Daily market overview from IFC Markets

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Old Nov 17, 2014, 3:59pm   #17
Joined Oct 2014
Japan: investors shocked

IFCM started this thread The Japanese recession onset pushed the major European, American and Asian indices. The Q3 GDP in Japan, the world’s third largest economy, shrank 1.6% after a reduction of 7.3% in the previous quarter. The official outlook amounted to 2.3% of it’s growth. It was reported that the Bank of Japan was planning to create new incentives for Japanese exports in terms of interest rate reduction and bond issuing. This event leads to the main conclusion: the US economy is no good at coping with the global economic growth function.

Stoxx Europe 600 Index has slipped 0.5% at the London Stock Exchange opening. S&P500 futures dropped 0.4%. Industrial Production data will be released today in the United States. It is estimated to 0.2% in the past month, and that is much lower than in September (1%). MSCI Pacific index and Japan’s Topix have also fallen 1.2% and 2.5%, respectively.

WTI crude oil continued to slide and lost 1.2% after the largest retracement in the previous month: investors don’t believe there will be any decision made regarding the reduction of oil supply at the next OPEC meeting. The targeted dumping is more probable to maintain the market share. Oil prices have fallen about 30% since early June as the US oil production rose till the historical high level. As a result, OPEC failed to achieve a reduction in oil production and was forced to decrease export prices. Among the most affected countries were Venezuela, Libya, and Ecuador. WTI price slipped more than 3.6% over the past week, and 24% compared to the last year.

Gold prices rose $24.10, or 2.07%, to $1185,60 per troy ounce. Gold futures is traded at the level of one-week high: investors are still cautious at closing short positions before the today’s release of important US economic data. Note that today we expect the publication of Empire State manufacturing Index and the US Industrial Production m/m. We don’t expect a long-term price growth of precious metals as positive US economic data makes it possible to expect the monetary policy tightening in the short term.
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Old Nov 18, 2014, 12:57pm   #18
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Stock markets rise, S&P500 hits new record

IFCM started this thread US stocks declined in the morning trade on Monday following unexpected news that Japan’s economy contracted for the second consecutive quarter. The US central bank report that nation’s industrial production fell 0.1% in October after a 0.8 percent increase in September, the second decline in the past three months didn’t help investor optimism either. Stocks recovered in afternoon trade after market sentiment was bolstered by the news report that European Central Bank president Mario Draghi stated during testimony to the European Parliament in Brussels that the central bank would be open to potentially buying government bonds, if needed. The S&P 500 posted a small gain of 1.5 points which was enough to push the index to a new record close at 2,041.43 , its 42nd this year. The Dow Jones Industrial Average added 13 points, or 0.1%, to 17,647.75. In a separate report, the New York Federal Reserve said its Empire State general business conditions index rose in November. Businesses remain upbeat about the future as an index for future business hit its highest level since January 2012.
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European stocks ended Monday higher after Draghi’s testimony indicated a possible start of a new round of monetary stimulus program by the ECB to help the recovery of euror zone economy. The Stoxx 600 had been lower for much of Monday’s session after data showed real gross domestic product in Japan shrank 1.6% in the third quarter. Draghi also reiterated his view that eurozone governments must enact structural reforms to foster economic growth, particularly by enacting labor reforms that would make job markets more flexible. The Stoxx Europe 600 index closed up 0.5% at 337.25, led by telecom, tech, resources and financial stocks. The euro fell to $1.2454 Monday as investors sold euros in anticipation of expansion of the monetary easing policy by ECB after trading above $1.2500 before Draghi’s remarks.
In Japan stock market is rising today after falling by 3% on Monday as investors anticipate that Japanese Prime Minister Shinzo Abe will announce later in the day that he will delay an unpopular sales tax increase by more than a year and call a general election on December 14. Investors expect that the Bank of Japan will also announce about expansion of its monetary stimulus program as its two-day policy board meeting ends on Wednesday. The unexpected GDP contraction and the expansion of monetary easing measures by Japan’s central bank indicate that the yen will continue to weaken against US dollar.
Brent crude oil fell for a second day amid signs of weakening global demand. Futures dropped as much as 0.6 percent in London. West Texas Intermediate was steady in New York. US shale drillers have said they are planning on production growth with fewer rigs despite of falling prices. More investors believe OPEC is not likely cut its output as it doesn’t want to lose its market share to US shale producers.
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Corn fell for a third day in the longest retreat this month as US farmers accelerated harvesting of a record crop. The contract for March delivery lost as much as 0.5 percent to $3.8875 a bushel on the Chicago Board of Trade and was at $3.8975 by 10:56 am in Singapore. A decline today would complete the longest such run since September 23. Soybeans also dropped. Soybeans for January delivery dropped 0.7 percent to $10.2925 a bushel.
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Old Nov 19, 2014, 12:11pm   #19
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Stocks continue rising, S&P 500 and Dow hit new record closing highs

