News on 20 junho 2013

20:00

Dow -345.42 14,766.77 -2.29% Nasdaq -78.48 3,364.72 -2.28% S&P -40.01 1,588.92 -2.46%

19:20

American focus: the European currency is trading down

The euro exchange rate rose slightly against the dollar, recovering from the lows, but in spite of this, is still trading lower.

Note that the earlier appreciation of the dollar was linked to yesterday's statement from Fed Chairman Ben Bernanke, who said that the central bank is prepared to reduce the volume of purchases of bonds this year and even suspend them in 2014, when the economy will show steady growth.

The current rise of the dollar also helped the U.S. data. First of all, it is worth noting the report from the National Association of Realtors, which showed that sales of existing homes in the U.S. in May to a seasonally adjusted rose 4.2% to 5.18 million homes per year compared with 4.97 million in April, reaching its highest level in more than three years. Economists predicted that sales of existing homes will rise to an annual rate of 5.01 million

Also helped to a report from the Federal Reserve Bank of Philadelphia, which showed that in June, the business activity index rose to 12.5 vs. -5.2 in May. Economists had expected the index to rise to -0.4. Increase in the index was caused by a significant increase in selling and purchase prices, as well as new orders. At the same time, reducing component showed delivery times and inventories.

However, the dollar failed to hold its position after the data from the European Commission showed that consumer confidence in the euro area has grown significantly in the month of June, which further points to signs of recovery in the region.

According to the report, a preliminary index of consumer confidence in the euro zone rose this month to the level of -18.8, compared with -21.9 in the previous month. It is worth noting that many economists had expected a more modest increase of the index - to the level of -21.5. We also add that this figure shows growth for the seventh consecutive month. In addition, it is worth noting that the last value of the index was the strongest in more than a year.

The pound has recovered after falling against the U.S. dollar after data on retail sales in Britain. Retail sales in the UK in May strongly revived after the failure of April, as consumers are willing to use advertising campaigns supermarkets. The data shows that consumers are still willing to spend money, despite the pressure exerted on their budget weak wage growth and inflation. Recent figures may strengthen expectations that the economy continued to grow in the 2nd quarter. National Bureau of Statistics reported that in May retail sales rose by 2.1% compared with April and by 1.9% compared with the same period last year.

Add that support the currency has had a report from the Confederation of British Industry, which showed that activity in the month of June in the UK manufacturing sector remained subdued, as the total number of orders, including export, remained roughly close to their long-term averages. In addition, it was reported that the price expectations also little changed from eight-month low, which was recorded in May. The volume of output also remained largely unchanged from three months earlier, which again disappointed hopes for a strong acceleration in production.

Studies have also shown that some companies have lowered their expectations, though they still expect a modest increase in production over the next three months.

The report showed that 14% of firms reported that the total number of orders was much higher, while 32% of the decline, which made the balance of -18%, in line with the long-term average at 17%. In addition, it was reported that the balance for export orders amounted to 22%, which was the lowest level since January 2013.

The yen fell sharply against the U.S. dollar, which was related to yesterday's statement FOMC. The volume of the QE program is the same, but the statement looked like this: "Downside risks to the economic outlook and the labor market declined in the autumn." The market reacted to the fall in risk appetite, which led to the dollar's rally. In general, the statement sounded more optimistic about the economy, inflation is now less concerned about power, and the labor market is encouraging, that can bring the rate increase.

In addition, the decline contributed to a number of reports on the United States. The index of leading indicators rose 0.1% against the expected 0.2%, while sales of existing homes - by 4.2% against the forecast of +0.6%. We also add that the Philadelphia Fed manufacturing activity improved to 12.5 vs. expected -0.4.

18:20

European stock close

European stocks sank the most in 18 months after Federal Reserve Chairman Ben S. Bernanke said the central bank may end bond purchases next year if the economy strengthens in line with forecasts.

The Stoxx Europe 600 Index (SXXP) plunged 2.8 percent to 284.22 as of 4:32 p.m. in London, the biggest retreat since Nov. 21, 2011. The benchmark measure has declined 8.5 percent since May 22, when Bernanke indicated the central bank could pare stimulus measures as the economy grows. The U.S. jobless rate will fall as low as 6.5 percent next year from 7.6 percent in May, the Fed forecast yesterday.

National benchmark indexes fell in every western European market except Iceland.

FTSE 100 6,159.51 -189.31 -2.98% CAC 40 3,698.93 -140.41 -3.66% DAX 7,928.48 -268.60 -3.28%

China's benchmark money-market rates climbed to records today as the People's Bank of China refrained from using reverse-repurchase agreements to address a cash crunch. The seven-day repurchase rate rose 2.7 percentage points to 10.77 percent in Shanghai, according to a daily fixing announced by the National Interbank Funding Center, the highest in data going back to March 2003.

The Fed will probably taper its stimulus measures later in 2013 and halt bond purchases around mid-2014 as long as the world's largest economy performs in line with its projections, Bernanke told reporters yesterday in Washington after a two-day meeting of the Federal Open Market Committee.

The central bank said it will keep buying bonds at a pace of $85 billion a month, and repeated that it's prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation.

Rio Tinto and BHP Billiton Ltd. (BLT), the world's largest mining companies, lost 4.8 percent to 2,667 pence and 5.1 percent to 1,720 pence, respectively.

