Wed, May 22, 2024 @ 14:30 GMT
Facebook Mail RSS Twitter
Live Comments Page 661

Live Comments

Latest

Barnier and Davis confirm Brexit transition agreement, new text published

    By
    ActionForex.com
    -

    EU Chief Negotiator Michel Barnier and UK Brexit Secretary David Davis confirm in a press conference that the deal for transition period is agreed.

    Barnier announced that the legal text of Brexit has been agreed, even though there are still works today, in particular regarding Irish border. And, a new text of draft Brexit withdrawal agreement published. (The new, color-coded text can be found here). He will present the document to MEPs and to the commission, and then to EU leaders during the summit on Friday. Be after all, he also emphasized that the transition agreement will only take effect if the final agreement is made.

    According to Barnier, EU nationals arrive in the UK during the transition will have the same rights as those arrived before. UK will not participate in EU decision making during the period, but it have to follow EU rules. Regarding Irish border, Brainier reiterated that both sides are committed to the joint position of avoiding a hard border, as published in a report back in December. The so called regulatory alignment solution will be part of the agreement as a fall back option.

    UK Brexit secretary David Davis sad the implementation phase (transition period) will provide certainty for the short term. And trade deals will be agreed this time, with a joint committee of UK and EU representatives working to resolve all differences. While UK will follow EU rules, on foreign policy, UK will go on their own. Davis also confirms that the transition period will end on December 31, 2020.

    Sterling soars as Brexit transition deal “done”. GBP/USD and EUR/GBP updates

      By
      ActionForex.com
      -

      Sterling jumps sharply on news that Brexit transition deal is agreed. And, it’s only awaiting sign-off by UK Brexit Secretary David Davis and EU Chief Negotiator Michel Barnier. David and Barnier are meeting in Brussels to hammer out the details today. The legal text of the agreement is expected to be delivered to the EU summit on Thursday and Friday for final approval. Davis and Barnier will hold a joint press conference later today.

      It’s reported elsewhere that the cut off date for the transition period will be December 2020. And, UK will be allowed to make 3rd party trade deals during the transition.

      GBP/USD takes out 1.3995 to resume the rally from 1.3711. It’s on course for a test on 1.4144. And, it’s getting more convincing that the correction from 1.4345 is completed. And the pair is ready for resuming larger up trend from 2016 low at 1.1946.

      EUR/GBP’s break of 0.8871 support also confirm that the corrective rise from 0.8686 has completed at 0.8967. Deeper fall should be seen to retest 0.8686 in near term. It’s a bit early to tell if fall from 0.9305 is resuming. But momentum looks promising.

      Sterling performing well, GBP/CHF with solid upside bias

        By
        ActionForex.com
        -

        Sterling doing rather well today with GBP/CHF, GBP/NZD and GBP/AUD topping the daily top mover table. These three pairs are also the top 10 movers in the 4 hour and monthly period.

        Upside momentum in GBP/CHF is quite clear as seen in 6H action bias chart.

        ECB Knot confident on inflation, Villeroy de Galhau on path to normalization

          By
          ActionForex.com
          -

          Some comments from ECB officials.

          Klaas Knot, ECB Governing Council member and President of the Dutch central bank, said “Inflation has been fairly stable so that provides me with a high degree confidence that actually inflation will pick up and will at some point approach the definition of price stability.”

          Francois Villeroy de Galhau, ECB Governing Council member and Bank of France Governor, said “we are making progress on the inflation front… although a bit slower than we had expected.” And, “our policy is on a path to normalization.”

          ECB Governing Council member and Bundesbank President Jens Weidmann said in a German newspaper interview that “I personally think that the good economic developments and the inflation forecast would allow a rapid end to the bond purchases.

          EU called urgent meeting on Brexit

            By
            ActionForex.com
            -

            It’s reported, with unnamed sources quoted, that EU officials called an urgent meeting regrading Brexit. It’s believed that there could be certain decisions made regarding the transition deal ahead of the EU summit later this week. Meanwhile, UK Brexit Secretary David Davis will also meet with EU chief negotiator Michel Barnier.

