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Economic News

Trump Calls for Investigation Following Manchester Leaks

US President Donald Trump has already called for an investigation regarding the “Manchester leaks” in order for the US government to determine how top-secret information were able to make their way towards the headlines of news reports, when these sets of information were actually only divulged to the key allies of the British government. Several UK officials have already expressed their dismay and disappointment with regards to this particular matter, among them being UK Prime Minister Theresa May. The bombings in Manchester last Monday night had killed a total of 22 people and has left more than 100 people with injuries. The victims were attending a pop concert before the bombings occurred.

Economic News

Drop in Oil Prices Discontented Investors in its Low Figure

Oil prices declined by 5 percent following the extension of production cuts by Opec causing other oil producing countries to be dismayed who are expecting a bigger reduction. Consequently, crude prices dropped to the highest percentage drop since early March.


During the last OPEC meeting, they reached an agreement to prolong supply cuts constitute of 1.8 million barrels per day until the first quarter ends next year and investors are anticipating around half a million extra barrels to be contracted. However, Saudi Arabia’s energy minister, Khalid Al-Falih said that other ministers find it unnecessary to lessen the output further and nine months is the “optimum” duration.

On the other hand, U.S. shale producers are motivated to provide more supplies because of the cheap cost of oil at $50 bpd. Although, they have to be careful since it could exceed the target increase and bring down further the price, stated by the Texas shale oil producer president David Arrington.

Economic News

Fast Track Economic Recovery of India in the First Quarter

The economy of India is considered as the fastest developing major economy globally in the previous quarter, induced by positive performance in manufacturing and services. For short-term, the demonetization has affected the demand but was able to recover. The forecast for this year ranged between 6.5 and 7.8 while the actual data achieved a 7.1 percent growth from January to March this year. It has significantly risen from last year’s Q1 growth of 7.9 percent.

The upswing in the economic growth was mainly pushed by positive domestic factors taking into account a notable progress of the central bank easing of policy rate into lending rates of financial institutions that made investment appealing to investors. Moreover, the infrastructure spending has substantiated growth and probability for better agricultural output when the monsoon rains become beneficial.

On the other hand, the goods and sales tax (GST) is also anticipated to contribute to the economy as its removal will encourage more businesses in India. This will be implemented on July 1st.

The current Money Fall contest has already started on May 29, 2017 and will end on June 2, 2017.

You can register for the next competition which will take place from June 5, 2017 to June 9, 2017.

Note:
Registration for the next competition finishes 1 hour before the contest starts.

Economic News

US Budget Concerns Casts Doubt on Fed Plans

The US Federal Reserve is more than ready to raise its interest rates this coming June, but the possibility of the Congress rattling up the markets by slowing down progress on increasing the debt ceiling of the US economy has cast a shadow of doubt on the Fed’s next scheduled rate hike on September. Prior to this development, the Fed has been saying that they are currently planning to implement two more rate hikes before the year ends, but has now reverted to saying that the third rate hike for year might be in for some delays if the market gets shaken by possible disagreements on fiscal policies.

Economic News

ECB not yet to Withdraw Stimulus Program

The European Central Bank decided to loosen its monetary policy on Thursday but indicated that it further needs some support from the central bank amid increasing growth.
Mario Draghi, ECB president, is very cautious in his announcement regarding the withdrawal stimulus.

During the meeting held on Thursday which is accompanied by 25 members of the council, the bank kept its interest rates and bond-purchase stimulus program steady.

The governing council settled small adjustments towards the 19 emerging countries that utilizes the European currency by stating that interest rates could probably move lower. While Draghi issued another significant change as he described that risk to growth is currently “broadly balanced”, the tweak was announced during the April wherein risk are said to "tilted to the downside."

Carsten Brzeski, analyst at ING-DiBa, allegorize the bank’s statement to a baby’s first step intended to taper the stimulus effort. The financial institution preserved its bond-buying program at 60 billion euros ($67 billion) each month which will last this year or longer.
Moreover, ECB officials were in a stew for the market’s response to the untimely notice that the stimulus will end as the rates will climb higher, undermining the effects.

The current Money Fall contest has already started on June 12, 2017 and will end on June 16, 2017.

You can register for the next competition which will take place from June 19, 2017 to June 23, 2017

Note:
Registration for the next competition finishes 1 hour before the contest starts.

