Daily Company News from ForexMart

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Sluggish Economic Growth Supported by Economic Data
Japan undergoes slow growth reflected on the several economic indicators. Statistics from last year until early this year showed they have recovered but it is still not sufficient.
The industrial output slowed by 0.1 percent in October because of less foreign and local demand that affects production. The retail sales and household spending were also expected to slow down for 8 consecutive months after it decreased by 1.2 percent and 0.6 percent respectively. The private consumption and unemployed also slowed down and moves at a steady rate.
There has been a optimistic results in the third quarter this year but a sustainable economic recovery is still questionable.

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Japanese CPI Data Records Longest Losing Streak since 2011, Drops for Eight Consecutive Months


The consumer prices data for Japan has again dropped for its eighth straight month, recording its longest losing streak since 2009-2011. This losing streak in the nation’s consumer data shows just how far Japan is from reaching its inflation target of 2%. The Bank of Japan’s primary inflation measurement, which is consumer prices minus fresh food, decreased by 0.4% last October as compared to its data from the same period last year. Consumer prices minus food and energy increased marginally and had a reading of 0.2% and was previously forecasted to come in at 0.1%. Consumer prices in general increased slightly by 0.1% with a surge in prices for fresh food making up for the drop in energy costs.

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Pound to Take A Break as Investors Sees a Longer Effect of Brexit


After the EU exit on June 23, the sterling had a 16 percent dip which is feasible for a huge adjustment on its economic status. Two of the most renowned Scotland-based investment company have conveyed their advice for the pound to give the pound a rest.
The Kames Capital and Standard Life Investments inferred that the aftereffect of the referendum would last a decade.
According to Andrew Milligan from the Standard Life company, the market valuates in advanced as they expected that the British economy would endure enormous changes. While Stephen Jones of Kames described the pound as the “whipping boy” of the forex market because this is the consequence from the unpleasant Brexit event.
At present, the financial situation of U.K had a worse progression which caused the pound to remain as one of the poorest performing currency among Majors, in general, followed by the Mexican peso.

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EU Stocks Surge, Extend its Longest Rallying Streak in Two Years
European stocks extended its longest rallying streak during Friday’s trading session, with EU stocks hitting its highest rallies in over two years following highly supportive projected policy plans from the European Central Bank. The Euro Stoxx 50 Index closed down the previous session within 0.7% of an impending bullish market, while the Stoxx Europe 600 Index increased by 1%. The Italian FTSE MIB Index meanwhile dropped by 0.7% after posting its highest three-day increase in six months.

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Demonetisation of 100-Bolivar Notes
The Republic of Venezuela made its announcement regarding the official replacement of the country’s banknotes, it will be fill in with coins within 3 days. The government decided to remove the 100-bolivar notes in order to minimize the smuggling of various items including foods. According to Nicolas Maduro, Venezuelan President, the syndicates run their operations within the border of the country cannot execute the repatriation of the notes. The most recent amount of the former “highest denomination” bill - 100 bolivar note is 2 US cents (£0.015). Moreover, the so-called “terrestrial paradise” are now dealing with a severe crisis both in political and economic sector since the region are included in the list of the world’s highest rates of inflation.

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Cut in Oil Production Lead to Oil Price Hike

Oil prices surged to new highs since 2015 after OPEC and other oil producers come up with an agreement to lessen output production to counterbalance the oversupply in the economy.

The agreement entails 1.0 million barrels per day reduction, lesser to the planned cut of 1.6 million barrels per day with the accrued 1.76 million barrels per day(bpd) from 24 countries. The former 52.6 million bpd equivalent to 54 percent of global oil supply. If the planned cut was followed, there will be higher risks involved.

OPEC aims to cut output by 1.2 million bpd on January 1st from the top exporter Saudi Arabia with a bid of 486,000 bpd to stop overproduction.

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Oil Prices Surge to Highest Levels in Almost Two Years Following Production Cuts Pledges from Non-OPEC Countries

Crude oil prices rose to its highest levels in over 17 months following Saudi Arabia’s pledge to cut back on its oil production more than the previous agreement, as well as a pledge from non-OPEC countries to implement production cuts next year. Saudi Arabia’s Energy Minister has already stated that the country will be cutting back well below the predetermined target, and non-OPEC nations followed suit, with the said countries agreeing on cutting back by up to 558,000 bpd next year. This particular agreement is the first of its kind between OPEC members and non-OPEC members during a 15-year period.

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US Treasuries Whipsaw as FOMC Minutes Shifts Focus on USD and Fiscal Policies
US Treasuries careened between losses and gains after the minutes from the FOMC meeting last December showed that majority of the Federal Reserve’s officials have shifted their focus on slowing down the frequency of interest rate hikes. The minutes also revealed that various risks from the central bank’s fiscal policies is seen as a catalyst for speedier economic growth. The minutes of the FOMC showed a docile hawkishness but lacked any dovishness in its stance.

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Inflation rate in the Eurozone Rack Up
The inflation rate in the European region had increased, reaching its highest pace after three years. The surge is driven by the price hike for alcohol and tobacco, energy and food.
Based on the report from the Eurostat, the inflation percentage for December gained 1.1% which is notably higher from November’s result of 0.6%.
The highest rate occurred last 2013 in the month of September by which the result is also 1.1%. The final outcome is higher-than-expected which made the ECB’s target less than 2%.
The energy prices surge by 2.5% yearly, while the value of food and intoxicants grew by 1.2% year over year. Moreover, the energy costs rose due to OPEC’s resolution to decrease the production output.
The sharp jump lessened the fears of Europe regarding the possible deflation which could weakened the eurozone’s economic growth. Meanwhile, other core prices compelled by world markets had a limited rise from 0.8% to 0.9% only, this little progress would mean that the December’s inflation is “short-lived” according to analysts.

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Countermeasures of China to Curb Yuan in 2017
Yuan rallied this year especially the offshore trading and China is creating its contingency plan to curb the capital outflows for 2017. The offshore yuan climbed 0.9 percent to 6.8958 against U.S. dollar which is the highest increment since January 2016.
This plan was thought to counter recovering U.S. dollar while country’s capital outflow increases. Moreover, the ongoing threat from changes in U.S. policies regarding exports under Trump’s presidency. China might also sell U.S. Treasuries this year if necessary to secure the currency. This is predicted to expand the supply for foreign exchange within the onshore market and in return would support yuan in the short term.

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Pound Surges, USD Plummets after Trump, May Comments
The sterling pound finally increased in value after a long slump after UK PM Theresa May outlined her plans for the hard Brexit process, therefore clearing up some of the Brexit-related confusions and placating investors. Meanwhile, US president-elect Donald Trump has recently commented on the strength of the dollar, saying that the USD’s current value might be “too strong” for the US economy to handle. This has then prompted USD investors to vacate the dollar and move to riskier assets such as stock markets and has caused the dollar to drop in value.

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India’s Demonetization Impacts the Economy

India presented consecutive growth for less than 7 percent in the past three-quarters during December 2012 and June 2013 based on the statement from an India economist at Soc Generale, Kunal Kumar Kundu.
SocGen also mentioned the fiscal growth rate of the country for 2017 is 6.6 percent versus the previous result of 7.3 percent. The bank further expects for a 7.2 percent, lesser than the earlier prediction of 7.7 percent, for the fiscal year 2018 which will end on March 2019.
India laid out its demonetization program since November with more than 50 days from now, causing an 86% impact on the currency circulation within the country.
The 500 ($7.35) and 1,000 ($14.70) rupees were replaced with 500 and 2,000 rupee notes.
The Jakarta-based investment firm reviewed the research from All India Manufacturers' Organization (AIMO), which showed that there are 35% job losses within the small scale and micro industries and suffered 50% decline in the revenue, 34 days after the demonetization program is set forth. However, in March 2017, the figures will likely drop into 60% in employment while 55% reduction in revenue as stated by AIMO, it’s because these sectors are highly dependent on cash transactions.

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Chinese Government’s Countermeasure for Decline in Home Prices
Residential property in Guangzhou climbed by 0.7 percent in December according to the report from Bureau of Statistics’ data. It is the only city who opposed the deflation program of residential properties in China.
Twenty local and provincial officials have seeked out counter measures to control loans and restrict second-home buyers to lessen the risk of elevated prices that may lead into dire repercussions. When this countermeasure has been implemented home prices from first and second tier cities steadied implying a positive change for the economy. As for the city of Beijing, he pledged that the prices of new homes will be kept unchanged for this year.

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Fed's Yellen Says Future Rate Hikes Dependent on US Economy
Federal Reserve Chair Janet Yellen has stated that the Fed might consider implementing a Fed rate hike in the near future provided that the US economy maintains its presently positive economic outlook. However, with the incoming Trump administration, Yellen has reiterated that the FOMC has yet to see the incoming administration’s policies and how these could alter the Fed’s current outlook. This particular statement has created support for the US dollar in the past trading sessions, while Treasuries dropped in value.

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January 19, 2017
Australia’s Increase in Employment
The Australian Bureau of Statistics released an official data on Thursday showing an upsurge in employment. The number of people employed increased by 13, 500 which is higher than the expected figures of 10, 000. The number of people who work full time expand by 9, 300 and the participation rate reached 64.7% in December while 64.6% for November.
Annette Beacher, Chief Macro Strategist of Asia-Pacific Research at TD Securities, mentioned that there were about 92,000 additional jobs created last year. However, these jobs are only part-time because full-time occupation declined in 2016.
Moreover, the stability of the labor market will be based on the actions of the Reserve Bank of Australia for 2017, according to an economist at Morgan Stanley, Daniel Blake.On one side, there are few analyst who believes on the positive impact of the employment statistics.