Asian stocks gained after experiencing the largest fall since May. With shares losing due to geopolitical risks last week today the Asian indexes increased substantially. The MSCI Asia Pacific Index added 1.2% and reached 145.84 as it rebounded from the 1.4% drop last Friday. Regional indexes such as Topix and HSI jumped 1.8% and 1.2%, respectively.
The Greenback jumped to trade close to its highest value in three months versus the Loonie due to concerns regarding geopolitical tension in Ukraine and Iraq, and also due to disappointing Canadian employment. The pair hit 1.0963 in the European session and proceeded to consolidate at 1.0959, representing a 0.36% gain.
The Sterling dropped to almost two-month low versus the Greenback today, following the issue of the unsatisfactory trade balance figures, whereas the geopolitical risks kept on fueling the safe-heaven demand. The Cable consolidated at 1.6813 today, sliding 0.11%. The data indicated the U.K. trade deficit increased to £9.41 billion in June, while the economists projected the deficit to narrow down to £8.80 billion.
US Treasuries gained and sent yields to a one-year low due to approved US airstrikes in Iraq. As a result investors are looking for safe haven assets and debt is being bought all across the world. The US 10-yield fell 0.03 percentage points to 2.38 percent in London as the current conflicts could increase the risk to growth prospects.
China's Yuan is facing the biggest weekly rise since June, after the overseas sales overshoot the expectations and promoted the record trade surplus. The exports grew 14.5% from the previous year in July. Imports by-turn dropped 1.6% to create the trade surplus of $47.3 billion. The Yuan appreciated 0.38% this week to trade at 6.1565 per dollar, whereas today the currency added 0.09%.
This Friday the data regarding the UK's trade balance was released and revealed to be worse than forecast. National Statistics in the UK reported that UK's trade balance dropped to -9.41 from the previous month's -9.15 (this was revised from -9.20). Analysts had forecast it to improve to -8.80 in July.
As the trade balance in the UK is expected to remain in the red, the Sterling dropped to its lowest price in two months against the Greenback. The Cable fell by 0.14% to 1.6807, correcting its value from a hype that was originated from the possibility of increased rates in the UK. Analysts predict the trade balance to be -8.9B.
The Euro managed to recover from yesterday's plummet, caused by Draghi's speech, which threw the common currency near to its lowest value in nine months. The Euro climbed by 0.27% to 1.3394 against the US Dollar. President Barack Obama approved air strikes in Iraq increasing demand for safe-haven assets.
Both Brent and West Texas Intermediate rose as the US President Barack Obama has authorised Iraq air strikes. The futures for September had a considerable rise with the Brent increasing 1.3% and the WTI 1.1%. Consequently, the Brent was trading at $106.85 a barrel in London and the Texas light sweet was at $98.45 on the NYMEX.
Tension in the Middle East and Ukraine keep on concerning traders, therefore causing gold to rise to its highest price in three weeks. Gold rose by 0.7% to 1,322.14, reversing a 0.3% loss, after Barack Obama approved air strikes in Iraq. Regarding futures, gold for December increased to 1,323.50 on the Comex.
The Greenback slid to two-and-a-half week lows versus the Yen today, after investors secured profits, following the U.S. Dollar latest rally due to an array of favourable U.S. data, whereas the BoJ left the monetary policy unaltered. USD/JPY traded at 101.73, having dropped 0.35%. The strength of the U.S. Dollar once again fueled the speculation over the timing of the Fed's rate cut.
The Reserve Bank of Australia reduced the growth and inflation projections amid steeper decrease in the mining investment and said the interest rates will be preserved at the same level. The Central Bank now anticipates the GDP growth to range from 2% to 3% through June 2015. The RBA lowered its inflation projection to 1.75% to 2.75%. Australia's unemployment rate climbed in July to surpass the
The Bank of Japan kept its promise to increase the base money with asset purchases of about 60-70 trillion yen per year. Further, the central bank added that it plans to continue an even more aggressive QE next year. In addition the BoJ warned about weak exports as the Japanese economy seems to be experiencing a slowdown mostly due to
U.S. jobless claims data overshoot the expectations thus upholding the U.S. Dollar over all of its major counterparts. However the growth is limited due to the global geopolitical risks, which cap the Greenback's advance. EUR/USD depreciated 0.13% yesterday evening, trading at 1.3364 against the Euro. The U.S. Department of Labor stated yesterday the number of jobless claims decreased by 14,000 last week.
The Chinese trade surplus was larger than forecast at $47.3 billion as there now is more reason to believe that the growth target of 7.5% will be reached. This surplus number was the largest for a month since November 2008 and the data also showed a substantial increase in exports to EU at 17% and US at 12.3%. If the central bank does not intervene
During the previous week less people filed applications for jobless benefits, causing July's average to fall to the lowest value in eight years. This means that the labour market keeps gaining momentum. Unemployment claims data revealed that 289,000 people filed for benefits, representing a decrease of 14,000 from the previous period.
Russia's President Vladimir Putin issued a ban on food imports on Wednesday from the countries that have recently imposed sanctions against Russia. With the EU being the country's largest importer of meat, dairy, fruit and vegetable products these probably will be banned even though the list remains in the works. Meanwhile, the Russian forces near the Ukraine border seem to
As it was expected, the European Central Bank did not change the minimum bid rate, keeping it at 0.15%. In the meantime, marginal lending facility rate was also unchanged at 0.4% and deposit facility rate at -0.1%.
As the tension in Ukraine intensified, with Russian troops gathering close to Ukraine's border, the higher demand for safe-haven triggered an increase in gold futures. Gold for December rose to 1,309.10 on the NYME. Elsewhere, silver futures for September also rose by 1.08% to 20.048 and copper declined to 3.164.
The common currency remained steady versus the Greenback, trading just above the nine-month lows before the conclusion of the ECB meeting later today. EUR/USD was traded at 1.3378, off yesterday's level of 1.3332, the pair's lowest since November 8th. The investors anticipate the ECB's rate announcement later today, following the controversy in monetary policy among it and its major counterparts.
The Japanese Yen fell against the other majors, after suddenly rising due to concerns regarding the ongoing tension in Ukraine. The US Dollar rose to 102.37 from 102.1 against the Yen. As to the common currency, the Yen dropped to 137.03 from 136.65. However, traders are still on hold as they wait for Mario Draghi's speech later today.
Bank of America is negotiating a settlement with the US Department of Justice around the 16, 17 billion US dollar mark. The record agreement to stop probes into mortgage-backed bonds could send as much as $9 billion in cash and the remainder in consumer relief. If this settlement is successful then it will become the largest in history surpassing the recent JPMorgan's $13 billion deal.
While waiting for Chinese data regarding its trade, which is an important indicator of the strength of the economy, the WTI crude ranged close to its lowest value in six months. Meanwhile, the Brent crude remained steady. On the NYME WTI futures dropped to 96.86 a barrel.
The New Zealand Dollar depreciated against the Greenback today after the demand for the U.S. Dollar remained backed up by the recent array of positive U.S. economic data and as markets anticipate the impending U.S. jobless claims figures. NZD/USD traded at 0.8463 today. The U.S. Dollar remained supported as the data indicated an unforeseen narrowing of the U.S. trade deficit in June.