Forex News from InstaForex

[IFX Gertrude]

Global Bonds Swivel as Investors Weigh in Central Banks’ Next Move



Government bonds around the world gyrated as investors strived to analyze hints from central banks on when the massive stimulus programs currently in place that have supported markets will reach its end.

Top ECB officials gave investors mixed signals regarding when the European Central Bank would unwind its 2.3 trillion euro bond-purchasing program and the heads of the Bank of England and the Bank of Canada indicated that would begin reducing stimulus.

The euro slid against the dollar then managed to bounce back. Meanwhile, the pound and the Canadian dollar surged. Yields on the U.K. government bonds jumped. Treasuries and other bonds' yields also rallied.

The movement on global bond markets have been strongly linked, and U.S. government bonds was on the heels of the movements of European bonds.

Yield on the 10-year Treasury note ended at 2.223 percent from 2.198 percent in the previous day. Stronger yields on European bonds make U.S. Treasuries less attractive to foreign investors.

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[IFX Gertrude]

China Manufacturing Sector Picks Up Steam In June



The manufacturing sector in China continued to expand in June, and at a faster pace, the latest survey from the National Bureau of Statistics showed on Friday with a manufacturing PMI score of 51.7.

That beat forecasts for 51.0, and it's up from 51.2 in May.

It also moves farther above the boom-or-bust line of 50 that separates expansion from contraction.

The bureau also said that its non-manufacturing PMI came in with a score of 54.9, up from 54.5 in the previous month.

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[IFX Gertrude]

BOE Chief Economist Reiterates Raising Rates Need to be Analyzed



Bank of England's main economist Andy Haldane emphasized the central bank had to study thoroughly the prospect of raising interest rates in order to cap the higher cost of living.

Haldane said Thursday they are satisfied with the current rates, although they need to be mindful for what happens next. He earlier said rate hikes had to be determined in a way that curtailed the threat of high inflation.

Britain's inflation is at 2.9%, its highest in nearly four years. Workers' pay has started to lag behind inflation again following a decade of mostly lower spending power.

The BOE economist mentioned low productivity was one of the biggest contributors to lackluster pay increase, noting that only between 1% and 5% of companies were high-innovation and the primary cause of low productivity and wage is that long lower tail of firms.

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[IFX Gertrude]

Indonesia Manufacturing Sector Slips To Contraction - Nikkei



The manufacturing sector in Indonesia fell into contraction in June, the latest survey from Nikkei showed on Monday with a manufacturing PMI score of 49.5.

That's down from 50.6 in May, and it falls beneath the boom-or-bust line of 50 that separates expansion from contraction.

Individually, stagnation in order books caused output to fall, while firms lowered their payroll numbers but scaled up buying levels.

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[IFX Gertrude]

Fairfax Ends Talks as PE Suitors Move On



Australia's oldest newspaper publisher Fairfax Media said it has ended talks with two U.S. private equity suitors, as neither of the two made a binding offer for the company.

The publisher previously took part in bids worth nearly A$2.87 billion ($2.2 billion) from TPG Capital Management LP and Hellman & Friedman, and both companies were granted due diligence.

TPG recently announced that it has pulled out it's A$1.20-per-share bid. A Hellman & Friedman spokesperson was not available for comment.

The Australian company will move on with initial plans to demerge its profitable property classified division, Domain Group, by the end of 2017, according to its statement.

Fairfax said it expects Domain's revenue to increase ten percent for the year to June 30, 2018, and revenues for its newspapers and radio divisions are seen to decline.

The forecast EBITDA range of between A$62 million and A$266 million is in line with the projections of two analysts polled by Thomson Reuters.

Fairfax shares tumbled eight percent in late trade on Friday after The Australian newspaper reported that Hellman & Friedman would unlikely embed a formal bid.

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[IFX Gertrude]

U.S. Auto Sales Drop in June



Major automakers posted a fourth straight month of lower U.S. new vehicle sales for June, despite substantial consumer discounts and looser loan terms, which provides new evidence that this year will fail to meet 2016's record year for the industry.

Shares of automakers increased, however, retail sales were comparatively stable at the U.S. automakers.

