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.

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EUR/USD forecasts – higher through to year end

A quick snippet via BNP on their outlook for the second half of the year

Expect the euro to strengthen versus the dollar

  • USD is expensive on valuation grounds
  • the Fed will ease

Thus see EUR/USD at:

1.16 for Q3

1.20 for Q4

More:

Expect the Fed to cut rates twice in H2 due to 

  • a slowing economy
  • subdued inflation
  • heightened uncertainty

A decline in the 10-year treasury yield will only be moderate with markets pricing in rate cuts

On the ECB, BNP expect rates to remain unchanged through 2020, but:

  • slower growth
  • subdued core inflation

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Canada’s Jobs Market Pauses After Monster Start to Year

© Reuters.  Canada’s Jobs Market Pauses After Monster Start to Year © Reuters. Canada’s Jobs Market Pauses After Monster Start to Year

(Bloomberg) — Canada’s booming labor market geared down in June, with employment little changed and a slight uptick in the jobless rate from historical lows.

The economy shed 2,200 jobs on the month, Statistics Canada said Friday in Ottawa, versus economist expectations for a gain of about 10,000. The unemployment rate rose to 5.5%, after reaching a four-decade low of 5.4% in May.

Even with the stall, the first half of the year was one of the best on record in terms of Canadian job gains.

Key Insights

  • The flat reading for employment in June doesn’t alter the picture of a labor market that remains the main driver of Canada’s expansion, with most economists widely expecting a slowdown from its recent unsustainable pace. The economy has added 247,500 jobs since the end of last year — the bulk of them full-time — which is the strongest since 2002 and the second-best first-half employment gain in four decades.
  • There were a number of pockets of strength in the report. Full-time jobs were up by 24,100, offsetting a decline in part-time employment. Self-employment fell, with the number of “employees” increasing. Wage gains accelerated to the fastest in more than a year.
  • The fact the labor market hasn’t pulled back should bolster confidence in the sustainability of the current economic rebound and ease pressure on the Bank of Canada to cut interest rates, even if other central banks ease policy.

Market Reaction

The Canadian dollar fell after the report, which coincided the release of U.S. payroll data that topped all estimates of economists. As of 8:34 a.m. in Toronto trading, the dollar was down 0.3% to C$ 1.3094 per U.S. dollar. Yields on Canadian two-year bonds were up however, reflecting easing worries about rate cuts.

“We’ll forgive Canada’s job market for taking an early summer holiday in terms of employment gains, given the massive surge in hiring that preceded it,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a note.

Get More

  • The one area of weakness seems to be the goods sector, which saw employment contract 32,800 in June. Half of that came from manufacturers. Employment in goods-producing industries is down by 9,400 in the first six months of 2019.
  • Wages, however, are showing signs of strength. Annual hourly wages gains accelerated to 3.8% in June, the fastest since May last year and up from 2.8% in May. Pay gains for permanent workers climbed 3.6%, also a sharp increase. The year-over- year acceleration largely reflects weakness this time last year.
  • Total hours worked accelerated to 1.8% from 1% in May, the most since last fall.

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.

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Suspects in David Ortiz shooting will be imprisoned for up to a year while awaiting trial

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World – CBSNews.com

Bank of Russia Resumes Easing Cycle With First Cut in a Year

&copy Bloomberg. The obverse, right, and reverse sides of 2014 issue Russian one ruble coins sit in this arranged photograph in Moscow, Russia, on Tuesday, Aug. 5, 2014. Russian government bonds slid, taking yields to a five-year high, and the ruble fell on concern the conflict in Ukraine will escalate after Poland warned President Vladimir Putin may be preparing to invade. &© Bloomberg. The obverse, right, and reverse sides of 2014 issue Russian one ruble coins sit in this arranged photograph in Moscow, Russia, on Tuesday, Aug. 5, 2014. Russian government bonds slid, taking yields to a five-year high, and the ruble fell on concern the conflict in Ukraine will escalate after Poland warned President Vladimir Putin may be preparing to invade.

(Bloomberg) — Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.

Russia cut interest rates for the first time since March 2018 and signaled more monetary easing at one of its upcoming meetings as growth slowed and inflation retreated closer to the central bank’s target.

The key rate was cut to 7.50% from 7.75%, according to a statement on Friday. That matched 33 forecasts in a Bloomberg survey, while two economists expected no change. Bank of Russia Governor Elvira Nabiullina will hold a news conference at 3pm in Moscow.

