Super Mario boosts confidence

Camilla Boldracchi, PhillipCapitalUK
19/Sep/2018 08:48

Yesterday, ECB President Mario Draghi stated that Eurozone banks have more work to do on soured debt, in an attempt reduce European banks risk of having non-performing loans. The recent emerging market rout had caused an increased risk of default for European banks and uncertainty for the EUR. Hence, his speech helped to give confidence to investors that safeguards would be duly placed. Draghi is due to speak again later. Thus far, he sounded confident that the Eurozone economy is able to weather the US trade threat. Therefore should he continue his hawkish tone and remain optimistic on the region’s growth, it would bring about investors’ confidence towards the EUR.


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Japan's central bank keeps policy steady

Camilla Boldracchi, PhillipCapitalUK
19/Sep/2018 08:44

Click here Japan’s interest rate will remain extremely low “for an extended period” holding to forward guidance it first introduced in July. The board voted 7-2 to maintain shorter-term interest rates at minus 0.1% and keep the target for the 10-year Japanese government bond yield at around zero. Bank of Japan’s Haruhiko Kuroda stated that bank would tolerate a rise in the yield to about 0.2% after previously setting an informal cap of about 0.1%.


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IMF: The UK's economy will take a financial hit post Brexit

Camilla Boldracchi , PhillipCapitalUK
18/Sep/2018 08:48

The IMF has warned that regardless of a "hard" or "soft" Brexit, the UK's economy will take a financial hit. This warning comes as negotiations between the U.K. and EU remain strained and key issues in the "divorce" are unresolved. Making matters worse, some lawmakers in Prime Minister Theresa May’s Conservative Party have rebelled against May’s Brexit plans. This has caused May to announce last night that she is willing to pull the UK out of the EU without a deal if they do not agree to her Brexit plan. A “hard” Brexit will put the UK’s economy in the worst scenario possible. Against a backdrop of disagreements and political instability, the probability of a "no deal" scenario has looked more likely in recent weeks. Hence, this could cause some downside pressure on the GBP.


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Oil prices react to Trump's trade-wars

Camilla Boldracchi, PhillipCapitalUK
18/Sep/2018 08:44

Crude oil prices pared back early gains as US-China trade row intensified. The IEA and OPEC have both warned on the impact of escalating trade tariffs and its potential damage to the global economy and oil demand growth as the two largest economies clash over trade imbalances. US Energy Secretary Rick Perry has stated that the world’s top 3 producers will be able to raise global output in the next 18 months to compensate for shortfalls from Iran and elsewhere. Oil prices will face headwinds in the current term as market sentiments remain shrouded by increasing geopolitical uncertainties and its impact on global economic growth.


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Could there be a second Brexit referendum?

Camilla Boldracchi , PhillipCapitalUK
17/Sep/2018 08:52

Domestic bickering over the best approach for Brexit continues to grab media coverage; the London Mayor is going against the Labour Party leadership and wants a second referendum, Boris Johnson as launched further criticism of the Chequers plan and Michael Gove says that while that is a sensible approach for now, there is nothing to stop any future PM subsequently taking a different one. It really is the gift that just keeps giving.


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Commodities: All Eyes on Oil

Camilla Boldracchi, PhillipCapitalUK
17/Sep/2018 08:47

Click here Global oil prices reduced in early Asian trading hours this morning as trade war fears are outweighing supply concerns from upcoming sanctions on Iran. India is set to cut its imports of oil from Iran by half over the next two months, which will put a significant dent in Iran’s ability to find markets for its oil.


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Brexit latest

Camilla Boldracchi , PhillipCapitalUK
13/Sep/2018 09:23

Markets had a relatively calm day yesterday ahead of today’s central bank announcements. Gilt yields were virtually unchanged, with a small bias to the downside. The UK political situation continues to look precarious from the PM’s point of view as the vultures circle looking for their opportunity to strike. The question remains as to who would replace her. While all this is going on in Westminster, there is talk that a date is about to be set for the signing of a Brexit agreement, however most of this speculation seems to be emanating from the European ranks and could be positioning if agreement can’t be met.


