Thread: Forex News from InstaForex

British Consumers Spend More on Essentials as Inflation Climbs





UK consumers spent more money on food and other essentials in June but cut back on less urgent purchases amid growing prices, according to two sets of industry figures.


Payments firm Barclaycard said year-on-year consumer spending growth softened to a 15-month low of 2.5 percent in June from 2.8 percent in May, while spending on household goods and entertainment also slowed.


According to the British Retail Consortium, its gauge of retail spending growth climbed to 2.0 percent in June from 0.2 percent in May, above its average of 1.4 percent in the previous six months.


However, BRC's chief executive, Helen Dickinson, said the pick-up emulated a temporary boost from warmer weather lifting clothing sales, along with the higher costs of food.


On a like-for-like basis, the BRC said sales rose by 1.4 percent year-on-year following a 0.4 percent decline in May.


Both figures from Barclaycard and BRC are not adjusted for inflation, which is running at an almost four-year peak of 2.9 percent as stated in the consumer price index. Therefore, the contribution of consumer spending to second-quarter economic growth could be limited.


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Australia Consumer Confidence Rebounds In July - Westpac





Consumer confidence in Australia saw a positive bounce in July, the latest survey from Westpac Bank showed on Wednesday - advancing 0.4 percent to a score of 96.6.


That follows the 1.8 percent decline in June to a reading of 96.2.


The July reading snapped three months of decline.


The index is not sending encouraging signals about the outlook for consumer spending, the bank said.


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Amazon.com On Track to Break Sales Record





Amazon.com Inc said its Prime Day sale is poised to be the largest shopping event in its history by sales. The world's biggest online retailer said customers ordered over three times as many Echo-family speakers than the previous year's Prime Day, which at the time broke records for Amazon devices.


Third-party sellers have sold over 50 percent more items on the site by noon compared with the same timeframe in 2016, according to a statement by Amazon.


Analysts estimated the previous year's event had brought in more than $500 million.


The news highlights Amazon's rapid pace of growth as more shoppers ordered online rather than going to stores.


Customers had to join Amazon Prime to get discounts in the 30-hour event. U.S. members of the club pay $99 a year for benefits like two-day shipping, and they tend to buy more goods, more often from Amazon. A timer showing when the deals will expire has encouraged shoppers to buy more.


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Dollar Flat After Yellen Statement, Canadian Dollar Held Firm





The dollar was relatively flat early on Thursday after Federal Reserve Chair Janet Yellen did not deliver a much hawkish tone as many had initially expected. The Canadian dollar held firm near a 13-month peak after the Bank of Canada raised interest rates for the first time since 2010.


The greenback fell as Yellen's comments spurred a sharp drop in U.S. Treasury yields.


The dollar index versus a basket of major currencies was little changed at 95.758 after pulling back to as low as 95.511 the day earlier, its weakest in 12 days.


The U.S. currency edged up 0.2 percent at 113.440 yen after falling nearly 0.7 percent overnight, when it retreated from a four-month peak near 114.495 touched earlier in the week on expectations of U.S.-Japan monetary policy divergence.


The Canadian dollar, also supported by an increase in crude oil prices, was at C$1.2750 a dollar, after rallying over one percent to C$1.2681 overnight, its highest since June 2016.


The BOC increased interest rates for the first time in almost seven years, claiming the economy was no longer in need of as much stimulus.


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Singapore GDP Expands 2.5% On Year In Q2





Singapore's gross domestic product advanced 2.5 percent on year in the second quarter of 2017, the Ministry of Trade and Industry said in Friday's advance estimate.


That follows the 2.5 percent increase in the previous three months.


On a quarterly annualized, seasonally adjusted basis, GDP added 0.4 percent after sinking 1.9 percent in the three months prior.


The manufacturing sector expanded 8.0 percent on year in the first quarter, moderating from the 8.5 percent growth in the previous quarter.


Growth was supported mainly by the electronics and precision engineering clusters, the ministry said, which saw robust expansion on the back of strong external demand for semiconductors.


It added 2.4 percent on quarter, up from 0.4 percent in Q1.


The construction sector contracted 5.6 percent on year after sliding 6.1 percent in the three months prior.


The sector was weighed down by weakness in both private and public sector construction, the bureau noted.


On a quarterly basis, the sector climbed 4.3 percent after contracting 14.4 percent in the previous three months.


The services producing industries added 1.7 percent on year after gaining 1.4 percent in the first quarter.


Growth was supported primarily by transportation, storage and business services.


On a quarterly basis, the sector added 0.4 percent after contracting 2.7 percent in the three months prior.


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Oil Prices Stabilizes on Solid Chinese Demand





Oil prices were steady as China's strong appetite for fuel eased worries of an ongoing supply overhang.


Brent crude futures traded at $47.75 per barrel, rising by 1 cent from their last settlement. Meanwhile, U.S. WTI crude futures traded at $45.48 per barrel, falling 1 cent from the previous session's close.


China imported 212 million tonnes of crude oil, equivalent to 8.55 million bpd from January to June of the year. This is up 13.8 percent during the same period last year, according to customs data, making china the biggest importer of crude products ahead of the U.S.


The solid demand from China allayed worries regarding an ongoing fuel supply glut.


On Wednesday, OPEC said that the world would require 32.20 million bpd of crude from its producer members next year, down 60, 000 bpd from the current year, as consumers have increasing options of supply from outside the cartel. But the group also said its output climbed by 393, 000 bpd in June to 32.611 million bpd, with gains led by Nigeria and Libya.


