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Forums > Commercial Zone > Broker Discussions - Reps Allowed > ForexMart's Forex News
Messages (24 Replies)
28 Jun 2018 1:43 AM

NZ’s Negative Outlook on Business Confidence

The business confidence survey of New Zealand signifies a slowdown in the economy that could lead to the possibility for the RBNZ to reduce the official cash rate.

Reserve Bank Governor Adrian Orr is anticipated to maintain the OCR at 1.75 percent at tomorrow’s review. Yet today, the ANZ Business Outlook reported a drop in the confidence level back to the post-election lows. It added more doubt to the growth outlook, as well as, the course of interest rates.

There are various possible reasons that induce the decline in confidence, including uncertainty of the policies in the new government, global trade fiction and effect of Mycoplasma Bovis cattle disease.

The ASB anticipates slow progress in business confidence in the upcoming months, given the ubiquitous support to the NZ economy.

Yet, the longer business confidence continues to be low and more questions will be raised in the economic outlook. "An OCR cut cannot be ruled out if this persists.", they added.

The New Zealand kiwi decline based on the survey results about the low growth situation.

Firms surveyed on their expectations on business condition representing 39% of businesses in total believe to have a gloomy outlook in the next 12 months, as told by the ANZ Senior Economist, Liz Kendall.

Since June of 2017, business confidence is headed for a downturn given strong “headwind” of the economy, she added.

She described it as “expansionary” amid the steadfast consumer confidence giving support but the economy may continue to gently lose steam in the next months despite being substantiated by fiscal stimulus and high commodity prices.

Andrea ForexMart, Official Representative ForexMart
29 Jun 2018 2:54 AM

Japan’s Industrial Output Dropped by 0.2% in May

Japan’s industrial output declined by 0.2 percent in May compared to the previous month, which is the first drop in four months, based on the government report on Friday.

The factory output was 104.4 in the seasonally adjusted index against the total of 100 in 2010, as reported by the Ministry of Economy, Trade, and Industry. Previously, the recorded data was 0.5 percent increase in April.

Forecast of the ministry on the industrial production remains slow.

Industrial shipments dropped to 101.4 by 1.6 percent compared to the increased inventories to 113.5 by 0.6 percent.

Manufacturer’s expected outcome is gaining 0.4 percent in June and 0.8 percent in July, as shown on the survey by the ministry.

Andrea ForexMart, Official Representative ForexMart
03 Jul 2018 11:23 PM

South Korea’s Exports Declined in June

Exports from South Korea had fallen in June following a strong rebound in May amid issues on trade wars between Trump administration and China. While other major economies may weaken the Korean economy since it was dependent on trade.

Foreign shipments in June had declined to 0.1% versus the previous year to $51.23 billion, followed by a surge to 13.2% in the month ahead, based on the initial data released by the trade ministry on Sunday. The latest forecast showed a lower-than-median outlook for 1.5% drop. On the other hand, imports for June increased by 10.7% a year earlier to  $44.91 billion, after the 12.7% growth in the past month.

The trade surplus tightened to $6.32 billion in June versus $6.55 billion a month earlier, while the median forecast showed $5.10 billion. The trade ministry partly blamed the sluggish June trade figures to lesser working days after the local elections this year and also mentioned that the rise in exports on the same month last year was because of the large shipbuilding contracts that offered a higher base for comparison and altered the data.

Andrea ForexMart, Official Representative ForexMart
12 Jul 2018 2:55 AM
India Becomes 6th Largest Economy and Beat France

The World Bank issued the updated economic figures for previous year which showed that India held the sixth rank for the world’s largest economy and pushed France lower into the seventh spot. The gross domestic product (GDP) of India reached $2.597 trillion at the end of 2017 while France’s GDP amounted to  $2.582 trillion.

The Indian economy had a strong rebound since July last year following the declines in the past quarters due to economic policies imposed by the Prime Minister Narendra Modi's administration. There are about 1.34 billion Indian citizens which would likely make India the world’s highest population against 67 million French inhabitants. This explains that India’s per capita GDP remains a portion of France which is approximately 20 times higher according to the World Bank.

