An RBA spokesman said: Australia GDP likely to grow at 3% in 2016, and 3.75% rate in 2017.
Malaysia Ringgit Still Weak as Traders Fret Over Politics.
USD/MYR is up slightly Monday as the ringgit remains weak on concerns that political instability in Malaysia could ratchet up toward end-August, when a major political opposition rally is set to take place in the capital as well as other cities. While the likelihood of the government being overthrown is slim, growing public discontent with the administration could devolve into civic strife and further dampen foreign investor confidence. Economists are already bearish on Malaysia’s growth potential as oil prices stay depressed and the global growth engine that is China sputters. Expectations are negative for the ringgit too, not just due to lackluster economic performance but also due to falling foreign-currency reserves that may weaken the country’s credit rating score. USD/MYR is now 4.1100 from its Friday close of 4.0790
India’s Wholesale Inflation May Stay in Negative Zone.
India’s wholesale inflation is likely to remain in negative zone in the coming months on expectation of further correction in fuel prices and weak global commodity prices, says Edelweiss Securities. India’s wholesale price index fell for the ninth-straight month in July. Demand-led inflation has also slipped below zero, for the past couple of months with nearly all the components showing a benign trend, Edelweiss says. However, a key uncertainty is related to the wet season, he added. After the above normal rainfall in June, momentum has slowed down and the monsoon rainfall was 10% below a 50-year average so far this season.
Yuan Devaluation Will Ultimately Boost Aussie & NZ Economy
*China’s Central Bank Sticks to Its Pledge With Yuan Fix.
*U.S. Strains Mount After China Devalues Yuan.
China’s Currency Devaluation Won’t Affect Fed, a Wealth Manager Says.
China’s devaluation of its currency shows that it’s running out of alternatives, but the move isn’t likely to affect Federal Reserve policy, says Michael Yoshikami, chief executive of Destination Wealth Management, a Walnut Creek, Calif., advisory firm managing $1.5 billion. “This is the most drastic alternative they [China] could take, and it’s taking a page out of the U.S. and Europe,” he says. “Currency adjustments are the easiest way to stimulate economies.” But the Fed will remain focused on the overall state of the global economy, Mr. Yoshikami says
Some Economists Looking Ahead to August Payrolls.
Whether it hits or misses, Friday’s employment report is expected to continue to reflect decent progress in the US labor market. To some analysts, it’s the August print–out the Friday before Labor Day–we should worry about. Coming less than two weeks ahead of the Fed’s next meeting (which many expect will deliver the first rate hike), Deutsche Bank notes August’s report has missed expectations each of the last 4 years by an average 55K jobs–and the initial readings were all below 200K. Analysis by Wrightson ICAP last month showed August’s initial payrolls result being the most understated of any month, seeing the biggest upward revisions
Neurology book: Prophylactic Neuro-protection
In animals, most neuroprotector drugs are effective only when they are initiated before stroke onset. Therefore, in patients at high risk for stroke, prophylactic neuroprotectors also should be considered to reduce the size of a potential infarct. The aim of prophylactic neuroprotection is not to actually prevent stroke but to minimize its consequences. A potentially prophylactic neuroprotective agent should be suitable for routine oral administration and is safe and inexpensive. Calcium channel blockers, N-methyl-D-aspartate antagonist, antioxidants, and B-blockers are drugs that may be appropriate. Short term prophylactic neuroprotection can be applied to patients undergoing risky procedures, such as coronary bypass surgery, carotid endarterectomy, and endovascular treatment, it might be initiated just before the procedure and continued for several days. Long-term prophylactic neuroprotection, continued for years, should be considered in patients who are at high risk for stroke, that is, 5% to 10% annual incidence because of multiple risk factors, such as arterial hypertension, diabetes mellitus, hyperlipidemia, CHD, history of stroke or TIA, AF, and asymptomatic carotid stenosis. These potential therapeutic approaches should be evaluated in well-designed clinical trials.
Sources: Fisher M Jones S, Sacco RL: Prophylactic Neuroprotection for cerebral ischemia. Stroke. Neurology books.
Nikkei Stocks Down Greece Jitters Yen Weigh
Japan Stock Index Down 0.6% as Fast Retailing, Greece Jitters Weigh.
