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KostiaFM 29-05-2020 16:09

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May 29. Italian economy experienced the strongest GDP decline in history in Q1

According to the final data of the statistical agency Istat, the Italian economy in the first quarter of 2020 decreased by 5.3% in quarterly terms and by 5.4% in annual terms. This was the largest drop in GDP since the start of statistics in 1996.

Preliminary data indicated an economic contraction of 4.7% in quarterly terms and 4.8% in annual terms.

In the fourth quarter of 2019, Italian GDP fell by 0.2% compared to the previous quarter, and not by 0.3%, as previously reported.

Consumer spending in Italy in January-March fell by 6.6% in quarterly terms, business investment fell by 8.1%, government spending fell by 0.3%. The volume of imports and exports decreased by 6.2% and 8% respectively compared to the previous quarter.

In recent weeks, the spread of Covid-19 disease and the number of people dying from it have been rapidly falling in Italy. The country is gradually loosening quarantine restrictions.

KostiaFM 01-06-2020 22:04

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June 01. Eurozone PMI index in May turned out to be worse than forecast

According to the final assessment of the research organization Markit Economics, the index of business activity (PMI) in industrial production of 19 countries in the eurozone in May rose to 39.4 points from 33.4 points in April.

Analysts assumed that the indicator remained at the preliminary assessment level of 39.5 points.

The largest growth of the PMI index in May 2020 was recorded in Italy (45.4 points), Greece (41.1 points), France (40.6 points) and Austria (40.4 points). Germany, Europe's largest economy, had the lowest PMI growth (36.6 points).

KostiaFM 02-06-2020 17:32

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June 02. NBK requires additional monetary policy measures

The Central Bank of China said that the economic damage from the coronavirus pandemic was stronger than expected, and that additional monetary policy measures were needed.

Pan Hongsheng, deputy head of the People’s Bank of China (NBK), said at a press conference in Beijing that new instruments to stimulate bank lending to small businesses are a short-term political agreement, not a form of quantitative easing.

Earlier, the regulator announced that it would begin to redeem bank loans provided by local lenders to small firms in order to try to encourage banks to issue loans to small enterprises in the amount of up to 1 trillion yuan ($140.44 billion).

The plan provides for the use of 400 billion yuan ($56 billion) from a separate program for the purchase of 40% of unsecured loans to small and medium-sized enterprises with a maturity of at least six months. Commercial lenders will need to repay the loans back in a year. Lenders will continue to receive interest payments from the borrower, while the Central Bank will not take credit risks. The plan could increase unsecured bank loans to small businesses by 1 trillion yuan.

KostiaFM 03-06-2020 13:34

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June 03. Egypt launched an oil well at 123 thousand barrels per month

Egypt has commissioned a new well in the Western Desert, capable of producing more than 0.5 million cubic meters of natural gas and more than 4 thousand barrels of oil per day. The production capacity of the new well will be approximately 123 thousand barrels of oil per month.

A 4.4-kilometer well is located in the Abu Sinan area in western Egypt.

Earlier in December, Egyptian authorities already announced the commissioning of another well, located in the same area and capable of producing up to 7 thousand barrels of oil per day and about 280 thousand cubic meters of gas. The Egyptian Oil Ministry notes that oil production in the Western Desert fields is about 60% of the country's total production.

KostiaFM 04-06-2020 20:10

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June 04. The ECB has added another 600 billion euros to combat the crisis

Today, a meeting of the European Central Bank (ECB) and a speech by regulator Christine Lagarde took place. The Central Bank kept the base rate at the current level of 0.0% and the deposit rate at -0.5%. Lagarde said the regulator will expand its anti-crisis program for the purchase of Eurobonds by €600 billion to combat the coronavirus pandemic.

The Central Bank also announced that it would leave interest rates unchanged, but at the same time increase the procurement period for debt securities of the Euroblock countries within the framework of this program for a year – until June 2021.

