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Re: Forex News from InstaForex

Postby IFX Gertrude » Sat Apr 22, 2017 1:55 am

Canadian Retail Sales Likely to have dropped Sequentially in February, says Td Economics

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The Canadian retail sales is likely to have eased in February, following a growth in January. According to a TD Economics research report, total retail sales are expected to have fallen 0.4 percent sequentially, whereas excluding auto it is likely to have dropped 0.5 percent month-on-month. Subdued prices for gasoline might be a considerable headwind for nominal consumer spending, whereas a wider drop in seasonally adjusted consumer prices might result in a moderate outperformance in volumes. In January, retail sales had expanded 2.2 percent sequentially, whereas ex-auto sales had risen 1.7 percent.

In spite of the 3.8 percent rise in motor vehicle sales last month, a pullback is unlikely. Meanwhile, industry reports indicate towards a moderate growth that might lead to a new monthly record. A surge in home sales might stimulate demand for furnishings and furniture. Outside these industries, a more disappointing performance is expected, but might downplay any adverse implications for the Canadian central bank amid increased worries regarding imbalances and a desire to witness a more balanced growth profile, noted TD Economics.

Moreover, the Bank of Canada is not expected to be greatly concerned with a moderate slowdown in February because of the real retail sales strength last month, which might be a mainstay for the quarter, added TD Economics.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Sun Apr 23, 2017 9:12 pm

French Election: Euro Cheers French Election Outcome, Yen Hammered

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The single currency is up almost 1.5 percent as the centrist, pro-European Union candidate Emmanuel Macron is set to win the first round of French Election, initial results show. The euro is currently trading at 1.087 against the dollar and at one point the single currency was trading at as high as 1.094 against the dollar.

According to latest numbers, Emmanuel Macron is leading with 23.7 percent of the votes, followed by Front National leader Marine le Pen, who is set to receive 21.7 percent of the votes. The other two top candidates, Republican François Fillon and the leftist leader Jean-Luc Mélenchon are set to receive 20 percent and 19.5 percent of the votes respectively. Since no candidate received 50 percent of the votes required to become the next President, the top two candidates will face each other in the second round of the election, to be held on May 7th.

A lightning Ipsos poll of second round voting intentions shows Macron beating Marine Le Pen in the second round by 24 percent margin. However, the outcome would depend a lot on undecided voters and abstention.

As the political tensions ease with a first round victory for Macron, the safe haven currency yen took a beating. The yen is trading more than a percent down at 110 per dollar. At one point, it was down to as low as 110.6 per dollar.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Sun Apr 23, 2017 11:04 pm

Macron, Le Pen Hails Victory on First Round of French Presidential Election

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Centrist Emmanuel Macron and far-right nationalist Marine Le Pen came out victorious during the first round of the French presidential election, sparking a runoff on May 7 between two radically distinct perspectives of the country's future.

Macron is on track to gain 23.8 percent in Sunday's election, and National Front Leader Le Pen with 21.7 percent, as stated in the predictions from the Interior Ministry based on over 90 percent of votes counted. The turnout signifies that for the first time in modern French political history, both establishment parties were eliminated in the first round.

Republican Francois Fillon conceded after placing third with a forecasted 20 percent, Communist-supported Jean-Luc Melenchon had 19.4 percent, and Socialist Benoit Hamon followed in fifth place with only 6.3 percent.

The rejection of the two main parties indicates the displeasure flowing through a society that has to deal with Islamic terrorism and years of subpar economic growth and high unemployment. The next two weeks will examine the appeal of both candidates' stand on the economy, Europe and security.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Mon Apr 24, 2017 9:20 pm

Moody's: the Upcoming Adoption of Ifrs 17 in Korea Will Pressure Capitalization, But Promote Structural Improvements

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Moody's Investors Service says that International Financial Reporting Standard (IFRS) 17 -- when implemented in Korea -- will challenge the reported capitalization of life insurers, by requiring them to measure their policy liabilities at current interest rate values and therefore provide higher levels of reserves.

"Nevertheless, beyond the pressure on insurers' capitalization profiles, the new standard will, over time, promote structural improvements and value creation in the industry," says Stella Ng, a Moody's Assistant Vice President and Analyst. Specifically, IFRS 17 will improve insurers' pricing discipline and product mix by better reflecting the true economic cost of embedded options and guarantees in their products.