            BoJ’s government debt holdings jumped to record high

              By
              ActionForex.com
              -

              BoJ’s government debt holdings jumped to record high in the period of October to December 2017. By the end of December, holdings jumped 6.8% yoy to JPY 449T. That equaled to 41.1% of all Japanese government debt. Insurance and pensions holdings was a distant second, at JPY 21.6T only. Overseas holdings also rose to JPY 122T, a record high.

              45 trade groups warn Trump: Don’t do something commercially meaningless and penalize Americans

                By
                ActionForex.com
                -

                45 trade groups wrote an open letter to Trump trying to stop him from starting a trade war with China. In a joint open letter: –

                The group urged Trump’s administration to take “measured, commercially meaningful actions consistent with international obligations” and warned Trump not to “penalize the American consumer and jeopardize recent gains in American competitiveness.” It’s clear to the group of businesses what Trump is trying to do regarding tariff on China is not commercially meaningful.

                The group also warned of the “chain reaction of negative consequences” of trade war with China by “provoking” retaliation. And Trump should not respond to unfair Chinese practices and policies by measures that will “harm U.S. companies, workers, farmers, ranchers, consumers, and investors.”

                In particular, it’s listed out in the letter that

                • Tariffs on consumer goods would raise price for consumers and business and “negating gains for American workers from U.S. tax reform.” T
                • Tariffs will also harm American companies that “sell component pieces of final products exported from China.”
                • Also, tariffs would harm community services provides including “health care, education, and emergency responders.
                • Tariffs on product components would “disrupting existing supply chains” and have “negative impact on American jobs”.
                • Tariffs will also depress financial markets.

                Additionally, the group warned that “imposition of unilateral tariffs by the Administration would only serve to split the United States from its allies”.

                Here is a copy of the letter.

                And below is the list of trade groups:

                1. Agriculture Transportation Coalition
                2. Airforwarders Association
                3. Allied for Startups
                4. American Apparel & Footwear Association
                5. AutoCare Association
                6. CAWA Auto Parts
                7. Coalition of New England Companies for Trade
                8. Columbia River Customs & Forwarders
                9. CompTIA
                10. Computer and Communications Industry Association
                11. Consumer Technology Association (CTA)
                12. Customs Brokers and Forwarders Association of Northern California
                13. Developers Alliance
                14. Fashion Accessory Shippers (FASA)
                15. Gemini Shippers Association
                16. Grocery Manufacturers Association
                17. Home Furnishings Association
                18. Information Technology Industry Council (ITI)
                19. International Wood Products Association
                20. Internet Association
                21. Los Angeles Customs Brokers
                22. National Customs Brokers and Forwarders Association of America
                23. National Foreign Trade Council
                24. National Retail Federation
                25. NY/NJ Forwarders and Brokers Association
                26. North American Meat Institute
                27. Outdoor Industry Association
                28. Pacific Northwest Asia Shippers Association
                29. Promotional Products Association International
                30. Retail Industry Leaders Association (RILA)
                31. Snowsports Industries America
                32. Specialty Crop Trade Council
                33. Sports and Fitness Industry
                34. Tea Association of the U.S.A., Inc.
                35. TechNet
                36. Telecommunications Industry Association (TIA)
                37. The APP Association (ACT)
                38. The Pacific Coast Council of Customs Brokers and Freight Forwarders
                39. The Toy Association
                40. Travel Goods Association (TGA)
                41. U.S. Chamber of Commerce
                42. U.S. Council for International Business
                43. U.S. Fashion Industry Association
                44. U.S. Hide, Skin, and Leather Association
                45. Wine and Spirits Shippers Association

                EU published retaliation list, up to EUR 6.4b of US imports

                  By
                  ActionForex.com
                  -

                  EU published a list of products for retaliation over US steel and trade tariffs last Friday. The total value of US imports to EU could add up to EUR 6.4b in total. There are two parts in the list. Part A includes goods that are worth EUR 2.8b and EU aim to impose 25% tariff. Part B include products that could be tariffed after three years. It’s believed that EU will notify the WTO as soon as possible within a 90-day deadline. For the time being, according to WTO rules, EU can only retaliate up to the amount of EU’s steel exports to the US, and thus that EUR 2.8b amount. But EU is making itself ready for further action, playing by the WTO book.

