Archive forOctober, 2014

BoJ announces unexpected stimulus program

Haruhiko Kuroda, Bank of Japan (BoJ)’s governor, surprised markets with an unprecedented monetary package to boost the struggling economy by fuelling inflation. BoJ would expand the monetary base to ¥80tn annually, up from ¥60tn to ¥70tn.

Sanctions on Russia impact exports from Germany

Germany’s Federal Statistical Office stated the country’s exports to Russia fell 26% y-o-y in August due to the European Union’s sanction measures in late July. For the first eight months, exports of motor vehicles & automotive parts and machinery declined 27% and 17%, respectively.

Sweden trims interest rates to zero

Sveriges Riksbank, Sweden’s central bank, cut its repo rate to zero from 0.25% at this month’s monetary policy meeting to stimulate the country’s economy and counter fears of deflation. This move beat market expectations of a rate cut to 0.1%. No rate hikes are expected until mid-2016 when inflation is projected to reach its target rate of 2%.

Lincoln Moore of DekelOil Public Limited speaks to, 28th October 2014

DirectorsTalk Catches up with Lincoln Moore, Executive Director at DekelOil plc (LSE:DKL) to discuss takeovers and output expectations going forward. (Source: – 28/10/2014

Japan retail sales rise in September

Today, Japan’s Ministry of Economy, Trade and Industry revealed retail sales rose 2.3% y-o-y to ¥11.2tn in September, beating estimates, following a 1.2% gain in the previous month. On a seasonally adjusted m-o-m basis, sales grew 2.7% vis-à-vis 1.9% in August.

ECB fails 25 banks in stress test

Yesterday, the ECB reported as many as 25 of Europe’s 130 largest banks failed the exercise, comprising a stress test and an asset quality review of balance sheets as of 31st December 2013. However, about half of these banks have already mended their capital challenges, about 13 have not yet closed capital gaps and most are based in Italy.

UK told to pay £1.7bn extra to EU

The UK has been told it must pay an extra £1.7bn (2.1bn euros) towards the European Union’s budget because the economy has performed better than expected in recent years. The payment follows new calculations by the EU, which determines how much each member state should contribute based on gross national incomes. It would add about a fifth to the UK’s annual net contribution of £8.6bn. It comes at a time of increased pressure on David Cameron over Europe. (Source: BBC)

Tesco boss Sir Richard Broadbent to quit over profits error

Tesco chairman Sir Richard Broadbent has announced that he will be leaving the firm, following the firm’s announcement of a bigger-than-forecast hole in its profits. Tesco now says that profits in the first half of the year were overstated by £263m. That is an increase from last month’s initial estimate of £250m. Tesco also reported a sharp fall in sales and profits for the first half of its financial year. (Source: BBC)

Japanese exports exceed estimates

Japan’s Ministry of Finance revealed that exports grew 6.9% y-o-y in September, the most in seven months, following a 1.3% drop in August. Markets estimated a 6.5% increase. On the other hand, imports rose 6.2% y-o-y after falling 1.5% last month. The trade deficit stood at ¥958.3bn.

China’s GDP climbs 7.3% y-o-y in third quarter

China’s government announced that its gross domestic product (GDP) increased 7.3% y-o-y, above the initial estimate of 7.2%. However, the economy slowed in comparison to the previous quarter growth of 7.5%. On an annualized quarterly basis the GDP rose 1.9%.

Moody’s reduces credit rating for Russia

Moody’s Investors Service cut Russia’s credit rating to Baa2 from Baa1, citing weak growth prospects and depletion of the country’s reserves, following the sanctions on Ukraine. Rapidly declining oil prices have added to Russia’s economic concerns.

Finding a sweet spot in the FTSE market mayhem

By Mike Franklin, Chief Investment Strategist Since mid-May 2014, the FTSE 100 Index has fallen by around 10% to the 6,100 level. It is a sobering reminder of the enduring truth of the financial world that, whatever you think it may be worth, the value of an asset at a particular point in time is […]

UK house price perception improves in October

As per a survey by Knight Frank and Markit Economic, the UK house price sentiment index rose to 60.7 in October from 60.6 in September, ending the view of price moderation. Moreover, the future house price sentiment index climbed to 70.8 from 69.2 in September.

