Tuesday, 24 November 2015
Draghi: ECB Immediately Increase Inflation
- European Central Bank President, Mario Draghi said it would provide further stimulus within two weeks.
Draghi said the ECB will do what is necessary to achieve immediate rise in inflation.
"If our policy is not enough to achieve that goal, then we will do what we should do is raise inflation as soon as possible," stated Draghi said in a speech in Frankfurt on Friday (20/11). Draghi also added that in making the assessment of price stability, it will not be ignored the fact that the Euro inflation has been low for some time.
ECB Draghi's comments underscore concern that the inflation rate in the euro area which consists of 19 countries, currently at 0.1 percent, will slip further away from the target of below 2 percent, depressed by a sharp weakening economy and declining oil prices.
- ECB policy makers assess the need for the expansion program of Quantitative Easing (QE) reached 1.1 trillion euros ($ 1.2 trillion), which began in March, or the taking of deposit rates further below zero.
Draghi's comments confirm that the announcement of further stimulus in December is a certainty, according to the Marco Valli, chief euro region economist economist at UniCredit SpA in Milan.
Supervisory Board of the ECB will meet in Frankfurt on December 3 for the next monetary policy meeting. While Draghi and Executive Board Peter Praet, chief economist of the agency, has signaled more monetary easing, some governors have expressed anxiety.
Ardo Hansson Estonia, Slovenia Bostjan Jazbec and German Jens Weidmann has signaled since the last meeting they saw no need for further QE policy now. Weidmann is scheduled to speak in Frankfurt on Friday.
- Praet said in an interview this week that taking action in a state of low inflation is a risk the credibility of the ECB. Draghi said core inflation, which excludes energy and food, is also a signal of price pressure is too weak. The rate was 1.1 percent in October.
The ECB recently bought € 60 billion monthly bond and intends to do so until September 2016. The deposit rate is at a record low of -0.2 percent.
Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. "We expect the ECB to increase the rate of QE by 20 billion euros per month, signaling that the purchase will continue to go beyond September, and extend asset to include municipal bonds.
We also expect a reduction of 10 basis points in deposit rates and the ECB will cut further if necessary. "
Yellen Defends Seven Years of Low Interest Rates in Letter to Nader
- Federal Reserve Chair Janet Yellen, responding to a letter calling for higher interest rates on behalf of savers, said Americans would have been worse off had the central bank not kept rates near zero since 2008, and repeated that she expects to tighten policy “gradually” after liftoff.
- Warning that “an overly aggressive increase in rates would at most benefit savers only temporarily,” she argued in the letter released Monday in Washington that the Fed’s seven-year era of zero rates had sheltered American savers from dramatic declines in the value of their homes and retirement accounts.
- “Many of these savers undoubtedly would have lost their jobs or pensions (or faced increased burdens from supporting unemployed children and grandchildren),” if the Fed had not acted with such force, she wrote.
- Fed officials are widely expected to increase the federal funds rate by a quarter percentage point when the Federal Open Market Committee meets in Washington Dec. 15-16, marking the bank’s first hike in almost 10 years.
Overly Aggressive
- Repeating that she and most of her colleagues expect the pace of policy tightening to be gradual after liftoff, Yellen said “overly aggressive” rate hikes could also undercut the economic expansion and force the Fed to reverse course back to zero, drawing a parallel with Japan, where rates have been stuck near zero for the past 25 years.
- Yellen’s letter responded to a plea from a “group of humble savers” that included consumer advocate Ralph Nader frustrated by low returns gained from traditional bank deposits and money-market accounts.
- “We want to know why the Federal Reserve, funded and heavily run by the banks, is keeping interest rates so low that we receive virtually no income for our hard-earned savings while the Fed lets the big banks borrow money for virtually no interest,” it read. “It doesn’t seem fair to put the burden of your Federal Reserve’s monetary policies on the backs of those Americans who are the least positioned to demand fair play.”
- Yellen told the group that lower borrowing costs helped make large purchases more affordable for American consumers, supporting the economy and creating “millions of jobs.”