IFCM started this thread The US stocks recorded sizable gains on Tuesday as investor optimism was boosted by upbeat housing data, as well as news of a sales tax hike delay in Japan and better-than-expected ZEW survey data from Germany. The S&P 500 rose 10.48 points, or 0.5% to close at an all-time high of 2,051.80. The Dow Jones Industrial Average added 40 points, or 0.2%, to close at a record level of 17,687.82. US home builder sentiment rose in November as the Housing Market Index released on Tuesday indicated an advance to 58 in November from 54 in October, which was led by more optimism over present and upcoming sales of single-family homes. And US producer inflation edged up 0.2 percent in October, above expectations. Nevertheless, the underlying inflation trend is weak as core PPI excluding energy, food and services rose only 0.1 percent. Today at 20:00 CET Fed releases Minutes from October 28-29 FOMC Meeting which markets will watch for any clues on when the Fed will start raising rates.
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European markets were buoyed by the better-than-expected German ZEW survey, showing the lead economic-sentiment indicator rose to 11.5 in November from a negative 3.6 in October. The survey eased concerns about Europe’s biggest economy by providing grounds for optimism after data released last week showed Germany narrowly avoided recession in the third quarter. The DAX equity index jumped 1.6% to 9,456.53, the strongest close since September 30. The UK’s FTSE 100 index rose 0.6% to 6,709.13, and in Paris, the CAC 40 gained 0.9% to end at 4,262.38. The euro rose against the dollar following the ZEW data, but will likely remain under pressure as the European Central Bank has indicated it is considering purchasing government bonds as the next stage of its monetary easing policy measures. The dollar fell against the pound after a report that inflation in the UK accelerated in October to 1.3%, from 1.2% in September. Yesterday afternoon Japanese Prime Minister Shinzo Abe called for snap elections in December and delayed a planned sales-tax hike delay for a year and a half. Japanese stocks started modestly higher today but quickly added to gains as the yen continued falling ahead of Bank of Japan’s Interest Rate Statement and the central bank’s Governor Haruhiko Kuroda’s press conference later in the day.
Oil continued falling amid speculation that OPEC will resist production cuts sought by some of its smaller members. Ecuador and Venezuela will ask members of the Organization of Petroleum Exporting Countries to reduce excess output, an Ecuador official said. Brent for January settlement fell 84 cents to $78.47 a barrel yesterday on the London-based ICE Futures Europe exchange.
Gold prices jumped Tuesday as the dollar fell against major currencies amid economic and political news. The US currency fell against the yen after Japanese Prime Minister Shinzo Abe said Tuesday the government will delay by 18 months a planned increase in sales tax. He will dissolve the lower house of parliament and has called for a snap election to be held in December. Gold has been falling against the backdrop of improving US economy and stronger dollar as central banks outside US expand monetary easing policy measures to stimulate faltering economies. Gold for December delivery gained $13.60, or 1.2%, to settle at $1,197.10 an ounce. December silver gained 12 cents, or 0.7%, settling at $16.17 an ounce.
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Old Nov 20, 2014, 12:27pm   #20
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Markets retreat, S&P 500 snaps 4-day advance