The Nikkei is down 0.6% at 19738.17 in early trading as investors take profits following the market’s dramatic rise to a positive finish Thursday, as stocks reversed a big early plunge. A selloff in shares of heavily-weighted Fast Retailing (9983.TO) is also weighing, despite the firm’s report of a record nine-month profit after the prior-day market close. Fast Retailing is down 6.0% at Y54,000. “China’s volatility, Greece’s fate in the euro zone, and U.S. corporate outlooks are all factoring into jitters for investors, and this affects stock market participation,” says Yoshihiro Okumura general manager at Chibagin Asset Management. “Longer-term investors may be waiting longer to buy in, thinking things could get worse, while short-term traders are looking for oversold shares to ride to a profit. Japan corporate fundamentals remain good, but there is too much ambient risk out there to simply buy and forget.”
USD/JPY Near 120 Provides Good Buying Opportunity.
Even assuming a prolonged China stock slump but no serious debilitating effect on the macro-economy there, the USD/JPY near 120 is a good chance to buy, says Taisuke Tanaka chief FX strategist at Deutsche Securities in Tokyo. “As long as we continue to believe the U.S. decision to raise rates, a deeper dip provides a better chance to buy,” says Tanaka. China stocks are not fully open to foreigners meaning there is less chance of contagion to the global economy. And a fallback from the short-lived stocks market boom (10 months) is spreading contagion to the macro economy there. But if China and the eurozone (due to Greece) roil the market to push back U.S. rate increase, the JPY weakness trajectory curve may become more moderate. It may take some time for the JPY to accelerate its weakness, so that better to hedge risk by limiting dip buying at Y120-level to only a portion of portfolio, he says
USD Slips As Treasury Yields Ease, Bond Price Jump
USD Slips Overnight As Treasury Yields Ease.
The USD was on the back foot overnight after disappointing U.S. corporate earnings weighed on stocks and Treasurys caught a bid. The DJIA shed 1%, while the 10-yr U.S. Treasury yield fell to a two-week low of 2.322%. The USD index printed a fresh one-week low of 97.108. Elsewhere, AUD made a brief recovery after RBA Governor Stevens was less dovish than expected both on rates and the currency. Up ahead, the minutes from the July meeting of the Bank of England’s Monetary Policy Committee are due for release at 0830 GMT, and the recent commentary from Governor Mark Carney hints of a hawkish leaning although the voting pattern is still expected to show an unanimous vote for rates to remain on hold
Foreign Holdings of US Treasurys Jump in May.
Foreign accounts buy a net $53.4B in US Treasury notes and bonds in May, the biggest monthly purchase since February 2014. Private investors accounted for all of the increase with their $57.9B net purchase while foreign governments sold a net $4.6B. The Treasurys market endured a rough patch in May, following eurozone bonds lower, although Treasury auctions conducted that month suggested demand from overseas held up. Holdings rose in China to $1.27T, keeping it the biggest single foreign lender to the US. Japans remains second with its holdings edging down slightly to $1.21T. Belgium’s ranking continues to slip, now sixth with $203B in holdings
Inflation Expectations Down, No Rate Hike
Traders Still Not Expecting September Rate Hike.
The sharp drop in jobless claims fails to generate anxiety over a rate hike in September. Fed-funds futures showed Thursday that investors and traders see a 19% likelihood of a rate increase at the September Fed meeting, according to data from the CME Group. The odds were little changed from a day ago and compared with 17% a month ago. Some analysts have warned that investors may be complacent and that any surprise from the Fed could spark selloff in bonds, esepcially shorter-dated noted. The yield on the two-year note was 0.715% vs 0.706% Wednesday, near the highest of 2015 but remains very low historically.
Inflation Expectations Down Despite Upbeat Yellen.
Fed chief Yellen tells lawmakers she expects inflation to gradually move toward the Fed’s 2% target, but the bond market suggests investors aren’t so sure. The five-year breakeven rate stands at 1.577 percentage point today, the lowest since May. That means investors expect the inflation rate to run at 1.577% on an annualized basis on average over the next five years. That’s down from 1.667 percentage point at the end of June and this year’s peak of 1.863 point on April 23. Even if the Fed proceeds with its plan to raise rates as soon as September, subdued inflation would reinforce the Fed’s approach to go slow, say money managers.
