Tag Archives: UK Economy

UK House Price Growth May Finally Be Slowing

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: CAD CPI @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

UK House Price Growth May Finally Be Slowing

The pace of house price growth in the U.K. may finally be slowing, amid concerns about interest rates rising sooner than expected. Home-owner sentiment about what will happen to the value of their house fell in June for the first time in six months, according to recent housing data. This may increase hopes of a soft landing for the property market. There have been fears in recent months of a bubble building, particularly in London. House prices in the U.K. were 9.9 percent higher in April compared with the same month 2013, but in London, they leapt by 18.7 percent over the year, according to data from Britain’s Office for National Statistics. The index was measured between June 11 and 16. On June 12, Bank of England Governor Mark Carney rattled the markets by suggesting interest rates would rise sooner than thought. Those predicting a soft landing pointed out that for most of the U.K., there has not been a recovery in house prices comparable to that in London.

Lagarde: ECB Should Consider QE

IMF Managing Director, Christine Lagarde has expressed that the European Central Bank should contemplate quantitative easing measures by way of purchasing of sovereign bonds, if inflation in the single currency bloc remains low for an extended period of time. Eurozone consumer prices rose by just 0.5 percent year-on-year in May, down from 0.7 percent in April and well short of the ECB’s target of close to 2 percent. The ECB has so far resisted embarking on a quantitative easing program, but has said it stands ready do so if needed. Earlier this month, the central bank revealed new measures to stimulate the economy including taking an unprecedented step on of imposing a negative interest rate on banks for their deposits which essentially means charging lenders to park money with it. Lagarde also pointed to three major risks currently facing the global economy; job creation, a sovereign and corporate debt overhang and geopolitical tensions which, she said “is creating massive uncertainty, and massive uncertainty is not conducive to investment decisions”.

Gold Gains And Moves Further Above $1,300

Gold held strong above the $1,300 level today, maintaining its upward momentum amid escalating violence in Iraq, along with the promise of steady interest rates. Gold for August delivery was up $1.50 to $1,315.60 an ounce. A day earlier, gold exploded for a 3.3% rally to reach its highest point since April 14. Analysts believe gold is destined to stay in a fairly tight range over the short term, with a bias to the upside. The metal should enjoy a degree of underlying support from geopolitical headlines which still remain of concern as they have the ability to seriously destabilise the markets, especially if they result in a further spike in oil prices.

That sums up today’s highlights! Remember that we are constantly updating our social media pages with all the latest market news so keep checking in! We hope you have a profitable day on the markets.

Stocks Rally, Gold Extends Gains As Fed Calms Rate Concerns

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD Unemployment Claims @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Stocks Rally, Gold Extends Gains As Fed Calms Rate Concerns

U.S. stocks jumped on Wednesday after the Federal Reserve played down forecasts by some of its own policy makers that interest rates might rise faster than they previously predicted. Even after rates rise, officials said last month, they might have to be kept at levels considered below normal for longer because of tighter credit, higher savings and slower growth in potential output.

Gold, meanwhile, extended gains to a third session on Thursday, reaching two-week highs. This follows the Federal Reserve’s decision not to increase interest rates any time soon. Gold prices came under pressure last month after Fed Chair Janet Yellen said the U.S. central bank would probably end its massive bond-buying program this fall and could start raising interest rates around six months later.

GBP/USD Remains Near 1-Month Highs

The pound remained near one-month highs against the U.S. dollar on Wednesday, as demand for sterling remained supported by data showing that the U.K. trade deficit narrowed more-than-expected in February. GBP/USD hit 1.6765, the pair’s highest since March 7. The pound remained supported after the U.K. trade deficit narrowed to £9.09 billion from a downwardly revised deficit of £9.46 billion in January. Analysts had expected the trade deficit to shrink to £9.20 billion. Exports in February fell by 1.6% to £23.547 billion, lowest since November 2010, while imports were down 2.2% to £32.641 billion, the lowest since April 2011. The data came one day after the International Monetary Fund upgraded the U.K. growth forecast for this year. The fund nevertheless expects the U.K. economy to expand by 2.9% in 2014, up from a previous forecast of 2.5% in January. The pound also strengthened after upbeat U.K. industrial production data on Tuesday boosted the outlook for the wider recovery and fuelled expectations that the Bank of England may raise interest rates sooner.