As a result, the amount issued by the bank under the Emergency Pandemic Bonds Purchase Financing Program (PEPP) will increase to 1.35 trillion euros, which means the bank will be able to buy up most of the debt of the eurozone countries this year.

In addition to the PEPP program, another ECB program for the purchase of assets worth about 20 billion euros is now operating.

KostiaFM 05-06-2020 16:17

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June 05. OPEC+ meeting scheduled for June 6

Today it became known that the ministerial meetings of OPEC and OPEC + will be held on the same day, June 6. The decision to hold these events suggests that countries that are not fully implementing the deal (Iraq, Nigeria and Kazakhstan) in the past months have promised to compensate for this later by increasing production cuts. Approximately 1.5 million bpd in the following months.

In May, OPEC countries were to reduce production by 6.085 million bpd from 26.7 million bpd. According to preliminary data, OPEC countries completed the deal in May by about 75%, in particular because of Iraq and Nigeria. Nigeria reported that it completed the deal by 52%.

This news provided strong support for Brent quotes: on Friday, oil rose to $41.60 per barrel.

KostiaFM 08-06-2020 20:52

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June 08. Italy's economy will decline in 2020 by 8.3%

According to the forecast of the Italian statistical office ISTAT, the country's GDP will fall by 8.3% this year and recover at 4.6% next year. The agency noted that the spread of the COVID-19 epidemic and the subsequent containment measures taken by the government caused an unprecedented shock for the Italian economy.

ISTAT also said that this year, household spending on households will be reduced by 8.7%, and investment – by 12.5%. Unemployment will drop to 9.6% due to an increase in the number of unemployed people.

It was noted that about 500 thousand people returned to the country's labor market.

KostiaFM 09-06-2020 15:21

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June 09. German exports collapsed by a record 31.1% in April

According to the Federal Statistical Office of German (Destatis), exports in the country, which is the largest economy in Europe, fell in April by 31.1% in annual terms and amounted to 75.7 billion euros. Imports for the reporting period decreased by 21.6%, to 72.2 billion euros.

Such a decline in exports was a record since the start of statistics on foreign trade in Germany in 1950. And such a strong drop in imports was recorded in July 2009, during the financial crisis (-23.6%).

In monthly terms, the decline in exports amounted to 24%, analysts expected a decrease of only 15.6%. Import compared to March decreased by 16.5%, which also turned out to be worse than analysts' forecasts of 16%.

The surplus of Germany's foreign trade balance in April amounted to 3.2 billion euros. Analysts predicted 10 billion euros.

KostiaFM 10-06-2020 15:26

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June 10. US annual inflation slows to 0.1% in May

According to the US Department of Labor, consumer prices in May rose 0.1% on an annualized basis, and a monthly deflation of 0.1% was recorded. Analysts had forecast inflation at an annualized rate of 0.2%, and monthly inflation – at 0.1%.

In April, consumer prices in the country fell by 0.8% in monthly terms and rose by 0.3% in annual terms.

Core inflation in the United States (excluding food and energy prices) in May year on year amounted to 1.2%, which was lower than analysts' forecasts of 1.3%. In monthly terms, a deflation of 0.1% was recorded, which coincided with analysts' forecasts.

Food prices in the USA in May in monthly terms increased by 0.7%, while energy prices decreased by 1.8%. On an annualized basis, foodstuffs rose in price in the reporting month by 4%, while energy prices fell by 33.2%.

KostiaFM 11-06-2020 16:41

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June 11. The number of applications for unemployment benefits in the US fell more than forecast

According to the US Department of Labor, the number of applications for unemployment benefits continued to decline last week, although it may take a lot of time to fully recover the labor market after a pandemic.

The number of Americans applying for unemployment benefits for the first time in the week of June 6 was 1.542 million. Analysts surveyed by Bloomberg, on average, predicted a decrease in the number of applications to 1.55 million.

The number of applications is gradually decreasing after reaching a historical maximum of 6.867 million in the week ended March 28. The number of people continuing to receive unemployment benefits fell less than expected to 20.929, compared with 21.268 million a week earlier.