IFCM started this thread The US stocks traded in a narrow range on Wednesday as the latest minutes from the October meeting of the Federal Open Market Committee were published and closed marginally lower. The S&P 500 closed 3.1 points lower at 2,048.72, ending its four-day winning streak and posting its 43rd record high previous day. The Dow Jones Industrial Average ticked down 2.1 points to 17,685.73. The Nasdaq Composite finished down 26.73 points, or 0.6%, at 4,675.71. The Fed minutes revealed that several Federal Reserve officials pushed colleagues to say more publicly about the pace of interest rate increases, suggesting that the central bank is still planning to raise rates next year despite low inflation and weak global economic outlook. No additional information was revealed about when interest rates would be hiked. It is expected Fed will increase rates near the end of 2015. Earlier Wednesday the Commerce Department reported that construction started on new US homes fell in October as multifamily-home construction dropped 15.5%, while single family home construction actually rose 4.2% to its highest pace since November 2013. Today at 14:30 CET the Consumer Price Index for October (YoY) will be released in US, the tentative forecast is 1.6% against 1.7 percent in the previous month. At the same time the Continuing Claims and Initial Jobless Claims for the weeks ended November 8 and 15 will be released, and the tentative forecast is positive. At 15:45 CET Markit releases preliminary US Manufacturing PMI for November. And at 16:00 CET Existing Home Sales for October, the Leading Indicators for October and Philadelphia Fed Manufacturing Index will be released, which are expected to come out lower compared with the previous month.
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European stock markets posted marginal gains after hitting a seven-week high earlier on Wednesday as investors adopted cautious stance ahead of minutes of Fed’s October policy meeting. The stocks were also under pressure as mining shares fell following a 5% drop in China’s iron ore futures, indicating a supply glut and weak demand. Germany's DAX rose 0.17 percent and France's CAC was up 0.09 percent. UK’s FTSE 100 index fell 0.2% to 6,696.60. The euro moved higher against the dollar for the second consecutive session, briefly climbing to $1.2605 immediately after the FOMC minutes before falling back to $1.2543. Japan’s exports rose the most in eight months in October, as data from finance ministry indicated overseas shipments rose 9.6 percent from a year earlier to the highest level since October 2008. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession. China’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction and the lowest in six months.
Crude-oil futures extended losses to a third straight session on the backdrop of the US Energy Information Administration report earlier Wednesday showing a surprise increase in supplies. January Brent crude on London’s ICE Futures exchange fell 0.5%, to finish at $78.10 a barrel. Brent prices slid 1.7% in the last three sessions. Gold declined on reports Wednesday that support for a Swiss November 30 referendum to require the country’s central bank to hold 20% of its reserves in gold will likely not secure more than 50% support to pass. Gold for December delivery slid $3.20 to settle at 1,193.90 an ounce.
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Old Nov 21, 2014, 1:19pm   #21
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Double jeopardy for GBP

IFCM started this thread The British pound continued slipping against other liquid currencies. The UK Independence party (UKIP), which goes for the country’s exit from the EU, won the European Parliament elections held in Britain on Thursday. This event casts doubt on the cooperation outlook with the largest trading partner. If the decision of the UK leaving the EU is taken, we would expect the pound to weaken no less than 10%. It dipped 0.3%, falling to $1.5645 on London Exchange. This is the most severe weakening of the national currency over the entire week.
Stocks of European companies rose after Mario Draghi had spoken on inflation rate. Today Stoxx Europe 600 has upped 0.9% at the trading session opening on London Stock Exchange, approaching the weekly high +1.7%. The growth was also demonstrated by oil and gas companies: oil price boosted during the week for the first time since September. S&P 500 and MSCI Pacific showed weak growth by 0.3%, which has no significant fundamental reasons.

Analysts are not consistent in their opinion after the OPEC meeting of 12 member-states: there is no single opinion on possible oil supply cuts. Therefore, slightly risen oil prices this week are likely to be explained as the price retreat in the face of uncertainty. Nevertheless, members of the organization recognize that the demand will be significantly lower next year. Brent crude oil fell 30% since June as US oil production was increasing for three consecutive quarters. However, weak global economic growth does not guarantee the expected demand. Opinions of OPEC members are also divided: if Saudi Arabia is resisting the demand cut, Venezuela and other countries are looking for ways to support the market before the meeting on November 27.
The world’s largest meat company JBS announced its plans to increase exports to Asia. It happened after the Primo Group purchase, the largest meat producer in Australia and New Zealand. That gives the opportunity to increase the share of more expensive products and expand the market. Currently, Australia can not export about 20% of pork due to the lack of certification in the Chinese market. However, this restriction would be overleaped as the free trade agreement between the two countries enters into force beginning in 2018. The prospects for meat supply hike on the biggest Asian market resulted in F-CATTLE price drop: today the price has dropped 0.7% on Chicago Mercantile Exchange and indicated further reduction outlook.
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Old Nov 25, 2014, 2:15pm   #22
Joined Oct 2014
Markets rise, S&P 500 and Dow hit new records

IFCM started this thread US markets closed higher on Monday. The S&P 500 closed 5.91 points, or 0.3%, higher at 2,069.41, the 46th time it closed at record level this year. The heaviest-weighted company on the index, Apple, Inc. rose 1.9%, helping lift the benchmark. The Dow Jones Industrial Average dipped in an out of negative territory but closed marginally higher at 17,817, a record high for the 29th time this year. Analysts expect that revised third-quarter gross domestic product figures expected to be released today at 14:30 CET, followed by the consumer confidence index for November will indicate an improved outlook for the US.