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President Xi against protectionism and the politics of force

Camilla Boldracchi, PhillipCapitalUK
12/Sep/2018 12:09

Trade war trepidations continue to loom over Asia and whilst Beijing has maintained a resolute stance in the face of U.S. tariff threats, Chinese firms, many of which are owned by the state, are acknowledging their worries. Chinese President Xi, in his speech at the Eastern Economic Forum in Russia’s Vladivostok, launched a coded attack on Trump by stating that “There are deep and complex changes underway in the international situation, the politics of force, unilateral approaches and protectionism are rearing their head.”


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Brexit in 6 weeks?

Camilla Boldracchi, PhillipCapitalUK
11/Sep/2018 09:55

Click here The UK remains in focus following a day of data yesterday. On Monday the pound jumped to its highest against the dollar in a month, after the EU’s chief Brexit negotiator Michel Barnier said the possibility of reaching a deal by November was ‘realistic’. Today it is the turn of unemployment and average earnings data. The ILO measure of unemployment is expected to hold steady at 4%, while, more importantly from the MPC's point of view, average earnings including bonus payments are forecast to hold at 2.4% and increase by 0.1% excluding bonuses to 2.8%.This morning sees the UK jobs report released, with markets keeping a particularly close eye on the average earnings figure given the impact on inflation expectations.


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US-China Trade war and its impact on WTI prices

Camilla Boldracchi, PhillipCapitalUK
11/Sep/2018 09:50

U.S. oil exports to Japan and South Korea are expected to rise to record highs this month as Asian refiners take advantage of the discounts American sellers are offering after losing Chinese customers resulting from trade dispute between Washington and Beijing. In addition as U.S. sanctions against Iran are due to hit in November, many Asian refineries are seeking to make up the short fall with American supply. WTI is currently priced at $ 67.75.


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Brexit in the limelight

Camilla Boldracchi, PhillipCapitalUK
10/Sep/2018 09:13

The EU chief Brexit negotiator Michel Barnier said 90% of Brexit treaty is now complete as UK’s former foreign minister, Boris Johnson, cast PM Theresa May’s Brexit plans a "a suicide vest" wrapped around the British constitution. Meanwhile, KPMG are reporting that even a ‘smooth’ Brexit will see low growth in the UK next year. It has pencilled in 1.4% for an amicable exit and 0.6% in a no deal scenario. Its forecast for this year is 1.3%. Separately BDO says that business confidence is at a fifteen month low as a lack of reported progress on Brexit negotiations hang heavy in the air.


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Tags:   Brexit Theresa May UK

US wage growth

Camilla Boldracchi, PhillipCapitalUK
10/Sep/2018 08:50

Strong wage growth in the US means that the policy setting FOMC is unlikely to stray from its current path of steadily tightening monetary policy in the States any time soon. This is not good news for those dollar debt laden emerging market economies including Turkey, Brazil and Russia, already struggling under the weight of the action taken to date and their equity markets are reflecting it.


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Tags:   US Emerging markets

US: Non-farm payrolls set to increase

Andrew Hall , PhillipCapitalUK
07/Sep/2018 09:33

Taking centre stage today will be the release of US Non-Farm Payrolls (NFP) for August. The July NFP saw a weaker than expected increase in jobs, only 157K, slightly better figures are likely on Friday with prediction stating a possible gain of 191K jobs. This is the last NFP report before the Fed convenes later in September.


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Tags:   US Fed NFP (Aug).

Asian shares unable to revert recent slump

Andrew Hall , PhillipCapitalUK
07/Sep/2018 09:18

Another bad session for Asian equities as they recorded a 7th straight day of declines as investors’ fear the latest developments in the ongoing Sino-US tariff war. The White House are set to announce imminently the additional import tariff on $200 billion worth of Chinese products with the public comment period having ended yesterday, in which US President Donald Trump came in for an ear-bashing from American business, who unsuccessfully attempted to convince Trump to reverse the course of action. The MSCI’s broadest index of Asia-Pacific shares outside Japan dropped -0.3% having now hit its lowest level since mid-July. Elsewhere the Hong Kong’s Hang Seng closed down -0.10%, whilst in Australia the ASX200 continued its recent downward trend at -0.27%, recovering from sharp early losses.


