Forex News from InstaForex

[IFX Gertrude]

Iraq Says to Trail Consensus at Next Month's OPEC Gathering



Iraq said it will simply go with the flow when OPEC convenes in Vienna this May to determine whether to prolong output accord, according to the country's oil chief.

Iraqi oil leader Jabar Ali al-Luaibi reiterated Thursday they are definitely going with the consensus reached by the oil cartel during their gathering.

He added the country is fully committed to the agreement as it has attained around 97% of its production target.

Luaibi also said the production cuts led by the organization were slowly leading to a much-anticipated rebalancing of the crude market.

The Iraqi official stressed the OPEC decision to c

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[IFX Gertrude]

Global Manufacturing Sentiment Off to Weak Start in Q2 2017, says Barclays



Barclays global manufacturing sentiment index dropped in April to 0.10 from March’s 0.23. The fall was mainly due to a drop in the headline manufacturing PMI prints in the U.S. and China. But some of this softness was countered by a rebound in U.K.’s manufacturing sentiment and a robust report from the euro area.

Taking a closer look of the country-level PMI reports indicate that manufacturing sentiment in the U.S. continues to be solid and therefore the fall in April is not a particular cause of worry. But the decline in China’s PMI implies a downside risk to Chinese economic growth. There is concern relating to the optimism seen amongst U.K. companies over domestic demand given several factors that might work against the consumer sector, such as the real income squeeze and the possibly weakening in unsecured credit growth ahead.

“Looking at the subcomponents, our global new orders gauge slipped to 0.02 in April (prev.: 0.32) while new export orders edged only slightly lower to 0.49 (prev.: 0.53), suggesting that weakness was domestically driven”, added Barclays.

The forward-looking measure of new orders excluding finished goods inventories dropped to -0.08, mainly due to inventory accumulation and a decline in new orders. The global input prices gauge weakened to 0.33 from 0.49, implying some easing in cost pressures.

In all, global manufacturing sentiment is off to a weak start in the second quarter of this year, following a solid showing in the first quarter, according to Barclays.

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[IFX Gertrude]

U.S. Treasury Rallies on Weak Economic Data, Low Crude Prices



Prices of U.S. government bonds firmed as the sluggish U.S. automobile sales and the lower oil prices stoked demand for safe-haven assets.

Automakers General Motors Co. and Ford Motor Co. posted April sales declines of 5.8 percent and 7.1 percent respectively, against the same period last year.

Yield on the 10-year Treasury note ended at 2.296 percent, down from the 2.327 percent on Monday. Yields move inversely to bond prices. The yield on the benchmark debt has climbed to 2.34 percent earlier in the session, lifted by the strongest PMI reading in the U.K. manufacturing sector in three years.

The downward movement of crude prices also drove up demand for government debt, as U.S. crude oil futures posted a steep drop of over 2 percent on Tuesday. A fall in energy prices lowered expectations that the inflation would undermine the fixed returns investors get from Treasury debt investments.

The swinging movement in the market came as the U.S. central bank's rate setting committee held its two-day policy meeting on Tuesday. The Federal Reserve is highly anticipated to stand pat on its key short-term policy rate. Fed-funds futures indicated a 66 percent probability that the Fed's next cycle of monetary policy tightening would occur in June, CME group stated.

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[IFX Gertrude]

Anz New Zealand Job Ads rise Strongly in April, Suggests Ongoing Solid Employment Growth



The ANZ New Zealand job ads rose strongly in April on a seasonally adjusted basis. The job ads rose robustly by 2.8 percent, the strongest rise in five months. On a year-on-year basis, job ads were up 18.2 percent.

The ongoing high level of job ads shows a robust labor market. The rate of growth seems to be rising again following flattening off for a period. This is in line with the economy reaccelerating in the first quarter after moderate growth seen at the end of last year.

Auckland continues to be the strongest of the main centres on a year-on-year basis, with the seasonally adjusted monthly figure of job ads rising 3 percent to a fresh high. Wellington job ads growth was up 15 percent year-on-year, whereas Canterbury job ads rose to the highest level since mid-2015.

The regions continue to set the pace, noted ANZ. Except Taranaki, every region is seeing stronger annual job ad growth than any of the three main centres. However, the picture over the last few months is more mixed. The total job ads growth is being mainly driven by the construction, manufacturing, utilities and transport sector. The service sector is also adding strongly, along with retail and tourism.

“The data suggests ongoing strong employment growth, with the unemployment rate remaining under 5 percent this year. Lower unemployment will help propel wages higher”, added ANZ.

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[IFX Gertrude]

Wall Street Drops as Fed Held Rates



U.S. equities closed marginally lower after the U.S. Federal Reserve held interest rates unchanged while investors priced in another round of earnings reports. Bank stocks increased broadly as expectations for a June rate hike from the U.S. central bank rose.

The Dow Jones industrial average edged up 0.04 percent at 20,957.90, as Merck led gains while Walt Disney underperformed the most. The S&P 500 slipped 0.13 percent at 2,388.13, with real estate leading losses while financials were the best performing. The Nasdaq Composite retreated 0.37 percent at 6,072.55.

The SPDR S&P Bank ETF (KBE) gained 0.75 percent, outperforming the wider stock market. The S&P financial sector closed 0.6 percent higher following the Fed's bullish statement, which led all groups. However, seven of the 11 major sectors ended in negative territory.

Shares of Apple dropped 0.3 percent, adding pressure on indexes, but still managed to pare losses following its quarterly report, in which it posted a sudden decline in iPhone sales.

