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Threatened Oil Weakens If OPEC Output Cuts Fail

Monday, November 24th, 2014

Ahead of OPEC meeting in Vienna this week, investors will be wary as the risk of a sharp fall in oil prices if OPEC producers' cartel failed to reduce the rate of production.

In fact, some analysts expect the WTI oil price could potentially drop below $ 70 a barrel if OPEC does not implement significant decline in output.

Some of the reasons that may push OPEC to cut production rate significantly is, US crude oil imports from OPEC countries has fallen to its lowest level in 30 years. The decreasing US dependence on oil imports from the cartel that produces about 1/3 of world oil demand caused by the oil shale technology where the US has overtaken the rate of oil production per day Saudi Arabia.

Anxiety reduction in oil imports from OPEC's dominance is the basis for OPEC to keep providing discounted prices, as WTI oil prices below $ 60 is likely to cause one by one company in the US shale oil began offline due to less competitive price.

So far the price of US crude oil futures slightly lower -0.17% to $ 76.37 per barrel, after reaching the highest point at $ 76.95 intraday and daily lows at $ 76.02 per barrel.

News and Economic Review Zone Asia (Japan)

Central Bank Stimulus Drag Yen

Monday, November 24th, 2014

The yen weakened and near its lowest level against the dollar after seven years several central banks in the world to add monetary stimulus, reducing the demand for air-yielding assets such as the yen lower.

People's Bank of China surprisingly cut interest rates for the first time since the year 2012 on 21 November after the closure of regional trade. Cut deposit rates by 0.25% to 2.75%, and the one-year lending rate by 0.4% to 5.6%. PBOC also said it would provide more flexibility in deposit rates.

A few hours before the President of the European Central Bank, Mario Draghi, reiterated commitment on to add monetary stimulus if needed in order to overcome the low inflation in the euro zone and spur the economy. ECB on Friday also reported started to purchase asset-backed security (ABS), which is part of the European central bank's monetary stimulus is

News and Review of European Economic Zone (UK)

Early week, Sterling Moving In Narrow Range

Monday, November 24th, 2014

Sterling moving flat to trade the European session earlier this week, after last week recorded a decline in four successive weeks. The British currency is likely to move in a narrow trading range due to the lack of economic data released from the UK. Market participants are likely to be cautious ahead of US gross domestic product data tomorrow.

GPPUSD traded at around 1.5645 at 17:38 pm, with daily highs and lows 1.5672 1.5627

Sterling last week recorded a weekly decline after the UK Independence Party, the party's anti-EU, won two parliamentary seats in by-elections, and a sign of an increase in political risk ahead of elections next May. UKIP victory is feared to have an impact on British policy towards the EU which is the main trading partners

News and Review of European Economic Zone

German business sentiment strengthens Euro

Monday, November 24th, 2014

The euro rebounded from a two-year low against the dollar after the data German business sentiment rose for the first time in seven months. Institute fo Economic Research reported that German business sentiment for the next six months rose to 104.7 this month after a record decline in six months straight. Figures in November also broke expectations fell to 103.0 by economists, from October's 103.2. While economic sentiment for current conditions rose to 110.0 from 108.4 previously.

The euro extended gains after data showed the US service sector activity fell in November. Markit reported preliminary calculations service sector activity index fell to 56.3 in November from October's 57.1. Figures in November also broke the expectation of rising to 57.3 economists, and became the lowest level since April.

European Central Bank council member Jens Weidmann, said further steps for the new low inflation will be difficult to do and can be facing a legal boundaries. Different things expressed by the President of the ECB, Mario Draghi, said on Friday that the ECB is ready to act quickly in the face of low inflation. ECB on Friday also reported started to purchase asset-backed security (ABS), which is part of the European central bank's monetary stimulus is

News and Review of European Economic Zone (Germany)

German Business Confidence Up in November

Monday, November 24th, 2014

German business confidence levels are surprisingly rose in November, and became the first increase in seven months. Germany myang back economic growth in the third quarter, as well as additional monetary stimulus from the European Central Bank was able to raise the sentiment of businesses.

