Daily Market News Digest

[andy003]

FOREX UPDATE-Euro witnesses Gain, USD plummets against Canadian Dollar

Thursday,19th February 09

Euro sees rise:
The euro rose from near a three- month low against the dollar since yesterday on speculation German Chancellor Angela Merkel will signal Europe’s largest economy plans to take action to help avert the financial turmoil in the region. Optimism about the stabilization of the European financial system is being seen as helpful to halt the recent steep decline of the euro.
The euro climbed to $1.2589 as of 12:57 p.m. in Tokyo from $1.2530 late in New York yesterday, when it touched $1.2513, the lowest level since Nov. 21.
Gains in the euro may be tempered by concern European companies will report steeper-than-expected losses stemming from the global financial turmoil.

USD near Peak Versus Canada’s Currency:
Demand for the dollar was tempered by speculation the U.S.’s largest automakers will fail unless they get increased government aid. General Motors Corp. and Chrysler have a 70 percent likelihood of filing for bankruptcy.The Canadian dollar is being seen as emerging with a cyclical growth profile that is as good as or better than that of the U.S. dollar.

U.S. Data:
The Labor Department’s report on producer prices, scheduled for today, may show wholesale prices fell 2.5 percent last month from a year earlier, according to a Bloomberg survey, signaling the world’s largest economy may be heading for a period of sustained deflation.

 

[andy003]

Russians Retrench as Crisis Evokes Memories of 1998 --Déjà vu?

It took Marina Zaporozhtseva a decade to save for a new car after Russia’s last economic crisis. Scared of living through a repeat, she’s hanging on to her money.

Back in 1998, when the country let the ruble plunge, defaulted on debt and millions of people’s savings were wiped out, the Moscow accountant couldn’t find a job and had to work as a cook to make ends meet. “Now, once again, there are nightmares at work,” said Zaporozhtseva, 46. “I have to think over every little purchase because I’m not sure if I’ll have a job tomorrow.”

Russia has lurched into reverse after 10 years of uninterrupted growth driven by revenue from oil, gas, metals and consumer spending. The government expects the economy to shrink 2.2 percent this year after expanding about 7 percent a year since 1999.

The Russian central bank has raised its benchmark repurchase rate four times since November, to 12 percent. Car loan rates have almost doubled to as much as 21 percent in ruble terms, compared with 12 percent to 13 percent “before the crisis,” or between January and May last year. Russia’s peers including Brazil, India and China, have cut borrowing costs.

Irina Pivovarova, 25, a manager at an aviation company, said she decided against buying an apartment for 3.8 million rubles after VTB Bank decreased the amount of mortgage she had applied for and said it would raise rates. “I couldn’t get that much money anywhere,” she said. Tatyana Volkova, 26, an advertising specialist, also pulled out of purchasing a home for 4.5 million rubles ...

Living through it:
Yet the weaker ruble is pushing some Russians towards shopping rather than saving, meaning consumer spending is growing at a reduced pace rather than falling like in countries in Western Europe. Volkova ended up buying a car instead of an apartment because “you can’t keep rubles now,” she said.

For people like Zaporozhtseva, the fear is there might be no escape from the sudden reversal in Russian fortunes.“It’s just that we’ve lived through so many economic shocks we’re used to them by now.”

 

[onlinestock]

Hi there, FXexpert, your observation is da perfect. I have seen significant declination in Asian markets from past couple of days. Thank god, i pulled my some investment. Actually I had been advised to invest in them from one of my friend. And literally i wanted to invest. You made me aware on right time, thanks.

 

[andy003]

China-U.S. can lead world to recovery:Clinton; Obama vows to spend money wisely

Saturday,21 February,09

U.S. Secretary of State Hillary Clinton said on Saturday the United States and China could help the world recover from economic crisis by working together, adding that Washington appreciated Beijing's confidence in U.S. government debt.

"I appreciate greatly the Chinese government's continuing confidence in United States Treasuries. I think that's a well grounded confidence," Clinton said at a news conference with Chinese Foreign Minister Yang Jiechi.China invests the bulk of its reserves in liquid debt, notably U.S. Treasury bonds. Beijing is wary of taking excessive risks after suffering heavy book losses on stakes in financial firms such as Blackstone and Morgan Stanley.On Friday, Clinton said Washington would press China on human rights but added that this would not keep them from working together on a range of issues such as the financial crisis.


