FOREXYARD: Forex News Blog | |
- Turkey Risking Asymmetric Growth; Potential for Bust Rising
- Corn Prices Drop as 2011 Supply Expected to be Higher than Forecast
- Asian Manufacturing in Steep Decline
- Weekly Fundamental FX Preview – Long Weekend to Ponder European Debt Solution
- Dollar up as UK Manufacturing Falls
- PMI Numbers to Highlight Growth Risks
- Affirmative Greece Austerity Vote a Blessing or Curse?
- Canadian GDP Beats Forecast after CPI Hints at Growth
- French Spending in Decline amid Greece Concerns
- Consumer Confidence Rising in New Zealand
| Turkey Risking Asymmetric Growth; Potential for Bust Rising Posted: 01 Jul 2011 07:07 AM PDT
The rapid pace of growth seen in the Turkish economy lately has both generated remarks of applause and concern. On the one hand, the economy of Turkey, as reported by the agency TurkStat, has risen 11% year-on-year for the first quarter of 2011, outpacing the expectation for a 9.6% rise, and a prior 9.2% growth in Q4 2010. On the other hand, trade data is showing the Turkish trade deficit widening sharply, with imports rising 43% and exports a meager 11.7%. This asymmetry of Turkish economic expansion, according to analysts, is being fueled by rising domestic consumption propped up by an increase in credit growth. If measures are not taken soon to quell this booming rise in debt and rampant consumption, the Turkish economy risks overheating and entering a harsh downturn later this year. So far the Turkish central bank disagrees, arguing in their latest meeting minutes that they view the current growth as healthy and see no signs of overheating. But the growing deficit in the nation's current account could force the bank to hike rates in the near future to dampen the booming domestic demand that could eventually cause a bust in the economic growth of Turkey. Read more forex trading news on our forex blog. |
| Corn Prices Drop as 2011 Supply Expected to be Higher than Forecast Posted: 01 Jul 2011 07:01 AM PDT
The price of corn was seen plummeting Friday after a US Department of Agriculture (USDA) study found both stockpiles and seeded areas to be larger than market forecasts. The whopping 92.28 million acres of land seeded this spring was the largest since World War II, with farmers overcoming the relatively colder and wetter period that had many economists speculating a short-fall this year. Moreover, the amount of corn held in storage was found to be larger than many analysts were anticipating, with an amount of 3.67 billion bushels located in US stockpiles. The price of corn has so far fallen to a low not seen since March, with a current value just under $5.82 per bushel and steadily declining. Read more forex trading news on our forex blog. |
| Asian Manufacturing in Steep Decline Posted: 01 Jul 2011 06:57 AM PDT
Data from several Asian nations this morning revealed a stark downturn in manufacturing across the East. With similar downturns across Europe and the Americas, several analysts view the figures as in line with expectations, despite coming in below market forecasts; though the data is hardly worth celebrating. China published its Manufacturing PMI figures at 2:00 GMT this morning, revealing a minor short-fall in market expectations, though the impact was barely felt. Japan's Tankan manufacturing data also fell short of forecasts, which was somewhat more surprising given the recent data on inflationary growth, a better-than-forecast retail sales report, and rising monthly industrial output. Analysts have taken the news as a sign that growth in other parts of the globe may also see a downturn. This morning's Chinese data suggests that fuel demand may wane in the months ahead; driving oil prices lower over the short- to mid-term. With manufacturing in decline, traders may anticipate more risk averse behavior throughout the next few months, leading to a stabilizing in value for safe haven currencies like the USD, JPY and CHF. Read more forex trading news on our forex blog. |
| Weekly Fundamental FX Preview – Long Weekend to Ponder European Debt Solution Posted: 01 Jul 2011 06:22 AM PDT
With a long weekend ahead of US traders and a Greek disaster averted, albeit temporarily, this should allow for markets to calm a bit as traders will now turn their attention to the economic data in order to build on this past week's rally. Though questions remain given the compromises that are required to bridge the German and French rollover plans as well as the opinions of the ECB and the rating agencies. The European debt crisis is also heating up in other areas given the fiscal difficulties Italy faces combined with the threat of a ratings downgrade of major Italian banks. Economic data should turn to the forefront as the US jobs report will be highlight of the week. Today's sub-par PMI releases from the UK, EU and China should be a note of concern for increased growth prospects. Weak Chinese manufacturing PMI data slid under the radar today while inflationary pressures in China continue to make headlines following Chinese Premier Wen's comments to target 4% inflation despite continued readings above 5%. More drastic approaches may be needed in order to win the fight against inflation and the risk of a hard landing in China has broader implications for the global economy that depends on Chinese growth. Read more forex trading news on our forex blog. |
| Dollar up as UK Manufacturing Falls Posted: 01 Jul 2011 05:01 AM PDT