The preliminary reading of a Chinese purchasing managers' index for June released today by HSBC Holdings Plc and Markit Economics was 48.3, missing economists' estimates of 49.1. A number below 50 indicates contraction.

Randgold Resources Ltd. tumbled 7.3 percent to 4,304 pence as gold slid to the lowest since 2010. Polymetal International Plc, a Russian gold and silver producer, sank 12 percent to 541.5 pence, the lowest price since it sold shares in London in October 2011.

Swatch, the biggest maker of Swiss watches, and Cie. Financiere Richemont SA, owner of the Cartier brand, fell 5.5 percent to 505 francs and 5.5 percent to 80.45 francs, respectively. Watch exports declined 3.9 percent in May from a year earlier, the Federation of the Swiss Watch Industry said.

Eurotunnel, operator of the Channel Tunnel between Britain and France, plunged 12 percent to 5.51 euros. Les Echos reported the European Commission will demand toll reductions as freight and passenger rates are seen as excessive.

Aberdeen Asset Management Plc (ADN), Scotland's largest money manager, lost 8.3 percent to 366.9 pence as Goldman Sachs Group Inc. downgraded the stock to neutral from buy.

Ashtead Group Plc, the U.K. equipment-rental company, rose 4.5 percent to 655 pence, gaining for a fifth day, after posting earnings that beat estimates and raising its dividend.

17:00

European stock close: FTSE 100 6,159.51 -189.31 -2.98% CAC 40 3,698.93 -140.41 -3.66% DAX 7,928.48 -268.60 -3.28%

16:40

Oil: an overview of the market situation

Oil prices fell sharply, losing in the course of trade of more than $ 2 a barrel, and reached one-week low near $ 103, which was due to pressure from the Chinese data, as well as statements by the U.S. Federal Reserve in reducing the size of the program to purchase assets.

Note that the results of preliminary studies that were presented today Markit Economics and HSBC, have shown that in June, China's manufacturing activity continued to shrink, thus accelerating its pace, which reduces the prospects for sustainable economic recovery.

According to the report, this month the manufacturing purchasing managers' index fell to 48.3, compared with a final reading in May at 49.2. It is worth noting that the index is now at its lowest level in nine months. Recall that the value of this indicator is below 50 suggests contraction in activity in the sector. In addition, the data showed that the volume of new orders and new export orders fell in June at a faster pace.

Studies have also found that the production index for the manufacturing sector fell in June to the level of 48.8 from 50.7, while reaching the lowest level in eight months. Add that employment in this sector has also declined at a faster pace. Meanwhile, the rate of decline has slowed in purchase prices and selling prices for the products continued a downward trend, with the rate accelerating its fall compared to the previous month.

The Chinese authorities have indicated that they tolerate the growth slowdown to give more opportunities for reforms that could be good for the economy in the long term.

Oil is also lost in the price after Federal Reserve Chairman Ben Bernanke said the U.S. economy is growing fast enough to start slowing down the pace of bond purchases this year.

Prices also took a hit from an amazing increase in oil inventories in the U.S., even though the height of the summer driving season, when demand for gasoline increases. Add that inventories rose by more than 300,000 barrels, in contrast to the predictions of experts at -500,000 barrel.

However, it is worth noting that the oil can not fall much further from current levels due to concerns over supply disruptions from the Middle East, where about one third of world production.

The cost of the July futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to 95.40 dollars a barrel on the New York Mercantile Exchange.

July futures price for North Sea Brent crude oil mixture fell by $ 2.84 to $ 102.84 a barrel on the London exchange ICE Futures Europe.

16:20

Gold: an overview of the market situation

The cost of gold has declined substantially, falling at the same time below $ 1,300 per ounce, which was the first time in nearly three years, as traders rushed to sell gold, after the Federal Reserve hinted at a possible decrease in the volume of its asset-purchase program.

Recall that yesterday the chairman of the Board of Governors of the Federal Reserve Ben Bernanke said that the U.S. Federal Reserve may begin to reduce the volume of quantitative easing (QE) later this year if the country's economic recovery will continue at the pace at which the central bank expects. According to him, the decline in purchases in one month does not mean that the Fed will not be able to increase it in the next month, if the data is worse. Perhaps the Fed will stop buying government bonds at about the same time when the unemployment rate to reach 7%, but this is only a guideline, not a hard and a guide to action, Bernanke added. Meanwhile, Ben Bernanke at a news conference he tried to separate the reduction in the purchase of assets from higher short-term interest rates, as many economists expected. He stressed that the rate increase will not happen immediately, even after achieving the stated macroeconomic thresholds in December (including the unemployment rate of 6.5%) - the Fed wants to ensure sustainability of recovery.

Note that since the beginning of 2013, gold was dumped at the price of 22% due to the financial policy of the United States, aimed at the gradual reduction of the volume of stimulation.

The cost of the August gold futures on COMEX today fell to 1299.60 dollars an ounce.

15:30

U.S. Existing Home Sales Jump More Than Expected In May

Existing home sales in the U.S. rose by much more than anticipated in the month of May, the National Association of Realtors revealed in a report on Thursday, with sales rising to their highest level in well over three years.

NAR said existing home sales rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April. Economists had been expecting existing home sales to edge up to an annual rate of 5.0 million.

The bigger than expected increase lifted existing home sales to their highest annual rate since November of 2009, when sales spiked to 5.44 million in response to the home buyer tax credit.