Meanwhile U.S. President Barack Obama vowed strict oversight Friday of his $787 billion stimulus plan, pushing back against Republicans who have labeled the centerpiece of his economic agenda fiscally irresponsible.He pledged to see to it the money is spent in its intended purpose without waste, inefficiency, or fraud.

 

[andy003]

AIG to seek additional aid from government

Preparing to announce a mammoth fourth-quarter loss, the largest in U.S. corporate history, troubled insurer American International Group, Inc) is reportedly seeking additional funds from the government. The company is in discussions with the government to secure more funds so that it can keep operating after next Monday, when the nearly $60 billion loss is announced.

AIG, which until last September was the world's largest insurer, was saved from going bankrupt, after receiving an initial $85 billion U.S. government bailout package. The Federal Reserve and Treasury have already provided over $150 billion of aid to AIG and the federal government now owns 79.9% of the company. Not helping AIG in its crisis could unfold a chain of events that could lead to problems for several financial institutions, which still rely on AIG to insure them against losses on loans and other debt.

However, helping AIG this time around is a little tricky, as the government's stake cannot exceed the current limit. The situation creates an opportunity for officials to find a new way by which value can be transferred to the U.S. in lieu of AIG reducing its debt so that it can then borrow more from the government to meet its collateral calls.

 

[andy003]

Dollar Gains as Obama expresses Optimism

25th February 09, Wednesday

The dollar strengthened against the euro after President Barack Obama expressed optimism that the U.S. will emerge from its recession “stronger than before.”

The greenback gained for a third day also versus the yen in forex trading as Obama said the world’s largest economy “will recover” and the tools to revive growth were within reach. Japan’s currency fell for a sixth day against the euro, the longest stretch since April, after the Ministry of Finance said the trade deficit widened in January to the most since at least 1986. The dollar rose to $1.2816 per euro as of 1:40 p.m. in Tokyo from $1.2846 late yesterday in New York. The greenback climbed to 97.10 yen from 96.64 yen.

“The markets like the fact that Obama’s trying to tighten things up and striking an optimistic tone…that would be supportive of the dollar.”Obama, delivering his first address to a joint session of Congress, also said the credit crisis paralyzing the banking system must be fixed or “our recovery will be choked off before it even begins.”

 

[andy003]

Downturn creeping into Asia

26th February,09 Thursday

Japan’s exports fell by 46 percent in January, and Hong Kong’s economy contracted 2.5 percent in the last three months of 2008, furthering signs that the economic downturn in Asia is set to drag on through this year.

Japan leads recession in Asia:
The Japanese economy was one of the first in Asia to tip into recession since last three months of 2008 as weakness stemming from poor domestic demand was mixed with evaporating demand from overseas. Exports plunged 46 percent from a year earlier and imports dropped 32 percent. Similar sharp declines have been reported recently by China and Taiwan also.

Worsening Yen:
Japan’s export decline was significant from a grim December 2008, when exports fell 35 percent. The yen — whose strength against the dollar has made Japanese goods more expensive for American consumers — has weakened during the last three weeks, trading at around 97 to the dollar on Wednesday, compared with about 89 in early February.
Exporters have continually cited the yen as a main reason for sharply reduced sales that are expected to lead to deep losses this year.

Rest of the Continent:
In Hong Kong, the government said on Wednesday that it expected the economy to shrink 2 to 3 percent in 2009. Elsewhere in the region, South Korea said it would start a $13.2 billion fund to bolster its commercial banks .India had Malaysia have already recorded the slowest growth in at least last seven years.

Much of Asia’s growth in recent years was based on an export boom, allowing the recession in the United States and Europe to spread through a region that had been insulated from the American financial troubles that ignited the current downturn.

 

[andy003]

U.S. to Raise Stake in Citigroup

27th February,09,Friday

The U.S. Treasury Department reached a deal late Thursday to take a stake of 30 to 40 percent in Citigroup as part of a third bailout of the embattled bank, according to several people close to the deal. Vikram S. Pandit, the chief executive, will remain at the helm, but Citigroup will have to shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing.

The Obama administration will probably come under intense pressure to take a much larger role in shaping the bank’s direction.Analysts believe Citigroup may require even more down the road.

The move is one of the most drastic steps federal officials have taken to prevent the collapse of an institution deemed “too big too fail,” as its downfall could send shockwaves through the global forex trading and financial markets. The government also took a major ownership stake in the American International Group, AIG, which is already seeking additional funds, and seized control of Fannie Mae and Freddie Mac in September. So far, none of those deals have turned out well.