The dollar was up versus sterling and the safe haven yen and Swiss franc following disappointing UK PMI data. Weak US PMI data would likely feed into additional USD strength heading into the holiday weekend and slow the market commentary about a rebound in risky assets. UK manufacturing PMI declined to 51.3 on consensus forecasts of 52.2. The negative tone of the report was emphasized by the reduction of last month's numbers to 52.0 from 52.1. With UK manufacturing slipping this ends a dreadful week of UK economic data that began with a larger increase to the current account deficit and a flat HPI index. Sterling was down at the 1.60 level and for the day and really failed to capitalize in the "risk-on" environment. Next week's UK interest rate decision and MPC notes could reflect the committee's deteriorating assessment of the UK economy. Sterling may have further downside and a close below the March low at 1.5935 would put the bears in charge. The euro is even versus the dollar but up in the crosses as traders unwind short bets against the 17-nation currency, particularly in the EUR/CHF which has rallied 3.7% this week. Expectations that the EU/IMF may transfer the 5th tranche of the Greek bailout as early as this weekend has offered the euro support and has the safe-haven Swiss franc and Japanese yen trading lower versus the dollar. Euro zone PMI was flat and did little to support the currency. The EUR/USD hasn't been able to overcome the falling resistance line from the May and June highs and a failure today might reduce the momentum behind the recent move. Today's US PMI data will do a lot to reinforce/discredit the "risk-on" talking heads who site a short term rally in risky assets such as US equities and crude oil while general safe-havens such as gold has pulled back. Next week's jobs report is also key. Read more forex trading news on our forex blog. |
| PMI Numbers to Highlight Growth Risks Posted: 01 Jul 2011 12:21 AM PDT
With the Greek debt crisis pushed to the back burner markets will turn their attention to economic data beginning with the PMI releases due out later today from the UK and the US as well as next Friday's jobs report. The PMI data are likely to show a pullback in manufacturing which could damper this week's relief rally. Today's Economic Events: UK – Manufacturing PMI – 08:30 GMT USD – ISM manufacturing PMI – 14:00 GMT Read more forex trading news on our forex blog. |
| Affirmative Greece Austerity Vote a Blessing or Curse? Posted: 30 Jun 2011 12:16 PM PDT
After Greece passed its austerity budget in parliament yesterday, the governments of Europe have been analyzing and speculating about what comes next. Though securing another installment of its International Monetary Fund (IMF) bailout, the citizens of Greece expressed their anger at the measure in a day of intense rioting and violence. Protesters were filling the streets and attempting to blockade entry for MPs trying to enter the parliamentarian building and stop the vote. The budget package includes such measures that will put more pressure on the economically underprivileged in the country, possibly resulting in a refusal to pay taxes among individuals unable to survive by doing so. Markets responded favorably to the news that Greece was addressing its debt concerns, but a sentiment is being passed around that the medicine may cure the disease, but kill the patient. If Greek citizens begin to resist the payment of taxes, a threat of default moves from possible to inevitable and the region will once more be thrown into turmoil and the EUR may find itself under attack and at risk of dissolving. |
| Canadian GDP Beats Forecast after CPI Hints at Growth Posted: 30 Jun 2011 12:12 PM PDT
The agency Statistics Canada released news this afternoon in line with what several analysts were expecting after yesterday's CPI figures. Canadian GDP stagnated at 0% growth for the past month, but was optimistically above the forecast contraction of 0.1% and therefore acted as a general buy signal for investors. Wednesday's nominal and core CPI data signaled growth across consumer prices that hinted at a rise in economic output. Today's GDP reflected the reality of this growth. So far the Canadian dollar (CAD) is on a bull run amid this positive news, and looks to continue gaining so long as the rest of the world fidgets with angst amid Greece concerns and an uncertainty about risk appetite. |
| French Spending in Decline amid Greece Concerns Posted: 30 Jun 2011 12:08 PM PDT
The consumer spending report out of France this morning came out below forecasts and highlighted a contraction of 1.5% in consumer spending for June. The monthly report was forecast to reveal 1.0% growth in this vital sector of the French economy, but the sudden contraction has sparked worries that Europeans may be avoiding consumption in an effort to save for the hard times ahead should Greece continue to experience problems. The Greece austerity vote, which took place Wednesday and passed 155-138 in parliament, has wrinkled portfolio analyses given its sensitive nature. The impact on risk appetite is being felt across multiple sectors of the European economies, a French spending decline being one of the earliest signals. |
| Consumer Confidence Rising in New Zealand Posted: 30 Jun 2011 12:05 PM PDT
The National Bank of New Zealand's report on consumer confidence this month struck an optimistic tone with investors, who have been moving sporadically in and out of risk these past two weeks as the crisis in Greece captivates headlines. The report, which came in significantly higher than last month, underlines a growing trend in the Pacific countries that are seeing more growth than their other Western counterparts in Europe and the Americas. The NBNZ figure acts as a leading indicator of economic health in New Zealand. It factors into portfolio analyses regarding such growth measures as consumer spending, income levels, financial and economic outlook, as well as business optimism toward expansion. With the figure growing in June, many traders are attempting to anticipate a bull run for the New Zealand dollar (NZD) in the days ahead. |
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