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International financial news

International financial news


[Federal Reserve Beige Book: The U.S. economy expands moderately in the last six weeks of 2019] 
As in the previous report, manufacturing activity in most regions is basically flat; employment in most regions is stable or growing slowly, and the nation ’s labor market is still tight . Most regions mentioned general labor shortages as a factor limiting employment growth, and in a few cases as a factor limiting business expansion. Wage growth has moderated or moderated in most regions. During the reporting period, prices continued to rise slowly, as were input costs. Some regions say that some companies are passing on the cost of tariffs to consumers, mainly retail and construction.

[EIA report: U.S. commercial crude inventories except strategic reserves decreased by 2.549 million barrels to 428.5 million barrels last week] 
From the United States to the week of January 10, EIA gasoline inventories increased by 6.678 million barrels, and refined oil inventories increased by 8.171 million barrels. Inventories rose to a new high since September 2017; last week domestic US crude oil production increased by 100,000 barrels to a record 13 million barrels per day.

[Federal Reserve Daley (no voting right in 2020): Expected inflation rate will continue to reach the 2% target in 2021] 
It is expected that the inflation rate will gradually rise to the 2% target set by the central bank, and it is expected to achieve this in 2021 aims. You need to observe the yield curve, but a lower neutral interest rate means that it will be flatter in the future than in the past. The yield curve you have seen recently is very small and not durable.

[Federal Reserve Kaplan (with voting rights in 2020): The Fed's purchase of Treasury bills has an impact on risk assets] 
The Fed’s increase in reserves by purchasing Treasury bills is one of the factors affecting risk assets. This is not quantitative easing because we have not followed the curve buy. On the other hand, I personally think that this has a certain impact on risk assets. When we buy Treasury bills and inject more liquidity, it is a derivative form of quantitative easing that affects risky assets. “

[Federal Reserve Hack (with voting rights in 2020): The action to appease the repo market at the end of the year was obviously effective, but the funding pressure in September raised many questions, including whether the central bank should expand its toolkit. The Fed is considering supporting the Positive and negative factors on the convenience of purchasing]

[U.S. President Trump's economic adviser Larry Kudlow said the White House is still working on a second round of tax cuts and will be announced sometime in the summer]

[Fed Cashash (with voting rights in 2020): The US economy is generally performing well and the job market is strong; the Fed ’s rate cuts have reduced the risk of a recession to some extent]

[Russian Prime Minister Medvedev announced the resignation of the Russian government] 

According to Russian media reports, Russian Prime Minister Medvedev announced the resignation of the Russian government. Medvedev said that the constitutional amendments mentioned by President Putin in the State of the Union address will have a significant impact on the balance of power and the administrative, legislative and judicial fields after discussion and adoption. Therefore, the Government of the Russian Federation should give the President the opportunity to make all necessary decisions. In this case, Medvedev believes that the current government of the Russian Federation should resign under Article 117 of the Constitution of the Russian Federation. According to RIA Novosti, Russian President Putin stated that he intends to increase the post of Deputy Chairman of the Russian Federal Security Council and intends to propose Medvedev to this post. Putin thanked the current government for its work and asked all members to do their work well before the new government was established.


GMT(time)

Currency

News and Data

10:50

JPY

Producer Price Index (MoM) (Dec)

Machinery Orders (MoM) (Nov) 

Producer Price Index (YoY) (Dec)

Machinery Orders (YoY) (Nov) 

11:01

GBP

RICS Housing Price Balance (Dec)

11:30

AUD

Home Loans (Nov)

Investment Lending for Homes (Nov)

12:30

CNY

FDI - Foreign Direct Investment (YTD) (YoY) (Dec)

House Price Index (Dec)

18:00

EUR

Consumer Price Index (YoY) (Dec)

Consumer Price Index (MoM) (Dec)

Harmonized Index of Consumer Prices (YoY) (Dec)

Harmonized Index of Consumer Prices (MoM) (Dec)

N/A

CNY

New Loans (Dec)

M2 Money Supply (YoY) (Dec)

20:30

GBP

BoE Credit Conditions Survey (Q4)

23:30

EUR

ECB Monetary Policy Meeting Accounts

Summary of investment bank views

National Australia Bank: If the US dollar index closes below 96.91 weekly, it may trigger a mid-term plunge




The National Australia Bank (NAB) released a technical analysis report on Wednesday (January 15) indicating that if the dollar index weekly closes below 96.91, it will become the trigger point of a sharp decline in the medium term. Analysts at the bank said that in the fourth quarter of 2019, the US dollar experienced a sharp decline in two months, but it has not yet fallen below the upward channel. The key point is at 95.85; however, the market still needs to be patient. The RSI indicator on the monthly chart The long-term trend resistance has been tested, so the opening of the downtrend is coming to a close. The rally in January this year may be similar to the short-term rebound in November last year; 96.91 on the weekly chart has supported the US dollar index since the third quarter of 2018, so if it falls below this, it may start to fall sharply in the medium term.


Mitsubishi UFJ Bank: Outflow of Japanese funds is expected to further pressure the yen in the short-term




Tokyo Mitsubishi UFJ Bank (MUFG) writes that the US dollar is expected to strengthen against the yen in the short-term; analysts at the bank said that the signing of the first phase of the China-US trade agreement will not have much impact on the market, of course, market risk sentiment Will be supported; at the same time the existing tariffs have been confirmed to be retained, but this will not cause much damage to market confidence, after all, this is already everyone's expectations. We see that the USD / JPY is currently consolidating near the 110 mark, and the short-term trend is upward. On the other hand, the outflow of funds from Japan is expected to further pressure the yen.


Citi: Australian fire will weigh on economy in short-term, RBA expected to cut interest rates in February




Citi released an assessment report of the Australian fire on Wednesday that the short-term impact of the Australian dollar is negative, but the drag on the economy will not last. The fire in 2019-20 will have a negative impact on the local economy. Consumer spending and investment are expected to decline temporarily, but it is expected to gradually recover.

The fire is expected to have a 0.25 percentage point contraction in Australian GDP in the fourth quarter of 2019 and the first quarter of 2020, but for the whole year, the average negative impact per quarter is only slightly higher than 0.1%. Inflation will also be temporarily affected. A temporary rise in food prices is inevitable, but it will not last. Australian short-term inflation is expected to rise by 0.3 percentage points. The RBA is expected to still cut interest rates by 25 basis points at its February meeting due to short-term fluctuations in inflation and the unemployment rate to maintain a high of 5.2%.


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