In May, the number of jobs in the US economy increased by 2.509 million. Unemployment fell to 13.3% from 14.7% in April.

KostiaFM 15-06-2020 16:25

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June 15. UK Central Bank may extend £150 billion QE program on Thursday

On Thursday, a meeting of the Bank of England board will take place, during which the regulator can expand the program of «quantitative easing» (QE) by 150 billion pounds. This decision aims to continue the repurchase of financial assets from the market amid possible economic problems due to the negative impact of the coronavirus pandemic and the country's exit from the European Union (Brexit).

On March 19, the British Central Bank has already increased the amount of assets bought back from the market to 645 billion pounds from the previous 435 billion, and also lowered its key rate by 15 basis points to 0.1%. The next expansion of the QE program will continue the ransom until the beginning of October.

Economists speculate that the UK economy will continue to be much lower in the third quarter, even despite the expected start of economic recovery by easing restrictions imposed by the coronavirus pandemic.

KostiaFM 18-06-2020 15:56

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June 18. Bank of England maintains interest rates and expands QE program

Today, a meeting of the Board of the Bank of England took place, at which the regulator kept the key rate at 0.1%, as expected. In addition, the British Central Bank increased its bond purchase program by £100 billion ($125 billion) to 745 billion. The authorities hope that such actions will help the country's economy recover from a record downturn in March and April caused by quarantine.

Representatives of the regulator noted that the Bank of England will spend an additional 100 billion on state bonds, but will slow down the pace of purchases. A new program target of £745 billion is expected to be reached by the end of the year.

The interest rate has been at 0.1% since March 19. In March, the regulator cut the rate twice during extraordinary meetings – first by 50 basis points, to 0.25%, and then by 15 basis points, to 0.1%.

KostiaFM 22-06-2020 16:58

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June 22. Home sales in the US secondary market in May decreased by 9.7%, worse than forecast

Today in the United States published a report of the National Association of Realtors (NAR), traditionally important for the dynamics of the US dollar in the context of the crisis caused by the coronavirus pandemic. According to recent data, home sales in the secondary market in May fell by 9.7% compared with April, to 3.91 million.

Analysts polled by Reuters expected a 3% drop in the number of such deals, to 4.12 million.

In addition, the share of distressed real estate in this market in May amounted to 3%, which generally corresponds to the level of April, but above 2% in May 2019. Sales of single family homes amounted to 3.57 million, in monthly terms there was a decrease of 9.4%, in annual terms – by 24.8%.

KostiaFM 23-06-2020 16:25

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June 23. Economists significantly worsen German GDP drop forecast this year

The Council of Economic Experts under the German government has adjusted the forecast for German GDP for the current year downward. Now economists expect the country's economy to collapse by 6.5% in 2020.

Council Chairman Lars Feld said the coronavirus pandemic will lead to the worst collapse of the German economy in the entire existence of the Federal Republic. At the same time, Feld suggests that the German economic recovery will presumably begin in the summer, and a return to growth – in early 2021. The return of economic indicators to the levels before the pandemic begins is expected only in 2022.

Recall that earlier economists considered a five-week lockdown and a 2.8% reduction in GDP the most likely scenario. In the worst case scenario, experts predicted a collapse of the economy in 2020 by 5.4%.

KostiaFM 25-06-2020 16:47

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June 25. The final estimate of US GDP in the I quarter: a fall of 5%

According to the final estimate of the US Department of Commerce, the country's GDP in the first quarter fell by 5% in annual terms. The indicator coincided with the forecasts of analysts and the second assessment of the department. The first estimate suggested a decrease of only 4.8%. At the same time, exports fell by almost 9% and imports by 15.7%.

In the first quarter of 2019, US GDP growth in annual terms was 3.1%, in the second – 2%, in the third – 2.1%, in the fourth – also 2.1%.