                  Here is the list of products in case you’re interested.

                  German Economy Minister Altmaier: Americans are “still” our allies

                    By
                    ActionForex.com
                    -

                    German Economy Minister Peter Altmaier will meet with US Commerce Secretary Wilbur Ross this week, and “anyone in Washington who is willing to talk.” US steel and aluminum tariffs is the main focus on the trip for Altmaier. He warned that “what’s dangerous about the current situation is that it threatens a spiral of one-sided measures that contradict the idea of free trade.” And, “that would counter what we’ve done for the past 60 years. Altmaier also emphasized that “Americans are still our allies” and he’d want to prevent a trade war.

                    German Finance Minister Olaf Scholz will meet US Treasurer Steven Mnuchin at G20 finance head meeting in Buenos Aires. Scholz told the press that “we must think about how we can ensure growth for the future and of course also how we can keep one of the most important resources for future wealth — the possibility to trade freely — stable.” And, that’s why it would be difficult if protectionism played a bigger role now again.”

                    Bundesbank Weidmann: Good economic developments and inflation forecast allows quick end to asset purchase

                      By
                      ActionForex.com
                      -

                      Bundesbank President Jens Weidmann said in a German newspaper interview:-

                      • “I personally think that the good economic developments and the inflation forecast would allow a rapid end to the bond purchases.”

                      Weidmann is always felt like the lone hawk in ECB board. Recent comments from other ECB officials generally remained cautious.

                      For example, ECB President Mario Draghi just repeated last week that he still need to see further evidence of prices picking up towards target. And repeated that “monetary policy will remain patient, persistent and prudent.” Chief economist Peter Praet said last week that he didn’t even prefer to revise the ECB’s forward guidance too early.

                      BoJ summary of opinions at March meeting: Need to explain the difference between normalization and tightening

                        By
                        ActionForex.com
                        -

                        BoJ summary of opinions at March 8-9 policy meeting showed no change in the board’s stance on monetary policy. Generally speaking “powerful monetary easing” will be maintained as it’s “still a long way” to meet 2% inflation target. There were concerns of Yen’s appreciation and stocks’ decline as they would “constrain wages and prices” and risk delaying of meeting price target. the board also saw the need to explain the difference between “normalization” and “tightening” even though it’s not in the phase to consider normalization. So we’ll likely hear more rhetorics from BoJ Governor Haruhiko Kuroda ahead regarding exit. Yet he’ll repeat and repeat that it’s not there for exit yet.

                        Some quote highlights:-

                        • If the current trends of the appreciation of the yen and the decline in stock prices become prolonged, business fixed investment and consumption will be restrained due to negative wealth effects and a deterioration of households’ and firms’ balance sheets, and the profits of export industries will decrease due to the adverse effects on exports. As these will constrain wages and prices, there will be a risk of a delay in achieving the price stability target.
                        • The year-on-year rate of change in the consumer price index (CPI) is likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium- to long-term inflation expectations.
                        • In terms of projecting price developments, the key is to what extent wage developments after the annual spring labor-management wage negotiations will improve individual firms’ price-setting stance and consumers’ acceptance of price rises.
                        • Considering that there is still a long way to go to achieve the price stability target of 2 percent, it is appropriate to pursue powerful monetary easing with persistence under the current guideline for market operations in order to firmly maintain the momentum toward achieving the price stability target
                        • This is not the phase in which the Bank should consider “normalization” — that is, gradually reducing the degree of monetary accommodation — in a concrete manner. However, the Bank needs to explain to market participants so that they can fully understand that “normalization” is still in the process of monetary accommodation and completely different from monetary tightening, which aims at reducing the positive output gap. Such explanation will also be beneficial in smoothly proceeding with “normalization” in the future.
                        • If there is a heightened risk that achieving the price stability target will be delayed, additional monetary easing will be needed