Institute fo Economic Research reported that German business sentiment for the next six months rose to 104.7 this month after a record decline in six months straight. Figures in November also broke expectations fell to 103.0 by economists, from October's 103.2. While economic sentiment for current conditions rose to 110.0 from 108.4 previously.

The German economy grew 0.1% in the third quarter, after contracting in the previous quarter. Germany is the largest economy in Europe, so that the country's economic growth to be important for the recovery of the eurozone economy. Yet Germany's economic growth rate is still very low, and the Bundesbank had previously said the German economy will lack momentum until the end of this year. The statement looks of business activity both manufacturing and services sectors which are at their lowest level in 16 months in November.

Turned Oil Rises After Trimming China Interest Rate

Friday, November 21, 2014

Once weakened during the Asian trading session and early European session, the oil has now turned higher after China's central bank cut interest rates for the first time since 2012. These measures were taken to reinvigorating the Chinese economy is likely to record the lowest growth in more than three the last decade.

HSBC on Thursday released the initial calculation of China's manufacturing activity this month at 50.0, lower than last month of 50.4, 50.2 and economists' forecasts, which indicate a slowdown in manufacturing activity of the bamboo curtain. The interest rate cut is expected to boost economic activity that could have an impact on the increase in demand for oil. China is the second largest oil consumer in the world.

Dow Jones Newswires reported the central bank of China (PBOC) cut deposit rates by 0.25%, and the one-year lending rate by 0.4%. PBOC also said it would provide more flexibility in deposit rates.

News and Economic Review Zone Asia (China)

China's Central Bank Cuts Interest Rate

Friday, November 21, 2014

China's central bank on Friday cut its benchmark interest rate for the first time in more than two years, in an effort to lower borrowing costs and cope with the economic slowdown. China has so far still stuck in the path to the worst annual growth in 24 years.

People's Bank of China announced that lowered the lending rate by 40 basis points to 5.6%. PBOC also cut deposit rates by 25 basis points, effective will come into force on 22 November.

On the same occasion the Chinese central bank also said that if it would be more flexible in setting interest rates on deposits to raise the ceiling to 1.2 times of the benchmark level, from 1.1 times before.

News and Review of European Economic Zone

Euro Hit By Draghi Comments

Friday, November 21, 2014

The euro fell against the US dollar on Friday after European Central Bank President Mario Draghi said that if the outlook for inflation has dropped to a very low level, which keeps the chance for further monetary easing. The assertion on the readiness of the ECB's Draghi to act in a timely manner is also fueled speculation about the stimulus measures further at the beginning of next month. European stock market responded positively to the comments that, while peripheral bond yields down.

"Draghi has brought a hard blow to the euro, especially the comments which imply worries about inflation expectations. It indicates if the ECB could soon loosen policy," said Niels Christensen, forex analyst at Nordea. "Euro zone inflation data next week is likely to be an important influence on the thinking of the ECB.

News and Review of European Economic Zone

Pessimistic Recovery Against Euro Zone, the ECB Ready Add Asset Purchase

Friday, November 21, 2014

European Central Bank President Mario Draghi speaks at the European Banking Congress in Frankfurt said that the ECB will increase its asset purchases if needed to boost the rate of inflation. "We will continue to carry out our responsibility .. we will do whatever must be done to raise inflation and expectations secepatan possible, according to the mandate of price stability," he said. "If you think our policy projections are still not effective enough to achieve this target, or there is a further risk to the inflation outlook, we will add to the pressure rise and expand our intervention channels, by changing the amount, rate, and the composition of our asset purchases," he said.

The euro zone economy is likely to remain stagnant in the short to medium term, according to the European Central Bank President Mario Draghi on Friday. "Strong recovery seems unlikely to happen in the next few months," Draghi said in a speech at the opening of the European Banking Congress in Frankfurt. The ECB has launched a number of policies to ease credit conditions in the euro zone to boost growth rates and inflation megnatasi that are dangerously low levels. Such policies include cutting interest rates to a record low and announced plans to buy covered bonds and asset-backed securities (ABS).