"It will also encourage insurers to sell more longer-term protection products instead of volume-driven, short-term savings products," adds Ng. "We note that the industry has been increasing its higher-margin protection policy sales, including long-term healthcare and critical illness products, and we expect that this trend will continue even after IFRS 17 is implemented".

Moody's analysis is contained in its just-released report titled "Life Insurance - Korea: IFRS 17 Will Reduce Reported Capitalization, But Drive Structural Improvements" and is authored by Ng.

Moody's report points out that under IFRS 17, the banning of netting between policy surplus and deficits, and the use of market-consistent discount rates -- which will likely be lower than the average discount rates currently used by Korean life insurers -- to arrive at best estimate liability (BEL), will result in broadly lower reported capitalization.

Also, the impact will be more significant for insurers that have a large book of negative spread in-force business. As a result, insurers will be under pressure to strengthen their capitalization, with many likely to do so through hybrid bond issuance.

Moody's also says that IFRS 17 will provide a strong incentive for insurers to reduce their duration mismatches.

Because the new accounting standard requires closer monitoring and matching of economic assets and liabilities, Moody's expects that IFRS 17 will push the industry towards more dynamic asset-liability management and investment strategies to minimize duration mismatches and the associated interest-rate risk exposure. This situation will lower the potential sensitivity of insurers' solvency and earnings to financial market shocks.

As for small insurers, they will face greater operational challenges because the more explicit recognition and disclosure of the contractual service margin and risk margin under IFRS 17 will expose their relatively weak earnings quality, given that they rely heavily on spread income.

Smaller insurers will therefore face more difficulty in adapting to IFRS 17, and in addition they will need to devote substantial resources and incur adjustment costs to meet the more stringent measurement and disclosure standards.

Moody's explains that Korean life insurers are preparing for IFRS 17 that is scheduled to be finalized by the International Accounting Standards Board in May 2017, and which will come into effect in Korea on 1 January 2021. The Financial Services Commission and the Financial Supervisory Service in Korea have announced that they will issue guidelines to insurance companies after the finalized standards of IFRS 17 are released.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Mon Apr 24, 2017 10:12 pm

Chow Tai Fook Gains Australian Government Approval for $3 Billion Deal

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Hong Kong conglomerate Chow Tai Fook Enterprises Ltd. has obtained the approval of the Australian government regarding its bid for gas and electricity firm Alinta Energy Ltd.

According to a spokeswoman for Treasurer Scott Morrison, the takeover was approved with strict conditions. The deal has been approved by the Foreign Investment Review Board and the treasury declined to comment further.

The buyout bid from Chow Tai Fook valued Alinta at nearly four billion Australian dollars (US$3.02 billion), a person familiar with the topic said. Both companies did not reveal financial terms on the deal.

Chow Tai Fook, which is widely-known for its jewelry business, is the biggest in the world by revenue. For the conglomerate, this deal marks its first significant investment in Australia's energy industry, granting the company control of a utility with nearly 800,000 electricity and gas customers as well as a generation portfolio of as much as 1,957 megawatts.

The Hong Kong conglomerate said it plans to maintain Alinta's current senior management team and aims to expand business through investment in the energy market. The deal is seen to close by the end of April.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Tue Apr 25, 2017 9:35 pm

Moody's: Rising Czech Koruna Will have Uneven But Manageable Impact for the Country's Banks

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The appreciation of the koruna will impact Czech banks unevenly, with UniCredit Bank Czech Republic and Slovakia (UniCredit CzSk) and Raiffeisenbank, a.s. the most vulnerable to the shift and Ceskoslovenska Obchodni Banka, a.s. (CSOB) and Ceská Sporitelna, a.s. (Ceská) likely to be least affected. The rating agency notes that overall the impact will still be manageable due to the primarily domestic focus of the banks' operations and the Czech National Bank's commitment to limiting excessive currency volatility.

The Czech National Bank removed its CZK27 upper limit on the koruna-euro exchange rate on April 6, allowing the koruna to rise for the first time in three and a half years.