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BRAZIL: IMF Increases GDP Growth Forecast For 2017, Cuts 2018 Estimate





The International Monetary Fund (IMF) raised Brazil's economic growth forecast for this year but reduced its expansion estimate for 2018, highlighting the political uncertainty in the country.


According to the IMF, the Brazilian Gross Domestic Product (GDP) should rise by 0.3% in 2017 and 1.3% in 2018. In April, the growth forecasts were at 0.2% and 1.7%, respectively. "The severe Brazilian economic recession seems to be nearing an end," IMF said in the report.


In the medium term, according to the IMF, Brazil's GDP should move to an annual expansion of 2%, although the recent increase in political instability could hurt the economy's predictability.


"The government's ability to deliver on social security reform, a necessary step toward securing fiscal sustainability, has become more uncertain - and, with national elections scheduled for 2018, the window for legislative action is closing," the Fund said.


Regarding inflation, the IMF projects that it will remain below the 4.5% target for this year and next. The slowdown in inflation, according to the Fund, should make room for more monetary easing.


"After almost two years of being above the ceiling of the central bank's tolerance range of 6.5 percent, inflation has declined rapidly over the past year. The impact of large increases in regulated prices in 2015 has dissipated, while a widening output gap, an appreciating exchange rate, declining inflation expectations, and a favorable shock to food prices have combined to speed disinflation since late 2016," IMF said in its report.


Nevertheless, the Fund stresses that political instability and the impact of corruption investigations are the primary sources of risks for Brazil, which could jeopardize reforms and economic recovery.


The IMF considers possible that the pension reform will be weakened or postponed until after the next presidential election. On the external side, the tightening of global financial conditions and a slowdown in China's economy are the main threats to Brazilian economic growth.


The Fund also mentions Brazil's flexible exchange rate and the high level of international reserves - at $ 365 billion at the end of last year, above the level deemed adequate by the IMF - as positive highlights.


The health of the Brazilian banking sector has also improved. "Despite the recession, profits before taxes have surged due to high interest margins and lower funding costs. To limit increases in nonperforming loans, banks have continued renegotiating the terms of loans and writing off delinquent loans," noted the Fund.


In order for Brazil to enter sustainably on a growth path, the IMF recommends that the government guarantee fiscal sustainability through the consolidation of public finances and pension reform. The Fund also stressed the importance of spending control and drew attention to the debt of the Brazilian states, suggesting that the federal government must continue to seek coordinated solutions to solve the problem.


On monetary policy, the Fund recommends that the Central Bank reduce the interest rate, although it considers that the institution has taken appropriate decisions so far. For the IMF, the Central Bank must constantly monitor the evolution of inflation and improve its communication and measures to alleviate distortions in the credit market.


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Hammond Warns of Brexit Uncertainty's Impact





Chancellor Philip Hammond told BBC that firms are postponing their investments in the UK due to the uncertainty regarding Brexit.


Hammond's comments came as a Confederation of British Industry (CBI) survey indicated that 42 percent of UK firms believe Brexit has affected their investment plans, prompting the business group to call on the government to swiftly secure a future EU trade deal.


He said that businesses are holding off from putting more money in the country until they see more clarity regarding the future relationship of the UK with the Europe will look like.


He said that government ministers were becoming increasingly resolved that there is a need for a transitional deal in order to avoid shaking up business conditions too much as the UK withdraws from the EU.


He noted that five weeks ago the concept of a transition period was relatively new, but not the majority of the cabinet now sees the need for some kind of transition period.


The second round of Brexit talks will occur on Monday in Brussels.


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European Markets Mixed but Mining Shares Rise





European stocks closed mixed as investors priced in upbeat Chinese data and paid attention to earnings, while mining shares rose.


The pan-European Stoxx 600 climbed less than two points at 386.86, trimming its gains as most major European stocks moved lower. London's FTSE 100 rose 0.22 percent, France's CAC 40 fell 0.14 percent and Germany's DAX 30 lost 0.41 percent. Last week, the Stoxx 600 advanced 1.8 percent, the biggest gain since early May.


The upbeat second quarter gross domestic product reading released overnight from China helped boost bullish sentiment.


Advances in the basic materials group were led by mining stocks, which were supported following China's stronger than expected data. Data from China, a major consumer of industrial and precious metals, also revealed strengthening in industrial production and retail sales.


Weir Group led gains on the Stoxx 600 with advances of over eight percent after the company said it sees full-year revenue to exceed analysts' estimates.


Telenor was the second biggest advancer, rising almost eight percent as the Norwegian telecommunications firm increased its margin forecasts for this year after posting a solid second quarter.


European energy stocks traded mixed while financial stocks were under pressure.


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Australia New Motor Vehicle Sales Gain 1.2% In June





The total number of new motor vehicle sales in Australia was up a seasonally adjusted 1.2 percent on month in June, the Australian Bureau of Statistics said on Tuesday - coming in at 102,275.


That follows the 3.1 percent jump in May.


Sales for passenger vehicles added 0.5 percent, along with sports utility vehicles (1.4 percent) and other vehicles (1.3 percent).


The largest upward movement across all states and territories was in the Northern Territory (2.8 percent),


On a yearly basis, sales advanced 3.6 percent, slowing from 5.3 percent in the previous month.


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