Forex News from InstaForex

[IFX Gertrude]

Greek Election Raises the Stakes for ECB Qe

Greek elections scheduled for 25 January complicate an already difficult debate over whether, when and how to do sovereign quantitative easing (QE) in the euro area.The European Central Bank (ECB) is "in technical preparations to adjust the size, speed and composition" of policy easing measures "should it become necessary to react to a too-long period of low inflation," according to President Draghi, and an imminent slide into negative inflation suggests now is the time to act. Standard Chartered research notes: Euro-area inflation is set to turn negative, raising the need for sovereign QE Greek default threats look overdone, but designing QE has become more complicated EUR/USD remains vulnerable to diverging US/euro-area policy and political uncertainty. A looser ECB stance and near-term political jitters are likely to further undermine EUR/USD. The US dollar (USD) finished 2014 near its highs for the year, but the consensus on the USD is still bullish and investors remain long. In our view, the USD has room to rally further, benefiting from US economic outperformance and anticipated FOMC policy tightening. Reflecting the divergence in the outlook for US and euro-area policy, on 5 January we lowered our EUR/USD forecasts for 2015 as follows: Q1: to 1.17 (from 1.22); Q2: 1.15 (1.20); Q3: 1.17 (1.22); and Q4: 1.18 (1.24).

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[IFX Gertrude]

UK Shop Prices Drop 1.7% In December - BRC



Retail prices in the United Kingdom were down a seasonally adjusted 1.7 percent on year in December, the British Retail Consortium said on Wednesday. That beat forecasts for a decline of 1.8 percent following the 1.9 percent fall in November. Food prices were up 0.1 percent after falling 0.2 percent in November - the first such decline in the history of the series. Non-food prices dropped 2.8 percent in December after falling 2.9 percent in November. Shop prices were down every month in 2014, and have declined in 20 consecutive months overall. "A number of key commodities in the retail supply chain, in particular oil, have fallen dramatically recently and the impact of these falls will continue to make its way through to shop prices for some time to come," said Helen Dickinson, BRC director general.

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[IFX Gertrude]

Gold inched Higher on Thursday Along With An Uptick in Oil Prices, capped by Strong Usd and US Data



Spot gold edged up 0.2 percent to $1,212.63 an ounce by 0045 GMT. The metal fell 0.7 percent in the previous session, ending a three-day winning streak. Prices had climbed to a three-week high on global equities concerns over a Greece exit of the euro zone if a left-wing party that wants to cancel austerity measures wins the Jan. 25 elections. But gold lost some ground on Wednesday as stocks edged up after recent sharp losses and as minutes from the Federal Reserve's policy meeting in December showed the U.S. central bank maintaining the status quo on interest rates. Data on Wednesday also showed the U.S. trade deficit fell to an 11-month low in November as declining crude oil prices curbed the import bill, prompting economists to sharply raise their growth estimates for fourth-quarter growth. Traders were eyeing U.S. payrolls data due later this week for clues about the economy and its potential impact on the Fed's monetary policy. A robust economy could prompt the Fed to raise interest rates soon, dulling demand for non-interest-bearing bullion. For now, investors were eyeing moves in oil prices, which slumped to five-year lows earlier this week. U.S. crude stayed above $48 a barrel on Thursday, holding on to gains in the previous session following an unexpected drop in crude inventories and a positive economic outlook at the world's largest oil consumer the United States.

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[IFX Gertrude]

Risk Rally Extends Showing mixed Results in Fx



The rebound in risk sentiment extended through the North American session, with US equities up 1.8% and US 10yr yields back above 2.00%. Commodity prices have been stable. The more positive risk tone is partly reflected in FX market, with JPY underperforming (USDJPY testing 120) and NOK, AUD, NZD outperforming, although better domestic data in those regions in recent days have helped. EUR continues to be heavy with EURUSD making new lows and now near 9-year low. Draghi remarks that ECB measures may include sovereign-bond buying got quite a few headlines, although is not surprising at this point

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[IFX Gertrude]

