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Market Review 16-04

Market Review 16-04

Forex News

Turkish unemployment jumps to highest in nearly a decade

From: Reuters.com

Turkey’s unemployment rate surged to 14.7 percent in the December-February period, its highest level in nearly a decade according to official data on Monday, as the effects of last year’s currency crisis continued to weigh on workers.

The jobless rate was up from 13.5 percent in the previous period ending in January, and it included a jump in youth unemployment to its highest level since at least 2005.

The Turkish economy contracted a sharper than expected 3 percent in the fourth quarter of 2018, its worst performance in nearly a decade, indicating that last year’s near 30 percent slide in the lira had tipped it into recession.

Both President Tayyip Erdogan and his son-in-law Finance Minister Berat Albayrak have said Turkey has left the worst of its economic troubles behind, and Albayrak last week announced a series of structural measures to prop up the ailing economy.

Inflation has slipped from last year’s high but remains elevated, and the country’s current account deficit has narrowed sharply.

However, the number of people registered as unemployed rose to 4.67 million in the three months to February, a surge of more than one million from a year earlier, data from the Turkish Statistics Institute showed.

Non-agricultural unemployment stood at 16.8 percent in the same period, the data showed, jumping from 15.6 percent in the November-January period.

In February, the government and Union of Chambers and Commodity Exchanges launched a campaign to boost employment, which they said will provide jobs for 2.5 million people.

But Turkish unemployment was expected to continue rising in the months ahead and weigh on private consumption and investment, ratings agency Moody’s said in March.

Tatha Ghose, senior emerging markets economist at Commerzbank, said: “The labor market is a lagging indicator and we all know Turkey is in a recession, and until that changes, unemployment is expected to go up.”

“It should go up further as the recovery has not yet taken hold and will continue rising at least until July or August. It will get worse before it gets better,” Ghose said.

In the three months to February, the unemployment rate among people aged 15-24 rose to 26.7 percent, its highest level since the data became available in 2005, the data showed.

Overall unemployment last stood at 14.7 percent in the February-April period of 2009.

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Aussie trips on dovish RBA minutes; eyes on UK wages, German ZEW

From: FXstreet.com

Forex today witnessed a quiet Asian affair amid a cautious risk tone, with most majors sticking to thin trading ranges while the US dollar attempted a tepid bounce broadly. The Asian stock markets traded mixed, as markets remained unnerved ahead of the key Eurozone and Chinese macro releases. Oil prices also traded on the back foot heading into the US weekly supply data release. Meanwhile, gold traded modestly flat near 1285, with the bias leaning towards the downside.

Amongst the G10 currencies, the AUD/USD pair was the worst performer, as the Aussie dollar incurred steep losses following the release of the RBA April meeting’s minutes that was widely read as dovish. Its OZ neighbor, the Kiwi, enjoyed some good two-way businesses, having tripped to near 0.6740 region on dovish remarks from the RBNZ Governor Orr before recovering to the familiar ranges around 0.6765 levels. The USD/JPY pair was stuck in 20-pips trading range near the 112 handle, with the JPY bulls unfazed by the BOJ Governor Kuroda’s willingness to ease the monetary policy further, if required. Both the Euro and the GBP remained confined within its recent trading ranges while the Loonie recovered losses and traded below the 1.34 handle.

Key Focus Ahead

The EUR calendar ahead remains relatively eventful, with the UK employment data and German ZEW survey to headline. The UK jobs and wage growth report will drop in at 0830 GMT and is expected to have a major impact on the GBP, given no fresh updates on the Brexit front. Meanwhile, the shared currency could be influenced by the German ZEW survey for April, with a rebound expected in the German economic sentiment.

In the NA session, the Canadian manufacturing sales will release at 1230 GMT, followed by the US capacity utilization and industrial figures due at 1315 GMT. Also, of note remains New Zealand’s GDT price index data that will be published around 1400 GMT. Oil and Loonie traders will await the release of the US API weekly crude stocks data that is slated for release late-Tuesday at 2030 GMT. Meanwhile, the NZ inflation report will remain the key focus in the early Asian trading alongside the Indonesian Presidential elections.

EUR/USD: Drop in Greek 10-year yield to 13-year lows fails to put a bid under EUR, eyes on German ZEW

The shared currency is struggling to pick up a bid despite tighter Greek-German 10-year government bond yield spread. A better-than-expected German Zew survey, due at 09:00 GMT, could yield a sustained move above 1.1320.

GBP/USD: 5-week old resistance-line in focus ahead of UK employment data

Traders may now concentrate on February month average earnings and unemployment rate from the UK, coupled with the British claimant count change for March, ahead of focusing on the US industrial production figure.

UK jobs report preview: With Brexit on the back burner, upbeat wages could lift the pound

The British labor market is doing quite well. The jobless rate dropped to 3.9% in January, with record employment. Wages grew at a satisfactory standard of 3.4%, including and excluding bonuses.

When are the Indonesian general elections and how could they affect USD/IDR?

The Indonesian general elections will be held on 17 April 2019. For the first time in the country’s history, the president, the vice president, and members of the People’s Consultative Assembly (MPR), will be elected on the same day with over 190 million eligible voters.

China GDP Preview: What you see is what you will get

China’s annual gross domestic product (GDP) is expected to decline to 6.3% in the first quarter of 2019 from 6.4% in the final three months of 2018. On the quarter it is projected to slide to 1.4% from 1.5%.