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Pound regains some lost ground

Andrew Hall , PhillipCapitalUK
06/Sep/2018 08:49

Talk of a softening in the stance of Germany and the UK in regards to the Brexit negotiations helped the pound regain some lost ground yesterday but we are still some way from agreement. The suggestions look like an attempt to kick the contentious issues into the long grass, to be addressed after the actual Brexit date, i.e. the Northern Ireland border issue. The pound saw marginal gains against both the Euro and Dollar, with EURGBP trading down at 0.9003, whilst cable edged back over the $1.29 mark.


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Raft of US data ahead

Andrew Hall , PhillipCapitalUK
06/Sep/2018 08:44

We receive a raft of US data today with US ADP nonfarm employment change for private sector jobs. In July the data surprised with a gain of 219K positions, above expectation. This month a slower pace of hiring is projected at 189K. Also from the US, we receive the ISM Non-Manufacturing PMI. The services sector saw slower growth than the manufacturing one back in July, with a score of 55.7 points. Finally the U.S. Energy Information Administration will release its weekly report on oil stockpiles, set to show a reduction of -1.294M barrels, from -2.566M previously.


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Oil prices lower as Tropical Storm Gordon fears ease

Andrew Hall , PhillipCapitalUK
05/Sep/2018 09:24

Oil prices have slipped on the back of a strong dollar, whilst expectations for a surprise build in stock piles at Cushing outweighed the impact from tropical storm Gordon on US Gulf coast production. The markets initial knee-jerk reaction saw prices jump but has reversed lower again in early trading today. Brent crude futures are trading down -0.5%, whilst US crude futures slipped -0.75%.


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Asian shares lower as trade fears linger

Andrew Hall , PhillipCapitalUK
05/Sep/2018 08:51

Asian shares traded broadly lower on Wednesday as Emerging Market stocks fought to contain the contagion from the sharp falls in the Argentinian peso, whilst global trade tensions remain high as markets await Beijing’s next move. Talks are set to resume today between Canada and the US as they look to resolve issues holding up the renegotiation of the North American Free Trade Agreement (NAFTA). The MSCI's broadest index of Asia-Pacific shares outside of Japan was down -1.00% hitting a two-week low. Elsewhere Hong Kong’s Hang Seng slumped -2.29% and Australia’s ASX200 continued its recent downward trend losing -1.00% as major mining stocks traded in negative territory.


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Mark Carney to lead session of BoE inflation reports

Andrew Hall , PhillipCapitalUK
04/Sep/2018 08:59

Later today, we receive the latest inflation report hearings with policy makers led by Bank of England Governor Mark Carney, who is set to explain the decision to raise the base rate 25bps to their highest level in almost a decade in August amongst ongoing Brexit uncertainty and rising inflation. UK inflation rose to 2.5% last time out, recording an increase for the first time since November. Whilst no doubt the small matter of Mr Carney’s future will also be discussed with his tenure set to end in June of next year with speculation mounting that Carney will extend his term with talks ongoing.


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Tags:   UK BoE Commons Carney CPI.

RBA holds rates for record 25th consecutive month

Andrew Hall , PhillipCapitalUK
04/Sep/2018 08:50

We started early on Tuesday with the RBA deciding to keep rates unchanged for a record 25th consecutive month in September. The RBA have kept the key final paragraph of the rate statement unchanged - “further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual”. The RBA are optimistic on wage growth, whilst unemployment has fallen to 5.3% its lowest level in almost six years. Keep your eyes peeled for RBA Governor Phillip Lowe who is due to speak at 10.30 BST, expect increased volatility in Aussie pairs during this time.


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