 

[andy003]

India lauds Obama climate plan but sees concerns

28th February 09,Saturday

India's chief climate envoy Shyam Saran said on Friday he welcomed President Barack Obama's policy on climate change but warned there would be no global deal if rich nations insisted on emission targets for all.

"There is no doubt that Obama has brought a renewed focus…(but )negotiations at a key Copenhagen climate summit in December would not yield any results if Western nations linked any cut in their emissions to targets accepted by developing countries",he was quoted.

Saran repeated India's stance that it was not in a position to commit to an emissions target.

Developing nations such as India and China -- among the world's worst polluters -- are exempt from adopting emission targets under the Kyoto Protocol because they need to burn fossil fuels to lift massive chunks of their population out of poverty.

 

[andy003]

Forex and global stocks fall sharply on fears financial sector could worsen

2nd March 2, 2009 Monday

Forex and financial markets have been gripped by fears the global financial sector may perform worse than calculated. Investor confidence has already been hit by talk that US insurance giant AIG will need a further injection of government cash with its report due to be released today.

Monday morning slide in forex and stock indices was followed by a poor performance on Wall Street on Friday last week after data showed that economic growth was even weaker than thought.

This is turning out to be one of the most tumultuous times on record in the global financial markets. "You're seeing the U.S. is sinking lower and lower, and we're still desperately searching for a bottom," remarked an analyst.

 

[andy003]

Standard Chartered defies Pessimism

3rd March 09, Tuesday

Standard Chartered bank which focuses on Asia, Africa and the Middle East, has defied the gloom afflicting the banking sector by reporting a rise in profits. The bank said its pre-tax profit for 2008 was $4.8bn, up 19% compared with a year earlier.

A spokesperson for the Standard Chartered said that it was on a "firm footing" for 2009.It warned, however, that its core markets, which have so far proved more resilient to the credit crisis, have begun to feel the heat.

John Peace, the acting chairman of Standard Chartered, said last year's turmoil on the financial markets had been "truly extraordinary" and an extreme test for the banking industry warning the uncertainty and the contraction of economies will continue this year and the situation can worsen.

The company said its focus on Asia and its sensible attitude to liquidity and costs had helped it to weather the storm.

 

[andy003]

Japan to Hand Out Cash to People

4th March 09, Wednesday

Japan's parliament has passed legislation to give a cash hand-out to every resident in an attempt to boost the recession-hit economy. People will get at least 12,000 yen ($121) under the $20bn plan. In forex trading Yen has been growing weaker.

There are fears however that most Japanese people, who have a strong tradition of saving, will hang on to the cash instead of spending it. Japan is in a far sharper recession than the US or Europe.

Critics of the plan say it is a ploy to boost the popularity of Prime Minister Taro Aso .Japan has been one of the fist countries in Asia to be hit by the global meltdown and lead the recession into the continent.

 

[andy003]

Oil price up over petrol demand

Date: 5th March 09 Thursday

Oil prices have risen nearly 9% after the US government reported an unexpected drop in crude stocks and an increase in demand for petrol. Prices were also supported by a rise in China's manufacturing index. China is the second biggest oil consumer
US crude stocks fell by 700,000 barrels for the last week of February.


"Overall the (US oil inventory) numbers are very bullish... again, gasoline remains the one bright spot in the market that can really pull the complex higher,"pointed out an analyst.

Stock markets around the world have been rising on Wednesday on hopes China will announce an expansion to its economic stimulus plan.

 

[andy003]

FOREX-NEWS UPDATE FOR TODAY

Date: 6th March 6, 2009 Friday
Here are the Top Two Headlines from Forex and Financial World.

EU calls for crisis talks over GM:

The European Commission has called for a crisis meeting among EU states hosting General Motors (GM) plants. Earlier, the troubled carmaker's auditors said there was "substantial doubt" about the ability of General Motors to stay afloat.
Last week GM posted a $30.9bn (£21.9bn) loss for 2008.It also warned that 2009 was set to be "challenging”. Shares in General Motors fell more than 15% in New York trading.


BOJ to Expand Debt Buys:

Bank of Japan Deputy Governor Yamaguchi said the central bank may need to expand its purchases of corporate debt to prevent a credit shortage from worsening the recession.
"We can’t deny corporate financing will become even more difficult towards the fiscal year end on this month.Yamaguchi said hinting at further policy actions since it unveiled the plan to purchase corporate bonds from banks last month.


