Category 5 is the highest on the Saffir-Simpson scale of hurricane intensity.
Rigs Buffeted
To become a hurricane, Edouard must have maximum sustained winds of at least 74 mph. A hurricane watch remains in effect along the coast from Intracoastal City to Port O'Connor, meaning such conditions are possible within about 36 hours.
Some oil rigs south of the Louisiana coast were reporting gusts near hurricane strength during the past few hours, the hurricane center's advisory said.
Producers have idled 7.2 percent of natural-gas output and 0.87 percent of oil output in the Gulf because of the storm, the U.S. government said.
Marathon Oil Corp. said yesterday it is shutting its Texas City refinery. Marathon evacuated some non-essential workers from the Gulf, as did companies including Anadarko Petroleum Corp. and McMoRan Exploration Co.
The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, and the Houston Ship Channel, which serves the ports in Houston, Texas City and Galveston, shut down operations.
The Louisiana facility has the capacity to receive 1 million barrels of oil a day, or about 10 percent of U.S. imports.
The Gulf produced about 1.3 million barrels a day of crude oil and 7.7 billion cubic feet of natural gas a day in January, according to the Interior Department's Minerals Management Service.
Crude oil for September delivery fell as much as $1.41, or 1.2 percent, to $120 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $120.11 at 2:22 p.m. Singapore time. Yesterday, crude oil dropped $3.69 to settle at $121.41 a barrel in New York, the lowest close since May 5.
To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Aaron Sheldrick in Tokyo at asheldrick@bloomberg.net.
Read more...
Aug. 5 (Bloomberg) -- Tropical Storm Edouard strengthened as it headed for Galveston, Texas, the biggest petroleum port in the U.S., prompting evacuations of some oil and gas rigs in the Gulf of Mexico.
The storm had maximum sustained winds of about 60 miles (97 kilometers) per hour at 1 a.m. Houston time, from 45 mph yesterday, the National Hurricane Center in Miami said in an advisory on its Web site. The system was 120 miles east of Galveston and moving west-northwest at 10 mph.
``Edouard is forecast to strengthen,'' the center's bulletin said. ``It is expected to be near hurricane strength by the time it reaches the coastline later today.''
Edouard may affect about 5.4 million residents of Texas and Louisiana, according to a Census Bureau report. Texas Governor Rick Perry yesterday issued a disaster declaration covering 17 counties and activated 1,200 National Guard personnel as a precaution. In neighboring Louisiana, Governor Bobby Jindal declared a state of emergency.
Crude oil fell to a three-month low as traders bet the storm would miss most offshore facilities. Six rigs and 23 production platforms were evacuated in the Gulf, according to the U.S. Interior Department.
Hurricanes Katrina and Rita, both of which reached Category 5 with wind speeds of more than 155 mph over the Gulf before hitting land as weaker storms, devastated New Orleans and the U.S. Gulf coast's oil output and refineries in 2005, roiling oil and natural-gas markets. Category 5 is the highest on the Saffir-Simpson scale of hurricane intensity.
Rigs Buffeted
To become a hurricane, Edouard must have maximum sustained winds of at least 74 mph. A hurricane watch remains in effect along the coast from Intracoastal City to Port O'Connor, meaning such conditions are possible within about 36 hours.
Some oil rigs south of the Louisiana coast were reporting gusts near hurricane strength during the past few hours, the hurricane center's advisory said.
Producers have idled 7.2 percent of natural-gas output and 0.87 percent of oil output in the Gulf because of the storm, the U.S. government said.
Marathon Oil Corp. said yesterday it is shutting its Texas City refinery. Marathon evacuated some non-essential workers from the Gulf, as did companies including Anadarko Petroleum Corp. and McMoRan Exploration Co.
The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, and the Houston Ship Channel, which serves the ports in Houston, Texas City and Galveston, shut down operations.
The Louisiana facility has the capacity to receive 1 million barrels of oil a day, or about 10 percent of U.S. imports.
The Gulf produced about 1.3 million barrels a day of crude oil and 7.7 billion cubic feet of natural gas a day in January, according to the Interior Department's Minerals Management Service.
Crude oil for September delivery fell as much as $1.41, or 1.2 percent, to $120 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $120.11 at 2:22 p.m. Singapore time. Yesterday, crude oil dropped $3.69 to settle at $121.41 a barrel in New York, the lowest close since May 5.
To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Aaron Sheldrick in Tokyo at asheldrick@bloomberg.net.
Read more...
Australia's Newcastle Coal Exports Jump 20%; Ship Queue Drops
By Jesse Riseborough
Aug. 5 (Bloomberg) -- Coal exports from Australia's Newcastle, the world's biggest export harbor for the fuel, increased 20 percent last week while the number of ships waiting outside the port fell.
The volume shipped in the week ended 7 a.m. local time yesterday gained to 2.01 million metric tons from 1.67 million tons a week earlier, Newcastle Port Corp. said today on its Web site. A total of 23 ships, waiting to load 2.32 million tons of coal, were lined up outside the port, down from 30 last week.
Coal exporters in Australia, the world's largest shippers of the fuel, are boosting output to take advantage of prices that gained to a record last month. Rio Tinto Group, Xstrata Plc and BHP Billiton Ltd. are among mining companies that ship coal through Newcastle.
Coal ships waited 11.3 days to load coal in the week, down from 13.15 days a week earlier, Newcastle Port said. The waiting time compared with 0.33 day for general cargo vessels last week, it said.
A total of 25 vessels carrying coal left Newcastle in the week ended Aug. 2, Newcastle Port said today in an e-mailed report. Seventeen ships were bound for Japan, four for Taiwan, two for Malaysia and one for South Korea and Turkey, it said.
The weekly price index for power-station coal shipped from Newcastle dropped 8.2 percent last week to $160.40 a ton, according to the globalCOAL NEWC index. The monthly index for July increased 13 percent to $184.51.
To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net
Read more...
Aug. 5 (Bloomberg) -- Coal exports from Australia's Newcastle, the world's biggest export harbor for the fuel, increased 20 percent last week while the number of ships waiting outside the port fell.
The volume shipped in the week ended 7 a.m. local time yesterday gained to 2.01 million metric tons from 1.67 million tons a week earlier, Newcastle Port Corp. said today on its Web site. A total of 23 ships, waiting to load 2.32 million tons of coal, were lined up outside the port, down from 30 last week.
Coal exporters in Australia, the world's largest shippers of the fuel, are boosting output to take advantage of prices that gained to a record last month. Rio Tinto Group, Xstrata Plc and BHP Billiton Ltd. are among mining companies that ship coal through Newcastle.
Coal ships waited 11.3 days to load coal in the week, down from 13.15 days a week earlier, Newcastle Port said. The waiting time compared with 0.33 day for general cargo vessels last week, it said.
A total of 25 vessels carrying coal left Newcastle in the week ended Aug. 2, Newcastle Port said today in an e-mailed report. Seventeen ships were bound for Japan, four for Taiwan, two for Malaysia and one for South Korea and Turkey, it said.
The weekly price index for power-station coal shipped from Newcastle dropped 8.2 percent last week to $160.40 a ton, according to the globalCOAL NEWC index. The monthly index for July increased 13 percent to $184.51.
To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net
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