Posts belonging to Category FOREX



Boris Johnson humiliated Theresa May

Tory members cheered every word

Imagine being Theresa May, at half past 12 this afternoon. Walking, with your party chairman, through the venue of your party conference – when you happen upon a swarm of photographers. But those photographers aren’t here to see you. And nor, not far from the swarm, are the hundreds upon hundreds of your party members, who are currently standing in the most enormous, snaking queue.

The queue isn’t for the main hall, where your ministers are giving speeches to promote your policies. The main hall is practically empty. Your members aren’t interested. They don’t want to see your ministers, or hear about your policies.

http://www.telegraph.co.uk

China will never use its currency as a weapon in the trade war

The trade war between China and the United States is intensifying

Premier Li Keqiang told an audience of global executives and policymakers that China would not weaken the yuan to boost trade with the rest of the world. “China will never go down the path of stimulating exports by devaluing its currency,” Chinese Premier Li Keqiang said Wednesday.

His comments came a day after the United States and China announced that they would impose their biggestrounds of tariffs yet on each other’s exports, starting next week. That brings the value of goods hit by tariffs in the escalating conflict to more than $360 billion. President Donald Trump has threatened to hit another $267 billion of Chinese goods with tariffs.

http://www.cnn.com

Why Turkey’s currency is plunging

Turkey’s currency and stock market kept on falling

Turkey’s currency and stock market kept on falling Monday, weighed down by investor fears about the country’s economic policies and worsening relations with the United States. The lira fell as low as 6.89 to the dollar Monday, down about 7 percent on the day and 45 percent since the start of the year. The main stock index fell 3.5 percent.

Why is Turkey currency so weak? One reason is that cheap borrowing rates in major economies like the U.S. are rising, attracting investors’ money away from emerging economies like Turkey. Ultra-low interest rates in the U.S. and Europe had for years encouraged companies in Turkey to borrow in foreign currencies. That helped the economy, which booked 7 percent growth last year. But now the U.S. Federal Reserve is raising rates. That draws capital away from Turkey, weakening the currency. And it makes it more expensive for Turkish companies to repay the foreign currency debts, raising economic concerns that can further weaken the currency.

https://www.washingtonpost.com/

Why gold is plunging

Gold is supposed to be a haven

Why has the price fallen lately? Simply put, it’s the strong US dollar.

Expectations for more interest rate hikes by the Federal Reserve have helped lift the value of the currency.

A stronger dollar often is a bad thing for gold because it makes the metal more expensive for international investors.

http://www.cnn.com

Turkey could be the next emerging market to fall into crisis

The Turkish lira has now lost 27% of its value this year

Economists had been expecting the bank to hike rates to fight inflation, which topped 15% in June. Many observers said the unorthodox decision showed that President Recep Tayyip Erdogan, who supports lower interest rates, has increased his influence over the central bank.

http://www.cnn.com

All-out trade war would lower earnings for US companies by 15%

60% probability that the U.S. imposes tariffs on $200 billion of imports from China

The acceleration of U.S. trade actions poses a risk to S&P 500 earnings through falling export revenues and rising input costs for American companies, according to Goldman Sachs. A 10 percent tariff on all imports from China would lower Goldman’s 2019 S&P 500 earnings per share estimate by 3 percent, Goldman Sachs chief U.S. equity strategist David Kostin wrote. If “tensions spread” and a 10 percent tariff were imposed on all U.S. imports, Goldman said, it would lower its 2019 EPS estimate by 15 percent to $145 a share.

“Tariffs benefit some domestic industries, but pose a risk to S&P 500 earnings through reduced revenues (lower exports) and weaker margins (higher input costs),” Kostin wrote. “Our economists now assign a 60 percent probability that the U.S. imposes tariffs on the recently targeted $200 billion of imports from China.” President Donald Trump and his administration have defended an initiative of “fair and reciprocal” trade in recent months, demanding that some of the nation’s economic allies offer the U.S. a better deal in an effort to curb Washington’s trade deficit and promote American exports.

http://www.cnbc.com

The City of London just suffered a major defeat from the EU over plans for Brexit

Major blow to the UK’s financial services sector

The European Union late last week dealt a major blow to the UK’s financial services sector in the lead up to Brexit, after negotiators rejected the plans for the sector laid out by the British government in Prime Minister Theresa May’s controversial white paper. According to a report from the Financial Times, the EU’s chief negotiator Michel Barnier, last Friday told EU ministers that the financial services elements of May’s Brexit plans could not be accepted as they threatened to rob the bloc’s “decision-making autonomy” when it comes to finance.

The UK, earlier in July, proposed a new relationship between the highly interconnected financial services sectors of the UK and the EU that would involve a system of so-called “equivalence.” Under the plans in the white paper, the government said i t will seek to improve on existing requirements for equivalence of rules between the EU and outside countries.

Equivalence is a framework whereby the EU acknowledges that the legal, regulatory and supervisory regime of a non-EU country is as good as its own, and therefore allows that state access to the financial services sector within the bloc. Countries like Singapore and the USA already use a similar system to trade financial services with the EU.

http://www.businessinsider.com

Stocks or Bonds: What Happens When Rates Rise?

Basic rules

Although there are no specific rules about how bonds and dividend-paying stocks respond to rising interest rates, there are some broad tendencies you may want to consider, suggests Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy.