The consumer and manufacturing expenditure served as the main drivers for India’s economy in 2017 after Modi’s demonetization program of large banknotes way back in 2016 as well as the unorganized new tax system of the country.

India was able to double its GDP in a span of a decade and anticipated to power ahead as Asia’s economic engine as China wind down. The International Monetary Fund stated that India is predicted to grow by 7.4 percent in the current year and 7.8 percent in 2019, supported by tax reform and household spending. This was compared to the world’s forecast average expansion of 3.9 percent.

The Centre for Economics and Business Research mentioned that India would likely beat the GDP of France and the United Kingdom at the end of 2017. The London-based consultancy further told that there is a modest chance for the Indian economy hit the third place for the world’s largest economy by 2032.

Last year, Britain was regarded to be the fifth biggest economy in the world with a GDP worth $2.622 trillion. Meanwhile, the United States hailed as the number one economy followed by China, Japan, and Germany.
13 Jul 2018 2:43 AM
Irish Economy to Reach Highest Growth in 2018

The economy of Ireland is projected to reach its highest record in 2018 based on the latest outlook of the European Commission. Ireland’s gross domestic product (GDP) is projected to expand by 5.6 percent this year and 4 percent in 2018, supported mainly by domestic demand.

Meanwhile, the estimate of the EU executive shows that eurozone GDP has the potential to increase by 2.1 percent, which is below the 2.3 percent forecast according to its May report. 

Since Ireland is a very open economy, the country is potential to have revisions in the international taxation and trade environment. While the activities of multinational corporations could affect the headline GDP growth. In the near term, the commission expects that the domestic economic activity could possibly grow at a strong momentum.

In general, the commission reduced its predictions for the EU economic growth for this year because of trade adjustments due to increasing oil prices and tensions with the United States which drove the EU inflation higher.
There is an optimistic outlook for the whole year despite better trade with the United States. Forecasts were mostly taken prior to the United States raising their stakes through 10 percent tariffs on an extra $200 billion worth of Chinese imports, announced on Tuesday. 

The worsening trade war has added uncertainty on the outlook that also affected the Chinese financial markets in the past few weeks. 

With sluggish credit expansion and domestic demand ranging from government-funded infrastructure investment to consumer spending, China’s economy seems to be showing signs of struggle and weakening. 

The huge export sector may add impact on tariffs with the U.S. giving 25 percent tariffs on $34 billion of Chinese imports on Friday, which then triggered Beijing for rapid retaliatory measures on the same amount of U.S. Chinese exports to China. 

Moreover, the uncertainty caused by trade war pushed the corporate borrowing costs higher in reaction to soften the economic effect of a multi-year easing on riskier lending. More cash were accumulated through lesser reserve requirements for lenders three times this year.

16 Jul 2018 9:47 PM
Drop in Inflation Rate of Malaysia

The Annual inflation rate of Malaysia declined to 1.3 percent in June from 1.8 percent the month earlier due to the withdrawal of a goods and services tax based on the poll by Reuters. 

A survey of ten analysts by Reuters forecast for June ranged from 0.6 percent to 1.9 percent. The central bank of Malaysia kept the interest rates at 3.25 percent at a policy meeting on July 11 despite sluggish inflation and steady growth. 

The new government by Prime Minister Mahathir Mohamad starting May 9 general election abolished the consumption tax of 6 percent on June 1, which was implemented for three years. 

According to economists, the elimination of goods and services tax affect the inflation and pushed it lower in June,  despite the higher cost of transportation and food during the month of fasting in Ramadan and subsequent Eid al-Fitr celebrations. 
17 Jul 2018 3:52 AM
South Korea to Unite with Asean and India

The 1950-53 Korean War ended under the Presidency of South Korean leader Moon Jae-in and successfully settled regional programs for economic, political, security, social and cultural. While the previous presidents including  Kim Dae-Jung, Roh Moo-hyun, Lee Myung-bak and Park Geun-Hye attempted to fix similar issues but failed to do so. 

