Forex News from InstaForex

[IFX Gertrude]

US court favors Apple in patent dispute against Samsung



Apple Inc. gained victory in its patent case versus Samsung Electronics Co. when the District Court in San Jose ordered the South Korean firm to halt the usage, sale, or development of software in the United States which aids mobile phones transgress on such patents. The said ruling encompasses software utilized in older Samsung devices, including Galaxy S II, SIII, and Note smartphones. Both smartphone giants have filed cases against each other in several courts around the world, claiming the other's phones violating their respective patents. Both companies did not immediately respond to requests for comment.

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[IFX Gertrude]

NZ Dollar Drops Against Majors



The New Zealand dollar weakened against the other major currencies in the Asian session on Wednesday. The NZ dollar fell to more than a 3-month low of 1.7165 against the euro and a 5-day low of 74.61 against the yen, from yesterday's closing quotes of 1.7000 and 75.38, respectively. Against the U.S. and the Australian dollars, the kiwi dropped to nearly a 4-month low of 0.6366 and more than a 5-week low of 1.0841 from yesterday's closing quotes of 0.6408 and 1.0775, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.73 against the euro, 73.00 against the yen, 0.62 against the greenback and 1.10 against the aussie.

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[IFX Gertrude]

Oversupply may saturate oil market, says IEA



Oversupply may submerge the overall crude oil market until at least in the latter part of 2016 due to increasing supply and unusual warm weather. Based on the International Energy Agency's monthly report, such factors could push oil prices lower than its present 12-year troughs. It also warned of more price declines ahead. Also, the IEA said oil supply worldwide could surpass demand by 1.5 million barrels per day in the first half of the year, with Iran adding 600,000 bpd by mid-2016 and other nations keeping current output. Brent futures LCOc1, sliding below $30 a barrel, have hit its lowest level since late 2003 after the Organization of the Petroleum Exporting Countries decided not to reduce output to stop the price decline amid oversupply.

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[IFX Gertrude]

Taiwan Dec Jobless Rate Rises More Than Expected



Taiwan's unemployment rate increased more-than-expected December, figures from the Directorate General of Budget Accounting and Statistics, or DGBAS, showed Friday. The seasonally adjusted jobless rate rose to 3.88 percent in December from 3.84 percent in November. Economists had forecast the unemployment rate to climb marginally to 3.85 percent. The number of unemployed people grew to 453,000 in December from 449,000 in the previous month. A year ago, the jobless figure totaled 442,000. Meanwhile, the labor force participation rate held steady for the second straight month in December at 58.67 percent. On an unadjusted basis, the unemployment rate came in at 3.87 percent in December, down from 3.91 percent a month earlier.

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[IFX Gertrude]

China to look after stock traders, says Li



China assures stock market investors the country will uphold their interests to ensure speculators won't benefit at their expense, and that the government is willing to intervene, if necessary. Vice President Li Yuanchao said the administration would improve regulation in order to curb volatility, saying the Chinese market is not yet mature. Both the Hang Seng China and the Shanghai composite indices have wiped out over 15% this year even though the People's Bank of China injected cash into the system to bolster the economy and pull down borrowing costs.

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[IFX Gertrude]

Treasuries Give Back Ground Amid Global Stock Market Rally



Following the pullback seen in the previous session, treasuries saw some further downside during trading on Friday. Bond prices came under pressure in early trading but managed to regain some ground as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.9 basis points to 2.048 percent. With the increase on the day, the ten-year yield climbed further off the three-month closing low set on Wednesday. The continued weakness among treasuries came amid a pickup in risk appetite the helped drive a global stock markets rally. A notable increase by the price of crude oil also reduced the appeal of treasuries, with crude for March delivery jumping $2.66 to $32.19 a barrel. The price of crude added to the $1.18 a barrel increase seen in the previous session to climb back above the $30 a barrel level. On the U.S. economic front, the National Association of Realtors released a report showing that existing home sales rebounded strongly in December after seeing a steep drop in the previous month. NAR said existing home sales jumped 14.7 percent to an annual rate of 5.46 million in December from a rate of 4.76 million in November. Economists had expected sales to climb to a rate of 5.20 million. A separate report from the Conference Board showed a modest decrease by its index of leading economic indicators in December. The Federal Reserve's monetary policy announcement is likely to attract attention next week, although the central bank is widely expected to leave interest rates unchanged. Trading could also be impacted by reaction to reports on consumer confidence, new home sales, durable goods orders and pending home sales. Bond traders are also likely to keep an eye on the Treasury Department's auctions of two-year, five-year and seven-year notes. The Treasury is due to auction $26 billion worth of two-year notes next Tuesday, $35 billion worth of five-year notes next Wednesday and $29 billion worth of seven-year notes next Thursday.