The decrease in US GDP was noted for the first time since the first quarter of 2014, when this decrease amounted to 1.1%. It also became the strongest since the fourth quarter of 2008, when the country's economy shrank by 8.4%. Experts point out that social isolation measures in response to the coronavirus pandemic had a negative impact on the American economy in the spring of 2020.

KostiaFM 26-06-2020 16:41

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June 26. US consumer income down 4.2% in May, better than forecast

According to the Bureau of Economic Analysis of the US Department of Commerce, consumer income in May fell 4.2% compared with April. Consumer spending rose 8.2% on a monthly basis. Analysts had forecast a 6% decline in revenue and a 9% increase in spending.

Growth in consumer spending was a record, but experts are confident that this trend will not last long: millions of Americans will soon cease to receive increased unemployment benefits. In April, consumer spending fell by a record 12.6%.

An estimate of the income and expenses of Americans in May was influenced by the quarantine response to the spread of COVID-19. The ministry noted that government payments aimed at restoring the economy were still made, but in smaller volumes than in April.

KostiaFM 29-06-2020 17:26

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June 29. More than 40% of S&P 500 companies abandoned forecasts due to coronavirus

More than 40% of the S&P 500 companies withdrew quarterly or annual forecasts due to the uncertainty surrounding the outbreak of coronavirus. As the reasons, some of them noted the likelihood of new outbreaks of the disease, changes in consumer behavior and additional costs.

According to The Wall Street Journal, the stocks of the companies that made this decision have fallen in price by 18.2% since the beginning of the year, while the S&P 500 value fell by 6.9%. Many companies that have withdrawn forecasts are most affected by the industry pandemic – the telecommunications, entertainment, automotive, and industrial goods sectors.

However, among these companies there are those who have benefited from the effects of the pandemic. For example, this is the Kroger Co. supermarket chain, whose sales have jumped, and capitalization has increased by almost 13% since the beginning of the year. Payment system PayPal Holdings Inc. over the period of the pandemic, it added 58% against the backdrop of an increase in online trading.

Uncertainty is also associated with the lifting of quarantine measures in the United States. Texas and Florida reinstated some restrictions last week due to a spike in new cases. Many S&P 500 companies updated their forecasts due to a coronavirus outbreak: 154 companies worsened expectations in at least some indicators, while 28 improved forecasts.

KostiaFM 30-06-2020 17:33

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30.06. US consumer confidence in June turns better than forecast

According to analysts at Conference Board, the US Consumer Confidence Index in June rose to 98.1 points from a revised May figure of 85.9 points. Analysts had forecast an increase to 91.8 points from an initial May value of 86.6 points.

The US economic expectations index in June rose to 106 points from a revised May figure of 97.6 points. The initial indicator of the previous month was 96.9 points.

The economic conditions index in the reporting month rose to 86.2 points from the revised May value of 68.4 points. The initial figure last month was 71.1 points.

KostiaFM 02-07-2020 21:21

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July 02. The number of jobs in the US in June jumped to a record 4.8 million

According to the US Department of Labor, in June the number of jobs in the economy increased by 4.8 million. This growth was a record since the beginning of statistics in 1939. Experts on average predicted job growth of 3 million.

Experts note the gradual recovery of economic activity in the country, following the partial lifting of quarantine measures. In March and April, the American economy lost about 22.2 million jobs.

However, few people expect a quick recovery: many believe that the official data does not reflect the real scale of the losses, since a large number of people are considered to be employed, but they are not able to work due to continuing restrictions. In addition, there remains a high risk of a second wave of the epidemic not only in the United States, but throughout the world.

The number of jobs in the private sector grew by 4.767 million in June, while in the public sector by 33 thousand. Industrial enterprises increased the number of employees by 356 thousand.

KostiaFM 06-07-2020 17:12

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July 06. Eurozone retail sales up 17.8% in May

According to the European statistical agency Eurostat, retail sales in the eurozone in May rose by 17.8% compared with 11.7% in April . Analysts had expected sales growth of 15%.