News excerpts from the BBC and Bloomberg.

 

[andy003]

~ News Update: US jobless rate climbs to 8.1% ~


7th March 09, Saturday

U.S. Jobless rate Increases:
The US jobless rate jumped in February to 8.1%, according to official figures from the U.S. Labor Department. The number of people out of work rose by 651,000 during the month.Both figures are bigger than expected.
A total of 12.5 million people are now unemployed in the US.

President Obama said that the number of jobs lost so far in the recession was "astounding" adding that he had signed his economic stimulus package in order to save jobs.Rising unemployment has also meant greater demand for free meals.

Across sectors:
Jobs were cut in most sectors, with only government, education and health services adding staff.
In the manufacturing sector 168,000 jobs were cut in the month.
104,000 jobs went in construction and 375,000 were cut in the service sector.

Grim Future Ahead:
Federal Reserve Chairman Ben Bernanke told Congress earlier in the week that economic indicators "show little sign of improvement" and that "labor market conditions may have worsened further in recent weeks".

 

[andy003]

Japan's exports halved in January

"Consumers around the world no longer want to buy Japanese cars"

Japan's exports halved in January.Japan's current account recorded its largest deficit on record in January, reaching 172.8bn yen ($1.8bn). This is Japan's first deficit in 13 years.

Corporate blow:
Car exports alone dropped 66.1%, with semiconductor and electronic parts exports down 52.8%.
Consumers around the world no longer want to buy Japanese cars. Consumers in Asia, Europe, the Middle East and the United States are not buying pricey Japanese goods such as cars and electronic goods.

Dismal Economy:
"Japan's export-driven economy is really engulfed by waves of the global economic crisis. “An economist pointed out.

 

[andy003]

Australia headed for recession:

Australia headed for recession:
Hello all traders this is news for today I would like to share
10th March 09, Tuesday

"Australia's economy is heavily resource based"

Australia's economy has shrunk for the first time in eight years, raising fears that the country may be heading for a recession.The economy contracted by 0.5% in the last three months of 2008 from the previous quarter.

Hit Hard:
If Australia's economy shrinks again the current quarter, it will enter recession, usually defined as two consecutive quarters of contraction.
Australia's resource-based economy has been hit hard by the decline in commodity prices. The country's mining firms are cutting back on spending, slashing staff numbers, and shelving projects.

Recession was inevitable:
According to analysts, Australia had hoped to duck the worst of the global recession, but this no longer looks possible."After surviving the 1997 Asian financial crisis and the 2000 dotcom bubble, Australia had hoped to complete the impressive hat-trick of not being forced into recession by the global financial crisis," our correspondent says.

This seems to be the recession that Australia could not avoid.

 

[andy003]

China factory output growth slows-Optimism on rebound

March 12, 2009, Thursday

China witnessed slowed Industrial production growth in the past two months because of the plunging worldwide demand. China’s exports have been hit badly. As a result China has been battered by a fall in demand for its goods. China's export figures fell a record 25.7% in February. In Forex trading, Yuan strengthened against the U.S. dollar

There are signs however in China that things will start looking up.

The government in China has introduced the 4 trillion Yuan ($585bn) stimulus package in a hope to reduce the country's heavy depended on export of its goods.China is hoping for a mid year recovery.

 

[andy003]

Expect First Global Recession in Decades

Hello all traders
I would like to share one of today's news digest as follows

13th March 09, Friday
The world economy is likely to shrink for the first time in decades this year. According to the IMF, the prediction can only be gloomier.

The head of the IMF Dominique Strauss-Kahn, speaking at a conference in Tanzania said that trade was falling at an alarming rate and business and consumer confidence had collapsed.

Africa is already reeling under global negative growth. Decrease in worldwide demand has undermined demand for many industrial commodities, which are important exports for several African countries.As such For the first in most of our lifetimes we can expect the global growth rate to fall under the zero

 

[andy003]

Obama seeks coordination of worldwide efforts

14th March 09,Saturday


One of the prime agendas at the upcoming G-20 summit at London next month is the coordination of the worldwide efforts in reviving the world economy.

US President Barack Obama is seeking to coordinate efforts his country is undertaking to deal with the economic crisis with that of most other countries worldwide.

Asian countries including China and Japan have already introduced massive stimulus packages to increase consumer spending. President Obama is looking to match the simultaneous efforts his country and the countries overseas are making to cope with the economic crisis.