Rosengren Eyes Rate Rise, But Anxious on Greece, Canada
Boston Fed boss Rosengren has long been the voice of caution when it comes to rate rises. Speaking today, he says in a carefully hedged view that if the forecast now held by officials comes to pass, the FOMC should consider rate rises this year. His caveats center mostly on overseas events. Rosengren wants to see events in Greece not get out of control and hit the US economy before supporting a rate rise. He also wants to see inflation pressures rise. It’s not a big evolution in the non-voting member’s views, but all the same he’s showing that Greece and other foreign events are on the Fed’s mind–and that if trouble there gets worse, the debate over rate rises could turn more dovish
If There Was a Canada Recession, It Was ‘Mild’.
Any recession that hit Canada in 1H was “mild,” say economists at Canadian think tank Conference Board of Canada. They’re not persuaded yet the country fell into recession, as defined by two straight quarters of sub-zero GDP, and 1Q’s contraction was “mild and selective.” The think tank, which was the first to call a recession in Alberta, says growth prospects for Canada are positive but modest, regardless of whether a recession emerged. It also notes employment and after-tax income are expanding in 2015 and on pace to beat 2014 results
(market talk, business situation, economic growth and housing, stocks and world commodity prices, interest rates and debt, wall street nasdaq, dowjones shares)
Survey Shows Improving U.S Consumer
Survey Shows Improving US Consumer Sentiment
US consumer sentiment has improved since last year, with Americans more bullish about the economy than at any time since 2010, according to an annual survey by Sanford Bernstein. Half of respondents still don’t feel the economy is improving, down from 59% in 2014. And 39% feel the economy was improving, up from 29% last year. The others say they weren’t sure. Still, respondents remain cautious about what to do with extra cash, prioritizing savings, housing and debt repayment, in that order. The latest survey had 828 respondents. “Overall, we find the results to be positive and in-line with the improving retail environment for US consumers,” Bernstein says
Fisher Not Pepsi’s Sole New Director Today
While former Dallas Fed chief Richard Fisher joining Pepsi’s (PEP) board is grabbing headlines today, he’s just one of 3 new directors effective today. The company said earlier this year it would add Minnesota Twins part-owner and former PEP bottler Robert Pohlad and former Heinz CEO William Johnson, an adviser to Trian (which has called in the past on PEP to break up). Ray Hunt, chairman of oil and real-estate holding company Hunt Consolidated, will retire from the board at PEP’s annual meeting on May 6.
(bond supply, bank rate, currency forecast, institutional investors, sell buy cfd, commodities export import, GDP data, Obama administration, chairwoman decisions)
Sell-off Day for Bonds Before Yellen Next Week — Market Talk
Fears about the Fed raising rates in June continue to rattle the Treasury market. Traders say investors are taking chips off the table as they are concerned Yellen’s tone may be a bit more hawkish in next week’s testimony before lawmakers. But before that is Wednesday’s release of the January meeting minutes. Meanwhile, traders say fast money again leads the selling today as real-money investors have been dip buyers. For now, the buying has failed to arrest yields’ sharp rise this month; the 10-year is at 2.10% versus 2.019% Friday
Meanwhile, the Australian currency back strengthened against the u.s. dollar due to the RBA’s Governor Glenn Stevens statement says he will rethink the possibility of cutting interest rates again in the coming March dismissed.
Strengthening Canada’s currency also rose nearly 1 percent due to the rise in crude oil
central bank, Federal reserve system, asian market, european bank, ecb, stock market, business journal, wall street review and bank analyst predict rate, bond and fund forecast)
BoC Official Say, Canadian Dollar Down
What Exactly Did BoC Official Say Tuesday?
The Canadian dollar is down again, and Canadian bonds are outperforming the U.S., both likely resulting from the dovish policy message many saw in Bank of Canada Deputy Gov. Carolyn Wilkins’ speech yesterday. While RBC says the media are interpreting the speech as an indication the central bank will cut rates again, it thinks the text “was perhaps not that suggestive.” The media–and investors–seizing on the idea there was strong signal in part reflects many people being sensitized to any information relating to BoC monetary policy, and yield differentials between Canada and the US. But it may also reflect the BoC’s new approach to transparency: laying out its view on the economy–and the speech was full of trenchant analysis–and leaving the market to make its own conclusion about probable policy direction.