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US Interest Rate Increase Optimism The Dollar Strengthens
Begin trading this morning, we reported Stocks closed down affected by fluctuations in oil prices end down and investors are still looking at the US GDP report to be released today. Dow Jones closed down 0.17 percent, at 17,792.68, with a drop in Pfizer shares.
S & P 500 closed down 0.12 percent, at 2,086.59, with the utilities sector led the six sectors were lower.
- The Nasdaq closed down 0.05 percent, at 5,102.48. Meanwhile, Asian stocks opened mixed with investor caution induced weakening of Wall Street. This morning the Nikkei down 0.06% at 19868.07, Kospi up 0.12% at 2006.14, the ASX 200 was down 0.28% at 5261.70.
- Of the commodity markets, spot gold price of LLG at the end of trading early this morning closed down 0.7 percent at 1069.61 dollars per troy ounce, a stronger dollar hampered by official optimism the Fed to raise US interest rates in December.
- While the price of oil futures for WTI December contract closed down 0.36%, to 41.75 dollars per barrel after rising as much as 1 percent on the promise of Saudi Arabia run price stability offset concerns about oversupply in the global oil market.
- Of the foreign exchange market, the US dollar rose to an 8-month highs after hawkish comments pejebat US Federal Reserve to hike US interest rates in December.
- EURUSD fell 0:09%, at 1.0635. GBPUSD dropped 0:43% at 1.5122. USDJPY fell 0:04%, at 122.82. Of the Indonesian capital market, the Composite Stock Price Index at the close of trading early in the week on Monday (203/11) a negative correction, down 0.44% at 4541.07. JCI weakening affected by the weakening of its global exchange.
- European exchanges opened this afternoon negatively affected by the decline in world oil prices and other commodity prices. While Asian markets closed mixed this afternoon, with investors still regard the continued policy to be taken by the US Federal Reserve.
- This further strengthening of the US dollar makes foreign investors withdrew their funds from the capital market of Indonesia to strengthen their investments are denominated in dollars .
- Technically there is support for JCI is expected to move in the range of 4511-4486 Support and Resistance range 4569-4594. Stocks that are interesting to observe today: PWON, PPRO, SRIL, TLKM.
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Crude Oil Prices Down Failed to Respond Positively Stabiitas Plan Prices
Crude oil prices at the close of trading on Tuesday morning (23/11) fell after rising as much as 1 percent on the promise of Saudi Arabia run price stability offset concerns about oversupply in the global oil market.
- Rally in gasoline and ultralow sulfur diesel (ULSD) futures also supported the complexity of petroleum. Traders buy processed products amid strong demand for gasoline triggered the onset of cold weather in the Northeast United States, which will increase demand for heating oil, or ULSD.
- At the beginning of the session, from the broader commodity selloff led by copper and dollar have weighed on oil.
- Saudi Arabia said in a prepared statement that the associated production and oil pengeskpor countries to implement price stability.
- Saudi statement came when oil prices are at 2.5-month low, and was greeted with a mixture of enthusiasm and skepticism.
- Although similar promise in the past, Saudi Arabia and other major OPEC producers have done continuously increasing production to maintain market share, and the price of crude oil has dropped 50 percent over the past year.
- The next OPEC meeting to set a production target will be held on December 4, WTI oil futures prices for December contract closed down 15 cents or 0.36 percent at 41.75 dollars per barrel.
- Meanwhile the price of Brent crude oil futures rose 19 cents, or 0.43 percent, to 44.85 dollars per barrel. Brent oil prices rose more than $ 1 on the statement of Saudi Arabia, but gave up on $ 1 lower before rebounding.
- Gasoline futures jumped nearly 3 percent, the highest in nearly three weeks. ULSD rose nearly 2 percent. Some remain unconvinced rebound in oil will last, pointing to high prices WTI contract approaching more than futures contracts.
- Analyst ZATco Research Center estimates that oil prices may still experience pressure to the negative sentiment in the oversupply of oil.
- The price of oil will be moved through a range of 40.00 to 38.00 Support, if prices turn higher will try to penetrate the resistance range of 43.00 to 45.00.