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Economic News

Italy and Qatar to Continue Economic Ties

Countries, Italy and Qatar decided to maintain their deal regarding close integration on economy and finances. Even the decision of some Arab Countries along with Saudi Arabia and the United Arab Emirates is to break diplomatic, travel and trade agreement with Qatar.

The consensus was succeeded by a meeting between Italian Economy Minister Pier Carlo Padoan and Qatari Finance Minister Ali Sherif Al-Emadi held in Rome on Monday.

The two countries said in a joint statement that they discussed the ties in a very friendly atmosphere in accordance with its outstanding relationships on economics and politics

The visit of Al-Emadi in Italy is part of the leader’s European tours, hence he will also go to Berlin, London, Paris, and Washington.

The sovereign states of Arab which include Saudi and UAE ended its agreement with Qatar in the past week, they believe that Doha supports the finances of Iran together with other Islamist groups, but Doha refuted this accusation. While al-Elmadia stated earlier on Monday that his country is able to protect its economy against these charges.

In an interview with CNBC, he further mentioned that those countries that inflicted such sanction have the tendency to lose money due to the damage it wrought in the business sector of the region.

"A lot of people think we're the only ones to lose in this ... If we're going to lose a dollar, they will lose a dollar also," the leader added.

Economic News

Job Creation in Australia Reached 42,000, Unemployment Rate Slowdown by 5.5% in May

Australia created additional jobs with a total of 42,000 which exceeded the expectations of 10,000 as indicated in the roughly calculated poll led by Reuters, disclosed by the Australian Bureau of Statistics on Thursday. However, the number of unemployed for this month accounts to 5.5 percent which came in lesser than predicted 5.7 percent.

The Aussie dollar further gained strength after releasing the current employment data of the Australian economy at exactly 9:30 HK/SIN while the exchange rate against its American counterpart is greater by 0.5 percent.

The employment figures appeared to be volatile but the rate in the past few months showed some development within the labor sector, said by Steven Milch, the chief economist of Suncorp. Mr. Milch also mentioned that the number remained stable for the third consecutive month and much stronger than their anticipated figures.

In case that the trend will continue, it will also increase the wages which could reinforce the reflection of the RBA towards the economy as a “half empty glass”. This shows that the Reserve Bank of Australia is not probable to revise its policy anytime.

The central bank announced that earlier this June the labour market indicators will remain mixed, keeping its benchmark cash rate on hold at a record low of 1.5 percent. The financial institution also noted that the slackening of real income will curtail the growth in household spending.

Economic News

US Stocks Plunge after Brent Crash

The majority of US stock prices crashed on the back of an ever-worsening bout of slump on both industrial and oil shares, eclipsing recent price rallies caused by growth in biotech and aviation technology companies. Brent crude prices dropped to just under $45 per barrel and is now at par with WTI in terms of living with a highly bearish market as US stockpiles continue to be above average and Libya resumes its production. The US dollar also subsequently dropped in value while US Treasury yields did not exhibit any major changes after it was able to regain its losses.

Economic News

Sluggish Growth Prediction for Developed Countries

A U.S. central banker forewarned that advanced economies and financial institutions in the United States will face a slower economic growth for long-term unless fiscal officials do something to counter this. Although, this comes surprisingly since the Federal Reserve just increased its interest rates earlier this month and intend to do more rate hikes gradually to prevent overheating of the economy. This also indicates positive growth of the economic outlook.

Federal Reserve president John Williams said that this optimism will only last for short-term and will change over time. With the sluggish growth, this gives a hard time for monetary policymakers to curb inflation and sustain full employment. This leaves the central bank with no choice but to rate hike since low growth trims the demand for investment and further push down the interest rates.

Economic News

Oil Recovered As Bonds Progressed

Oil improved after a sharp decline and both of the European stocks and bonds were in the red on Thursday as the market awaits for the ECB minutes. This would determine the next actions of the central bank. Although, the Fed Reserve showed mixed signals on Wednesday. Bond yields climbed higher again as the benchmark of U.S. Treasuries rose more than 2.34 percent which increased the global borrowing rates.

The market was caught in between the ambiguous results from FOMC minutes and the U.S. employment statistics on Friday. The beginning of G20 summit has been the center of attention after the long-range missile test this week launched by the North Korea.

Economic News

Yellen Assessed US Economy Growth Target

Fed Chair Janet Yellen said on Thursday that the 3 percent target of the current administration of Trump is “quite challenging” to cope with.

