Nigeria Holds Key Rate as Economic Growth Remains Sluggish

© Reuters.  Nigeria Holds Key Rate as Economic Growth Remains Sluggish © Reuters. Nigeria Holds Key Rate as Economic Growth Remains Sluggish

(Bloomberg) — Nigeria’s central bank held its benchmark rate for a third straight meeting as economic growth in the West African nation remains sluggish.

All nine members of the Monetary Policy Committee who attended the meeting voted to keep the rate at 13.5%, Governor Godwin Emefiele told reporters Friday in the capital, Abuja.

Key Insights

  • The central bank is caught between inflation that’s been above the target range for more than four years and an economy that’s still struggling to recover from a contraction in 2016. Growth in gross domestic product was lower than forecast and slowed for the second consecutive quarter in the three months through June. With limited scope to ease policy, the central bank has started forcing lenders — through regulations and penalties — to give out more credit in an attempt to stimulate growth.
  • Inflation eased to a 43-month low in August as food costs grew less. However, food-price growth may pick up again after President Muhammadu Buhari closed the border with Benin to halt rice smuggling and ordered the central bank to stop dollar supplies for some food imports.
  • The naira continues to be under pressure and by keeping rates on hold, the central bank would ensure portfolio investment doesn’t slump.

“Projections indicate that real GDP during the third and fourth quarter of 2019 would average 2.11% and 2.34% respectively, driven primarily by non-oil sector,” Emefiele said. “The headwinds to the growth prospects remain high — unemployment, rising public debt and high insecurity across the country.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

UK employers cut growth forecasts as Brexit, global slowdown weigh

LONDON (Reuters) – The British Chambers of Commerce cut its forecast for economic growth this year and 2020 on Monday, blaming a slower global economy, U.S.-China trade tensions and the persistent drag from Brexit.

The BCC, whose members employ about one in five British workers, cut its economic growth forecast for this year to 1.2% from its June forecast of 1.3% and lowered the figure for 2020 to 0.8% from 1.0%.

The BCC’s new 2020 prediction is well below the average 1.1% forecast for next year in a Reuters poll of economists, and would represent the slowest growth since the 2008-09 recession.

The group said its forecasts were based on the assumption that Britain avoids a damaging no-deal Brexit.

“Our latest forecast shows a number of warning lights are flashing for the UK economy, even if we are able to avoid a messy and disorderly exit from the EU in just a few weeks’ time,” BCC director general Adam Marshall said.

Prime Minister Boris Johnson has promised to take Britain out of the EU on Oct. 31, without a transition deal if necessary, but parliament has ordered him to delay Brexit if he cannot negotiate a new deal with Brussels next month.

The world economy is also losing momentum, largely due to an ongoing trade conflict between the United States and China which has hit goods exporters such as Germany especially hard.

Britain’s economy contracted by 0.2% in the three months to June, largely due to a hangover from preparations for the original March 29 Brexit date, but the BCC forecast a small bounce back to 0.3% growth in the current quarter.

Brexit uncertainty was hitting business investment – which was heading for its longest period of full-year declines in 17 years – and gains in productivity, limiting future rises in living standards, BCC economist Suren Thiru said.

The BCC forecast wage growth would average just under 3% over the next couple of years – a slower pace than so far this year – while inflation was seen holding at just over 2%, with Bank of England interest rates not rising until 2021.

Another employers group, the Institute of Directors, said a survey it conducted showed nearly 30% of member companies had or were considering setting up operations outside Britain because of Brexit.

Only 9% had or were considering setting up or moving operations back to Britain, the survey showed.

The survey also showed 51% of firms said a no-deal Brexit would be the worst outcome while 32% said further delay could have a worse impact.

“The idea of leaving the EU without a deal in place is certainly the bigger concern, but the prospect of repeated delays with no clear path forward is far from an appetizing prospect,” Allie Renison, the IoD’s head of trade policy, said.

The IoD survey of 952 companies was conducted between July 1 and 17.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Economy News

Goldman Sachs has lowered its forecast for oil demand growth this year

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Indian economy set for weakest quarter of growth in 5 years: Reuters poll

By Indradip Ghosh

BENGALURU (Reuters) – The Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand, according to economists polled by Reuters.