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Wall Street Closed Down, Investors Looking at the Price of Oil and the US GDP
Wall Street closed slightly lower on Tuesday morning earlier (24/11) as investors examine fluctuations in oil prices and economic reports that US GDP will be released today.
WTI oil futures prices for December contract closed down 0.36%, to 41.75 dollars per barrel after rising as much as 1 percent on the promise of Saudi Arabia run price stability offset concerns about oversupply in the global oil market.
- This day will also be released GDP Growth Rate QoQ 2nd Est Q3 are based on the consensus to increase the position of 3.9%, up from the previous 2.0%.
- Apple shares decline, Goldman Sachs and Boeing weighed on the Dow Jones. Meanwhile, shares of Home Depot contributed the highest rise in the index.
- While the Utilities sector fell more than 1 percent in afternoon trade as the biggest weight in the S & P 500.
- Shares of consumer sectors, energy and materials led the gains in the S & P 500. Alcoa shares closed down more than 4 percent higher as the winner of the materials sector.
- In economic news Monday, the Chicago Fed National Activity Index is at -0.04 in October, up from -0.29 in September.
- Existing home sales showed a decrease of 3.4 percent in October. Treasury yields held little changed, with the result of 2 years at 0.93 percent and 10-year yield fell to 2.25 percent.
- Treasury Department auction generated $ 26 billion recorded two years with high yield 0.948 percent, the highest since April 2010.
- In other corporate news, activist investor Carl Icahn said insurance giant American International Group is "too big to manage" and must be separated into three publicly traded companies. Shares closed up nearly 0.9 percent.
- CVC Capital and Canada Pension Plan Investment Board announced it would acquire Petco for $ 4.6 billion.
- Pfizer shares closed 2.6 percent lower after Allergan announced it would buy about $ 160 billion in the biggest deal ever in the health sector.
- This transaction will allow the drug giant based in New York to move to Ireland to cut US tax burden. Allergan shares ended down 3.4 percent.
- The Dow Jones Industrial Average closed down 31.13 points, or 0.17 percent, at 17,792.68, with the biggest drop in Pfizer shares, while the highest increase is in stock Home Depot.
- The S & P 500 closed down 2.58 points, or 0.12 percent, at 2,086.59, with the utilities sector led the six sectors were lower, while the consumer sector as the top gainers.
- While the Nasdaq closed down 2.44 points, or 0.05 percent, at 5,102.48.
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Indonesia Optimistic Suburbs Apartment Projects Practice Hard, strengthening APLN Stocks Limited
Support PT Agung Podomoro Land Tbk (APLN) against a government project to build one million housing project realized by Podomoro Golf View (PGV) located outside the city of Jakarta and is surrounded view 3 golf courses.
Project on an area of 80 hectares is to be built APLN 25 residential towers with a total number of 37,000 units.
- Prices are set APLN government will appropriate benchmark for a modest home, but equipped with complete facilities and modern.
- Property companies experienced a decrease in financial performance in the third quarter and is optimistic the project will demand a lot of people after last weekend held an election unit in the Main Atrium, Senayan City.
- See the company's past financial performance, APLN the last Q3 net profit Rp368,12 billion or Rp18,83 per share, while the same period in 2014 to reach Rp510,71 billion or Rp24,91 per share.
- But in terms of increased revenue from Rp3,51 trillion to Rp3,92 trillion, and the net profit down the magnitude of the burden borne by the company compared to 2014 both in cost of goods, financial expenses and operating expenses.
- For the movement of its shares on the stock exchange earlier this week (24/11) APLN shares closed 2.2% stronger at the level of 277 after the previous closing at the level of 271 and moved in the range 277-270 with trading volume reached 11 million shares.
- Analyst ZATco Research Center, see the technical indicators, stock prices since 2 weeks APLN last seen successfully out of the previously strong pressure since the beginning of October. Observed MA indicator is still moving down.
- In addition Stochastic indicator is moving up in the overbought area. While the Average Directional Index indicator observed to move down slightly supported by DI are moving up that shows the movement of APLN limited gain.