“If the situation develops in line with the baseline forecast, the Bank of Russia sees the possibility of a further key rate reduction at one of the upcoming Board of Directors’ meetings and a transition to neutral monetary policy by mid-2020,” the central bank said in its statement.

Read our live blog for more on the Russian rate decision

The move makes Russia the latest emerging market to tilt toward more dovish policy as escalating trade woes weigh on growth. Chile and India also lowered their benchmark rates recently and other central banks will likely follow if the Federal Reserve signals a shift to easing.

The change in trajectory of interest rates in developed economies reduces the risk of persistent outflows from emerging markets, the statement said.

The ruble extended gains and 10-year government bond yields retreated 4 basis points to 7.66% as investors cheered the prospect of more rate cuts and slower inflation. bonds, known as OFZs, have already handed carry traders some of the best returns in emerging markets this year.

“The central bank definitely wanted to signal that it is joining the global monetary easing trend,” said Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki. “We see more flows into OFZs given the current rate and inflation outlook.”

Annual inflation decelerated for a third month in June, reaching 5% as of June 10, the central bank said. Price growth will slow to 4.2%-4.7% by the end of the year, the statement said, citing weak consumer demand and ruble strength.

Inflation could rise if the Finance Ministry goes ahead with an idea to invest money accumulated in Russia’s wealth fund, the statement warned.

‘Dovish Undertones’

The central bank also cut its growth forecast for 2019 to 1.0%-1.5% from 1.2%-1.7%. A worsening of international trade tensions may lead to a slowdown in global growth, the statement warned.

Most economists are forecasting a second rate cut from Russia in September, and some see another one by the end of the year. Nabiullina warned last week that there’s no rush to undo two surprise rate hikes imposed last year as inflation jumped.

“The overall dovish undertones of the statement strongly suggest that the central bank will make another 25 basis points cut in 2019,” said Ivan Tchakarov, a Moscow-based economist at Citigroup Inc (NYSE:). “Given that the neutral policy rate is seen by the central bank in the range of 6-7%, there will be scope for further cuts next year.”

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.

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U.S. Treasury sells $19 billion of 30 year bonds and a high yield of 2.892%

WI just before auction traded at 2.89%

  • WI just prior was at 2.89%
  • High yield: 2.892%. Tail 0.2bps
  • Bid to cover: 2.20x vs six-month average of 2.22x
  • Dealers: 28.5% versus 6 month average of 27.8
  • Directs:11.0% versus 14.4% last auction
  • Indirects:60.5% versus 60.5% last auction

Better than yesterday but middle of the road auction.  

  • Bid to cover just below the 6 month average
  • As 0.2BP tail
  • Dealers took a little more than the 6 month average.  

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The Hong Kong Dollar Just Saw Its Biggest Jump This Year

© Bloomberg. Hong Kong one-hundred dollar banknotes are arranged for a photograph in Hong Kong, China. Photographer: Justin Chin © Bloomberg. Hong Kong one-hundred dollar banknotes are arranged for a photograph in Hong Kong, China. Photographer: Justin Chin

(Bloomberg) — The jumped the most since December on Wednesday, as short-sellers were burned by spiking borrowing costs.

The exchange rate strengthened as much as 0.14 percent, moving away from the weak end of its trading band, where it had been stuck for weeks. It pared the advance to 0.05 percent as of 5:24 p.m. local time. The Hong Kong Monetary Authority has spent $ 2.8 billion since the start of March to defend the peg.

The currency’s forward points have surged, with the one-month tenor touching the highest level since September, reflecting tighter liquidity and thus higher costs for traders to build bearish wagers. The Hong Kong dollar’s interbank interest rates, known as Hibor, also climbed, with the one-month cost rising the most this year Wednesday.

“Some short carry trade unwinding is reasonable,” said Stephen Chiu, foreign-exchange and rates strategist at China Construction Bank Asia Corp. “This movement could be temporary — the interbank liquidity situation wasn’t that bad, so the Hong Kong dollar rates should soften again in the future. And we do expect the U.S. rates to rebound.”