However, speculation has been circulating about how and when the ECB will start a program of buying government bonds as in the US. Besides Draghi, Jens Weidmann, President of the German central bank (Bundesbank) will also speak at the European Banking Congress in Frankfurt. Weidmann is known as a hawkish ECB Policy Council and has warned of "dangerous path" that may be applied quantitative easing.

Euro seems depressed after the speech of Draghi, dropped to a low level around 1.2470 area.

News and Review of European Economic Zone (Switzerland)

SNB Ready Maintaining Boundaries Franc Exchange Rate

Friday, November 21, 2014

Swiss National Bank (SNB) is ready to take action to defend the exchange rate limits franc against the euro by buying euros in unlimited quantities or with other policies, according to a statement Fritz Zurbruegg SNB officials. The exchange rate of the euro against the Swiss franc is now trading near the lower limit of 1.20 EURCHF has determined the central bank since 2011 after a sharp strengthening of the franc weighed on the performance of exporters and give the threat of deflation.

SNB's Zurbruegg not explain further what other policies that could be the Swiss central bank. However, the SNB had been put forward the idea imposition of negative interest rates on Swiss franc deposits in order to prevent the strengthening of the Swiss currency. SNB's Zurbruegg refused to comment on whether the SNB has resumed after the intervention policy had reached the level 1.2010 EURCHF several times in the past week. The last time the SNB intervened in September 2012. The financial markets are now traded EURCHF 1.2020; not so far from the minimum limit specified SNB EURCHF 1.2000

Ahead of Inventory Report, Oil Rebound

Thursday, November 20th, 2014

WTI crude oil traded higher ahead of the release of US oil inventory report by the Energy Information Administration. Analysts expect US oil inventories will be down by 1.5 million barrels. On Tuesday the American Petroleum Institute reported oil inventories rose 3.7 million barrels in the week ending 14 November.

The abundance of oil supply while demand remains weak has brought the oil entered the bearish market, and is now near its lowest level in four years.

Investors' attention focused on the upcoming OPEC meeting in Vienna 27 November, many are expecting that OPEC will cut oil production. However, a major manufacturer of OPEC, Saudi Arabia and Kuwait appear to reject the reduction of production. OPEC oil production as much as 30.97 million barrels per day in October.

News and Economic Review Zone Asia (China)

The pace of factory activity in China Hampered in November

Thursday, November 20th, 2014

China's factory activity inhibited in November as output contracted for the first time in six months, according to the survey results on Thursday. HSBC manufacturing PMI for November at the level of 50, which separates expansion and contraction, compared to the estimate of 50.3 and the following results at 50.4 in October last. The Australian dollar weakened after the data was released trehadap greenback, trading around $ 0.8607.

The data is the latest evidence that the country's second-largest interconnected economy continues to slow. House price data and recent foreign direct investments are also under estimated. "China is slowing and we think will continue to slow down. Most of the slowdown caused by structural problems, and we think pertumbuhanakan slowed to about 4.5% in the next 10 years. We expect a number of sectors will face serious challenges; especially real estate," said Robin Bew , MD at the Economist Intelligence Unit. Beijing party has signaled increased tolerance to a slowdown in economic growth as the transition from a major investment toward consumption-driven expansion.

News and Review of European Economic Zone (UK)

UK Retail Sales Rebound in October

Thursday, November 20th, 2014

The sharp drop in prices in the shops making UK retail sales rebound in October after a record decline in September. Average prices fell 1.5% in October, led by a decline in the price of the gas station after the decline of crude oil prices.

Office for National Statistics reported retail sales rose 0.8% in October from September. For retail sales in September was revised down to -0.4% from -0.3% the previous release. Meanwhile, when compared with the previous year, retail sales in October rose 4.3%.

Sales of household goods at department store retailer and the largest contributor to the increase in sales volume. The increase in sales also occur in a clothing store, after warmer weather in September to make consumers put off buying winter clothes.