US President Donald Trump pledged during his campaign in 2016 to improve the economic growth by 4 percent, however, the officials trimmed it down to 3 percent and claimed that it might take some time to complete.

Moreover, Yellen mentioned that is "very disappointing," and gave a forewarning that the potential growth of the American economy is now lowered to 2 percent. The chairwoman was asked if it's still possible for the country to gain its three percent goal in the next five years and she answered, "I think it would be quite challenging."

She further stated that higher growth rate requires a great increase in productivity growth which is currently at 0.5 percent, hence, an extreme surge is needed to accelerate and at least few points are regarded as significant.

During the second day of her semi-annual testimony, she said to the Senate Banking Committee that the 3 percent expansion would be wonderful and she’d love to witness it.

The incumbent Chair of the Board is scheduled to end her term on February 3, 2018, if President Trump did not reappoint her for another 4-year term.

Yellen also underlined the things that hamper productivity growth which is related to the dilemma of company reports about looking for qualified laborer, emphasizing the urgency to focus on training worker and further education.

Economic News

Japan’s Economic Assessment in Moderate Recovery

The Japanese government maintains its basic evaluation on domestic economy indicated in the monthly report for July, which will be released on Wednesday.

According to the Cabinet office, the economy of Japan is in a moderate recovery. In the previous month, the government increased its entire outlook for the first time after six months, underlining the advancement in business investment and private spending.

Nobuteru Ishihara, Economic and Fiscal Policy Minister, submitted the latest report to the economy’s ministerial meeting.

As indicated in the July report, the administration revised its content on producer prices assessment for the first time in 22 weeks, stating that the growth has recently slowed down. As the producer prices are said to be “rising moderately.”

Changes slightly caused a delay on the price increase in petroleum products because of the halt in price hike of crude oil, said by an official from the Cabinet Office.

Moreover, the government keep on hold its valuation on other sectors. While the household expenditure also rose moderately together with exports and capital investments.

The report further mentioned that the economy is projected to recover with an improved income growth and employment in the short-term.

Economic News

IMF Cut Growth Forecast for US Economy

The International Monetary Fund downgraded its growth outlook for the United States due to concerns regarding Trump’s capacity to carry out his promises to the economy to stir the American economy.

Although the Washington-based organization provided a positive forecast in April, they had trim it down to 2.1 percent for this year and based on earlier projections for 2018, the US economy will gain 2.3 and 2.5 percent growth.

While the global growth was held at 3.5 percent in 2017 and 3.6 percent for the next year according to the prediction of IMF managing director Christine Lagarde and described it as "quite well anchored".

However, based on the World Economic Update, the IMF mentioned about the uncertainty towards the policies of President Donald Trump since it is a major factor in the leery growth projections for the US.

Pres. Donald Trump got the presidential position six months ago, citing his plans about tax reductions, looser regulation and major infrastructure spending which triggered a rally on Wall Street. But the policies were stalled in the US Congress as the government continues to battle over other issues, like health care reform.

Economic News

Positive German Business Confidence as Economy Strengthen

German firms are preparing for a bountiful period on the back of a slackening summer season.

Business climate of the Germany boosted for the sixth month in July, claimed by the Ifo Institute. According to the poll, which includes 7,000 companies under the construction, manufacturing and trade sector around Europe’s biggest economy, the index increased to 116.0 which is adjusted from 115.2 last month. This was the highest level recorded for almost 26 years, compared with the Bloomberg’s median estimate showing a decline to 114.9.

The euro moved higher following the issued data and continued to trade at $1.1660 at 10:24 a.m. Frankfurt time.

Ebullient sentiment shows that the economy of Germany had performed strongly earlier this year and bound to run over until the second half.

The continuous decline in unemployment had supported the domestic demand as the Bundesbank projected that the “lively” demand for exports will lead the manufacturing as a major growth driver.

Clemens Fuest, Ifo President, said that “Sentiment among German businesses is euphoric”, citing that the German economy will stimulate ahead.

Moreover, the country moved at a fast pace in a year during the Q1 while the International Monetary Fund is confident enough towards the nation’s growth outlook after upgrading its forecast for 2018 in the past months.

The organization further mentioned that the development for 2017 is 1.8 percent and 1.6 percent in 2018, bolstered by the strong domestic demand and stabilized international trade.

The Ifo gauges the present economic situation will gain 125.4 from the adjusted 124.2 and the measures of confidence will expand to 107.3 from 106.8.

The GDP figures for the month of April to June is going to release on August 15.