Whenever the country’s leaders turned their attention to Southeast and South Asia, problems will always come up within the Northeast especially in the Korean Peninsula, which causes immediate distraction and inconsistency.

However, President Moon tried a new method instead of using the same strategy, he positioned South Korea within the ongoing alliance with the Indo-Pacific region. Mr. Moon travels within and outside the country and promised to take a visit on Asean nations on the first two years of his leadership.

18 Jul 2018 2:35 AM
Weak Income Growth In UK Despite High Employment

Income growth in Britain showed down at its weakest rate in six months despite positive figures in record employment. This further adds concerns whether interest rates will be raised since the global financial crisis. 

Average weekly earnings grew by 2.5 percent on the year between the period of March and May at a lesser rate with 2.6 percent at three months earlier which was the lowest since September last year based on the report by the Office of National Statistics. 

Momentum picks up in the British economy after a sluggish first three months of the year due to heavy snow downfall and the central bank is considering being affected by the speed limit that would begin to raise the inflation rate. 

The BoE Governor Mark Carney mentioned that the economy as a whole, as well as, the pay is rising similar to the forecast in May that paves the way for a rate hike in August. 

Yet, a central bank deputy said that rising figure did not exceed the recent values of .5-3.0 percent range with the purpose of 3 percent growth rate by the end of the year. 

Also, according to him, there have been multiple ‘false dawns’ regarding the growth rate of the income where there could still be a spare storage in the labor market than the initial estimate of the central bank.

There is also another record employment rate and the number of job openings has also reached a record new. Thus, it can be said the labor market is progressing steadfastly based on the reports, as described by the ONS statistician Matt Hughes.
19 Jul 2018 3:10 AM
NZ Economy Driven by Rural-Based Firms

The provincial economies of New Zealand were able to drive economic growth, reinforcing the price recovery in the dairy products as mentioned by Infometrics chief forecast Gareth Kiernan on Wednesday. The regional spending activity was able to improve faster than the activity in the main centers. While prices for exports commodity remained at high levels.

Moreover, the government’s simulatory fiscal policy also ease down the decline. Prior to the approval of the May Budget, the NZ expenditure options was restrained by the said policy which includes fees-free courses in tertiary education as well as the Families Package.

Forecasts from the Treasury shows surplus growth by $7.3billion in 2022, with an expected increase in government revenue and the administration projected for a further boost in spending while keeping its records written.

On the other hand, the lack of workers (skilled and unskilled) continue to hold back the NZ economic growth. Wage inflation expanded in the previous quarter and was able to trigger price pressure across the board for the next few years.

In the provincial areas, issues about the lack of labor and effects of Mycoplasma bovis are the most critical problem in the main centers, as the world economy would likely weaken because of the trade dispute between the US and China.

Low business reliance indicates that those companies who are domestically-centered were uncertain to hire or invest. Meanwhile, households were careful on their expenses due to higher oil prices and sluggish housing market.
20 Jul 2018 2:35 AM
US Leading Indicators Grew by 0.5% in June

The Leading Economic Index by the Conference Board was able to expand by a half percent this month, showing a higher than expected figures. The indicator had increased by 0.5 percent in June which beat the forecast of 0.4 percent growth based on the Reuters’ poll. The boost marks the eighth consecutive month of improvement for the index.

Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, stated that the US LEI rose due to the continued stable growth in the American economy. He added that the overall strengthening in leading indicators, except the housing permits which decreased again, does not indicate any significant slowdown in the near-term.

The flat reading in the month of May suggested that the economic performance will remain strong but will not move higher as shown in the  Conference Board's report. The measurement evaluates the US economic conditions and the outlook of world economic trends. Furthermore, the Conference Board imposed a composite value based on 10 key metrics which includes the average weekly unemployment claims, producers’ new orders and stock prices.
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