Forex News from InstaForex

[IFX Gertrude]

Gold Holds on to Gains, Supported by US Political Concerns



Gold prices were steady on Tuesday in spite of the explosion at a concert in the English city of Manchester which killed nearly 19 people in what British police said was being treated as a terrorist incident.

The precious metal has been lifted as the dollar fell versus the euro amid political uncertainty in the United States due to the controversies surrounding President Donald Trump.

Spot gold rose 0.1 percent at $1,261.62 an ounce. U.S. gold futures were little changed at $1,261 per ounce. Spot gold gained 2.2 percent the previous week as the uproar on Trump's alleged links to Russia and his dismissal of former Federal Bureau of Investigation chief James Comey have raised doubts on his ability to push through pledged fiscal stimulus.

Holdings in SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, climbed 0.21 percent to 852.48 tonnes.

Investors' net long position in COMEX gold has dropped to a two month-low, according to data from the U.S. Commodity Futures Trading Commission (CFTC).

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[IFX Gertrude]

New Zealand Has NZ$578 Million Trade Surplus



New Zealand saw a merchandise trade surplus of NZ$578 million in April, Statistics New Zealand said on Wednesday.

That beat forecasts for a surplus of NZ$267 million following the NZ$332 million surplus in March.

Exports climbed 9.8 percent on year to NZ$4.75 billion - also exceeding expectations for NZ$4.40 billion and up from NZ$4.65 billion in the previous month.

Imports gained an annual 4.9 percent to NZ$4.17 billion versus forecasts for NZ$4.10 billion and down from NZ$4.31 billion a month earlier.

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[IFX Gertrude]

U.S. Stocks Climb after Release of Trump Budget



Wall Street advanced on Tuesday as hopes surrounding the Trump trade was revived among investors. However, gains were pared by losses in consumer discretionary stocks amid weakness in auto-parts firms. Trump's budget called for an increase in infrastructure and military spending, as well as politically sensitive reductions in areas like healthcare and food assistance. Investors also eyed the White House's proposed budget for 2018. Stated in it, the White House aims to trim federal spending by $3.6 trillion in the next ten years.

The Dow Jones industrial average climbed 0.21 percent to 20,937.91, as Goldman Sachs outperformed while Home Depot lagged behind.

The S&P 500 added 0.18 percent to close at 2,398.42, with financials leading ten sectors up while consumer discretionary was the only decliner. The Nasdaq Composite rose 0.08 percent to 6,138.71.

Financials gained 0.8 percent supported by a 1.2 percent advance in the bank subsector. Consumer discretionary lagged behind the most with a 0.4 percent decline.

Autozone Inc weighed on the consumer sector the most, dropping 11.8 percent to $58.14. The auto part retailer's quarterly results did not meet expectations. Advance Auto Parts slipped 4.6 percent and O'Reilly Automotive was down 3.3 percent while Genuine Parts dropped nearly two percent.

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[IFX Gertrude]

HP Inc. Lifts Profit Guidance as PC, Printer Units Outperform



HP Inc.'s sales strongly performed in the second quarter, posting growth in both PC and printer units for the first time in over five years.

The company also reported better-than-anticipated revenue on stronger consumer demand, prompting it to lift its annual profit projection. Shares of the firm climbed 3.6 percent to $19.7 in extended trading.

Revenue from the personal computer business surged 9.6 percent to $7.66 billion in the period ending April 30. The unit represents almost two-third of the firm's overall sales. The firm's printer and copier division also posted its first increase in revenue since 2011, driven partially by the strong demand for its handheld photo printer, HP Sprocket.

Total revenue jumped 6.9 percent to $12.4 billion during the second quarter, as strong consumer demand caused a 12 percent jump in laptop deliveries. Earnings before adjustments registered at 40 cents per share, marginally higher than the expected 39 cents per share.

The firm also lifted its projection for third-quarter profit that beat estimates and also raised its outlook for the entire fiscal year. Full-year adjusted profit is seen to clock in between a range of $1.59-$1.66 per share, exceeding average estimates of $1.62 per share.

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[IFX Gertrude]

Fxwirepro: Usd/thb Hits Fresh 5-Week Low at 34.27 Mark, Bias Remains Bearish




USD/THB is currently trading around 34.28 marks.

It made intraday high at 34.34 and low at 34.27 marks.

Intraday bias remains bearish till the time pair holds key resistance at 34.48 marks.

On the top side, key resistances are seen at 34.48, 34.55, 34.67, 34.74, 34.82, 34.97, 35.11, 35.20, 35.32, 35.42, 35.62, 35.74, 35.84, 35.93, 36.01, 36.08 and 36.39 marks respectively.

Alternatively, a daily close below 34.34 will drag the parity down towards key supports around 34.14 and 34.02 marks respectively. Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart.

Yesterday BOT released interest rate decision.

Thailand’s Central Bank kept policy rate unchanged at 1.50 pct (poll 1.50 pct). We prefer to take short position in USD/THB around 34.30, stop loss at 34.48 and target of 34.02.

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[IFX Gertrude]

Japan Producer Prices Rise 0.7% In April



Producer prices in Japan were up 0.7 percent on year in April, the Bank of Japan said on Friday.

That was shy of expectations for an increase of 0.9 percent, and was down from 0.8 percent in March.

On a monthly basis, producer prices dipped 0.2 percent after jumping 0.6 percent in the previous month.

Prices for advertising, insurance and engineering all were down, while prices were up for communications and leasing.