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[IFX Gertrude]

Investors shift away from stocks, says BlackRock



Combating Investors are moving away from stocks and turning to more illiquid holdings, including private credit and real estate in order to counter market volatility and gain profits. According to a survey by BlackRock Inc., people are avoiding stocks in general. More than half of biggest institutional clients are planning to raise allotments to private credit and real estate assets, while 33% wanting to lower their equity allocations. BlackRock's senior managing director and global head of institutional client business Mark McCombe said recent events made investors manage their risks actively.

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[IFX Gertrude]

Franc Little Changed After Swiss Trade Data



Swiss Federal Customs Administration published foreign trade data for December in the pre-European session on Tuesday at 2:00 am ET. After the data, the Swiss franc changed little against its major rivals. As of 2:01 am ET, the Swiss franc was trading at 1.0993 against the euro, 1.4393 against the pound, 1.0128 against the U.S. dollar and 116.33 against the yen.

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[IFX Gertrude]

Moody's: China's Pursuit of Growth Target Risks Extending Economic Imbalances



Moody's Investors Service says that maintaining robust economic growth will remain the priority of China's (Aa3 stable) authorities in 2016, but some of the implications of this approach will be credit negative. Moody's notes that China's relatively robust GDP growth of 6.9% in 2015 owed to significant monetary and fiscal stimulus -- reflecting this focus -- which prevented a sharper slowdown from 7.3% in 2014. Policy support in the pursuit of growth targets is likely to persist in 2016, with the credit-negative effect of postponing deleveraging and the reduction of excess capacity. Moody's conclusions were contained in its just-released report on the Government of China, "Government of China: Stimulus Could Prolong Imbalances, a Credit Negative." In the context of equity and currency market volatility and persistent capital outflows, Moody's further notes that it is becoming increasingly difficult for the government to achieve its growth target while steering the economy toward a more balanced structure. While sustainable rebalancing advances one aspect of the authorities' policy agenda, a more rapid process would involve tackling excess capacity in parts of the industrial sector, with negative short-term consequences for the economy and potentially financial stability. In Moody's view, China's authorities will allow the fiscal deficit to widen to around 2.5-3% of GDP in 2016, after 2.7% in 2015 and under 2% in the previous five years, to provide room for policy support. Government debt will rise slightly above 40% of GDP, still in line with similarly rated peers. Moody's concludes that while fiscal and monetary policy supported overall GDP growth last year, they have not raised profitability in those sectors that the economy is rebalancing away from, such as heavy industry. As stimulus continues, it is likely to increase system-wide leverage -- or at least prevent it from falling -- without boosting profitability. This will raise debt serviceability risks.

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[IFX Gertrude]

Moody's: China's Pursuit of Growth Target Risks Extending Economic Imbalances



Moody's Investors Service says that maintaining robust economic growth will remain the priority of China's (Aa3 stable) authorities in 2016, but some of the implications of this approach will be credit negative. Moody's notes that China's relatively robust GDP growth of 6.9% in 2015 owed to significant monetary and fiscal stimulus -- reflecting this focus -- which prevented a sharper slowdown from 7.3% in 2014. Policy support in the pursuit of growth targets is likely to persist in 2016, with the credit-negative effect of postponing deleveraging and the reduction of excess capacity. Moody's conclusions were contained in its just-released report on the Government of China, "Government of China: Stimulus Could Prolong Imbalances, a Credit Negative." In the context of equity and currency market volatility and persistent capital outflows, Moody's further notes that it is becoming increasingly difficult for the government to achieve its growth target while steering the economy toward a more balanced structure. While sustainable rebalancing advances one aspect of the authorities' policy agenda, a more rapid process would involve tackling excess capacity in parts of the industrial sector, with negative short-term consequences for the economy and potentially financial stability. In Moody's view, China's authorities will allow the fiscal deficit to widen to around 2.5-3% of GDP in 2016, after 2.7% in 2015 and under 2% in the previous five years, to provide room for policy support. Government debt will rise slightly above 40% of GDP, still in line with similarly rated peers. Moody's concludes that while fiscal and monetary policy supported overall GDP growth last year, they have not raised profitability in those sectors that the economy is rebalancing away from, such as heavy industry. As stimulus continues, it is likely to increase system-wide leverage -- or at least prevent it from falling -- without boosting profitability. This will raise debt serviceability risks.

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