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russia
Quartz Daily Brief—More #Russia sanctions, #Scotland “No” leads, Pistorius’ final verdict, camel leotards
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Rate decision in #Russia will depend on scope of new #sanctions announced today 08/09/2014
Quotes from UniCredit Research: -The rate decision in Russia will depend on the scope of new sanctions announced today by the EU and the US. After NATO’s meeting in Waleslast week, markets anticipate further sanctions targeting the financial and energy (oil) sectors and a 50bp rate hike is already priced in. -The RUB had a rollercoaster week last week, with news of a possible truce bringing USD-RUBbelow 36.8 (-2.15%) on Wednesday, only to have the good news denied by both Russia and Ukraine. Fighting in Eastern Ukraine, followed by the announcement of another truce (this time between Ukraine and the rebels) increased USD-RUB volatility on Friday, with the pair ending the week above 37. -With inflation rising to 7.6% yoy in August and core inflation at 8.0% yoy, the danger of RUB depreciation spilling over to consumer prices increases. We expect the CBR to be on hold at 8.0% (in line with consensus), but risks of a hike are significant if the EU and the US propose a meaningful set of sanctions today and the RUB again comes under pressure. |
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Source: FxWire Pro
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Quartz Daily Brief—#NATO and #Ebola summits, #Putin’s ceasefire plan, #Bloomberg retakes control, snail farming profits
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#Eurozone #stagflation vis-a-vis #ECB #monetary #policy
he European Central bank meeting on Thursday is the prime event for markets seeking clarity on the bank’s response on Deflation in the euro zone. Euro zone inflation weakned to 0.3% in August, well below the ECB 2% target, raising fears that Europe is sliding towards deflation. Impact of Ukraine crisis on Europe Increased Geo political risks from conflict in Ukraine forced Europe to sanctions on Russia. Russia is third biggest trade partner of Europe. Russia is the fifth largest importer of food after EU, US, China and Japan. Russia is major buyer of European fruit and vegetables. The EU takes more than 45% of Russia exports but only 3% of EU exports go to Russia. This sanction on Russia will further reduce the Growth of EU. Unemployment ECB president Draghi in Jackson hole economic policy symposium highlighted the role and importance of unemployment in guiding monetary policy decisions. Reasons for the unemployment are the long recession. The rapid unemployment increase since 2008 can be attributed to two consecutive economic recessions. The first increase in unemployment occurred after the Great Recession in 2008 which impacted the U.S. and world economies. The 2008-2011 Icelandic financial crisis hit the Euro zone. What to expect from ECB |
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Source: FxWire Pro
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Continued Improvement in #Manufacturing Boosts #Transportation #Stocks to New Highs
The US dollar continued to rally against the Japanese yen and dragged US interest rates higher. The 10-year yield rose 7.5bps, it’s worst performance in months, and the curve steepened. More than $13 billion of new corporate credit issuance priced today, exacerbating the declines. Other highly-rated sovereign bonds were also weak, which contributed to the movement in the US.
Geopolitical tensions between Russia, Ukraine, and the West remained high today. Sharp words were exchanged between various EU political leaders and Russian President Vladimir Putin in the past 24 hours. However, news reports later in the day revealed that a new round of financials sanctions on Russia from the EU would not include restrictions on its natural gas exporters (Europe obtains more than 30% of its gas from Russia) or its SWIFT banking system.
Although the S&P 500 (SPX) only finished the day down a single point, many of the underlying sectors were hit hard. Utilities stocks were the second worst performers, falling 1.02%, thanks to the significant weakness in US interest rates. Energy was the worst off as brent and WTi crude oil fell by more than 2% as the market began to reduce the risk of a potential cutoff of Russian supplies.
The August reading of the ISM manufacturing index rose to 59.0 from 57.1 in the month prior, also ahead of the 57.0 expected. New orders, production, and inventories all rose. The single month reading was the highest in more than three years and reflected a continue improvement in the breadth of manufacturing activity. Transport stocks were among the best performers for today’s session.
News was revealed today that Home Depot (HD) was subject to a large cyberhack that may have compromised its credit card system. The stock was immediately hit for a 4% loss and a number of security providers such as FireEye (FEYE) were bid up.
Tomorrow will mainly be another day of waiting for Thursday’s big event, the ECB rate decision. The Fed will release its Beige Book in the afternoon and July factory orders will be reported in the morning. Auto sales, which finally began to show an inkling of deceleration back in July, will be reported some time around the close.
Unlike in the US, there will be a plethora of important economic data reported overnight. These include preliminary 2Q eurozone GDP, Australian 2Q GDP, two Chinese services PMI’s, similar reports from the UK and Japan, and a speech from Reserve Bank of Australia Governor Stevens. Of the listed, the eurozone GDP report will most likely carry the most weight as it will help determine how dovish the ECB’s statement will be on Thursday.
Toll Brothers (TOL), H&R Block (HRB), and PVH Corp (PVH) are scheduled to report earnings tomorrow.
Quartz Daily Brief—French jobs, $10 billion Snapchat, Russian warming, calm whales
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Quartz Daily Brief—Ukraine-Russia talks, Amazon’s YouTube, Time Warner layoffs, British fast food
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FX market briefs 12/08/2014
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Source: FxWire Pro
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Market movers today 12/08/2014
Quotes from Danske Bank: -Focus will continue to be on the international geopolitical situation, albeit tension at least for now appears to be easing. In Ukraine the risk of an imminent Russian intervention appears to have eased after Russia yesterday announced that major military exercises along the Ukrainian border have ended. -However, so far there are no signs that the Ukrainian government will stop its offensive in eastern Ukraine and it remains a major uncertainty how Russia will respond to the outlook for a possible Ukrainian victory. In Gaza the three-day temporary cease-fire is holding and negotiations about a permanent ceasefire restarted yesterday in Cairo. Finally, in Iraq the US bombings appear to have halted ISIS’s advance. -We have a relatively light data calendar today. In Europe the most interesting release is the German ZEW business sentiment indicator for August. We expect both current conditions and the expectations component to have declined further,underscoring that the German export engine has lost some steam recently. -In the US the Small Business Confidence for July also deserves some attention. Although it declined slightly in June, it remains strong with more and more companies reporting that they intend to increase prices and have difficulties filling vacancies. |
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Source: FxWire Pro
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