- With the condition of technical and fundamental supported, predicted recommendation Trading on the target level of support at the level of Rp268 to target resistance at the 300 level.
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Daily Fundamental Dollar 24 November, Rally Continues
The prospect of interest rate hikes by the Fed in December still thin support the strengthening dollar in forex trading early in the week.
But with high hopes of rising dollar overshadowed by US economic data were mixed good manufacturing performance data and existing home sales.
- Plan the Fed announced its monetary policy this evening gave a strong positive sentiment on Asian session trading earlier this week (23/11), especially in the US dollar exchange rate movements.
- Looks spot market this morning the dollar index managed to continue the rally weekend against major currencies. Sentiment fed rate hike in December increasingly hawkish statements include various local leaders of the US central bank in recent weeks.
- So the market saw no major obstacles to the rise time of the reference rate. The movement of the dollar exchange rate will be influenced by several important data such as data prelim third-quarter US GDP is expected to rise to a position of 2% from 1.5%.
- The next consumer sentiment data by the Conference Board survey also climbed to 99.3 from 97.6 index points.
- Both of these data indicated will support further strengthening of the dollar in early trade this morning despite negative move.
- Monitor the strength of the US dollar exchange rate against other currencies on the US dollar index today (00:30:40 GMT) rolling in the range of 99.67, up from 99.71 opening at 0000 GMT.
- Technically, Analyst ZATco Resarch Center see the movement of the US dollar index is based on the high price and low at 99.52 100.02 earlier today, the index is expected to have a resistance in the range of 100.25 and 99.97, while immediate support in the range of 99.47 and 99.25.
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European Stocks Decline Respond initial decline in commodity prices
- European stocks trade on Monday (23/11) opened slide negative impact of oil prices and other commodities.
- Oil prices remained under pressure during Asian trade as global supply surplus, US crude fell about 3 percent and internationally traded Brent benchmark down nearly 2 percent.
- Other commodities, including iron ore, zinc and nickel, which traded lower amid concerns about slowing demand in China. Copper fell to a more than six-year lows.
- Shares of mining giant Glencore fell as much as 6 percent, while the Arcelor Mittal steel shares fell more than 3 percent.
- Other stocks in this sector include Anglo American, Antofagasta and BHP Billiton all trading sharply lower.
- In the oil and gas sector, stock Amec Foster Wheeler, Seadrill and Tullow Oil all in negative territory.
- German energy company RWE shares rose more than 4.5 percent after the company's chief executive told the Frankfurter Allgemeine Zeitung that has no current plans to sell the 25 percent stake in Amprion to help pay the debt.
- He also did not rule out a future capital increase. Credit Suisse announced that it has raised 1.32 billion Swiss francs ($ 1.29 billion) after completing the first stage of the capital increase of 6 billion francs it.
- The lender shares sharply lower. Volkswagen shares are also in the red zone after the US government said more vehicles the German automaker is hit by scandal emissions.
- At the STOXX 600, shares of Home Retail Group UK, rose 6 percent after a report in the Sunday Times stated that the private equity firm is considering a takeover of the owner of Argos and Homebase.
- Ocado grocery delivery company is also traded sharply higher after UBS raised its outlook for the stock from "neutral" to "buy".
- For data of economic indicators, the growth in the French service sector slowed in November while manufacturing activity rose, the index of the Purchasing Managers Index (PMI) Flash to 51.3 in November, down from 52.6 in October.
- German manufacturing and service sectors grew in October. Flash composite PMI in the largest economy in the euro zone there are at 54.9, up from 54.2 in October results.
However, observed at this time, indices moving mixed European region:
- STOXX 600 European index tracked down -0.33% to 380.53
- German DAX index, tracked down -0.20% at 11097.51.
- CAC 40 of France, observed down -0.50% at 4886.28.
- Britain's FTSE 100 index, was observed to turn -0.29% at 6316.20.
- Italy's FTSE MIB index was observed up 0.77% at 22309.99.