On an annualized basis, retail sales in the eurozone in the reporting month fell by 5.1%, although analysts had expected a decrease of 7.5%.

In all EU countries, sales in May increased by 16.4% compared with April, and decreased by 4.2% in annual terms.

The largest decline in sales in May was recorded in Bulgaria (-20.4%), Luxembourg (-19.7%) and Spain (-17.9%). The strongest growth was recorded in Germany (+7.2%), Denmark (+6.6%) and Austria (+4.8%).

KostiaFM 08-07-2020 21:26

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July 08. The EC approved the plans of Germany to allocate 500 billion euros to help companies

The European Commission has announced that it has approved a plan by Germany to create a fund of 500 billion euros to help companies affected by the coronavirus pandemic. It is noted that with the help of this fund, companies will be able to get temporary access to government loans and investments.

The EC stated that it continues to work closely with EU member states in finding solutions to support and finance European companies, subject to all EU rules.

EC Executive Vice President Margret Westagher, who is responsible for competition policy, emphasized that assistance to companies will be determined by the necessary measures that will ensure compliance with competition rules.

KostiaFM 14-07-2020 15:36

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July 14. The number of applications for unemployment benefits in the US fell to 1.314 million, better than forecast

According to the US Department of Labor, the number of initial applications for unemployment benefits for the week ending July 4, fell from a revised index of the previous week by 99 thousand, to 1.314 million.

Analysts had forecast a decrease to 1.375 million from the original weekly rate of 1.427 million. The initial figure has been revised to 1.413 million.

At the same time, the average number of initial applications over the past four weeks decreased by 63 thousand, to 1.437 million from the previous week's revised figure of 1.5 million. The initial figure was 1.504 million.

And the total number of people receiving unemployment benefits in the United States for the week ending June 27 fell by 698 thousand from the revised figure of the previous week to 18.062 million people.

KostiaFM 15-07-2020 18:07

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15.07. Mexico announces completion of OPEC+ commitments and increased production

Mexican President Andres Manuel Lopez Obrador said the country has fulfilled its part of the OPEC+ deal and intends to begin to increase oil production. Mexico has already reduced production by 100 thousand barrels per day.

According to the agreement, Mexico reduced production by 9.7 million barrels per day from May to the end of June. In July, the contract was extended until the end of July. Since August, OPEC+ member countries are expected to reduce production by 7.7 million barrels for the period until the end of the year and by 5.8 million by the end of April 2022.

23 countries are involved in the agreement, however, Mexico initially insisted on separate commitments, agreeing to reduce production only in May-June by 100 thousand barrels per day instead of the 400 thousand offered to it.

It should be noted that in May Mexico even exceeded its obligations to the alliance: the commitment to the deal was 120%. And according to the International Energy Agency (IEA), in May the country exceeded its obligations even by 65%. In June, Mexico executed the OPEC+ deal 100%.

KostiaFM 20-07-2020 21:08

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July 20. EU emergency summit lasts for four days

The EU summit, following which the leaders of the EU countries should discuss a package of assistance to restore the economy of the countries affected by the coronavirus pandemic, has been going on for four days. However, the parties cannot come to an agreement on many issues. Initially, the negotiations were supposed to be completed within two days.

It became known that Austria, Denmark, the Netherlands, Sweden and Finland opposed Brussels' intentions to allocate 500 billion euros from a 750 billion package on the basis of a grant. This position caused a sharp discontent of the President of France: E. Macron said that the actions of these countries are «selfish», and France is ready to leave the summit in case of the prospect of signing a «bad agreement».

At the same time, the President of the European Council Charles Michel proposed to reduce the share of grants to 400 billion euros.

On the eve of the fourth day of the summit, the Prime Minister of the Netherlands noted some progress in the negotiations. Mark Rutte said that the head of the European Council is working on a new proposal to deal with the economic consequences of the pandemic.

It's worth reminding, that the leaders of the EU countries have gathered to agree on a multi-year budget of more than 1 trillion euros, as well as a recovery plan, the size of which should be 750 billion euros.