With bonds, the “coupon rate” is the interest rate that an issuer uses to calculate regular interest payments to investors. The longer the term of a bond, the higher the coupon is likely to be; you’re paid more to wait longer to get your principal back. Higher risk, too, affects the coupon, with high-yield bonds from less solid companies offering more generous interest payments than you’ll get from higher-rated corporations or from U.S. Treasury bonds.

http://www.ml.com…  Febuary 23, 2018

It’s official now: Brexit would damage UK growth

Leaked cabinet report

Brexit would leave the UK worse off under three possible scenarios: a comprehensive free trade deal, single market access and no deal at all, according to a leaked government analysis of the economic impact of leaving the EU.

The document was meant to be shown confidentially to cabinet ministers this week but was leaked in an embarrassing development for Theresa May and David Davis, the Brexit secretary.

It said national growth would be 8% lower under a no deal scenario, around 5% lower with a free trade agreement with the EU and about 2% lower with a soft Brexit option of single market membership over a 15-year period.

http://www.theguardian.com…  Febuary 01, 2018

Eastman Kodak unveils cryptocurrency

Stock doubles

Shares of Eastman Kodak Co (KODK.N) more than doubled on Tuesday after the one-time leader in photography became the latest company to jump on the cryptocurrency bandwagon.

The storied Rochester, New York-based company said in a statement it is launching a cryptocurrency called “KODAKCoin” for photographers, part of “KODAKOne,” an image rights management platform in a licensing partnership with WENN Digital.

The platform uses blockchain technology, the backbone of bitcoin and other digital currencies that have surged in recent months and raised fears of a price bubble.

http://reuters.com/ … Wed., 10  January 2018

Global Debt Hits Record $233 Trillion

The ratio of debt-to-gross domestic product is now 318 percent

Global debt rose to a record $233 trillion in the third quarter of 2017, more than $16 trillion higher from end-2016, according to an analysis by the Institute of International Finance. Private non-financial sector debt hit all-time highs in Canada, France, Hong Kong, South Korea, Switzerland and Turkey.

At the same time, though, the ratio of debt-to-gross domestic product fell for the fourth consecutive quarter as economic growth accelerated. The ratio is now around 318 percent, 3 percentage points below a high set in the third quarter of 2016, according to the IIF.

http://bloomberg.com/ … Mon., 08  January 2018

SEC warns bitcoin, cryptocurrency investors at risk

Investors should “exercise caution”

The U.S. Securities and Exchange Commission warned Thursday that investors should “exercise caution” with cryptocurrencies like bitcoin, noting state and federal regulators may not be able to recoup any lost investments from illegal actors.

Many promoters of initial coin offerings (ICOs) and other cryptocurrency investments are not following federal and state securities laws, SEC Chairman Jay Clayton and Commissioners Kara Stein and Michael Piwowar said in a statement. While regulators are trying to police these quickly growing markets, the SEC urged investors to be vigilant.

http://reuters.com/ … Fri., 05  January 2018

What is Blockchain?

Bitcoin and Blockchain explained in detail

This explainer will offer simple definitions and analogies for blockchain technology. It will also define Bitcoin, Ethereum, blockchain broadly, and initial coin offerings, and highlight promising use cases for the technology. (For a deep dive into how Ethereum works, you can read our What Is Ethereum explainer.)

Lastly, this report will make clear the distinctions between distributed ledger technology and blockchain, and highlight where these technologies have an application – and where they do not.

http://cbinsights.com/… Wed., 03  January 2018

Bitcoin becomes volatile

Bitcoin falls by more than $2,000 in 12 hours

Bitcoin and several other major cryptocurrencies plunged Thursday evening New York time as the end of an exponential year of growth neared. The slashing decline triggered temporary, built-in trading halts in the bitcoin futures traded on the CME and Cboe.

Bitcoin plunged more than 17 percent to a low of $13,077.94 according to CoinDesk, down more than $2,000 from $15,830 less than 12 hours ago. The digital currency recovered to near $ 14,039, as of 1:07 a.m., ET. 

http://www.cnbc.com… Fri., 22  December 2017

Brexit bill: Government loses key vote after Tory rebellion

Parliament is to be given a take-it-or leave-it vote

In a blow to Prime Minister Theresa May, MPs voted to give Parliament a legal guarantee of a vote on the final Brexit deal struck with Brussels.

The government had argued this would jeopardise its chances of delivering a smooth departure from the EU.

Despite a last-minute attempt to offer concessions to rebels, an amendment to the bill was backed by 309 to 305.

Ministers said the “minor setback” would not prevent the UK leaving the EU in 2019.

http://www.bbc.com… Thu., 14  December 2017

Bitcoin Futures Launch Sees Price Spike

CBOE Website Crashes

The Chicago Board Options Exchange (CBOE)’s website became unavailable just as it launched its first bitcoin futures contracts at 6 p.m. EST on Sunday.

The website downtime – which CBOE attributed to significant traffic around the futures launch in a post on Twitter – coincided with a sudden surge in the price of bitcoin, which jumped from $14,509 at 22:59 UTC to $15,732 at 23:06 UTC according to CoinDesk’s Bitcoin Price Index (BPI). Yet as of press time, CBOE’s website is becoming more available – delayed information about the contracts being offered can be found here – and the price of bitcoin has maintained a somewhat steady pace since that initial jump, trading at $15,226.29 per the BPI.

The data coming in thus far suggest that buyers are indeed moving to purchase contracts. Activity has been largely centered around the first contract to expire, dated January 17, 2018, with social media posts pointing to purchases of contracts scheduled to expire on March 14. According to CNBC, 672 January contracts have been sold as of 7:10 pm EST, with the news service reporting a price of $15,800.

http://www.coindesk.com… Mon., 11  December 2017