Tuesday, October 4, 2016

Yen Falls, Asian Stocks Surge


Stocks in Asia are higher on Tuesday as strong U.S. manufacturing data sends the yen slumping against the dollar. The stock surge was led by Japanese equities.

Also, the British pound dropped 0.6 percent at $1.2770 versus the dollar in Asian trade, the lowest level it hit in more than three decades.

The sterling started to roil following U.K. Prime Minister Theresa May’s announcement on Sunday that she would push through with Article 50 by end of March next year. This then gets the clock ticking for the two-year deadline for Britain to sever its ties with the European Union. Brexit negotiations are expected to cause “some turbulence” to the economy, according to U.K. Treasury chief Philip Hammond on Monday.

The Nikkei Stock index edged up 0.8 percent, Korea’s Kospi went 0.6 percent higher, while Singapore’s FTSE Straits Times Index ended up 0.2 percent. Hongkong’s Hang Seng Index closed up 0.1 percent. Chinese markets are closed for the week.

“We’re up based on a weaker yen. We’ve had some fairly positive data on the U.S. side last night,” remarked Alex Furber , senior client services executive at CMC Markets. This news makes a U.S. rate increase more probable, he also added.

Gaining traction and moving back into expansionary territory after a 49.4 plunge in August, the U.S. September purchasing managers index, a measure of factory activity, climbed to 51.5.


Solid manufacturing numbers sent the yen plunging 0.7 percent against the dollar, with traders exiting the safe-haven yen and turning back to risk assets. Major exporters gained as yen free-falls, with Honda Motor up at 1.9 percent, Olympus at 3.9 percent, and Panasonic closed 2 percent higher.

In other parts of Japan, financial equities made a rebound after worries about the status of Deutsche Bank prompted selloffs.

The Topix banking subsector added 1.6 percent. Individual banks like Mitsubishi UFJ Financial Group edged up 1.9 percent and Sumitomo Mitsui Financial Group was last up 1.6 percent.

Haruhiko Kuroda, governor of Bank of Japan, went in defense of his below zero interest-rate policy on Tuesday by saying it hadn’t damaged the bank’s ability to grant loans.


Also, yuan-denominated bond issuances hit record high with the Chinese currency’s formal inclusion in the International Monetary Fund’s special drawing-rights basket. Based on data released by Dealogic, there was a $619 billion volume of yuan-dominated bonds for the first three quarters of the year, rising 39 percent on year.

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Friday, August 19, 2016

Cisco to Plunge on the Release of NSA Spying Tools, 7% Layoff

[This market update and analysis is taken from: FSM News.]

The stock of Cisco Systems Inc. (NASDAQ: CSCO), the largest networking company in the world, is poised for a significant decline due to the mysterious release of spying tools created by the US National Security Agency’s elite group of hackers and the massive 7-percent job cuts.


Impact of NSA Hacking Tools Leak on Cisco

A cache of highly sophisticated hacking tools codenamed Buzzdirection, Epicbanana, Egregiousblunder, and Extra Bacon, among others appeared online just recently, and Cisco products were deemed vulnerable to these. ExtraBacon particularly targets Cisco Adaptive Security Appliance firewall.

This latest news can be considered as an international scandal as the multibillion dollar tech corporation’s networking equipment are used by countless of critical state agencies and large companies all over the world. With these hacking tools leaked out into the internet for all to see, anyone from a basement hacker to a professional spy could gain access to them now. Until these cybersecurity flaws are patched, many computer systems, especially those utilizing Cisco products, may be in jeopardy.

Friday, August 12, 2016

Oil Soars Higher as Saudi Hints Production Cut

On Friday, the price of oil has surged significantly, extending overnight gains after Saudi Arabia announced its plans to coordinate with other major oil producers to stabilize prices.

The recent comment of the world’s biggest oil producer has been interpreted by most market participants as a move to limit the production of oil. 


By 06:45 GMT, Brent crude futures were valued at $46.12 a barrel, receding from a three-week high of $46.66 posted in the day, though still 8 cents higher from its previous close.

U.S. West Texas Intermediate (WTI) crude was up 21 cents and is currently trading at $43.70 per barrel.

According to a recent update, Saudi Arabia and Russia, two of the world’s largest oil producers, has agreed to make a move to counter a slump that has severely hit economies, markets and companies. The oil producers would talk about a potential action to stabilize oil prices in a meeting in Algeria next month.

“Talk of production cuts in the oil markets saw prices surge overnight,” said ANZ bank on Friday.

The oil prices surged more than 4 percent on Thursday in response to the Saudi Arabia’s minister’s comments, which were interpreted as a positive development in a market suffering from an oversupply.

“Oil traders were spurred into action by the comments” a market strategist said.

Oil prices have been moving in a tight range recently as most market players and analysts were divided on what major producers, especially those who are members of the Organization of the Petroleum Exporting Countries (OPEC), would do to re-stabilize the oil market. 


OPEC has announced earlier this week that its members will meet on the sidelines of an energy conference in Algeria next month, from Sept. 26-28, after the cartel failed to reach an agreement at a meeting earlier this year.

“Markets remain highly skeptical over the potential for coordinated action to balance oil markets, with the failure to reach an output freeze deal earlier this year still fresh in the mind. Nevertheless, the knee-jerk reaction that followed sent crude prices rallying,” said PVM in a note.

Saudi Arabia, the world’s number 1 oil producer, is pumping insane amounts of oil – 10.67 million barrels per day in July – causing some market players to question the kingdom’s sincerity.