The increase in retail sales signaled the desire of consumers to do shopping, which became the backbone of the UK economy in the first half of this year. Economists had worried about a decline in consumer spending due to a decrease in salary when compared with inflation. But the figures in October showed wages rising above inflation for the first time since the third quarter of 2009.

News and Review of European Economic Zone

Eurozone PMI fell to 16 Months

Thursday, November 20th, 2014

Business activity in the euro zone slowed in November, to signal the economic bloc of 18 countries will slow later this year. Survey of purchasing managers' index (PMI) from Markit's manufacturing and service sectors showed 51.4, down from 52.1 the previous month.

Preliminary calculations of the business activity also gives an overview of the future will still be weak, after the new orders index recorded a decline for the first time since July 2013. The survey also showed businesses cut back their prices due to weak demand, which can be an early indication of weakness zone inflation eruo in this month.

Low inflation is a problem that continues to plague the region, and the European Central Bank has cut interest rates as well as the disbursement of stimulus to boost the economy and spur inflation. The eurozone economy in the third quarter grew only 0.2% from the previous quarter

News and Review of European Economic Zone (UK)

UK Car Production Dropped in October

Thursday, November 20th, 2014

The level of UK car production fell by almost 7% in the annual rate in October and is likely to fail to achieve its annual target due to weakening demand from abroad, according to one industry body said on Thursday. Automakers produce 150.060 cars a month Okotber, fell as much as 6.7% compared to last year, due to a decrease of more than 10% at the level of exports, which is equivalent to 4 out of 5 cars produced in the UK each year. With car production flat so far this year, the Society of Motor Manufacturers and Traders (SMMT) said the possibility of the UK can not achieve the annual target of producing as much as 1:59 million cars, which is expected at the beginning of the year.

SMMT chief executive Mike Hawes said the new model would help the car industry, but the blame can be attributed to a decrease in the level of foreign demand in October, after the data are under levle in 2013 for 3 months in a row. "The industry in the UK car plant is still in a strong position despite the increased uncertainty in the global economy," he said.

Oil Traded Near Low Level 4 Years

Wednesday, November 19th, 2014

Crude West Texas Intermediate and Brent traded near the lowest level in four years in speculation OPEC will reject a proposal to cut output posed several small oil producing countries in it. Ecuador and Venezuela will ask member states of the Organization of Petroleum Exporting Countries to cut excess production, according to the government of Ecuador. Pruning in large quantities may not be approved by the OPEC because it will encourage the supply of oil shale from the US, according to Goldman Sachs Group Inc. US Senate rejects the policy to allow the Keystone XL pipeline that carries oil from Canada to the Gulf Coast.

Oil has tumbled into a bear market as the level of oil production rose highest level in more than three decades and the level of demand slowed. Oil producing countries in OPEC of taking a including Saudi Arabia and Kuwait rejected proposals to cut the supply while others seek measures to prop up the price of oil as prepared to meet on 27 November in Vienna. "Without the intervention of OPEC, we can see a decrease of $ 10- $ 11 on oil prices from current levels," said David Lennox, an analyst with natural resources at Fat Prophets in Sydney, who predicts that OPEC will maintain production targets at the level of 30 million barrels per day. "We think there will be cuts in excess of output and that by Saudi Arabia."

News and Economic Review Zone Asia (Japan)

Kuroda Get Majority Support, Defend BOJ Stimulus

Wednesday, November 19th, 2014

Bank of Japan Governor Haruhiko Kuroda get majority support today as easing monetary policy board retaining the post data show that the world's third largest economy fell into recession. The central bank's promise to increase the monetary base at an annual pace of 80 trillion yen (683 billion dollars), according to the BOJ statement in Tokyo, according economists forecast. Voting shows the results of 8-1, compared to 5-4 for the decision to add stimulus last year. Prime Minister Shinzo Abe postpone the sales tax increase and add stimulus to help the recovery as Kuroda implement asset purchases. Signal slowing inflation raises the risk of the BOJ failed to achieve its target of 2%.

