Russian ruble drops to 2-year low as further sanctions spell trouble
By Anneken Tappe
A draft Senate bill proposing tough new sanctions for Russia’s role in interfering in the 2016 U.S. presidential election was published Wednesday by local Russian newspaper The Kommersant. The bill could include prohibiting U.S. entities from purchasing Russian debt securities and limit Russian banks’ operations in the U.S. Later in the day, the U.S. announced separate sanctions against Russia over a chemical-weapons attack.
That sent Russian assets into a downward spiral and turned the rubleUSDRUB, +0.2218% to one of the biggest losers of the session Wednesday, dropping 3.3%. Since the beginning of the month, the ruble has shed more than 6% against the dollar.
Sanction talk has rattled the Russian currency before, and analysts expect more pain ahead, leading the ruble to weaken 13.5% against the dollar in 2018 so far, according to FactSet.
NZD/USD Review: Kiwi hit 29-month low on RBNZ’s dovish forward guidance
By Omkar Godbole
The NZD bears are ruling the roost after the RBNZ’s unexpected dovish forward guidance.
The kiwi dollar ran into offers around 0.6675 around five hours ago after the RBNZ kept rates unchanged as expected, but surprised markets by revising lower the September 2019 interest rate forecast to 1.8 percent from the previous forecast of 1.9 percent.
Further, RBNZ governor Orr said the central bank expects the interest rates to stay at the current level of 1.75 percent through 2019 and into 2020. This essentially means the yield differential will remain biased toward the USD bulls for another two years.
Thus, NZD could continue to lose altitude in the near future. The escalating US-China trade tensions could only add the bearish pressure around the kiwi.
AUD/USD: on the defensive, RBA trims inflation forecasts
By Omkar Godbole
The AUD/USD pair is trading at a five-day low of 0.7366, having created a bearish outside-day candle yesterday and risks falling further, courtesy of Reserve Bank of Australia’s (RBA) downward revision of the inflation forecasts.
The downward revision of inflation forecasts adds credence to RBA’s view that there is no strong case for a near-term rate move. The central bank also raised GDP (year average) forecast for 2018 to 3.25% from 3%, however, so far, that has not put a bid under the Aussie.
Further, the AUD is vulnerable to a drop in the Chinese yuan. As a result, the AUD risks posting a negative follow-through to previous day’s big bearish outside-day candle – a move which will likely strengthen the bear grip around the Aussie dollar.
Turkish lira plunges 13% to record low
By Daniel Shane
The currency’s plunge reflects a range of concerns, including tensions with the United States and the unwillingness of Turkish authorities to raise interest rates. Turkey has threatened to retaliate after the Trump administration imposed sanctions on senior Turkish government officials for their role in the detention of an American pastor.
After hitting a new all-time low against the dollar on Friday, the lira regained some of its losses to trade down about 6%. It has dropped about 40% against the US currency since the start of this year.
Investors worry about the country’s ability to bring in money during tough times to pay off its debts.
President Recep Tayyip Erdogan, who was re-elected in June, is another source of uncertainty. He has granted himself more power over economic policy and resisted calls for further interest rate increases.
Microsoft Stock May Rise 10% on Strong Cloud Sales
By Michael Kramer
The software company reported better than expected quarterly results that beat analysts’ estimates by nearly 5%, and revenue that came in 3% higher, driven by strong cloud growth. The better than expected results have prompted analysts to raise their earnings outlook for the fiscal first quarter and full year 2019, as well as their price targets.
Analysts are looking for shares to climb to an average price target of roughly $121, that is up from $112 just at the start of July. The higher price target comes as estimates for the full-year increase. Now, analysts are looking for earnings in fiscal 2019 to climb by 10% from their previous view of just 4%. Additionally, revenue growth is forecast to rise around 11% from only 9%.
Stocks to pop another 10% or more from here despite trade war, rising rates, says Street’s biggest bull Dwyer
By Thomas Franck
- Canaccord Genuity strategist Tony Dwyer says the S&P 500 will hit 3,200 points by year-end, beyond its all-time high of 2,872.87, which it clinched Jan. 26.
- Our “core thesis suggests any pause in the upside should be considered opportunity,” Dwyer said in a note to clients Tuesday.
- The S&P 500 has rebounded from correction territory on the back of economic growth and robust corporate earnings; the index was 0.5 percent away from a new high Thursday morning.
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