KostiaFM 21-07-2020 19:27

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July 21. India intends to store crude oil in the US

Authorities have announced that the country plans to store part of its crude oil reserves in the United States.

The government notes that India needs new strategic oil reserves of its own, but building them could take several years and huge financial resources.

The way out of the situation was the opportunity to rent American strategic storage facilities, moreover, that this would not entail large expenses. The oil that will be stored in the United States can be used by New Delhi both for its own needs and for sale on the world market. However, if oil prices fall during storage, India will suffer losses.

KostiaFM 22-07-2020 20:47

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July 22. US exchanges open lower on fears of conflict escalation with China

At the auction on Wednesday, American stock indices generally show a decline, reacting to the likelihood of aggravation of relations between the US and China.

The Dow Jones Industrial Average (DJIA) fell 0.13% to 26805.38 points, while the S&P 500 broad market index fell 0.03% to 3256.26 points. At the same time, the NASDAQ index of high-tech companies rose by 0.28%, to 10709.84 points. The index was supported by expectations of financial statements for the last quarter of such American companies as Microsoft and Tesla included in the index. Since the beginning of the year, Tesla shares have risen in price by 3.7 times, and Microsoft – by 32%.

Investors drew attention to the news around the relationship between the United States and China. It became known that Washington ordered the closure of the PRC Consulate General in Houston in order to protect the intellectual property and personal information of Americans. In response, China is considering the likelihood of closing the US consulate in Wuhan.

KostiaFM 23-07-2020 21:05

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July 23. Britain and the EU have not agreed on the basic principles of relations

The UK's chief Brexit negotiator David Frost said today that Britain and the EU have failed to reach agreement on key issues for a future trade deal. However, the politician still hopes for a successful conclusion of the negotiations in September.

Michel Barnier, the EU's chief Brexit negotiator, also noted that there is a high risk of not reaching any agreements with Britain. He also said that the current position of Britain in negotiations on a future partnership makes the possibility of a trade agreement unlikely. It is about the UK abandoning open and fair competition and a balanced fisheries agreement.

The next stage of negotiations is scheduled for August 17.

KostiaFM 24-07-2020 19:45

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July 24. US stock exchanges decline on geopolitical risks and fears for the country's economy

According to the trading data, the main US stock indexes are declining on Friday, as investors assess the risks of the conflict between the US and China and doubt the prospects for the recovery of the US economy.

The Dow Jones Industrial Average (DJIA) fell by 0.57%, to 26501.72 points, the broad market S&P 500 index – by 0.62%, to 3215.7 points, the NASDAQ high-tech index – by 1.47%, up to 10307.8 points.

The pessimism in the markets was fueled by growing tensions between the world's two largest economies. Today, China has demanded that the US Consulate General in Chengdu, Sichuan Province cease operations. This demand was made in response to the closure of the Chinese Consulate General in Houston, USA.

Additional pressure on the market is exerted by fears for the recovery of the US economy. Investors speculate that an increase in the number of coronavirus cases in America and a new round of quarantine restrictions may again suspend economic activity in the country.

KostiaFM 28-07-2020 20:28

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July 28. Fed extends lending programs until December 31

A two-day meeting of the US Federal Reserve System starts today, following which the regulator will make public its decision on the rate and further monetary policy.

At the end of the first day, the central bank announced that it is extending operations on seven emergency lending programs by three months, until December 31, in order to maintain activity during the coronavirus pandemic.

These programs were initiated in March and April until September. Program extensions should facilitate planning for potential program participants and provide certainty that these programs will continue to be available.

KostiaFM 30-07-2020 22:38

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July 30. German GDP and quarterly losses hit the European market

On Thursday, the European stock market crashed after the publication of the German GDP report and disappointing macroeconomic data.

Germany's DAX traded 2.4% lower, to 12.516, France's CAC 40 fell 1.15%, to 4.901, and Britain's FTSE declined 1.65%, to 6.031.