That would reinforce concerns seen in the minutes from the central bank’s August meeting, which showed policymakers were worried about weak growth and indicated further rate cuts in the next few months to boost the slowing economy.

The poll median showed the economy was expected to have grown at a year-on-year pace of 5.7% in the June quarter, a touch slower than 5.8% in the preceding three months. But a large minority – about 40% of nearly 65 economists – expect an expansion of 5.6% or lower.

The GDP data is due to be released at 1200 GMT on Friday.

If the forecast is realized, it would be the weakest start in the first three months of a fiscal year in seven years.

“The deceleration in growth that commenced in the second quarter of the fiscal year ending March 2019 is likely to have continued,” said Rini Sen, India economist at ANZ.

“A host of high frequency indicators – consumption and investment – have continued to weaken. The most prominent ones include auto sales, output of consumer durables, cement and steel production.”

Domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades and declined for the ninth straight month in July, largely due to a liquidity crunch causing huge job cuts in the sector.

These measures, in addition to the risk of further escalation of the U.S. and China trade war are weighing on demand and business confidence in India.

The median response to an extra question in the poll, which was taken Aug. 21-26, showed the average growth rate for the current fiscal year 2019-2020 is likely to be 6.5% despite a weak start. But it is a downgrade from 6.8% predicted just last month and well below the RBI’s projection of 6.9%.

The RBI lowered its outlook for the fiscal year 2019-2020 at its August meeting. It has cut a total of 110 basis points in the repo rate since February, which includes an unconventional cut of 35 basis points earlier this month to 5.40%.

But with inflation not expected to rise anytime soon, the central bank will likely ease its benchmark rate by 25 basis points again to 5.15% at its October meeting, followed by a 15 basis points cut in the first quarter of 2020, according to a separate Reuters poll. [RBI/INT]

Those cuts, in addition to a suite of recently announced fiscal measures, could provide some cushion for the economy in coming months.

On Friday, Finance Minister Nirmala Sitharaman announced reforms to revive economic growth, including rolling back recent tax hikes on foreign and domestic equity investors and several measures for industries.

“We believe that the measures announced by the finance minister will help to provide a fillip to credit growth, rate transmission and improving investor sentiment,” noted economists at Morgan Stanley (NYSE:).

“We continue to see a slow recovery in growth, as monetary measures will help but may not be sufficient to create a V-shaped recovery, especially in the context of slowing global growth.”

(Polling by Khushboo Mittal and Shaloo Shrivastava; Editing by Sam Holmes)

Let’s block ads! (Why?)

Economy News

RBA’s Lowe says monetary policy can push up asset prices but can’t deliver medium-term growth

Lowe at Jackson Hole

Lowe at Jackson Hole

RBA Governor Philip Lowe used his speech at Jackson Hole to prod governments to do more for growth.

“We are experiencing a period of major political shocks,” he said. “Political shocks are turning into economic shocks.”

He warned that central banks have a limited and partly exhausted arsenal of tools to fight back.

“Monetary policy cannot deliver medium-term growth,” Lowe said. ” We risk just pushing up asset prices.”

Instead, he called for investment in infrastructure and structural reforms.

This is the same sort of thing the ECB and BOJ have been saying for years but with everyone headed to the zero-bound, expect to hear much more of it in the years ahead.

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

StockBeat: Nvidia Climbs as Wall Street Says Growth Story in ‘Early Innings’

© Reuters.  © Reuters.

Investing.com – Nvidia climbed on Wednesday after a Wall Street analyst backed the chipmaker to leave its rivals behind as its growth story remains in the “early innings.”

Benchmark analyst Ruben Roy initiated coverage on the stock with a buy rating and a $ 210 price target, suggesting upside of more than 25% from its closing price of $ 167.87 a day earlier.

Nvidia (NASDAQ:) climbed 2.1% in afternoon trading. It’s up 28.4% on the year and 4.4% in the third quarter.