"The BOJ will have to re-add the stimulus," said Takuji Aida, an economist at Societe Generale SA. "The economy is much weaker than expected and will become more apparent that the economy and inflation away from the BOJ scenario." Abe has held early elections to extend his term of office and finish his Abenomics policy. He delayed the increase in sales tax to 10% for 18 months, following a rise to 8% in April to encourage Japan to the fourth recession since 2008.

News and Review of European Economic Zone (Switzerland)

SNB estimated Will Delay Withdrawal Limit Franc Exchange Rate

Wednesday, November 19th, 2014

Swiss central bank will maintain the exchange rate limit fance to 2017 for mencetah impact of unconventional policy of the European Central Bank, according to a monthly survey of economists by Bloomberg. More than half of the respondents mengatkan SNB will not lift the limit franc exchange rate at 1.20 per euro until 2007 or so. Only 3 of the 18 respondents who predicted the existence of the limit next year revocation.

The franc hit a 26-month high against the euro this week as investors are optimistic that the ECB will add stimulus to boost inflation. ECB President Mario Draghi said that the central bank was ready to do more and this week mennyebutkan government bond purchases as a policy tool that can be used. SNB set a limit at 1:20 about 3 years ago after the franc rose toward parity against the euro amid euro zone debt crisis.

"Given our expectations that the ECB will keep interest rates until 2017, it will force the SNB to maintain the minimum exchange rate," said Birgit Heim, senior research analyst at Zuercher Kantonalbank in Zurich. According to the survey, only one economist who predicted the SNB would repeal the limit this year and 3 others predict it will happen in the next year and 2016. The respondents estimate the limit will be lifted on more than 2016 "we do not expect the challenges faced by banks the central moment will be fleeting, "SNB President Thomas Jordan said in an interview with Zuercher Oberlaender, which was released today.

News and Review of European Economic Zone (Greece)

Troika Want Greek Start Saving Policy

Wednesday, November 19th, 2014

The Greek government is still not see the meeting point with the troika over austerity measures that need to be done as a prerequisite disbursement last bailout, according to a Bloomberg report. Greek creditors Troika representatives who presented the IMF, the EU, and the ECB. If agreement can not be reached before December 8 then Greece may not get the next bailout fund disbursement.

Resource persons Bloomberg said the Greek government does not want to run a query troika who want to see additional cost savings of 2.5 billion euros for 2015. The troika representatives seemed quite annoyed with the inability of Athens to show what austerity measures that can be taken to cover the funding shortfall. "There will be no new austerity measures. We will maintain that attitude," said Deputy Prime Minister Evangelos Venizelos Greece after attending a meeting with Prime Minister Antonis Samaras that the process of negotiation with the troika.

News and Review of European Economic Zone (UK)

BoE's Forbes Concerned With UK Current Account

Wednesday, November 19th, 2014

Slowing the flow of funds since the global financial crisis of 2008-09 will make the UK more difficult to fund the current account deficit, according to Kristin Forbes BoE officials. BoE's Forbes pointed out in capital flows between countries has dropped sharply since the global banking system nearly bankrupt seven years ago and has not returned to pre-crisis levels. This can have an impact on the UK economy given its role as one of the world's financial centers.

"The reduction in the flow of international banking capital can make the UK more difficult and more expensive to finance the current account deficit," Forbes said when delivering a speech at Queen Mary University. The current account deficit reached 5.2% of GDP in the second quarter of 2014; not so far from a record 5.6% of GDP in the third quarter of 2013. Forbes said the deficit is not going down any time soon, given the lack of demand from trading partners England.

Japanese recession Drag Oil Prices

Tuesday, November 18th, 2014

Japan is the largest importer of crude oil in the world's fourth in a recession in the third quarter of this year, giving fears of weakening demand for crude oil. WTI crude oil prices in today's trading back down, after last week recorded a decrease of 7 consecutive weeks.