Moody's report, entitled "Ceská; CSOB; Komercní; UniCredit CzSk; Raiffeisenbank; MONETA: Impact of Rising Koruna Will Be Uneven But Manageable," is available on www.moodys.com.

Moody's subscribers can access this report via the link provided at the end of this press release.

"Local currency appreciation in the Czech Republic will filter through to the country's banks via various channels, such as corporate margins, funding costs, and the value of government securities," says Arif Bekiroglu, Assistant Vice President and Analyst at Moody's. "UniCredit Bank Czech Republic and Slovakia and Raiffeisenbank are more vulnerable than their peers due to material exposures to the non-retail segment, leaner capital and weaker profitability."

MONETA Money Bank, a.s. (MONETA) has a high exposure to small businesses but strong capital, and Komercní banka has a high exposure to corporates which tends to be less vulnerable, but weaker capital. CSOB and Ceská are likely to be least affected due to their low to moderate exposure to riskier segments relative to their solid capitalisation.

MONETA and UniCredit CzSk could see rising problem loans as a result of their exposure to small and medium-sized enterprises (SMEs). SMEs are the most vulnerable to an economic slowdown. Exports account for more than 80% of Czech GDP and a strong currency appreciation means that Czech exporters may lose competitiveness. However, ongoing economic recovery in euro-area economies should help to offset most of this impact and to create growing demand for Czech goods. The euro area is the Czech Republic's biggest trading partner, accounting for 65% of Czech exports as of year-end 2015.

Banks holding larger shares of government securities as available-for-sale (AfS) assets, such as UniCredit CzSk, Ceska and MONETA could also be negatively impacted. This is because foreign investors looking for currency gains could exit long-held positions in Czech government securities as the currency appreciates, lowering the securities' market valuation.

Funding costs will rise as benchmark interest rates increase. We expect a rise in benchmark interest rates to control inflation once the exchange rate settles and this will impact funding costs at RBCZ and MONETA more than their peers due to their tighter koruna liquidity.

Moody's notes that since many Czech banks are subsidiaries of euro-area parents and provide those parents with a substantial part of their profit, these parents — Erste Group Bank AG, KBC Bank N.V., Société Générale, UniCredit S.p.A. and Raiffeisen Bank International AG— could benefit from improved revenues and capital. This is because the euro-equivalent of their Czech subsidiaries' revenue and capital will improve and the dividend equivalent in euros will also be higher.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Tue Apr 25, 2017 10:34 pm

Wall Street Gains as Nasdaq Rises Above 6,000

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U.S. equities advanced sharply as strong quarterly reports from numerous big-cap firms followed through. The Nasdaq Composite reached a record peak, while the Dow and S&P 500 were also near recent highs as solid earnings highlighted the health of corporate America.

The Dow Jones industrial average climbed 1.12 percent at 20,996.12, as Caterpillar led gains while Verizon was the top decliner. The S&P 500 rose 0.61 percent at 2,388.61, as materials led nine sectors up while telecommunications and utilities lagged behind. The Nasdaq composite advanced 0.7 percent at 6,025.49.

Caterpillar jumped 7.7 percent at $104.29 after earlier notching a multi-year peak of $104.71 while Mcdonald's bounced 5.6 percent to $141.71, both after exceeding profit estimates.

According to Thomson Reuters, total profits of S&P 500 firms are estimated to have increased 11 percent during the first quarter, the most since 2011.

The Nasdaq scaled a record level of 6,036.02, breaking 6,000 for the first time, powered by advances in index heavyweights Apple and Microsoft. The S&P 500 notched its day's peak after a report that U.S. President Donald Trump's tax proposal will be expected on Wednesday.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Wed Apr 26, 2017 8:29 pm

South Korea’s Real Gdp Grows Above Forecast in Q1 2017

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The South Korean economic growth accelerated in the first quarter of 2017, the advanced estimate of the Bank of Korea showed. The preliminary data for the first quarter indicated that the real GDP grew 0.9 percent on a sequential basis, as compared with the 0.5 percent growth seen in the prior quarter. This is more than the forecast of 0.7 percent growth.