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Monday, August 1, 2016

Dollar Rebounds after Blow from US GDP Data

In the report of a lower-than-expected growth data in the US, the greenback had fallen last Friday. Today, however, the greenback managed to bounce back, nursing its losses.


On Monday, the dollar tended its losses from lows it reached after the announcement of a downbeat US growth data report before the weekend.

us dollar bills
In a note by Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, it was written that “the US dollar advance was stopped in its tracks by the disappointingly weak Q2 GDP figures.”

The dollar index was higher at a meager 0.1% at 95.578, recovering from its Friday trough of 95.384, the lowest level last seen on July 5.

Meanwhile, the euro nudged higher 0.1% to $1.1176 while the sterling climbed 0.2% to $1.3251. Investors turned their attention to the Bank of England’s decision on Thursday.

The Australian dollar was trading higher at $0.7608.

Elsewhere, non-farm payrolls report for July will be released on Friday. In a poll by Reuters, economists predict an increase of 175,000 jobs, lower from June’s 287,000 gain. Jobless rate is forecasted hovering steady at 4.9%.

Monday, July 25, 2016

Gold Plunges on Firmer Equities

A stronger dollar, boosted by fading Brexit repercussions and upbeat US economic reports, are dragging commodities down, including gold. 


Precious metals including gold tumbled on Monday due to firmer, positive equities causing a weak trend overseas. The easing Brexit fallout impact on the US and optimistic US economic data are specifically what contributed to solid equities, thus a stronger dollar.

Spot gold plunged 0.4% at $1,316.16 a troy ounce. Bullion declined 0.7% last Friday, falling for a second week now. US gold toppled 0.5% to trade at $1,316.20 an ounce.

gold decline exocpm news trade12 options12
“We could see some falling of gold prices with markets thinking things are not as bad as expected post-Brexit and the good performance of key US economic indicators,” stated Jiang Shu, a chief analyst at Shandong Gold Group.

The decline was largely impelled by weak trends in global markets as upbeat equity markets and gains in the greenback dampened demand ahead of central bank meetings in the US and Japan set this week.

Based on data last Friday, hedge funds and money managers continue to flock on bullish silver bets in the week to July.

Friday, July 22, 2016

Crude Struggles Weekly Decline, Stockpiles on the Rise

Crude oil prices suffered a week-long decline due to persistent global oil glut.


After slightly climbing in Asian trade Friday morning, crude oil prices crashed once more as it extended sharp losses in the prior session. Investors reevaluated US data highlighting the petroleum oversupply, and Iraqi crude exports are progressively increasing.

Energy Aspects wrote in a note, “There is so much oil in storage that it will take months to truly feel the erosion of the overhang.”

crude oil glut exocpm news
Brent crude on the ICE Futures Exchange in London tumbled 0.3% to $46.07 a barrel, ending 2.1% lower in the preceding session. For this week, Brent had a decline of over 3%.

Meanwhile, US West Texas Intermediate (WTI) sank 0.6% to $44.50 a barrel, finishing lower 2.2% in the previous session. For this week, US oil prices fell 3.8%.

Earlier in the session, a weaker greenback lent support to prices which pushed crude into positive figures. The dollar index fell against its rival currencies on Friday, making dollar-branded commodities cheaper for other currency holders.

Wednesday, July 20, 2016

Gold Tumbles amid Revived Rate Hike Hopes

The precious metal fell to a three-week trough on Wednesday, extending overnight losses in North American trade as possibilities for the Federal Reserve to raise interest rates in latter 2016 were rekindled.  Contributing to the gold slump are also the positive US economic outlook and US stock futures gains brought by upbeat earnings results.

These renewed expectations and optimistic economic picture boosted the greenback and thus, dragged down gold prices.

Bill O’Neill, a broker at LOGIC Advisors, said that: “Gold had everything going for it. Now we’re in a period where things are a lot calmer… The perfect playing field that existed for gold is not in play for the short term.”

On the Comex division of the New York Mercantile Exchange (NYMEX), gold sank 1.2% to a low of $1,316.00 a troy ounce, a level last touched in June 30 during the period Britain voted to leave the European Union. It last traded at $1,318.70 by 12:38 GMT, down 1.02%.

Nonetheless, the yellow metal remained supported amid talks that European and Asian central banks will ramp up monetary stimulus in the coming months to counter the negative economic shock by the British referendum last June 23.

Expectations for monetary stimulus tend to boost gold as the bullion is considered a safe-haven asset and inflation hedge.




Monday, July 18, 2016

Bank of America Beats Analyst Estimates

Bank of America Corp. posted its quarterly earnings report on Monday with profit results topping analyst expectations.

The second largest U.S. bank by assets reported a high profit in each of its four main businesses as bond-trading revenue rallied more than estimates, amid quarterly earnings that were pulled back down by unrelenting low interest rates.

BAC shares, which had initially topped 19% this year, gained 3 cents to $13.69 in New York.

North Carolina-based lender The Charlotte announced a net income decline of 21% at $4.23 billion, or 36 cents a share for the second quarter, compared with $5.13 billion or 45 cents a share in the same period last year. The latest results comprised 6 cents a share in market-related charges.

Surveyed analysts from Reuters and Bloomberg had an average estimate of 33 cents per share.

Revenue tumbled 2.4% to $20.4 billion from $21.96 billion in 2015. Adjusted revenue was $20.6 billion, as analysts estimated $20.41 billion.

Meanwhile, shares climbed 0.4% pre-market. Global wealth-management profit added 7.9% to $722 million.