Industry consultant Autodata placed the industry's seasonally adjusted annualized rate of sales at 16.51 million units, its weakest rate since February 2015.

U.S. consumers were in favor of bigger pickup trucks, SUVs and crossovers. Sales of passenger cars were also hurt.

The U.S. auto industry has been preparing for a downturn after touching a record 17.55 million new vehicles sold last year. An oversupply of almost newly used vehicles posed as a threat for new vehicles sales while automakers depended on consumer discounts and loosed lending terms.

Car shopping website Edmunds said the average length of car loans hit a record peak of 69.3 months in June.

General Motors Co said its sales dropped five percent compared with June 2016, however, it believes that the industry will see higher sales by the second half of this year.

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[IFX Gertrude]

South Korea Inflation Eases Unexpectedly In June



South Korea's consumer price inflation eased unexpectedly in June, though marginally, figures from Statistics Korea showed Tuesday.

The consumer price index rose 1.9 percent year-over-year in June, slightly slower than the 2.0 percent climb in May. Economists had expected the inflation to remain stable at 2.0 percent.

Prices of food and non-alcoholic beverages grew 4.6 percent annually in June and transport costs went up by 2.0 percent.

On a monthly basis, consumer prices edged down 0.1 percent from May, when it increased by 0.1 percent.

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[IFX Gertrude]

Global Shares Lower Amid Geopolitical Unease



World shares retreated while bonds and gold climbed on Tuesday as a long-range ballistic missile test from North Korea and the July 4 holiday in the U.S. market reduced risk appetite.

Asian shares were lower while South Korea's won fell to a 16-week low after North Korea's missile landed in Japanese territorial waters amid Pyongyang claiming that it would strike “anywhere in the world”.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent. Japan's benchmark Nikkei pared gains to close 0.1 percent lower. Hong Kong was sharply hit by the regional jitters as it plunged as much as two percent at one point.

Europe saw a moderate decline as the pressure to lock in profit following Monday's largest gain in more than two months outweighed the recovery of commodity stocks as oil rises again after an overnight drop.

The perceived safe-haven Japanese yen and gold were both higher, as well as European bonds and Treasuries. MSCI's widely-tracked emerging equity index fell to its sharpest one-day decline in almost three weeks and most Asian currencies were also weaker.

Signs have emerged that alongside the geopolitical jitters, higher global borrowing rates and the greenback were beginning to weigh on emerging markets after their outstanding start in 2017.

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[IFX Gertrude]

CHILE: Economic Activity Index In May Rises The Most Since January



Chile's Monthly Indicator of Economic Activity (IMACEC) increased by 1.3% in May compared to the same month a year ago, according to the country's central bank. It was the strongest increase since January 2017.

The index rose 0.5% in May from the previous month and grew 1.3% in 12 months.

The mining sector activity index fell by 4.6% in May from a year before, while the activity index excluding the mining segment had a 1.9% increase. On a monthly basis, the mining sector index increased by 2.6%, while the non-mining index posted a 0.3% growth.

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[IFX Gertrude]

European Markets Climb as Retailers Soar



European stocks advanced for the second time in three days as a rally in financial service firms and retailers counterbalanced drops in oil and gas companies.

The Stoxx Europe 600 Index closed 0.2 percent higher. It slipped 0.3 percent in muted trading on Tuesday, extending declines in the final minutes before closing.

Retailers bounced 0.9 percent and financial services firms reported their largest gain in nearly three weeks. Energy shares dropped the most in the index while oil fell for the first time in nine days.

Investors were focused on the minutes from the Federal Reserve meeting. According to Fed fund futures, traders are implying at least seven odds of a rate hike in December.

Among shares active on corporate new, Persimmon rose 2.4 percent as the company expects its first-half operating margin to “comfortably exceed” that of the preceding six months.

Drugmaker GlaxoSmithKline fell 0.2 percent after a downgrade to neutral from buy at Citigroup. Novartis dropped 0.3 percent after it was downgraded to underperform from neutral at Credit Suisse.

Electricite de France tumbled 1.3 percent after HSBC Holdings slashed its ratings, saying recent gains have gone too far. Enagas fell 0.8 percent after Deutsche Bank trimmed its rating to hold from buy.

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