A gap between borrowing costs in the city and the U.S. fueled weakness in the Hong Kong dollar in March, as traders sold the local currency and put the proceeds in the higher-yielding greenback. That spread has narrowed, partly thanks to intervention, from almost 1.6 percentage points in February to 43 basis points — making shorting the Hong Kong currency a less lucrative trade.

Gains in local equities this year could also be contributing to the advance, as investors purchase the city’s currency to chase the rally, according to Ryan Lam, head of research at Shanghai Commercial Bank Ltd. The closed at the highest since June on Tuesday, before slipping 0.1 percent Wednesday.

The currency may move back to HK$ 7.85 per greenback later this month, according to Chiu and Lam.

The Hong Kong dollar’s one-month Hibor jumped 27 basis points to 2.05429 percent, its highest level this year.

After covering their stop-loss positions, investors will likely rebuild their bearish bets, pushing the Hong Kong dollar back to the weak end of the trading band, said Ken Cheung, a senior Asian foreign-exchange strategist at Mizuho Bank Ltd.

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.

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Credit Agricole bullish EUR/CHF, forecasting higher to year end and beyond

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.

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China smartphone shipments seen down 12-15.5 percent last year: market data

© Reuters. Mobile phones are seen on display at an electronics market in Shanghai © Reuters. Mobile phones are seen on display at an electronics market in Shanghai

(Reuters) – Smartphone shipments in China fell between 12-15.5 percent last year, market data indicated, suggesting a bleak outlook for the sector at a time when behemoths Apple (NASDAQ:) and Samsung Electronics (KS:) have already issued dour forecasts.

China Academy of Information and Communications Technology (CAICT), a research institute under the country’s Ministry of Industry and Information Technology, said shipments dropped 15.5 percent to roughly 390 million units for the year, with a 17 percent slump in December.

Market research firm Canalys estimates shipments fell 12 percent in China last year and expects smartphone shipments in 2019 to dip below 400 million for the first time since 2014.

The Chinese smartphone market, the world’s largest, could shrink another 3 percent this year, Canalys said, in what would be a third straight year of declines. Smartphone shipments in the country had fallen 4 percent in 2017.

Shipments are the number of smartphones that manufacturers deliver to retailers and carriers, different from sales that happen when customers actually buy these smartphones.

The plunge in Chinese shipments expected in 2018 could lead to a 1 percent contraction in the global smartphone market, Canalys said.

Apple triggered a selloff in global markets last week after it took the rare step of cutting its quarterly sales forecast citing slowing iPhone sales in China.

China boasts the world’s biggest smartphone market, but a slowing economy, exacerbated by a trade war with the United States, has seen demand for gadgets drop across the tech sector.

TuanAnh Nguyen, a Singapore-based analyst for Canalys, told Reuters that China was now a fully mature market and lengthening refresh cycles for smartphones would be the new normal.

"Weaker economic growth and lower consumer confidence will likely hit the premium segment well into the first half of 2019," Nguyen said.

"Apple certainly was the biggest victim of this trend, with added effects from the fact that it’s lagging behind local competitors in innovation and attractive pricing," he said.

Apple rival and supplier Samsung on Tuesday estimated that its fourth-quarter earnings plunged 29 percent and that profitability would remain subdued in the current quarter due to weak demand for its memory chips.

Also, Samsung’s display business is struggling due to the lack of growth of its own devices as well as worse-than-expected performance of Apple’s X/XS/XS Max iPhone series, Nguyen said.

Chinese firms Huawei and Xiaomi are challenging Samsung’s dominance in many key markets, he added.

Huawei dominates the Chinese market, where the once-market leading Korean firm is now nearly a bit player.

Samsung controls over a fifth of the global market, followed by Huawei, which has a 14-percent market share, Canalys said.

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.

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How do stock markets perform in the Chinese Year of the Pig?

Lunar new year holidays mean China is closed all next week

Chinese markets are closed throughout next week to celebrate lunar new year. 2019 is the Year of the Pig for the first time since 2007.

The Shanghai Composite finished near the highs of January today, up 1.3%. The index is down 27% since last February.

However, Stansberry Pacific Research notes that the historical returns in the Year of the Pig since 1988 have been great at +25.2%, third best on the Chinese zodiac.
Lunar new year holidays mean China is closed all next week

The Chinese market is relatively new so that’s only 3 data points. However using the S&P 500 as a benchmark, the pig lives up to its name. It’s mean return since 1928 is 18.1%, the best on an Chinese year.

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