                        Full release here

                        DOW approaching breakout point

                          By
                          ActionForex.com
                          -

                          DOW opens mildly higher today. It’s staying in converging triangle pattern. And should be approaching a breakout point. Levels to watch are 24668.83 and 25449.15.

                          U of Michigan Sentiment 102 vs exp 99.3; Industrial production 1.1% vs exp 0.3%; Housing starts 1.24m vs exp 1.30m

                            By
                            ActionForex.com
                            -

                            US session data wrap up:-

                            • US U of Michigan sentiment Mar P: 102 vs exp 99.3 vs prior 99.7
                            • US industrial production Feb: 1.1% mom vs exp 0.3% mom vs prior -0.3% mom
                            • US capacity utilization Feb: 78.1% vs exp 77.7% vs prior 77.4%
                            • US housing starts Feb: 1.24m vs exp 1.30m vs prior 1.33m
                            • US building permits Feb: 1.30m vs exp 1.33m vs prior 1.38m
                            • Canada manufacturing sales Jan: -1.0% mom vs exp -0.9% vs prior -0.1% mom
                            • Canada international securities transactions (CAD) Jan: 5.68b vs prior exp 9.11b vs prior -1.54b

                            Merkel criticized Trump’s tariffs as against the WTO principles

                              By
                              ActionForex.com
                              -

                              German Chancellor Angela Merkel criticized that US President Donald Trump’s steel and aluminum tariffs are against the principles of the WTO. And “we want to change or solve these problems via discussions if possible.”

                              At the same occasion, Swiedish Prims Minsiter Stefan Lofven said the tariffs are worrying and regrettable.

                              Yen broadly higher into US session, CAD/JPY increasing downside bias

                                By
                                ActionForex.com
                                -

                                Yen staying strongest entering into US session. Commodity currencies are under pressure.

                                CAD/JPY in down trend across time frame. With increasing intraday downside bias.

                                EU expects Brexit transition deal to be provisional

                                  By
                                  ActionForex.com
                                  -

                                  An unnamed EU official quoted saying that there will be a transition Brexit deal next week. But that would be provisional. He’s quoted:

                                  • “There could be an agreement on transition, but it would in any case only be a provisional agreement,”
                                  • “It would be completely dependant on what will be the fate of the withdrawal agreement. Of course, if there is no withdrawal agreement, there will be no transition.”

                                  It’s reported earlier that UK Brexit Secretary David Davis is targeting to complete the legal text of the transition deal at the two-day summit from March 22.

                                  However, it’s unlikely for a resolution on soft Irish border to be reached.
                                  Intensive talk is now planned between March 26 and April 18 on the issue.

                                  So, yes, the best transition deal will be provisional.

                                  BoE FPC statement talks Brexit, domestic and global risks

                                    By
                                    ActionForex.com
                                    -

                                    Some highlights on BoE’s FPC statement from the March 12 meeting:-

                                    • “Apart from those related to Brexit, domestic risks remain standard overall, and that risks from global vulnerabilities remain material.”
                                    • Globally, “the principle risks are in debt markets”
                                    • “Risks stemming from corporate debt in the United States have continued to build. “
                                    • “Financial vulnerabilities in China remain elevated.”
                                    • “Current account deficit remains large by international standards.”
                                    • “Over recent quarters (the current account) deficit has been increasingly funded by capital inflows – rather than sales of foreign assets by UK residents – thus increasing the UK’s reliance on the confidence of foreign investors,”
                                    • “The UK banking system could continue to support the real economy through a disorderly Brexit.”
                                    • “The FPC judged that Brexit risks did not warrant additional capital buffers for banks.  Developments since November have not changed this assessment.”
                                    • “The FPC judges that existing crypto-assets do not currently pose a material risk to UK financial stability”

