Economic growth in the UK decelerated more than economists estimated, with the lowest quarterly pace of 0.5% on a yearly basis. However, even with this figure the UK economy recorded its best performance since 2007. Meanwhile, the International Monetary Fund announced that the country is going expand 2.7% this year.
Chinese industrial companies' profits dropped 8% in December compared to the previous year, showing the biggest decline in three years and emphasizing slowing economy and harsh drop in commodity prices. As a result, coal mining profit diminished by 46.2% in 2014, while oil, as well as nuclear fuel, lost 79.2%. However, profits in vehicle production rose by 18.1%.
US house prices increased at a slower pace even with affordable low mortgage interest rates. The S&P/Case-Shiller home price index added 4.3% since November 2013. Moreover, property prices weakened last year, since home sales decreased, while demand was brought down by relatively soft wage growth and small amount of household formation.
US stocks declined on a slide in durable goods orders and unpromising earnings results, exacerbating concerns regarding the economic growth. Caterpillar fell 7.2% together with Microsoft that lost 8.8%, while the S&P 500 dropped 1% to 2,036.68 and the Dow Jones Industrial Average slipped 1.3% or 234.91, to 17,443.79.
Sight deposits at the SNB climbed almost 8% previous week, indicating that the central bank keeps purchasing foreign currency following cancellation of its three-year-old cap on the Franc. SNB's data report showed that sight deposits added to 365.5 billion francs during the week ending January 23, compared with 339.6 billion francs recorded a week earlier.
Brazilian Real dropped for a second day, while a dimmed GDP growth outlook made the assets of South American nation less attractive for international investors. Brazil's Real weakened 0.7% to 2.5983 against the Dollar in Sao Paulo, while economists revised downwards their forecasts for GDP growth in 2015 from 0.38% to 0.13%.
Japan's exports soared 12.9% in December, the most on the yearly basis, due to the weak Yen and strong US Dollar, as well as strong Chinese demand. A stable increase in exports could help the Prime Minister Shinzo Abe revive the stagnant economy, which was in recession after a sales tax raise. However, imports added only 1.9% on the year
The Euro appreciated from its weakest level in 11 years amid speculation the negative consequences from Syriza party election in Greece will be contained. The common currency advanced 0.2% to $1.1229 as of 7:05 a.m. New York time, while oil led commodities lower, dropping from its weakest closing price during six years, together with copper and gold.
US stock index futures declined, following the S&P 500 Index's weekly advance for the first time during this year, when anti-austerity party Syriza won during the Greek election. S&P 500 futures fell 0.3% to 2,037.5 as of 6:19 a.m. New York time, while Dow Jones Industrial Average contracts declined 0.4%, or 67 points, to 17,521 today.
Italy's 30-year bonds climbed, thus, pushing yields to a record low, after the ECB's recent stimulus programme and anti-austerity party Syriza victory during the Greek elections. Italy's yield lost 0.1%, or 10 basis points, to 2.58% at 11:20 a.m. in London, reaching the weakest, since Bloomberg started compiling the records in 1994.
The yellow metal cut its third weekly advance, while investors are evaluating the US interest rate outlook after the announcement of the ECB stimulus measures. Gold for immediate settlement fell 0.6% to $1,294.66 an ounce in Singapore, after reaching $1,307.62 yesterday, the strongest since August 15, and it has climbed 1.1% so far this week.
The Euro is set for its sixth weekly decline versus the Dollar before the Greek elections on January 25, where the power may be shifted from Antonis Samaras, the present Prime Minister, to his opponent. The common currency lost 0.3% to $1.1335 as of 7:02 London time, after reaching $1.1315, the lowest since 2003. Moreover, the Euro dropped 0.4% to
Saudi Arabia's new ruler, King Salman, is unlikely to introduce changes to the current oil policy, thus maintaining production levels in order to retain the market share even if the prices decline. An important question is whether the new King decides to change the current oil minister, Ali al-Naimi, who has been a key person for almost 20 years.
The ECB's President Mario Draghi decided to unveil a new stimulus programme in order to prevent deflation that threatens the Euro area, a step similar to what the Fed undertook six years ago. The measures taken by the ECB may stimulate investors to move their money into the US corporate bonds that offer more attractive yields compared to the debt
Oil climbed after the death of Saudi Arabia's King Abdullah, the number one oil supplier among the OPEC member states. Crude futures added 2.6% in London and 3.1% in New York, when the death of King was announced by the Saudi royal court. The sell-off in oil was prompted by the result of OPEC's meeting in November that failed to
The Canadian Dollar posted a noticeable decline after the nation's central back cut the key rate, saying that crude oil's crash could slow inflation and hit the economy. The benchmark rate was lowered to 0.75%, compared to the previous level of 1%, where it has stayed unchanged since 2010. Meanwhile, crude oil, Canada's main export item, has depreciated more than
Gold futures added 8.6% in January to $1,285.50 per ounce, outlining the highest monthly gain during the three-year period. The risk-off sentiment pushed silver up by 16% in January, also to their highest level since 1980, while WTI crude oil dropped 10%. According to the Standard Chartered Plc analysts, gold may climb to $1,420 by the end of this year,
The Bank of Japan is now expecting it will take more time to achieve a target of 2%, outlining the difficulties because of the low energy prices. The Yen climbed versus the Dollar, while the Japanese equities dropped since the BoJ postponed expansion of economic incentives. The BoJ will raise money base at an annual amount of 80 trillion yen
The import of nickel ore to the largest consumer of metals in the world, China, plunged to the lowest level since 2010, as Indonesia will no longer export unprocessed minerals. The demand in 2014 contracted 33% to 47.76 million metric tons. Last year China purchased a record amount of nickel ore from the Philippines, thereby making Southeast Asian nation their
China's manufacturing showed zero growth for the second month. As a result, the companies had to lower the prices more to remain competitive, and this is raising concerns regarding deflationary pressures in the economy. The manufacturing PMI stayed near 50 at 49.8 level in January.
Asian shares extended their gains on Friday, being that the European Central Bank announcement to buy EUR60 billion worth of bonds on a monthly basis boosted investors' risk appetite, pushing bonds higher but keeping the Euro near 11-year lows. Japan's Nikkei added 1%. Australian and South Korean indices also showed strong growth.
The manufacturing index rebounded in January, as implemented stimulus measures managed to support stabilisation of the Chinese economy. The PMI was at the 49.8 level, outperforming the mean forecast of 49.5. Meanwhile, China's GDP strengthened 7.4% in 2014, the slowest yearly rate in 24 years.
US shares extended their gains for a fourth consecutive day, erasing the yearly losses, since the ECB confirmed an enlarged stimulus programme, while banks and transportation companies mainly soared on better-than-expected earnings. The equity gauge added 1.5% to 2,063.15, and the Dow Jones Industrial Average climbed 1.5% as well.
Crude traded below $48 a barrel for a third day in London as investors are waiting the ECB's decision to start a QE programme. Another depressing factor is an expectation the crude oil inventories will continue to expand. Brent dropped 1.1% and futures for March delivery was at $48.93 a barrel at 9:45 a.m. in London. Meanwhile, WTI for March