Nvidia is “uniquely positioned” to grow at a faster compound annual rate than its peers and is in the “early innings” of its growth story due to the “increasing use of GPUs across a diverse set of growth markets,” Roy said.

Earlier this week, Microsoft (NASDAQ:) said it would use Nvidia’s RTX video graphics units to spice up the visuals of its popular world-building game “Minecraft.”

Semiconductors have been a hot group this year. The was up nearly 1% on the day, taking its gains for the year so far to about 31%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Stock Market News

Vietnam Investors Shrug Off U.S. Trade Threat in Favor of Growth

© Reuters.  Vietnam Investors Shrug Off U.S. Trade Threat in Favor of Growth © Reuters. Vietnam Investors Shrug Off U.S. Trade Threat in Favor of Growth

(Bloomberg) — Foreign investors in Vietnam stocks are shrugging off the threat of additional U.S. tariffs on the country’s exports, even as the Southeast Asian manufacturing hub draws increased scrutiny from President Donald Trump’s government.

Robust economic growth and the government’s planned sale of stakes in state-controlled companies will offset dips in equity prices triggered by trade frictions, according to investors including Federico Parenti at Sempione Sim SpA in Milan.

“I didn’t change my view,” said Parenti, who helps manage about $ 3 billion including Vietnam equities at Sempione Sim in Milan. “When you invest in a country, you do it for the long term.” Vietnam Dairy Products JSC and Saigon Beer Alcohol Beverage Corp. are among the firm’s holdings.

Foreign investors have poured $ 843 million into Vietnam’s $ 191 billion stock market in the 12 months through Aug. 14, even as the benchmark Ho Chi Minh Stock Index fell about 0.9% in the period. The gauge has climbed 9.7% so far this year through yesterday’s close, the most among Southeast Asian markets and outpacing the 0.8% rise in the MSCI AC Asean Index.

The government’s sale of shares in state-enterprises helped raise about 5.16 trillion dong ($ 222 million) in the first half of this year, adding to a record $ 5.09 billion from initial public offerings last year. Corporate tax breaks, along with economic expansion exceeding 6%, “augur well for the capital market,” said Mark Mobius, who runs Mobius Capital Partners LLP.

To be sure, most investors can’t ignore the risk of the U.S. increasing duties on Vietnam goods, said Felix Lam, who manages close to $ 2 billion in Asia Pacific equities at BNP Paribas (PA:) Asset Management. While Lam doesn’t hold Vietnam shares as turnover is too low for his mandate, he said an increase in liquidity could allow him to buy the stocks.

READ: Vietnam Won the U.S.-China Trade War But Is Now in Trouble

“If trade negotiations take longer and are more severe, then Vietnam will be affected alongside other Asian countries,” said Lam. Still, he added, “one would expect that companies would have captured quite a lot of that in their share prices already.”

The Trump administration has been increasing pressure on Vietnam to reduce its growing trade surplus with the U.S., including increasing to 400% in July the duty on steel imports that it alleges originated in Taiwan and South Korea. Exports to America equaled 20% of gross domestic product last year and almost 26% in the first half of 2019.

For Bharat Joshi, who helps oversee $ 650 billion as a fund manager at Aberdeen Standard Investments, Vietnam’s domestic demand outweighs risks arising from trade tensions. The firm counts Vietnam Dairy Products as an “anchor investment” in the country.

“There is structural growth happening on the ground, you have rising middle-class income, demand for credit is starting to expand, and the government is doing all it can to privatize,” said Joshi.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

ForexLive Asia FX news wrap: AUD up on jobs growth beat

Forex news for Asia trading Thursday 15 August 2019

Asia came in following a big down session for equities after poor German data and both UK and US yield curve inversions overnight. In the forex space we saw a stronger yen, and a weaker AUD and EUR (and others). 

Just scanning regional equities before I move on, there have been bounces from weak openings, but still net lower for the session here. Nikkei, for example:

Forex news for Asia trading Thursday 15 August 2019

While GBP has not moved much here its worth checking out the bullets above, we had some Brexit news out late in the UK evening. While parliament in the UK is on its summer break (really, you’d think there was enough to do to keep them all in London and busy) Brexit developments continue to evolve.