Among shares active in corporate news, U.S. wireless carrier Sprint plunged 14.3 percent after it failed to give particular details on deals it will pursue, despite its reduced quarterly loss. Facebook Inc slipped over one percent despite posting a 76.6 percent jump in quarterly profit.

The New York Times Co jumped 12.6 percent after the newspaper publisher posted its largest quarterly revenue growth in six years. Delphi Automotive was the largest percentage advancer in the S&P 500 as its shares rose 10.9 percent. The firm said it planned to spin off operations tied to internal combustion engines and eyed technology for electrically powered and self-driving vehicles.

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[IFX Gertrude]

Australia Performance Of Construction Index Climbs To 51.9 - AiG



The construction sector in Australia continued to expand in April, and at a faster rate, the latest survey from the Australian Industry Group revealed on Friday with a Performance of Construction Index score of 51.9.

That's up from 51.2 in March, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Among the actives, house building activity continued to expand in April, while apartment building turned back to expansion - but commercial construction continued to weaken.

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[IFX Gertrude]

Wall Street Little Changed as Healthcare Bill Passed



U.S. equities were little changed as the sharp decline for the energy sector offset some strong earnings reports after the U.S. House of Representatives passed a health care overhaul.

The House voted to repeal major parts of the 2010 Affordable Care Act, also known as Obamacare, and replace it with the Republican healthcare, sending it to the Senate for consideration.

The Dow Jones industrial average dropped 0.03 percent at 20,951.47, as Caterpillar lagged behind while 3M outperformed. The S&P 500 added 0.06 percent at 2,389.52, as consumer staples led eight sectors up while energy underperformed. The Nasdaq Composite gained 0.05 percent at 6,075.34.

The healthcare sector traded higher for most of the session and was the second-best performer in the S&P. Regeneron jumped 6.7 percent while Zoetis advanced 5.9 percent after results.

The energy sector fell 1.9 percent and was the worst performing group. Exxon Mobil's 1.3 percent drop and Chevron's 1.8 percent tumble added pressure on the S&P.

Among shares active in corporate news, Tesla slipped five percent after the electric automaker's quarterly net loss expanded.

Earnings season continued, as social media heavyweight Facebook exceeded estimates for both profit and revenue,the same goes for Chesapeake Energy and Church & Dwight, among others. The season has mostly been above expectations which encouraged investors.

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[IFX Gertrude]

French Election: How Much Pro-Eu Is Macron?



This year’s French election second round was similar to a referendum on the European Union. While the now defeated Front National candidate was the most prominent EU-skeptic, the independent candidate who just won with more than 65 percent of the votes is believed to be the most pro-EU candidate among the lot.

There were 11 candidates in this year’s French election. Three were EU-skeptic and the rest eight were pro-EU. So, how much pro-EU is Emmanuel Macron?

He is the candidate, who favors the European Union and wants further integration within the bloc to make the cementing stronger.

One of the biggest drawbacks of the European Union is that it is not a political union and Macron is one of the few who would like to remove that obstacle probably by giving up parts of the French sovereignty if others join in too.

He is an EU-optimist. While many remain skeptical towards the European Union in the current scenario, he believes that good days of the EU are ahead and he believes that the union could become even stronger under the right leadership.

The following instance would give the readers fair idea of his support towards the EU.

After it was clear that Emmanuel Macron is the winner of the election, he appeared in front of his supporters to the sound of the EU anthem Ode To Joy instead of the French instead of French National Anthem La Marseillaise.

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[IFX Gertrude]

Euro Strengthen on Relief as Macron Secures French Presidency



The euro has rallied after pro-European Union Emmanuel Macron emerged victorious in the French presidential election by a landslide.

The common currency advanced by as much as $1.1024, its highest in around six months, before retreating to $1.0998, unchanged from late U. S. levels in the prior week. The common currency reached a one-year peak point of 124.58 yen versus the Japanese currency and a five-month high of 1.08865 Swiss Franc.

On the other hand, the pound fell 0.1 per cent against the dollar at $1.2968 and weakened the same amount against the euro to €1.1794.

The reaction was muted as Macron's win was already priced in by the market. The former investment banker's promise of reducing corporate taxes and revamping the labour market has made him a highly-favored contender in the presidential race.

The independent candidate was swept to victory in the presidential election, beating the far right-candidate with 65 percent of the vote. Le Pen secured only 35 percent of the total votes. The gap that was broader than the 20 percentage points that pre-election polls had suggested.

During his campaign, Macron has advocated for greater European integration and has proposed a range of policies involving the combination of budget cuts, additional market flexibility, along with public investment and the extension of welfare state.

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[IFX Gertrude]

India’s Consumer Price Inflation Likely eased Further in April



India’s consumer price inflation for the April month is expected to have eased. According to a DBS Bank research report, the inflation is expected to have stayed below 4 percent for the sixth straight month, slowing to 3.4 percent year-on-year from March’s 3.8 percent. Food prices are expected to have dropped below 2 percent year-on-year on base effects, weaker pulses, while perishables stabilized.

In the meantime, core readings are expected to have remained sticky but below 5 percent. The slowdown in consumer price inflation expected to be at odds with the central bank’s neutral stance.

“Inflation is likely to ease further towards 3.0 percent by June on base effects, pushing the markets to monitor June policy guidance closely”, added DBS Bank.

The Reserve Bank of India is expected to play up the risks to inflation in the second half of 2017, thus justifying an on-hold stance, stated DBS Bank.

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