Germany's GDP report reflected a 10.1% decline in the German economy, the sharpest drop in history.

Indicators of quarterly losses of European companies also had a detrimental effect on the dynamics of the European market. French carmaker Renault SA fell 2.8%, posting a record net loss of 7.29 billion euros in the first half of this year. Its German rival Volkswagen AG plunged 5.3%, posting an operating loss of 800 million euros in the first half.

Shares of the Italian oil company ENI SpA fell 3.5% after the company reported a loss in the second quarter and cut dividends. France's Total recorded an asset impairment of $8.1 billion in the second quarter, but retained dividends.

Only pharmaceutical companies showed growth. In particular, AstraZeneca gained 3.1% after reporting a second quarter net profit growth and testing of a coronavirus vaccine.

KostiaFM 31-07-2020 17:22

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July 31. EU GDP collapses by record 14.4%

According to the statistical agency Eurostat, the GDP of the EU countries in the II quarter fell by 14.4% in annual terms. On a quarterly basis, the indicator decreased by 11.9%. In the first three months of the year, the EU economy contracted by 3.6%. Figures like these signal that the European economy has entered a recession.

Earlier in July, the European Commission presented its forecast for changes in Europe's GDP: experts expected the economy to decline by 8.3%.

At the same time, the economies of 19 eurozone countries contracted by 12.1% in the second quarter and by 15% – in annual terms. Analysts had expected a decline of 11.2% and 13.9%, respectively.

The fall in all indicators has become the sharpest and strongest since 1995 – since the beginning of statistics.

KostiaFM 03-08-2020 20:41

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August 03. The PMI index of the industry of the eurozone in July rose to 51.8 points

According to the research organization Markit Economics, the index of business activity (PMI) in industrial production of 19 eurozone countries in July rose to 51.8 points against 47.4 points in June. Analysts predicted that the indicator would rise to the level of preliminary estimates of 51.1 points.

At the same time, industry PMI in Germany, according to final data, rose to 51 points from 45.2 points in June. PMI in France in July increased to 52.4 points from 52.3 points in June.

Analysts had expected the German index to rise to 50 points and the French to 52.

KostiaFM 04-08-2020 16:34

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August 04. Gold rises in price on increasing geopolitical risks

On Tuesday evening, the price of gold started to rise sharply, reaching $ 2.001 per troy ounce. The growth driver was fears of further deterioration in relations between the United States and China.

Market participants continue to follow the news around the TikTok app, owned by the Chinese company ByteDance. Earlier, it became known that US President Donald Trump announced plans to ban TikTok on the grounds that this Chinese company, by law, must transfer user data to the PRC authorities.

Trump's actions are forcing TikTok to sell its US assets to an American company, which was seen by the Chinese authorities as another provocation and led to increased tensions between the two countries.

As a result, market players prefer to ditch risky assets in favor of safer ones, which traditionally include gold.

KostiaFM 06-08-2020 20:26

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August 06. US unemployment claims data are encouraging

According to the US Department of Labor, the number of Americans who filed initial applications for unemployment benefits fell to 1.186 million last week after rising in the previous two weeks. Economists had forecast a smaller decline to $ 1.415 million.

The number of secondary applications from those who continue to receive benefits dropped to 16.107 million, down from the previous week by 1.951 million.

On Friday, investors await a more complete report on nonfarm payrolls. The report is predicted to show that an additional 1.6 million jobs were created in the labor market last month, or hiring fell sharply from a record 4.8 million in June.

KostiaFM 07-08-2020 18:07

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August 07. US: 1.8 million jobs added in July, unemployment falls to 10.2%

According to the US Bureau of Labor Statistics, only 1.763 million jobs were created in the nonfarm economy. This signals that the recovery of the American economy after the coronavirus pandemic has slowed in July.

Forecasts assumed growth of 1.6 million jobs. Despite the fact that the current data exceeded analysts' expectations, there is a decrease in job growth compared to the jump in the previous month, when 4.791 million people were hired.