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[IFX Gertrude]

Gold Prices End Lower as Dollar Stabilizes



Gold Prices eased as the dollar pulled away from lows and steadied, while world stock markets reached fresh highs, reversing some gains from the prior session when U.S. Federal Reserve meeting minutes indicated it is more cautious on pulling the trigger on another rate hike.

Spot gold ended ended down 0.2 percent at $1, 255.91 per ounce, while U.S. gold futures ended up 0.3 percent at $1, 256 .50.

Economists anticipate the gold's resilience to fluctuate in the following weeks, citing hints in the Fed minutes that further monetary policy tightening is on the table as early as June.

Minutes of the May policy meeting showed policymakers generally agreed that they should postpone raising rates until it is sure that a recent U.S. economic slump is only transitory. Despite the cautious tone, majority of the rate-setting committee said a hike is coming soon.

Federal fund futures indicated traders are pricing in an 83 percent odds of a quarter percentage point rate hike during the Fed's june meeting.

Bets for U.S. interest rates to increase next month and possibly rise once more in the year have helped kept gold prices under $1,300.

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[IFX Gertrude]

Fitch: Interest Rate Risk Main Threat for Japanese Life Insurers



Interest rate risk is likely to remain the primary threat for Japanese traditional life insurers, as a majority of the country's life insurers will be unable to lengthen asset duration due to persistently low bond yields, says Fitch Ratings in a new report.

Fitch expects that Japan's life insurers will aim to secure a buffer against the interest rate risk by continuing to strengthen their capitalisation through retained earnings and accumulated reserves.

The agency also expects Japan's life insurers to maintain sufficient capital adequacy for their credit ratings, partly backed by their continuous issuance of hybrid debt; which is used to make large overseas acquisitions to take advantage of the extremely low global bond yields and investor appetite for yield.

The agency saw an improvement in the economic solvency ratios of insurers that disclosed the ratio for the financial year ending March 2017 (FYE17), helped by a steeper yield curve compared with the previous financial year. Consolidated profits of Japanese life insurance groups are also likely to remain strong, boosted by solid earnings growth from international insurance following some acquisitions of US-based life insurers.

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[IFX Gertrude]

Lenovo Turns to Pricier Models to Stop Bleeding in its Smartphone Business



Chinese multinational technology firm Lenovo Group Ltd is currently relying on a push upmarket to stop the losses incurred in its smartphone business following its acquisition of Motorola three years ago.

The company announced that it will reorganize its China business which is aimed at sharpening the PC brand's consumer focus amid the effort to strengthen its mobile branding and also shift the focus to more expensive models under the Moto brand.

The group's smartphone concerns began after it acquired Motorola Mobility from Google for $2.9 billion back in 2014 but have since then struggled to integrate the assets. Although the company returned to profit in the year to March, the group's phone problems worsened as marketing expenses for new products and key components costs increased.

In its home base of China, Lenovo's shipments have domestically dropped 80 percent year-on-year or 55 percent quarter-on-quarter during the first three months of 2017, according to Canalys data.

However, shipments in Brazil climbed 56 percent in the first quarter of this year according to Lenovo, exceeding India as its largest market, where volumes rose 34 percent.

Chairman Yang Yuanqing said Lenovo is poised to reach its goal of turning around the mobile business by the second half of the fiscal year starting in April. He added that the company will also have three more telecom partners in the U.S. in 2017 as its performance in Western Europe continues to improve.

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[IFX Gertrude]

Announcement: Moody's: New Zealand's 2017 Budget Highlights Fiscal Flexibility and Shock Absorption Capacity



Moody's Investors Service says that New Zealand's (Aaa stable) budget for the fiscal year ending June 2018 (2017 budget) demonstrates very strong public finances, underpinned by ongoing fiscal discipline and robust economic growth prospects, providing the government with significant fiscal flexibility to buffer potential shocks.

Ahead of the September election, Moody's expects the broad consensus on fiscal discipline, regardless of the party in power, will continue to deliver on the goals of maintaining budget surpluses and reducing debt in the coming years, a credit positive commitment.

Moody's conclusions are contained in its in-depth report "Government of New Zealand: 2017 Budget Highlights Fiscal Flexibility, Credit-Positive Commitment to Increasing Surpluses and Reducing Debt".

In its budget, the government maintains its commitment to increasing fiscal surpluses, which Moody's expects will help reduce gross government debt towards 28% of GDP by 2018, significantly lower than the median for Aaa-rated sovereigns.

The government's track record of fiscal prudence affords it significant fiscal policy flexibility, such that it can fund spending on new measures like the Family Incomes Package while maintaining fiscal surpluses.

Additionally, the government's commitment to resuming contributions to the Superannuation Fund in the fiscal year ending June 2021 (FY 2020-21) will help limit the future fiscal burden from an aging population and support public finances in the longer run.

Finally, the increase in the Earthquake Commission levy will help rebuild the depleted Natural Disaster Fund and boost the sovereign's ability to counter disaster-related shocks.

Moody's expects robust population growth, strong Asian demand for New Zealand dairy, tourism and education and solid investment spending to support real GDP growth of around 3.0% in 2017 and 2018, broadly consistent with the government's projections.

New Zealand will be among the fastest growing Aaa-rated economies in coming years, says Moody's. The government's robust fiscal position and prospects for it to strengthen provide ample room to pursue expansionary fiscal policy to buffer the economy against potential future shocks.

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