Palladium & Platinum See Price Increases

Palladium prices are on the up having seen a 7-percent jump in futures prices year-to-date with analysts seeing a further upside for the commodity, thanks to squeezed supply and growing automobile demand. Currently trading around $782 per ounce, palladium is mainly produced in South Africa and Russia. Ongoing strikes by miners in South Africa and unresolved tension surrounding sanctions on Russia could drive up the prices by triggering supply constraints. If the situation with Russia intensifies or if there is a supply disruption, analysts predict that the price could reach $950 or more. Palladium isn’t the only standout among the metals. Traders are also bullish on platinum, a precious metal also in high demand for industrial use. South Africa produces 70 percent of the metal, and there is far less exposure to Russia. Platinum futures are up nearly 5 percent year-to-date, and were recently trading at $1,441 an ounce. Analysts project a sharp price increase in the prices of both platinum and palladium metals over the next four years and a more stagnant movement for gold, silver and copper.

That sums up today’s highlights! We hope you have a profitable day on the markets.

Fed Outlook: Geopolitical Concerns, Rates Set To Rise

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:

Main Trading Event Of The Day: Several today including USD FOMC Statement @ 18.00 GMT & GBP Annual Budget Release @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Fed Outlook: Geopolitical Concerns, Rates Could Rise At Turn Of The Year

Janet Yellen will chair the FOMC today with wide agreement on Wall Street over the outlook for policy this year and a forecast for stronger U.S. growth this year and next. There are some divisions over what happens to Federal Reserve policy in 2015 with a cloud of geopolitical concern hanging over the outlook but most analysts see the Fed tapering at the meeting today and at each of the remaining meetings this year. On average, analysts see the Fed tapering by around $10 billion at each meeting. The Fed currently is purchasing $65 billion in assets every month to try and drive down interest rates and stimulate the economy. It has signaled it would reduce or taper its purchases by $10 billion at each meeting this year, which would effectively end its purchase program by December. However, investors pricing in a federal funds rate hike in mid-2015 could get caught off guard, according to former Federal Reserve Governor, Robert Heller. Heller believes that markets will force the Fed to tighten a little bit earlier than that, probably around the turn of the year as we approach 2015, which is around the time that the tapering operation should be finished. The Federal Reserve has kept its benchmark interest rate near zero since 2008, when a global financial crisis that plunged financial markets into turmoil. As the Fed now unwinds its massive stimulus program and the U.S. economy recovers, markets anticipate an interest rate increase to follow not too long after the end of tapering. According to Heller, as investors become more become more bullish about the domestic recovery, yields on U.S. government bonds will be pushed higher, encouraging the Fed to follow suit. Other factors being taken into consideration are the recent weak U.S. economic data due to extreme weather conditions and new economic risks on the horizon, particularly China and Ukraine. Nevertheless, the general feeling is that Wall Street is reasonably comfortable with its outlook for Fed policy.

FOMC Statement/Press Conference @ 18.00 GMT

UK Budget 2014: Osborne Supporting A Resilient Economy

George Osborne will set out his plans to support a “resilient” economy in today’s Budget, which will be focused on boosting economic security and aspiration. The budget comes against a backdrop of a strengthening economic recovery, with unemployment and inflation falling and growth this year projected to be the among the strongest of any Western economy. Business groups have forecast that the UK’s total economic output will exceed its pre-recession peak in the second quarter of 2014 after the economy grew by 1.9% in 2013. Osborne is expected to address the UK’s historic economic weaknesses, particularly the need to increase manufacturing output and improve the UK’s balance of payments by boosting exports. He is also expected the chancellor to unveil schemes, incentives and tax breaks for some businesses. Alongside details of proposed tax and spending changes, Osborne will announce the Office for Budget Responsibility’s latest forecasts for economic growth and government borrowing for the years ahead. Deficit reduction remains his number one priority, with the ultimate goal of delivering an annual budget surplus before 2020.

Stocks: Google To Launch New Smartwatch Platform

Google announced earlier this week that smartwatches based on its Android mobile software will be available later this year, enlisting a variety of partners including Samsung Electronics, LG Electronics and Intel, signaling the company’s intent to play a leading role in what could be the next big computing market. Android Wear will allow people to speak into their watches to check sports scores, control music, send replies to text messages and even open their home garages. By aligning itself with a broad spectrum of partners to develop the smartwatches, Google is hoping to replicate the success that helped make its free Android software the most popular smartphone operating system, analysts said. Many believe wearable computers represent the next big shift in technology. More than 130 million smart wearable devices are predicted to ship by 2018.

That sums up today’s highlights! It’s a busy day on the markets so make sure you keep up to date with all the events via our Facebook, Twitter, Google+ and LinkedIn pages.

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