Selling CADJPY made 65 pips profit.
(details to be added)
(details to be added)
December 10, 2008
November 28, 2008
Japan Unemployment: Points for Interpreting Report
Unemployment rate unexpectedly fell from 4.0 percent to 3.7 in October. However it might be another case showing single numbers, especially the headlines, usually give the least information about the state of the economy and may be even misleading.
Analysts believe that the fall in the unemployment rate reflects the disappointment from job-seekers when the disappointment itself may be just the sign that finding jobs has been increasingly difficult and this is far more consistent with other economic data that point to the recession in Japan.
As a supportive fact, the Job-to-Applicant ratio, which shows how plentiful the job opportunities are, fell to 0.80 at the same period; more than estimates and lowest since 2004.
Industrial Production also fell as much as 3.1 percent from September, showing that the recession might have been deepened. Exports negatively affected both from the sharp slowdown in global economic activity and the recent appreciation of the Japanese yen.
Japan is one of the major oil importers and it is reasonable to see the negative impact of weak economic data on oil prices. Following chart may show that relation.
Analysts believe that the fall in the unemployment rate reflects the disappointment from job-seekers when the disappointment itself may be just the sign that finding jobs has been increasingly difficult and this is far more consistent with other economic data that point to the recession in Japan.
As a supportive fact, the Job-to-Applicant ratio, which shows how plentiful the job opportunities are, fell to 0.80 at the same period; more than estimates and lowest since 2004.
Industrial Production also fell as much as 3.1 percent from September, showing that the recession might have been deepened. Exports negatively affected both from the sharp slowdown in global economic activity and the recent appreciation of the Japanese yen.
Japan is one of the major oil importers and it is reasonable to see the negative impact of weak economic data on oil prices. Following chart may show that relation.
November 26, 2008
Dollar Weakened on Fed's Lending Facility
Tuesday morning the Federal Reserve and the Treasury announced a new plan to make borrowing easier for consumers. The new facility includes $800B trying to revive lending and lowering borrowing costs.
Recent attempts seem to have positive effects. Today's report showed that the average mortgage rates dropped in the U.S. most in seven years and the number of applicants for that mortgages rose in November.
Dollar weakened and gold rose in response to the news; not a surprise considering falling interest rates, or at least the possibility of such fall, and its negative effect on rate of return of dollar-denominated assets.
Also on Tuesday, OECD released its economic outlook for the members. As it was expected the report has nothing but concerns about the economic slowdown and need for further attempts to revive growth. I made profit by selling Euro against dollar before the report and closing the position near the pivot.
Recent attempts seem to have positive effects. Today's report showed that the average mortgage rates dropped in the U.S. most in seven years and the number of applicants for that mortgages rose in November.
Dollar weakened and gold rose in response to the news; not a surprise considering falling interest rates, or at least the possibility of such fall, and its negative effect on rate of return of dollar-denominated assets.
Also on Tuesday, OECD released its economic outlook for the members. As it was expected the report has nothing but concerns about the economic slowdown and need for further attempts to revive growth. I made profit by selling Euro against dollar before the report and closing the position near the pivot.
November 20, 2008
U.S. CPI; the Source of Inflation/Deflation Matters
U.S. CPI fell as much as 1.0 percent in October when a 0.1 percent decline in the Core CPI, which excludes food and energy as volatile items, was even more impressive.
But what does it mean for the economy? The answer depends on the sources of inflation/deflation. Price pressures can ease by different reasons. Demand and cost are two main sources of changes in inflation headlines.
A significant decline in cost-structure, like the recent sharp drop in commodities prices, could result in an increase in output but at lower prices. But when prices are falling in response to lower demand, may be because consumers are pessimistic about the future and cutting back in spending, then falling output and rising unemployment could be more probable.
It is the first time since 1982 that the Core CPI declines, reflecting that the slowdown has not been limited to commodities prices but it is now the whole economy which faces the danger of deflation.
It means nothing but lower interest rates. Following charts show the market's reactions after the CPI report. U.S. dollar weakened against its major counterparts though some analysts believe that technical reasons could be also blamed for that excessive reaction.
But what does it mean for the economy? The answer depends on the sources of inflation/deflation. Price pressures can ease by different reasons. Demand and cost are two main sources of changes in inflation headlines.
A significant decline in cost-structure, like the recent sharp drop in commodities prices, could result in an increase in output but at lower prices. But when prices are falling in response to lower demand, may be because consumers are pessimistic about the future and cutting back in spending, then falling output and rising unemployment could be more probable.
It is the first time since 1982 that the Core CPI declines, reflecting that the slowdown has not been limited to commodities prices but it is now the whole economy which faces the danger of deflation.
It means nothing but lower interest rates. Following charts show the market's reactions after the CPI report. U.S. dollar weakened against its major counterparts though some analysts believe that technical reasons could be also blamed for that excessive reaction.
November 18, 2008
Update: U.K. CPI and U.S. PPI
There was limited reaction to the U.K. CPI which declined 0.7 percent to 4.5 percent annually, the sharpest in at least eleven years. It might be overshadowed somewhat by frequent news from the troubled auto industry in the U.S.
The U.S. PPI declined 2.8 percent just in October, more than analysts' estimates, but the Core PPI which excludes the volatile food and energy prices rose again showing that the recent sharp drop in commodities prices still needs time to be passed through the production channels.
The U.S. PPI declined 2.8 percent just in October, more than analysts' estimates, but the Core PPI which excludes the volatile food and energy prices rose again showing that the recent sharp drop in commodities prices still needs time to be passed through the production channels.
Subscribe to:
Posts (Atom)
Posts
