Tuesday, 16 August 2016 08:06

Japan's economy stagnated in 2nd quarter

EconomyVN - The latest report from the Japanese government said the Japanese economy in the 2nd quarter of 2016 equals to the previous quarter and rise only 0.2% compared to the same period of 2015.

Accordingly, contrary to the forecasts of economists, growth in the Japanese economy in the second quarter of this year is only at 0%, due to weaker exports and reduced business spending. This result creates tremendous pressure on Japanese officials to revive the country's economy, while there are also more skeptics about the effectiveness of the economic program "Abenomics" lasted many years by Prime Minister Shinzo Abe.

The above figure is lower than the market's forecast and raises concerns about the stalemate of the Japanese Government in their efforts to recover the 3rd largest economy in the world.

Last week, Tokyo announced a new economic stimulus package worth up to 28.000 billion yen to support the economy, after the results of Brexit have made the global financial markets wobble.

Oanh Dao

Published in World economy

On 2nd of August, the Cabinet of Japanese Prime Minister Shinzo Abe adopted a new economic policy stimulus package of more than 28,000 billion yen (274 billion dollars).

The Japanese government estimates that with this economic stimulus package the country will increase GDP by 1.3% in the context that the domestic economy is facing a strong reduction of consumption, private investment, slow growth of economic world and risks.

Due to financial difficulties, most of the economic stimulus package will not rely on the general budget, which is removed from the financial loan and investment programs.

It is expected that the draft budget will be submitted to an extraordinary session of Japan's parliament convened in mid-September.

Tonny Le

Published in News

On Friday, crude prices remained around April minimums as slowing economic growth threatened to drastically worsen ongoing oversupply of oil as well as refined products.  

International Brent crude oil futures were worth $42.78, showing a 8 cent surge from their previous close. Meanwhile, US West Texas Intermediate crude futures traded at $41.16, rising 2 cents.

Brent achieved its lowest value since April during last trading session, hitting $42.56, while WTI boasted another minimum of $40.95 per barrel on Friday. Currently, both crude benchmarks are down approximately 20% since their last high in June.

Due to ongoing oversupply, American bank Goldman Sachs told this week that it didn’t expect a huge recovery in prices any time soon.

Financial experts are still expecting that crude prices will stay within a $45 per barrel to $50 per barrel trading range in mid-2017.

Besides this, some experts told that recent price drops in oil had been heavily overdone, especially as demand is still strong notwithstanding worries over future economic growth.

Gold soars as BOJ notes downside risks to economy

Gold grew during Asia trade as Japan’s number one financial institution moved cautiously in its recent policy review, but indicated that it might act in the future if required.  

In New York, December delivery gold futures edged up 0.45%, being worth $1,347.25 per troy ounce. As for September delivery silver futures, they gained 0.57%, trading at $20.307 per troy ounce. At the same time, September delivery copper futures sagged 0.45%, being worth $2.206 per pound.

Market participants were on the lookout for moderate easing measures. While Japan’s prime minister Shinzo Abe disclosed a broad ¥28 trillion stimulus measure on Wednesday, Reuters posted that the Japanese government might only offer as much as ¥7 trillion in direct fiscal stimulus.

Still if Abe appears to be unable to deliver on his promises of jump starting the national economy with a broad stimulus initiative, then the BOJ could feel extra pressure to lower interest rates more into negative territory.

Bazooka

Published in Commodities

Contrary to forecasts of economic analysts and investors, Bank of England (BOE) on 14th of July ended policy meeting by deciding to keep the interest rate at record low 0.5% maintained for more than 7 years, and have not made any changes to the program of 375 billion pound quantitative easing (QE) made from November, 2012.

BOE's decision surprised a lot because before the meeting, participants of market forecasted with probability 70%, BoE will cut rates from 0.5% to 0.25% to support economy deal with risk of depression after the voters of this country voted to leave EU. Even BoE Governor Mark Carney has issued clear signals about the possibility of lower interest rates in the context of deteriorating economic outlook.

In the minutes of the meetings published immediately afterwards, BOE said the agency did not change monetary policy until there is a more complete assessment of impact of Brexit for UK economy. Besides, most members of Monetary Policy Committee (MPC) of BOE have endorsed the easing monetary policy in August, if the economic outlook does not improve.

Shortly after BOE announced this decision, GBP / USD soared nearly 2% to 1.3470, the highest level of 3 weeks before falling partially. Although the recovery of British pound is likely to continue, but this currency is expected to drop again in the near future.