Gross fixed capital formation contributed the most to the first quarter growth. It expanded 4 percent sequentially. Within the gross fixed capital formation, construction rose 5.3 percent. Meanwhile, private consumption rose 0.4 percent, with overseas consumption by residents increasing. Expenditures on non-durable goods and services dropped. Exports grew 1.9 percent sequentially, while imports were up 4.3 percent, thanks to growth in imports and machinery and equipment and precision instruments.

On a year-on-year basis, South Korea’s real GDP grew 2.7 percent in the March quarter, as compared with the 2.4 percent growth recorded in the fourth quarter of 2016. It is slightly above the forecast of 2.6 percent growth. Private consumption was up 2 percent, whereas government consumption rose 2.7 percent. On a year-on-year basis, construction was up 9.7 percent. Exports grew 3.7 percent year-on-year, while imports were up 9.4 percent.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Wed Apr 26, 2017 11:32 pm

Wall Street Slips as Trump Unveils Tax Plan

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U.S. equities retreated as investors priced in President Donald Trump's plan for tax reform, while earnings season carried on. The proposal from the Trump administration reduced tax rates for businesses and on overseas corporate profits returned to the country.

The Dow Jones industrial average slipped 0.1 percent at 20,975.09, as Procter & Gamble led losses while Verizon outperformed. The S&P 500 fell 0.05 percent at 2,387.45, with real estate leading seven sectors down and telecommunication the top gainer. The Nasdaq composite lost 0.27 points to end at 6,025.23.

The S&P 500 dropped marginally after wavering near an all-time peak. Expectations for lower corporate taxes have been an advantage for stocks ever since Trump was elected in November.

Retail stocks jumped on Trump's announcement, as it revealed that it did not include a border adjustment tax. The SPDR S&P Retail ETF (XRT) climbed one percent.

Among stocks, United Technologies climbed 1.1 percent to $118.20 and gave the largest lift to the Dow industrials after posting a quarterly profit that exceeded expectations supported by higher sales in all four of its business units. Shares of Boeing lost almost one percent to $181.71 after the planemaker posted a decline in revenue.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Thu Apr 27, 2017 10:25 pm

Announcement: Moody's: Russia and Turkey Face Common Growth Challenges, Despite Differing Exposure to Commodity Cycle

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Credit ratings for Russia (Ba1, stable) and Turkey (Ba1, negative) broadly reflect a deterioration in previously supportive credit fundamentals, including their growth potential and, to a lesser extent, fiscal metrics, Moody's Investors Service said in a new peer comparison report.

The report, "Governments of Russia and Turkey Peer Comparison -- Turkey's Growth Potential and Russia's Fiscal and External Strengths Back Respective Credit Profiles", is available on www.moodys.com.

Moody's subscribers can access this report using the link at the end of this press release. The research is an update to the markets and does not constitute a rating action.

The report reviews the credit strengths and challenges that characterize the two countries, and gives Moody's forward-looking view of how the rating agency sees these drivers moving over the next 12 to 18 months.

"Turkey has greater economic growth potential, but Russia's economy is larger and wealthier," says Kristin Lindow, a Moody's Senior Vice President and co-author of the report. "We expect real GDP growth of around 3% in Turkey over the next four years, twice that of Russia's 1.5%, underpinned by Turkey's more favourable demographics. That said, downside risks proliferate with respect to Turkey's growth, while upside risks arguably dominate for Russia given that the worst of its recent crisis has passed."

With entrenched structural constraints -- low savings rates, declining total factor productivity and labour market inefficiencies in Turkey, and constrained household incomes, an ageing work force and over-dependence on hydrocarbons in Russia -- sluggish investment will likely suppress the potential growth of both countries in the absence of targeted structural reforms.

Turkey's demographics are more supportive of growth potential than Russia's, given that in 2016 57.9% of its population was under the age of 35, compared to 44.2% in Russia, according to United Nations figures.

Public debt in both Russia and Turkey is set to rise over the next two years, although the increases will be modest as a share of GDP. The starting point for Russia's debt is much lower (16% of GDP in 2016), thank Turkey's (28% of GDP). Debt servicing costs are also much lower in Russia.

While both countries usually run small budget deficits, maintaining these has become more difficult for Russia and Turkey as a result of country-specific challenges: lower oil prices in Russia's case and lower growth in Turkey's.

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