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European stocks rose Monday building on last week’s momentum after the ECB revealed plans for further stimulus and announced Friday that it had begun purchases of asset-backed securities, marking a second stage of its quantitative easing measures. The Stoxx Europe 600 closed 0.1% higher, pulling back from bigger gains during the session after reports of unexpected improvement of German business sentiment provided some reason to expect the ECB will likely reconsider the urgency of immediate action in light of improving outlook in Europe’s biggest economy. On Monday the Ifo institute reported German business confidence survey results which indicated the monthly index rose unexpectedly to 104.7 points in November from 103.2 points in October, after declining for six months in a row. Euro rose against other major currencies, climbing to $1.2409, up from $1.2392 late Friday. The gains for euro could have been higher if it were not for the European Central Bank President Mario Draghi’s remark last week that it was necessary to bring euro zone inflation up to the ECB’s target “without delay.” The comment reinforced Investor expectations that the ECB will implement a full-scale quantitative easing program, which likely would weaken the euro. In other currency pairs, the yen fell against the dollar to ¥118.245 from ¥117.72 Friday. Investors are looking forward to the release of minutes from October’s Bank of Japan meeting Monday evening to see if it will reveal any details for central bank’s monetary easing program. Russia’s ruble , which has fallen almost 37% so far this year against the dollar rose around 2.1% against the greenback.

Oil futures declined in choppy trade Monday as investors awaited the results of talks over Iran’s nuclear program. A deal would end sanctions on Iranian oil exports, further increasing the supply and adding pressure on oil in a global market suffering from low demand and increased output by major producers. ICE January Brent futures dropped 68 cents, or 0.9%, to end at $79.68 a barrel, after two sessions of gains. As the Organization of the Petroleum Exporting Countries is planning a meeting on Thursday, investors expect no major cut to be announced. The cartel wants to preserve its market share therefore leave production as is, and a large cut would enable US shale producers to keep their own production levels high.

Gold futures declined as US inflation concerns eased and the dollar climbed to the highest level since March 2009 against a basket of 10 currencies as Japan and Europe added to monetary stimulus. In 2014, gold has declined 0.5 percent. The metal in 2013 tumbled 28 percent, ending a 12-year bull run. A second straight annual drop would mark the longest slump since 1998.

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Old Nov 26, 2014, 11:42am   #23
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Global markets mixed, S&P 500 and Dow close lower

IFCM started this thread The US stocks traded in a narrow range on Tuesday and closed marginally lower snapping a three day run on the S&P 500 and Dow Jones Industrial Average. The Commerce Department upgraded its reading on third quarter gross domestic product (GDP) growth to 3.9 percent on Tuesday from 3.5 percent reported last month. The raised estimates reflected upward revisions to business and consumer spending, At the same time The Conference Board report released on Tuesday indicated that US consumer confidence fell unexpectedly in November to its lowest level since June as optimism waned in the short-term outlook for business conditions and jobs. The S&P 500 set an intraday high, but closed 0.1% lower at 2,067.04. The Dow Jones Industrial Average slipped 3 points to 17,814.94.

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In Europe, Germany’s Federal Statistics Office confirmed an earlier preliminary estimate showing a 0.1 percent rise in seasonally-adjusted GDP in the third quarter, indicating that Europe’s biggest economy narrowly avoided recession after contraction in the second quarter. Germany’s DAX 30 index climbed 0.8% to 6,731.14, pushing the index’s month-to-date gain to 5.7%. The Stoxx Europe 600 rose 0.2% to 346.28. The European Commission agreed on Tuesday to set up a new fund with $26 billion of capital to act as a catalyst for 300 billion euros of private investment into infrastructure projects to revive growth. The Commission hopes it will create a million jobs over three years. The Nikkei Average rose 0.3% to 17,407.62 on Tuesday. Bank of Japan Governor Haruhiko Kuroda said on Tuesday that the central bank would continue to take actions to achieve its 2% inflation target. On Tuesday, the People’s Bank of China lowered its 14-day repurchase-agreement rate by 20 basis points after a surprise interest rate cut on Friday.