Usd/krw marked Lower in Opening Trades Below 1085



Next line of support is the 17 December 2014 low at 1080.7
JPY/KRW as a consequence down to 9.15; JPY strength simply not enough
Broad although modest US Dollar weakness this morning - DXY down 0.2%
Kospi not keen to follow the Wall Street lead - down just 0.2% early


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[IFX Gertrude]

Japan Has Y433.0 Billion Current Account Surplus



Japan posted a current account surplus of 433.0 billion yen in November, the Ministry of Finance said on Tuesday. That beat expectations for a surplus of 139.5 billion yen following the 833.4 billion yen surplus in October. The trade balance showed a deficit of 636.8 billion yen versus forecasts for a shortfall of 734.0 billion yen following the 766.6 billion yen deficit in the previous month. Imports were up 2.2 percent on year to 6.959 trillion yen, slowing from the 7.4 percent jump a month earlier. Exports climbed an annual 10.8 percent to 6.322 trillion yen, easing from the 11.2 percent spike in October. The data also showed that the capital account balance reflected a deficit of 6.6 billion yen after showing a 13.9 billion yen shortfall in October. The financial account had a surplus of 506.4 billion yen - down sharply from the 1,207.7 billion yen surplus in the previous month. The adjusted current account surplus came in at 914.5 billion - beating expectations for 69295billion yen and down from 947.0 billion yen a month earlier. Also on Tuesday, the Bank of Japan said that bank lending in Japan was up 2.7 percent on year in December, coming in at 422.604 trillion yen. That was in line with expectations and down from the 2.8 percent gain in November. Including trusts, bank lending added an annual 2.6 percent to 485.945 trillion yen, also matching expectations and down from 2.7 percent in the previous month. Lending from trusts gained 1.6 percent on year to 63.340 trillion yen after adding a revised 1.5 percent a month earlier.


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[IFX Gertrude]

Japan M2 Money Stock Gains 3.6% In December



The M2 money stock in Japan climbed 3.6 percent on year in December, the Bank of Japan said on Wednesday - worth 893.9 trillion yen. That was in line with expectations and unchanged from November. The M3 money stock gained an annual 2.9 percent to 1,209.1 trillion yen - unchanged from the previous month but missing forecasts for 3.0 percent. The L money stock gained 3.5 percent to 1,589.2 trillion yen following the 3.4 percent jump a month earlier. For the third quarter and for all of 2014, M2 added 3.4 percent, M3 gained 2.8 percent and L advanced 3.4 percent.


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[IFX Gertrude]

Japan Producer Prices Ease 0.4% In December
An index measuring producer prices in Japan was down 0.4 percent on month in December, the Bank of Japan said on Thursday, showing a score of 104.8. That missed forecasts for a decline of 0.3 percent, which would have been unchanged from the November reading following a downward revision from -0.2 percent. On a yearly basis, prices added 1.9 percent - also missing expectations for 2.1 perent and down from the downwardly revised2.6 percent gain in the previous month (originally -2.7 percent). Export prices were down 0.7 percent on month and 2.7 percent on year, the data showed, while import prices fell 3.2 percent in month and 9.0 percent on year.

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[IFX Gertrude]

Japan November Tertiary Industry Index Adds 0.2%



An index measuring tertiary industrial activity in Japan was up a seasonally adjusted 0.2 percent on month in November, the Ministry of Economy, Trade and Industry said on Friday, coming in at 99.2. That was in line with expectations following the 0.2 percent decline in October. Industries that contributed to the increase included finance, personal services, accommodations, communications, real estate, health care and utilities. Industries that declined included retail trade, scientific research, transportation, compound services and learning support.


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[IFX Gertrude]

Japan November Tertiary Industry Index Adds 0.2%



An index measuring tertiary industrial activity in Japan was up a seasonally adjusted 0.2 percent on month in November, the Ministry of Economy, Trade and Industry said on Friday, coming in at 99.2. That was in line with expectations following the 0.2 percent decline in October. Industries that contributed to the increase included finance, personal services, accommodations, communications, real estate, health care and utilities. Industries that declined included retail trade, scientific research, transportation, compound services and learning support.


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