Cabinet Office of Japan reported the Japanese economy contracted by 1.6% in the period from July to September, from the same period the previous year. The contraction was once broke estimate of 2.1% expansion of economists polled by Reuters. GDP contraction in the second quarter was also revised from 7.1% to 7.3%, becoming the biggest slump since the Japan earthquake and tsunami struck in 2011.

The market is now waiting whether OPEC will reduce crude oil production at the end of the meeting of November. While the decline in oil prices in recent weeks to make speculators raised bullish positions on oil, with expectations that OPEC will cut production at its next meeting. Data from the Commodity Futures Trading Commission showed net-long position of oil rose 8.7% from 17-month lows in the week ending November 11th.

News and Economic Review Zone Asia (China)

New House Prices Down 2.6% in China

Tuesday, November 18th, 2014

New home prices in China scored the second annual decline in a row in October, increasing concern the deteriorating condition of the real estate sector. New home prices fell as much as 2.6% in October from the period a year ago, after falling by 1.3% in September, according to the release of data from the National Bureau of Statistics said on Tuesday. On a monthly basis, home prices fell as much as 0.8%, losing streak for 6 months and following a decrease of 1% in September. Economists said the property sector asset bubbles as the biggest risk to the economy of China. The sector contributes more than 15% of the Chinese economy and has a direct impact on the banking sector and construction.

According to Alan Jin, property analyst at Mizuho Securities, the housing sector is still slow, but there are bright spots. "This is a correction in house prices, not collapse. Many people feel this is a difficult year for China's property sector but the actual volume is the second highest level after last year. In China, a lot of demand to replace the old building into a new and modern . the demand is strong enough, "said Jin

News and Review of European Economic Zone (Greece)

People Greece Want IMF Program Ends

Tuesday, November 18th, 2014

Tens of thousands of Greeks held a demonstration as a form of rejection of the implementation of austerity policies implemented by Athens to get the IMF bailout fund disbursement. Greece has six years to run the IMF programs that contribute to high levels of unemployment and reduced living standards. The dominance of disaffection of the people against the IMF program can be seen from the increasing support for the opposition party Syriza were very critical of the IMF bailout program.

Around 40,000 students, workers, and retirees do demonstrations that took place near the parliament building and the US embassy. Giant banner that said 'IMF Out "looks at the rallies that took place Monday night local time. Action clashes had occurred where the police threw tear gas at a group of youths who had melemparkar stones and plastic bottles. Greek trade unions called for a strike even work for 24 hours on 27 November as a form of protest against the austerity measures proposed by the IMF and Europe.

News and Review of European Economic Zone (Germany)

German Economic Sentiment Rebounds in November

Tuesday, November 18th, 2014

German economic sentiment rose for the first time in 11 months after the biggest economy was able to avoid a recession. ZEW economic expectations index reported in the next six months rose to 11.5 in November, rebounding sharply from October by-3.6. Economists had expected a gain of 0.9.

Destatis on Friday reported the German economy grew 0.1% in the third quarter, rebounding from the previous quarter contracted by 0.1%, and the corresponding economists forecast of 0.1%.

For the current economic conditions, sentiment edged up to 3.3 from 3.2 last month. ZEW also reported that consumer sentiment overall euro zone rose to 11.0 in November, from 4.1 the previous month, well above economists' estimates of 4.3.

News and Review of European Economic Zone (UK)

UK Inflation Rise in November

Tuesday, November 18th, 2014

Office for National Statistics reported UK inflation (year-on-year) rose to 1.3% in October from the previous month by 1.2% and higher than economists' estimates of 1.2%. Reported core inflation remained at 1.5%.

UK inflation is under the Bank of England's target of 2% since January. The low inflation has provided a space for the BOE to keep interest rates for longer.

BOE Governor, Mark Carney, the quarterly inflation report last week said inflation would fall down 1% in the coming months, and will re-achieve the target of 2% in three years. Carney also lowered its economic growth England in 2015 to 2.9% and 2.6% in 2016, from a previous projection of 3.1% and 2.8%.