Oil futures slumped to their lowest close in more than four years Tuesday after a meeting between OPEC members Saudi Arabia and Venezuela with major oil producers Russia and Mexico failed to reach an agreement on output cuts. ICE January Brent dropped $1.35, or 1.7%, to $78.33 a barrel. Analysts expect Saudi Arabia is likely to adhere to calls for the cartel to stick closer to its production ceiling of 30 million barrels which could provide some near-term support, but have argued it would likely take a bigger reduction to provide a more sustainable increase in the price. The cartel has been exceeding its existing production ceiling of 30 million barrels a day, producing around 30.7 million barrels a day in September.

Gold inched higher on Tuesday after reports US confidence index fell unexpectedly in November. December gold futures settled up 0.1% at $1,197.10 an ounce. December silver settled higher 1% at $16.55 an ounce. China will begin to buy corn from farmers this week under an annual intervention program as it seeks to support the domestic market and boost rural incomes, and plans to buy 40 million tons of corn in 2014/2015. And falling soymeal prices in China are threatening to cut China's booming demand for US beans as processing margins have started turning negative. A slowdown in imports by China, which buys more than 60 percent of globally traded beans, could add to pressure on global prices that rallied to a four-month high earlier this month on the back of strong demand.

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Old Nov 27, 2014, 2:05pm   #24
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S&P 500 and Dow hit new record highs

IFCM started this thread US stocks ended Wednesday session marginally higher as investors discounted mostly disappointing economic news. The S&P 500 and Dow Jones Industrial Average scored their 47th and 30th record closes this year at 2072.77 and 17827.75 respectively. Trading was thin ahead of Thanksgiving holiday. The Commerce Department said Wednesday consumer spending climbed a seasonally adjusted 0.2% in October after being flat in September. Core capital goods orders excluding aircraft fell 1.3 percent for a second straight month, a closely watched proxy for business spending plans. The drop in core capital goods suggests the economy is not fully immune to Japan's recession and cooling growth in China and Europe. A separate report from the Labor Department showed initial claims for state unemployment benefits last week were above 300,000 for the first time since early September. The Chicago purchasing-managers index and the University of Michigan Consumer sentiment index for November fell slightly. Sales of new single-family homes rose 0.7% in October, while a gauge of pending home sales fell 1.1% in October, signaling that upcoming deals could slow down.

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Vitor Constancio, the European Central Bank’s vice president, said on Wednesday the ECB might decide as early as the first quarter of next year whether to begin buying sovereign bonds, starting the so called quantitative easing program. Equities across Europe rose after this news but ended essentially flat as The Stoxx Europe 600 index closed unchanged at 346.28. The euro declined after Constancio’s comments , but recovered later against the dollar to buy $1.2502 compared with $1.2473 in late Tuesday as the dollar lost ground after a round of weak US economic data.

Oil futures declined further on Wednesday on expectations the Organization of the Petroleum Exporting Countries will not decide to cut significantly oil production at its meeting on Thursday. January Brent crude on London’s ICE Futures exchange slid 54 cents to $77.80 a barrel. Nymex crude has dropped nearly 3.7% since the beginning of the week. Oil futures are down more than 30% from their midyear high. Saudi Arabia’s oil minister, Ali Al-Naimi, said Wednesday that he believes the crude market “will stabilize itself,” while Iran’s oil minister said OPEC should comply with its output ceiling. As analysts point out, lowering the production limit is not in OPEC’s long term interest as by limiting its own output it would concede more market share to shale oil producers. At the same time, current low oil prices are to the benefit of some larger OPEC members like Saudi Arabia as this will undoubtedly put pressure on smaller and inefficient oil producers.

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Gold declined on Wednesday with December gold finishing down less than 0.1% at $1,196.60 an ounce as the mixed US economic data indicating some slowing in the pace of economic growth were discounted by investors and didn’t cause an increase for the safe haven asset demand. Gold is up 2.1% in the month to date, having dipped just 0.1% so far in this holiday-shortened week. Meanwhile, December silver settled unchanged at $16.55 an ounce. Corn futures rose for a second day in Chicago on demand for the grain to make ethanol as US output of the fuel climbed to an all-time high. Yesterday, corn futures for March delivery gained 1.8 percent. With 94 percent of the crop harvested as of November 23, many farmers are storing corn until prices rise.
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