A lot of the incoming info today was AUD related, with a speech from RBA Deputy Governor Guy Debelle (see bullets above) that didn’t cover much new or surprising. Later we received the July employment report, which showed a huge beat for jobs added. The headline unemployment rate remained unchanged while the ‘trend’ rate ticked up by 0.1% – the ‘trend’ employment data is usually thought to be a more reliable indicator than the headline number and its likely the result today will do nothing to dissuade the RBA from its easing bias (although monitoring mode will persist until more data comes in for the months ahead after two consecutive cuts in June and July).

The AUD moved higher after the report, towards 0.6790. Its circa 0.6780 as I update. Pricing for RBA rate cuts ahead have fallen after the numbers, but as I said the rise in the trend unemployment rate will not change the RBA easing bias. 

EUR/USD is up small, as is kiwi. Otherwise not too much change to report for the majors.

The  People’s Bank of China set the onshore yuan a touch stronger for the day. Gold moved above 1520USD again but is currently just under. 

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Forex – Yen Gains as Trade War, Global Growth Fears Weigh

© Reuters.  © Reuters.

Investing.com – The safe haven yen was broadly higher on Monday as uncertainty over the next stage in the U.S.-China trade war and growing fears over a slowdown in global growth hit market sentiment.

Uncertainty over the U.S.-China trade dispute persisted after U.S. President Donald Trump on Friday said he was not ready to make a deal with China and even cast doubt over a round of trade talks due to take place in September.

Goldman Sachs over the weekend cut its forecast for U.S. economic growth, warning that a trade deal was unlikely before the 2020 presidential election and that the risks of a recession were increasing.

“Overall, we have increased our estimate of the growth impact of the trade war,” the bank said in a note.

National Australia Bank downgraded its estimates for a range of major currencies as it now expects “nothing positive will happen” on the trade front at least through early 2020.

It expects the greenback to broadly hold firm in the face of policy easings by other major central banks while , and euro are seen on a slippery slope.

The greenback was down 0.18% against the to 105.46 by 0:27 AM ET (07:27 GMT), not far from a seven-month low of 105.25 hit on Friday.

The was also weaker against the Japanese currency at 118.04 yen and close to its lowest since April 2017. The was at lows not seen since 2016, trading at 127.27 yen.

The dollar was a touch lower against the after the Chinese central bank’s daily fixing came in firmer than market expectations. That helped eased some fears that Beijing would use its currency as a weapon in its trade war with Washington.

A week ago, China let its currency slip to weaker than 7 to the dollar for the first time since 2008, which some saw as an offset to U.S. tariffs. The change pressured emerging market currencies across Asia and boosted the yen.

All eyes will be on Chinese figures on July retail sales and industrial output due Wednesday to gauge the impact of the long-running tussle with the United States on domestic activity.

Market attention will also be on the U.S. Federal Reserve annual symposium at Jackson Hole later in the week, where investors hope to get some clarity on the future path of interest rates. Markets are expecting nearly 100 basis points of cut from the Fed by next year.

Sterling edged higher against the , rising 0.15% to 1.2050.

The pound reached two-year lows against the dollar on Friday after data showed the U.K. economy unexpectedly contracted in the second quarter, only adding to the bearishness over Brexit and the chance of a no-deal exit.

The was a touch lower against the dollar at 1.1185, as the prospect of snap elections in Italy weighed.

–Reuters contributed to this report

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

Australia – Business Sales Indicator (for May 2019) is showing above-average growth

Australia’s Commonwealth Bank Business Sales Indicator (BSI) is a measure of economy-wide spending.

Some positive news for the Oz economy. 

+0.7% in May (trend terms)

  • Same as in March and April
  • there has not been stronger spending growth for almost 18 months

+6.0% y/y

  • prior +5.7%
  • fastest rate in seven months
  • 5.5 % is the long-term average
Australia's Commonwealth Bank Business Sales Indicator (BSI) is a measure of economy-wide spending.

The Commonwealth Bank BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. 

  • The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines.

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed