Thread: ForexMart's Forex News

German industry is looking for salvation abroad

A study conducted in September 2024 among the top managers of 115 industrial companies in Germany revealed alarming trends.

Almost half of the respondents (45%) plan to expand abroad. And only a few companies (13%) are interested in new branches within the country. Moreover, 29% of enterprises reported readiness to transfer jobs from Germany, and only a tiny part (4%) is considering the reverse process of returning immigrated employees.

The results of the study confirm the fears of managers that more than two thirds of the survey participants are confident that the number of jobs in Germany will decrease in the coming years. Only about half expect the situation to improve in five years, while the rest are skeptical about the prospects for the development of the German economy.

Experts point to a number of reasons underlying the current trend. The majority of respondents consider excessive bureaucracy to be the main obstacle to economic recovery. «Wrong policy decisions,» according to almost half of the respondents, also play a significant role in slowing growth. «Insufficient management efficiency» is considered a problem by every fourth participant in the survey.
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Bitcoin has updated the historical record amid Trump's victory

On the night of November 6, the bitcoin exchange rate reached a new historical high, exceeding the $75,000 mark.

According to Coinmarketcap, the cost of one bitcoin was $74,909, after which the exchange rate decreased slightly and began to grow again, stopping at $74,500.

On the Binance exchange bitcoin was briefly trading at exactly $75,011.

The growth of bitcoin occurred against the background of the US presidential election held yesterday, as a result of which Donald Trump, known for his support of cryptocurrencies, won. This has caused optimism among investors who expect positive changes for the digital asset market.

Bitcoin set the previous record in March 2024, when its exchange rate reached $73,777.
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Bitcoin has broken the historical maximum of $81000

The bitcoin exchange rate exceeded $81,000 for the first time after Donald Trump's victory in the US presidential election. Traders expect a relaxation of cryptocurrency regulation by Trump, who has previously expressed his support for them.

On Monday, bitcoin rose 2.8% to $81,241. Over the past week, the growth was 14%, over 25% in a month, and over 100% in a year.

Republicans, in addition to Trump's victory, are approaching full control of Congress. This will allow the new administration to implement policies that will support cryptocurrencies.

Experts suggest that the new administration will bring positive changes, in particular, in the work of the Securities and Exchange Commission. These changes will lead to a softer regulatory stance on digital assets.

They also note that the increased demand for bitcoin is due to a combination of favorable factors: reduced regulatory risks, improved financial conditions and optimistic macroeconomic prospects for the United States.
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China has prepared countermeasures in case of increased trade competition with the United States China has prepared effective countermeasures in case the trade standoff with the United States intensifies under the leadership of new President Donald Trump. During Trump's first term, Beijing was not prepared for Washington's tough moves, including the imposition of increased tariffs and tighter controls on Chinese investments. However, over the past eight years, China has significantly strengthened its position by passing laws that allow foreign companies to be blacklisted and restrict U.S. access to critical supply chains. Today, Beijing has legislative tools to counter sanctions imposed by other countries, and has compiled a «list of unreliable organizations» that undermine China's national interests. In addition, the expanded law on the control of exports of dual-use goods allows China to use its dominant position in global markets for the supply of key resources as an instrument of pressure. A number of analysts believe that many underestimate the possible damage that China can cause to the US economy. An example is the recent ban on the supply of components for the largest American drone manufacturer Skydio, which supplies equipment for Ukraine as well. These sanctions make it difficult to access critical components needed for production. After winning the election, Donald Trump should succeed Joe Biden in January 2025. In his election campaign, he promised to abolish the most-favored-nation status in trade with China, which will allow any tariffs to be imposed, and also announced his intention to "divide" Russia and China in order to weaken their strategic alliance. More news on our website: https://bit.ly/4a81506

Why the US Dollar Will Continue to Strengthen

Yesterday, the euro and pound quickly lost ground against the US dollar after Federal Reserve Chair Jerome Powell confirmed traders' concerns by stating that recent data provides the central bank with room to lower interest rates cautiously.

"The economy is not signaling any need for us to rush into rate cuts," Powell said on Thursday in Dallas. "The current state of the economy allows us to approach our decisions cautiously."

The Fed began lowering borrowing costs in September with an aggressive half-point cut, followed by a quarter-point reduction last week. The Fed indicated readiness to continue lowering rates if inflation remains subdued. However, Powell's remarks align with several colleagues who advocate for a more gradual approach to future rate cuts.