China’s aggregate financing rises in September

The People’s Bank of China (PBoC) stated that the new credit financing for September rose to a three-month high of ¥1.05tn, indicating the success of its monetary policies. Moreover, towards the end of September, the M2 money supply grew 12.9% y-o-y, while foreign reserves stood at US$3.89tn, down 2.6% from the previous quarter.

Germany trims 2014 growth forecast

Germany cut its 2014 growth forecast to 1.2% from 1.8%, as estimated previously, due to the adverse impact of the weakening Eurozone. The government also reduced its projection for 2015 to 1.3% from 2% earlier.

Warm weather impacts UK retail sales in September

The British Retail Consortium reported like-for-like (LFL) retail sales decline of 2.1% y-o-y in September, after rising a strong 1.3% y-o-y in August. Total sales dropped 0.8% y-o-y, the biggest fall in years, due to unusually warm weather. Sales had increased 2.7% y-o-y in the previous month.

China trade data beats expectations in September

Exports grew 15.3% y-o-y from 9.4% in August, while the imports gained 7.0% against a drop of 2.4% last month, both beating market expectations. However, the trade surplus for the month stood at US$31.0bn.

The ‘widening triangle’ revisited and a peaking Wall Street

The widening triangle analysis has served us well in the past few months and helped to identify the 14th May as a possible recent market peak and guided us to use the last rally to raise liquidity. The charts of the FTSE 100 Index below show that we are now just below the bottom of the triangle on a closing price basis so today’s closing level may be very important. This coincides with the market having become oversold.

Bank lending in Japan increases in September

The Bank of Japan (BoJ) informed today that the bank lending in Japan rose 2.3% y-o-y to ¥479.0tn in September vis-à-vis 2.2% in August. At the end of its meeting, the BoJ maintained its monetary policy and said softening measures were fruitful.

House prices in London decline in September

The Royal Institution of Chartered Surveyors (RICS) reported house prices in London dropped for the first time since January 2011, marking a slowdown in the UK housing market. The RICS price balance slipped to 30.0 in September from a downwardly revised 39.0 in August.

IMF downgrades global growth forecast for 2015

The International Monetary Fund reduced its global growth projection for the next year to 3.8% from 4% estimated in July. Recovery in the US economy has been largely offset by persistent weakness in the Eurozone and major slowdown in numerous emerging markets.

This time is different…(?)

Now that the long term (bull market) trend line since March 2009 has been broken, it may be appropriate to circulate the chart below showing how the 2007 to 2009 bear market emerged for anyone who has forgotten.

BOJ retains monetary policy

The Bank of Japan (BOJ) upheld its record stimulus at the conclusion of its meeting today. The monetary base would be increased to ¥70tn from ¥60tn annually. A six-year low yen deferred further monetary easing. The BOJ projects consumer prices to increase in the middle term.

UK home prices may fall in 2015

As per the Centre for Economics and Business Research, home prices in the UK would decrease 0.8% y-o-y in 2015, partly reversing the 7.8% y-o-y gain in 2014.

Japan services PMI expands in September

Today, the latest survey by Markit Economics in Japan reported a services PMI reading of 52.5 for September. The reading significantly exceeded 49.9 in the previous month.

Japanese firms maintain inflation forecast

A survey by the Bank of Japan (BoJ) revealed Japanese companies retained their inflation forecast of 1.5% for the coming year. These companies’ three- and five-year estimates are unchanged at 1.6% and 1.7%, respectively. Inflation forecasts were lower than the BoJ’s inflation target of 2%.

Italy downgrades growth forecasts

The Italian Finance Minister Pier Carlo Padoan stated the country’s GDP is likely to contract 0.3% this year, instead of growing 0.8%, as previously predicted. Estimated expansion for 2015 was also cut to 0.6% from the initial forecast of 1.3%.