- Spain's IBEX 35 index tracked down -0.22% at 10287.90.
- Analyst ZATco Research Center estimates that the European market will try to retain reinforcement to respond to the outcome of the Eurogroup meeting on this night.
- If the results of the meeting gave a positive sentiment for the strengthening of the European economy, it would make the exchanges in the European region strengthened.
- But the potential pressures remain, given the European countries seemed to be constantly alert to the security situation in their respective countries.
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Best Achievement Private Business Zone Euro Since May 2011
In addition to reporting the performance of the German private business according to flash data from Markit Economics also reported business performance of private sector firms in the euro area experienced the highest growth in 4.5 years in November.
- Reports composite index based on a survey of 5,000 companies across the region show an increase in the value of the previous month period. Flash data from Markit today showed the composite output index rose to 54.4 in November from 53.9 in October.
- A stronger business expansion was driven by the expansion of best manufacturing and service sectors, but it is supported by the German private business expansion.
Euro Area Composite PMI
- From the survey report mentioned services sector PMI index increased quite surprising to position 54.6 in November after October are in the position of economists' forecast of 54.1 months decreased to 54.3 positions.
- Similarly, for the manufacturing PMI index rose to 52.8 index points from 52.3 in October, while economists ekspektasikan dropped to 52 index points.
- But the report also noted manufacturing output rose at its highest level in 19 months.
- But the performance of the Euro area's private business could be even higher if the performance of the private business French country has not decreased.
- Because this afternoon Markit also reported the expansion of French private business dropped to 51.3 from 52.6 index points.
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Best Performance of Private Business German In 3 Months
Business firms in the German private sector experienced a fairly rapid growth in November in the last three months based Markit Economics survey on 1,000 companies engaged in the business of manufacturing and services.
- Composite index reports indicated this institution shows the increase in the value of the previous month period.
- Flash data from Markit today showed the composite output index rose to 54.9 in November from 54.2 in October. A stronger business expansion was driven by the improvement in the business performance of the German service sector with the highest rate of increase in 14 months.
Germany Composite PMI
- From the survey report mentioned services sector PMI index increased quite surprising to position 55.6 in November after October are in the position of economists' forecast of 54.5 months decreased to 54.3 positions.
- Similarly, for the manufacturing PMI index rose to 52.6 index points from 52.1 in October, while economists ekspektasikan dropped to 52 index points. However, the report also divatat manufacturing output rose at its weakest level since July.
- By also increasing third-quarter GDP Euro area's largest economy, analysts ZATco Research Center estimates that the business performance of the country's private companies will also be boosted even higher.
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Japanese businesses Out Of Recession; Raise Minimum Wage and Tax Cut
After the Japanese central bank did not change its monetary policy after last week's announcement of an economic recession, the Japanese government is preparing a plan to stimulate the economy economy and reported third-quarter GDP continued to contract during the preceding quarter.
- One that will do the Japanese government is raising the minimum wage of workers who previously had been raised, but still far below the average wage increase in OECD member countries.
- According to a report written in the Nikkei newspaper this morning (23/22), this plan is being prepared by the Ministry of Economy to be proposed at a meeting with the head of the Japanese government this week.
- In this case the Japanese government tried to revive the country's labor market which has long experienced static conditions with declining productivity of the existing workforce in the country, therefore the government will raise the minimum wage of workers by 3%.
- The government is also expecting a rise in labor costs will increase consumer spending society.
- However, according to analyst ZATco Research Center plans the Japanese government is not enough to reverse the economic conditions experienced a recession of up to two times since Shinzo Abe served as Prime Minister in late 2012, because the average minimum wage in Japan last only 780 yen per hour and the increase 3% is still very small and takes longer to boost the economy.
- In addition to wage increases, the Japanese Ministry of Economy also plans to encourage capital spending small companies by reducing the corporate tax rate below 30 percent, but the employers demanded greater tax cuts again.
- With the current conditions of the Japanese economy, the government should prepare a plan that economic structural reform as practiced by the government Jokowi in economic policies launched since the second quarter ago.
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