Powell's comments have tempered market expectations for a December rate cut. Policy-sensitive two-year Treasury yields rose by eight basis points to 4.36%, while swap traders reduced the odds of a December rate cut to less than 55%, down from about 88% the day before.

Powell also addressed recent data, noting that inflation remains on a bumpy path: "The economy shows no urgency for rate cuts, as inflation demonstrates some signs of picking up," Powell stated on Thursday. He added that uncertainty about the neutral rate—where policy neither stimulates nor restrains growth—warrants caution. This week, several Fed officials highlighted the importance of defining the new neutral rate as a key factor in shaping future policy.

"We should be cautious in this environment," Powell said. "As the central bank approaches the plausible range of neutral levels, it may be the case that we slow the pace of what we're doing."

As I noted above, recent data showed that headline inflation in October remained unchanged, while the core Consumer Price Index (CPI), excluding food and energy costs, rose 0.3% for the third consecutive month. "Inflation is approaching our long-term 2% target, but it hasn't reached it yet," Powell said. "We are committed to finishing the job. With labor-market conditions in rough balance and inflation expectations well anchored. I expect inflation to continue its descent toward 2%, albeit on a bumpy trajectory."

Powell refrained from commenting on the likelihood of a December cut.

Monetary policy could face new headwinds following President-elect Donald Trump's potential tax cuts, immigration restrictions, and tariffs. Political uncertainty may further reinforce the Fed's cautious stance on rate cuts.

The US dollar has gained significant strength over the past two weeks and now dominates the forex market.

As for the current technical picture of EUR/USD, buyers need to reclaim the 1.0580 level to target a test of 1.0615. A move beyond this level could lead to 1.0655, although such progress will require support from major market players. The most distant target is 1.0690. If the trading instrument declines in 1.0540, I expect major buyers to take action; failing that, it would be good to wait for the 1.0495 low to be updated or to open long positions from 1.0460.

As for the current technical picture of GBP/USD, pound buyers need to break through the nearest resistance at 1.2680 to aim for 1.2725, above which breaking through will be quite problematic. The furthest target will be 1.2760, followed by a potential sharp rally to 1.2796. Bears will aim to regain control of the 1.2630 area if the pair declines. A breakdown here would deal a significant blow to bullish positions, pushing GBP/USD toward 1.2585, with a further target at 1.2550.
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Electricity prices in Germany have soared to record levels

In Germany, electricity prices have peaked in the last 12 months. The driver of growth was the upcoming cold snap and a decrease in the production of renewable energy sources.

Futures for next month in Europe's largest economy rose 4.4%, reaching their highest value since October last year.

Despite a relatively mild autumn, a colder winter is expected in most of the continent, which will lead to increased demand for electricity and natural gas. Weather forecasts point to lower temperatures in the coming days, especially in Berlin, where temperatures are expected to drop to 1°C.

A decrease in the projected wind energy production in Germany for most of this week also has a negative impact on the market.

The cold weather also encourages utilities to consume more natural gas from storage facilities, which contributes to higher fuel prices. Uncertainty about supplies from Russia adds even more risks to the market.

As a result, the price of electricity in Germany for the next month increased to €108 per MWh, and in France – to €101.5.
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ECB: AI bubble threatens financial stability

The European Central Bank (ECB) has expressed alarm about a possible bubble in the stock market related to artificial intelligence (AI).

In its semi-annual financial stability review, the ECB noted that the stock market, especially in the United States, is increasingly dependent on several companies considered leaders in the field of AI. This concentration raises concerns about the possibility of an AI asset bubble. Investors demand a low premium for owning stocks and bonds, and funds have reduced their cash reserves, which can cause a shortage of cash and forced asset sales.

The central bank warned that if investors' expectations for the revenues of these companies are not met, then a sudden drop in asset prices may occur, which threatens adverse global consequences.

The ECB expressed concern about the low liquidity of assets and the reduction of funds' cash reserves, which could lead to forced asset sales and a decrease in their value. Among other risks, the ECB noted the vulnerability of the eurozone to trade fragmentation and possible negative consequences from the introduction of tariffs, as well as an increase in borrowing by eurozone countries at higher interest rates.
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