Japanese yen continued strong downtrend since the beginning of the week and in this morning USD / JPY exceeded 106 level, 3-week high as the market continues to expect Bank of Japan (BOJ) will strengthen the easing monetary policy by expanding bond purchase program at a meeting of the agency on July 27-28th. After the landslide victory of the ruling coalition of Prime Minister Shinzo Abe at the Japanese Senate elections, observers are expecting a fiscal stimulus package will be announced in future.

GBP: BUY 1.335 TARGET: 1.3520 STOP-LOSS: 1.3260

Thông Lê

Published in Trading strategies
Thursday, 14 July 2016 08:23

Pound plunged ahead of BOE meeting

After the recovery session impressed due to the stable return of British politics as the country has a new prime minister, British pound yesterday plunged back before meeting result of Bank of England (BOE) will be announced today with the majority of analysts are predicting that the BoE will cut rates from 0.5% to 0.25% in this meeting.

However, Some analysts suppose that that cutting interest rates will be delayed until the August meeting. At present England is in the process of establishing a new government, policy makers at the BOE can to open policy until the statements related to Brexit are declared by the new government as well as impacts of Brexit for the UK economy are expressed more clearly. If BoE cut interest rates, pound will continue to plunge and set new lows. Otherwise, GBP/USD will have a strong recovery.

Canadian Dollar rose sharply yesterday after Bank of Canada (BOC) decided to keep interest rates at 0.5%. In the statement issued after the meeting, BOC expressed optimistic prospects for the Canadian economy as oil prices on world markets have rebounded. Besides, the agency said that the stability of US economy will support the growth of Canada in the remaining months of this year.

After the slowdown session yesterday, this morning Japanese yen JPY continued to decline to the 3-week low against US dollar as the market continues to expect Bank of Japan (BOJ) will enhance easing monetary policy through the expansion of bond purchase program in the meeting of the agency on 27-28th of July.

Monday, July 11th, Prime Minister Shinzo Abe announced that they will strengthen the economic stimulus measures after the landslide victory of the ruling coalition in Japan's upper house election held on the weekend. The rate increase of the majority coalition in the Japan upper house will allow policy makers to pass bigger fiscal stimulus package in a easier way. Rumors of that the Central Bank of Japan (BOJ) will increase monetary stimulus are strengthened after the yesterday meeting took place between Prime Minister Shinzo Abe and FED former chairman Ben Bernanke, who is known to be author of the giant quantitative easing programs to revive the US economy after the global economic crisis in 2008.

Thông Lê

Published in Trading strategies
Tuesday, 12 July 2016 07:46

Japanese Yen fell strongly in 2 years

Japanese yen yesterday had the strongest decline in 2 years against the dollar after Japanese Prime Minister Shinzo Abe announced that they will strengthen the economic stimulus measures after the landslide victory of the ruling coalition in Japan's upper house election held on the weekend. The rate increase of the majority coalition in the Japan upper house will allow policy makers to pass bigger fiscal stimulus package in a easier way.

According to analysts, fiscal stimulus could reach 10 trillion yen, Central Bank of Japan (BOJ) is also expected to strengthen easing monetary policy by expanding programs to purchase bond in order to maintain a weaker Yen to boost growth after the currency rose sharply in recent times.

British pound rose in early trading week after Andrea Leadsom -  Theresa May's only rival in the race to the leadership position of the Conservative Party and as prime minister suddenly announced to give up. In a yesterday speech, Prime Minister David Cameron said he would resign on 12th of July. According to procedure, the queen will invite Ms. May, the leader of the party dominating in the House of England, to form a new government.

UK finds a new prime minister, this has temporarily closed a period of 3 weeks with a series of turbulent shocking developments. Majority of Britons supported the decision to leave EU in a referendum held on 23rd of June, it has made the global financial markets tanked sharply. The market volatility has peaked when the exchange rate of the pound against the dollar fell to the 31-year record lows.

The majority of analysts are predicting that the BoE will cut interest rate from 0.5% to 0.25% in this session, but there are people who still believe that this will only happen in August. The recent political arena in England is highly volatile, policy makers at the Bank of England may step into the period of remaining policy until the claims concerning Brexit from government are formally launched. If the BoE cut interest rates, the pound will continue falling and set new lows. In this case of no action from this agency, GBP/USD will see a bounce back from the 31-year low.

 

CURRENCY

BUY

SELL

TARGET

STOP LOSS

Gold

 

1358

1342

1366

EUR/USD

 

1.1090

1.1010

1.1130

GBP/USD

 

1.3090

1.2920

1.3180

AUD/USD

 

0.7600

0.7510

0.7650

USD/JPY

102.80 

 

103.80

102.30

 

Published in Trading strategies

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