The report also reflected the current state of unemployment in the country. To date, the unemployment rate has dropped to 10.2% of the total working-age population, after 11.1% in June. Analysts predicted the growth rate to 10.5%.

KostiaFM 10-08-2020 16:12

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August 10. US stock market opened with growth in hopes of new liquidity injections

The US stock market started the week in a positive mood amid hopes for a compromise on a new package of measures to support the population and the economy.

Treasury Secretary Steven Mnuchin said a deal with House Democrats this week is still possible, despite the failure of talks last week when the parties failed to agree on a $2 trillion bailout.

So, Donald Trump the day before decided to extend the payment of unemployment benefits in the amount of $400 per week and to suspend the income tax bypassing Congress.

As a result, the Dow Jones Industrial Average rose 190 points, or 0.7%, to 27.624 points. The S&P 500 rose 0.3% to hit 3.350, while the Nasdaq Composite rose 0.2% to 10.923. Shares of such companies as McDonald's Corporation, Eastman Kodak Co, Simon Property Group Inc also showed growth.

KostiaFM 11-08-2020 17:05

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August 11. The rise in producer prices in the United States was the highest in almost 2 years

According to the US Department of Labor, producer prices in the country (PPI) in July 2020 rose by 0.6% compared to the previous month. This was the highest growth rate since October 2018. Analysts on average had expected an increase of 0.3%.

Such jump in prices is mainly due to the rise in energy costs amid the relaxation of restrictions imposed in connection with the coronavirus pandemic.

Compared to July 2019, the PPI index dropped by 0.4%. Experts had forecast a 0.7% decline.

KostiaFM 13-08-2020 16:01

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August 13. US still can't agree on stimulus package

Negotiations between Republicans and Democrats in Congress on the next round of economic aid measures remain stalled.

House Speaker Nancy Pelosi said yesterday that the lower house is ready to negotiate with the Senate and the administration and reduce the difference between the proposed package of measures. The White House administration is offering $1 trillion, and the Chamber is offering $3.5 trillion.

However, US Treasury Secretary Steven Mnuchin called such a proposal «misleading» and said that Democratic negotiators were not yet ready for a compromise at all.

KostiaFM 14-08-2020 20:59

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August 14. GDP of the European Union in the II quarter fell by a record 14.1%

According to the second estimate of the European statistical agency Eurostat, the GDP of the EU countries in the second quarter fell by 14.1% in annual terms. On a quarterly basis, the indicator decreased by 11.7%.

In the second quarter of the year, the economies of 19 eurozone countries contracted by 12.1% in quarterly terms and by 15% in annual terms. All indicators were in line with analysts' forecasts and the agency's first estimate.

Eurostat noted that the decline in all indicators was the strongest since the start of statistics in 1995. Thus, the European economy has been declining for two quarters, which suggests that Europe has entered a recession. In the first quarter of 2020, the decline in GDP of 19 eurozone countries amounted to 3.6% in quarterly terms and 3.1% in annual terms. The EU economy contracted by 3.2% in Q1 and 2.5% in annual terms in Q1.

KostiaFM 19-08-2020 16:17

Re: Daily Economic news by ForexMart
August 19. Gold prices dropped below $ 2,000 due to dollar stabilization

The price of gold dropped today below the level of $2,000 per ounce (to $1,987.93) amid the stabilization of the US dollar in the market. The American currency is awaiting details on the strategy of the US Federal Reserve to support the economy affected by the pandemic.

However, experts note that expectations of further weakening of the dollar may lead to the fact that in the near future gold will be able to gain a foothold above the $2,000 level and reach new record highs.

Tonight will be released the minutes of the meeting of the US Federal Reserve, which may contain hints of a shift in the forecast for monetary policy. However, no changes in interest rates are expected until the end of 2021.

Palladium lost 0.33% to $2.181.43 an ounce, while silver slipped 0.73% to $27.45 an ounce. Platinum fell 1.15% to $945.25.

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