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[QUOTE="Daniel LQDFX, post: 230298, member: 107699"] [HEADING=2][Center][Heading=1][B]Daily News Update[/B][/Heading][/Center][/HEADING] [HEADING=2] [Right]5 March 2024[/Right][/HEADING] [Right]Tuesday[/Right] [Heading=2]Tuesday is poised to be a significant day for economic news, with two key events on the agenda. Firstly, the Governor of the Bank of Japan, Ueda, is scheduled to deliver a speech. In conjunction, the United States is set to release its ISM Services PMI data, providing insights into the service sector's performance.[/Heading] [B][U][Center]JPY - BOJ Gov Ueda Speaks[/Center][/U][/B] Scheduled to deliver a keynote address at FIN/SUM 2024 in Tokyo, the current Governor of the Bank of Japan, serving from April 2023 to March 2028, holds a pivotal role in shaping market sentiments. His speeches are keenly observed for their potential impact on currency valuation, as a more hawkish stance than anticipated typically bolsters the currency's strength. Given his significant influence over short-term interest rates as the head of the central bank, traders meticulously analyze his remarks for hints of forthcoming changes in monetary policy and interest rate adjustments, often leading to heightened market volatility during his addresses. During a discussion with the Keidanren in Tokyo on December 25, 2023, UEDA Kazuo, the Bank of Japan's Governor at the time, provided insights into Japan's economic progress. He mentioned that his predecessor had previously identified a crucial turning point for Japan as it moved past its prolonged period of low inflation and growth. The year 2023 was characterized by a gradual economic upturn, facilitated by easing supply-side limitations and a closing output gap, which resulted in inflation consistently exceeding 2%. This inflationary trend was largely driven by the rollover effects of previous hikes in import prices on consumer pricing, coupled with changes in how companies approach wage and pricing strategies, indicating a shift away from the long-standing era of low inflation toward achieving the Bank's 2% inflation target. Kazuo provided a historical overview, contrasting the current economic climate with the late 1990s when Japan was caught in a cycle of stagnant wages and prices. He pointed out that the current global pricing pressures were compelling companies to revise their pricing models. Despite facing recent hurdles like the COVID-19 pandemic and geopolitical conflicts that disrupted supply chains and commodity prices, Kazuo remained positive about Japan moving beyond its low-inflation phase, supported by governmental economic policies and monetary relaxation. He projected a future where an upward spiral of wages and prices would enhance the effectiveness of monetary policy, improve resource distribution, and boost economic efficiency. Kazuo acknowledged the challenges businesses might encounter in this changing environment but highlighted the advantages of a more dynamic wage and price setting. In closing, he reiterated the Bank's dedication to keeping a close watch on economic trends and the interplay between wages and prices, with the goal of reaching the 2% inflation target in a sustainable manner, reflecting a cautiously optimistic stance on Japan's economic prospects. [B]TL;DR[/B] [/LIST] [*]UEDA Kazuo, the Governor of the Bank of Japan, discussed Japan's economic progress in a meeting with the Keidanren in Tokyo on December 25, 2023, highlighting a move past a long period of low inflation and growth. [*]The year 2023 saw a gradual economic upturn, driven by easing supply-side constraints and a closing output gap, resulting in inflation consistently above 2%. [*]The inflationary trend was attributed to rollover effects of previous import price increases on consumer prices and a shift in corporate wage and pricing strategies, indicating a move towards the Bank's 2% inflation target. [*]Kazuo contrasted the current economic situation with the late 1990s, noting that global pricing pressures are now prompting companies to revise their pricing models. [*]Despite challenges such as the COVID-19 pandemic and geopolitical conflicts affecting supply chains and commodity prices, Kazuo remained optimistic about Japan's economic future, supported by government policies and monetary easing. [*]He envisioned a future with an upward wage and price spiral, enhancing monetary policy effectiveness, resource distribution, and economic efficiency, while acknowledging the challenges businesses may face in adapting to this change. [*]Kazuo closed by reaffirming the Bank's commitment to monitoring economic trends and the wage-price relationship, aiming for a sustainable achievement of the 2% inflation target, reflecting a cautiously optimistic outlook for Japan's economy. [B]Governor Ueda's[/B] address at the [B]Bank of Japan[/B] is set for [B]Tuesday at 4:00 AM GMT[/B]. [B][U][Center]USD - ISM Services PMI[/Center][/U][/B] The diffusion index in question, derived from surveys conducted with purchasing managers outside the manufacturing sector, is released monthly on the third business day following the conclusion of the month. An index value above 50.0 signifies expansion within the industry, whereas a value below 50.0 indicates contraction. Notably, the methodology for this index was adjusted to incorporate seasonal adjustments starting from January 2001, and further modifications were made to the calculation formula in February 2008. This index is highly regarded by traders and analysts as a leading economic indicator. The rapid response of businesses to market conditions is captured through the insights of purchasing managers, who offer a contemporaneous and informed perspective on the economic outlook of their companies. The survey encompasses approximately 300 purchasing managers, querying them on various aspects of business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories, thereby providing a comprehensive view of the business landscape. In January 2024, the services sector witnessed significant growth, marking its 13th consecutive month of expansion, as revealed by the latest Services ISM Report On Business. The Services PMI® surged to 53.4 %, up from the prior month's seasonally adjusted 50.5 %, signalling a robust rebound from a slight contraction in December 2022, which was the first since May 2020. The growth was driven by key metrics such as the Business Activity Index, which held steady at 55.8 %, and the New Orders Index, which climbed to 55 %, reflecting a renewed increase in demand. The Supplier Deliveries Index also rose to 52.4 %, indicating a deceleration in supplier deliveries amid an improving economy. Despite facing headwinds from inflation and geopolitical uncertainties, the services sector remains positive, supported by the prospect of interest rate reductions and stable business conditions. Anthony Nieves of the Institute for Supply Management provided the report, emphasizing the sector's enduring resilience and its pivotal contribution to the overall economic framework. [B]TL;DR[/B] [ATTACH type="full"]27604[/ATTACH] The upcoming [B]ISM Services PMI report[/B] is set to be published on [B]Tuesday at 3:00 PM GMT[/B]. The forecast for the [B]ISM Services PMI[/B] is predicting a slight dip to [B]52.5[/B], down from the previous reading of [B]53.4[/B]. [HR][/HR] [I]Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.[/I] [/QUOTE]
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