                                    Full statement here

                                    ECB Praet prefer not to revise forward guidances too early

                                      By
                                      ActionForex.com
                                      -

                                      ECB chief economist Peter Praet sounds cautious as usual. In the latest ECB meeting, the central bank took away the option to expand the asset purchase program again. But going further, Praet said “I would not revise the guidance too early, because that could send wrong signals about the end of our net asset purchases.” And, “I wouldn’t say there is a date or a deadline” for the program.

                                      He also added that “it is clear that if you believe that the degree of slack is higher, then the process of convergence to below, but close to, 2 percent over the medium term would be drawn out. ” And, “other things being equal, it would (mean a) shallower (inflation path)”.

                                      Referring to ECB’s pledge to keep interest at current level “well past” end of asset purchase, Praet said “markets quantify the ‘well past’ interval as ‘up to next spring’.” And he emphasized that “once you stop net asset purchases the signaling aspect of the asset purchase program disappears and you therefore have to be much more precise about the future path of the short term rates.”

                                      Fitch predicts 25bps RBA hike in 2018, 50bps hike in 2019

                                        By
                                        ActionForex.com
                                        -

                                        Fitch rating agency predicts RBA to raise cash rate by 25bps this year. It also predicts another 50bps hike next year in 2019.

                                        What Fitch observed is that RBA appears comfortable lagging behind other central banks in tightening policy, allowing exchange rate flexibility to serve as a buffer”. This is in-line with what RBA Governor Stephen Lowe has repeated a couple of times. That is, RBA didn’t cut as deep as other global central banks. And therefore, it also doesn’t need to reverse that cycle as others like Fed and BoC.

                                        But Fitch expects Australia economy to gain further momentum this year with growth holding steady at 2.7% in 2019. That’s thanks to “strong terms of trade on income, broadly accommodative financial conditions and buoyant prospects for investment”.

                                        IMF Lagarde: Fix economic imbalances with fiscal means, not trade obstacles

                                          By
                                          ActionForex.com
                                          -

                                          IMF Managing Director Christine Lagarde on trade war:-

                                          • She urged politicans to “resolve trade disagreements without resort to exceptional measures”.
                                          • “Trade wars not only hurt global growth, but they are also unwinnable”.
                                          • “We know that the self-inflicted harm of import tariffs can be substantial even when trade partners do not retaliate with tariffs of their own,”
                                          • “We also know that protectionism is pernicious, because it puts the biggest strain on the poorest consumers who buy relatively more low-priced imports. In other words, harming trade is bad for the economy and bad for people.”
                                          • “The way to address global economic imbalances is not to raise new obstacles to trade. Using fiscal means to address global imbalances is critical. This includes, for example, lowering deficits in the US to bring public debt towards a sustainable path, and stronger infrastructure investment and education spending in Germany,”
                                          • “And importantly, those who are adversely affected by globalization and technological progress should receive more support to ensure that they can invest in their skills and transition to higher-quality jobs.”

                                          The IMF’s Global Prospects and Policy Challenges report:-

                                          • “The global expansion is gaining strength from the pick-up in international trade, and it should not be put at risk by the adoption of inward-looking policies,”
                                          • “The modernization of the rules-based multilateral trade system should continue, anchored in the World Trade Organization, with well-enforced rules that promote competition and a level playing field. Co-operation is also needed to tackle excess global imbalances.”
                                          • “The re-emergence of unilateral trade restrictions may escalate tensions and fuel global protectionism, disrupting worldwide supply chains and affecting long-term productivity.”
                                          Load more

                                          ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.

                                          Contact us: contact@actionforex.com

                                          © ActionForex.com © 2024 All rights reserved.