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Stock Market News

S&P 500 Reversal Forming, Nikkei 225 Gains with Docomo Price Cuts

From: DailyFX.com

  • Nikkei 225 supported by gains in NTT Docomo
  • Equities facing European sentiment, US data
  • S&P 500 carving out bearish reversal pattern

Asia Pacific equities generally traded higher in a rather choppy session. On Wall Street, the S&P 500 ended the day close to little changed following a mixed start to the early phases of the US earnings season.

Japan’s benchmark Nikkei 225 was supported by wireless telecommunication services as NTT Docomo soared. The company announced smaller-than-expected price cuts as the stock rose about 3.4%, its best performance in a single day since December.

Elsewhere, the Shanghai Composite climbed out of negative territory as it rose over one percent. In Australia, the ASX 200 rose more than 0.35% as the equity index was supported by financials which carry about a 31% weighting in the index.

There was a temporary surge of risk aversion around the time of the RBA minutes from the April policy meeting. As anticipated in this week’s fundamental forecast, AUD/USD weakened and remained lower despite equities resuming their upside push. The anti-risk Japanese Yen underperformed.

Ahead, the equity outlook is vulnerable to disappointing economic sentiment surveys out of Europe. Another risk may come from softer-than-expected US industrial production. Lately, data out of the world’s largest economy has been tending to underperform. More of the same may add fundamental pressures to the S&P.

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Wall Street slips as bank earnings disappoint

From: Moneycontrol.com

Wall Street lost ground on Monday, dragged down by financials as underwhelming bank earnings curbed investor enthusiasm.

But while all three major US stock indexes edged lower, the S&P 500 remained within a percent of its record high.

Following a January-March rally that marked the US stock market’s best quarterly performance in nearly a decade, stocks had been in a holding pattern in April ahead of first quarter reporting season.

Goldman Sachs dipped 3.8% after the investment bank’s first quarter revenue came in below analyst expectations.

Citigroup Inc posted higher-than-expected earnings as cost-cutting offset falling revenues. Its shares ended the session nominally lower, dropping 0.1%.

“We’re coming off of a strong week last week,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “So any bad news or earnings reports this week, such as we saw with Goldman and Citigroup, is going to take away some of that momentum.”

With first quarter reporting season shifting into high gear, analysts now see S&P 500 companies posting a 2.1% year-on-year decline in profits. While an improvement over recent estimates, it would still mark the first annual decline in earnings since 2016.

“We’ll get a clearer sense as we move through the week,” Sroka added. “As we move into other sectors we’ll get a clearer picture of corporate earnings and the economy.”

Bank of America Co, Morgan Stanley, Netflix Inc, Johnson & Johnson, Textron Inc, Honeywell International Inc, Schlumberger NV and American Express Co are among the closely-watched earnings expected this holiday-shortened week.

Aside from earnings, “we still have to be watchful for global geopolitical events such as the U.S.-China trade discussion,” warned Sam Stovall, chief investment strategist of CFRA Research in New York.

Sources said U.S. negotiators have softened their demands that China curb industrial subsidies as a condition for a trade deal, marking a retreat from a core U.S. objective.

“It’s a net positive,” Stovall said. “The president wants to get some sort of deal signed so he can move on.”

The Dow Jones Industrial Average fell 27.53 points, or 0.1%, to 26,384.77, the S&P 500 lost 1.83 points, or 0.06%, to 2,905.58 and the Nasdaq Composite dropped 8.15 points, or 0.1%, to 7,976.01.

Of the 11 major sectors in the S&P 500, six ended the session in the red.

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Cryptocurrency News

Crypto Prices Fall as U.S. SEC Cracks Down on “Misleading” ETF Names

From: Investing.com

Cryptocurrency prices fell on Tuesday in Asia as the U.S. Securities and Exchange Commission (SEC) cracked down on ETF names that could be misleading investors.

Bitcoin declined 2% to $5,048.9 by 11:28 PM ET (03:28 GMT). Ethereum lost 4.2% to $161.29, XRP slipped 1.9% to $0.31919 and Litecoin was down 5.6% to $78.433.

The SEC has found in multiple occasions that “blockchain” was misleadingly used in some funds’ names and will now refuse the term to be mentioned in the title of any fund.

“Issuers are prohibited from using “materially deceptive or misleading” names under the Investment Company Act of 1940,” the SEC said.

In other news, Corporate Traveller, the largest travel management firm in the U.K., will now accept Bitcoin as a payment method, according to a press release on April 15.

“We identified an increasing demand from our clients for the option to pay in bitcoin for business travel bookings made by our travel consultants. We chose BitPay to manage our merchant processing because they make it easy and handle the entire process of getting the Bitcoin or Bitcoin Cash from the customer and depositing cash into our account,” the company said.

Elsewhere, a financial sector law that included regulations aimed at encouraging cryptocurrency issuers and traders to set up in France by giving them some official recognition was approved in France last week.

French Finance Minister Bruno Le Maire said on Monday that France would ask the European Union to adopt this regulatory framework.

“I will propose to my European partners that we set up a single regulatory framework on crypto-assets inspired by the French experience,” Le Maire said in Paris at an event on blockchain technology. “Our model is the right one.”

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