Wall St. climbs on Bernanke, S&P 500 passes record :
Stocks jumped on Thursday, with the S&P 500 index climbing above its
all-time closing high, after Federal Reserve Chairman Ben Bernanke
reasserted that monetary policy will remain accommodative for some time.
More than 80 percent of shares
on the New York Stock Exchange were higher on Thursday and all 10
S&P 500 industry sectors advanced, led by gains in materials and
Bernanke sparked a rally in equity futures
Wednesday night after he said the U.S. unemployment rate of 7.6 percent
overstated the health of the job market. "A highly accommodative policy
is needed for the foreseeable future," he said.
than being hawkish, Bernanke is saying the right thing that the market
wants to hear," said Yu-Dee Chang, chief trader of ACE Investments in
We are having the following news event at 12:30 GMT (or 14:30 MQ metatrader 5 time):
2013-07-12 12:30 GMT | [USD - PPI core]
US Producer Price Index – Current & Historical Data :
Previous Reading: 0.5% (MoM), 1.7% (YoY)
Analysts Expect: 0.5% (MoM), 2.1% (YoY)
Release Date & Time: Friday, July 12, 12:30 GMT (Released monthly, about 15 days after the reporting month ends.)
Source of Report: Bureau of Labor Statistics, U.S. Department of Labor
Upcoming Release Commentary:
U.S. producer price index gained 0.5 percent in May after falling 0.7 percent in the prior month. The core rate, which excludes volatile items like food and energy, increased 0.1 percent, to record the seventh straight monthly gain. Food prices rebounded from the 0.8 percent decline in April, gaining 0.6 percent. Energy prices climbed 1.3 percent, following a drop of 2.5 percent. Gasoline prices rose 1.5 percent after dipping 6.0 percent in April.
For June, analysts expect a 0.5 percent increase in the top line producer price index, while core PPI should report a modest 0.1 percent increase. Gasoline and food prices likely witnessed a small gain last month. Inflationary pressures remain muted, and the moderate domestic demand makes it extremely difficult for producers to pass on the increased costs to consumers.
U.S. Producer Price Index vs. Core Producer Price Index:
How it impacts the U.S. Dollar:
Since Producer Price Index measures prices at the producer level before they are passed on to the consumers, it is an early indicator of inflation. A rising PPI signals an increase in inflationary pressures, which could force the Federal Reserve to raise interest rates. Similarly, a declining PPI is indicative of falling prices, and may suggest an economic slowdown, which could compel the Fed to slash rates. Since interest rates are the primary factor in currency valuation, a high PPI reading is generally seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish) for the currency. Due to sharp volatility in food and energy prices, which constitute nearly one-quarter of the PPI, analysts and economists prefer monitoring the PPI excluding food and energy, also called the “core” PPI, to get a better picture of the prevailing trend.
Understanding Producer Price Index:
Producer Price Index is a family of indexes that measure the change in the price of finished goods and services sold by producers. The headline figure is expressed as the percentage change in producer price from the prior period. The Producer Price Index comes in three variants:
The Producer Price Index is considered a major precursor of both consumer price inflation and profits, and is very useful for analyzing potential sales and earnings trends.
past data is 0.5% (monthly data)
forecast data is 0.5% (monthly)
actual data is 0.8% (mom) according to latest press release
if actual > forecast = good for currency (for USD in our case)
U.S. Producer Prices Rise More Than Expected In June :
With energy prices showing a substantial increase, the Labor
Department released a report on Friday showing that U.S. producer prices
rose by more than expected in the month of June.
Department said its producer price index rose by 0.8 percent in June
following a 0.5 percent increase in May. Economists had been expecting
the price growth to match the increase seen in the previous month.
food and energy prices, core producer prices edged up by 0.2 percent in
June after inching up by 0.1 percent in May. The increase in core
prices matched economist estimates.
Don't Be Afraid To Buy Into Strength :
In life, “when” matters.
If your coworkers see you out drinking at 8 p.m., they will consider you
a fun loving guy who enjoys himself after work. However, should your
coworkers see you out drinking at 8 a.m., they will consider you an
alcoholic who probably won’t be their coworker too much longer.
To illustrate further, if you take a plate of warm cookies to a new
neighbors house at 3 p.m., you will be considered hospitable and kind.
If you take a plate of warm cookies to a new neighbors house at 3 a.m.,
you will be considered creepy, weird and possibly get shot depending on
your geographical location.
Yes, “when” does indeed matter in life.
In the markets, however, the issue of “when” is much less relevant. This
is contrary to the popular wisdom that insists on timing being such an
important facet of the investor experience. Obsessing over “when” for
investors is one of the biggest stumbling blocks to profits. It creates
trepidation, doubt and anxiety that would not come into the equation if
the issue of “when” was left in the realm of life and out of the realm
Dollar gains after selloff; stocks nearly flat :
(Reuters) - The
dollar bounced back from a steep selloff on Friday while world stock
indexes were nearly flat as investors' focus shifted to mixed U.S.
Gold dipped as the dollar
rebounded and investors booked profits after four days of gains, but was
on track for its biggest weekly advance in nearly two years.
bond prices and commodities have rallied this week while the dollar
tumbled on hints from Federal Reserve Chairman Ben Bernanke that the
U.S. central bank was unlikely to phase out its stimulative bond buying
before the unemployment rate improved further.
U.S. stocks were little changed, a day after the Dow
and S&P 500 hit all-time closing highs. However, the S&P 500
was on track to end the week up 2.5 percent, its best weekly performance
GOLD EASES, OIL CLIMBS
markets have also enjoyed a strong run this week as talk of continued
central bank support has bolstered hopes of a pickup in global growth.
gold was trading down 0.4 percent at $1,279.80 on ounce, having cut
some losses. Bullion was on course for its biggest weekly gain in nearly
two years on easing fears of an early end to Fed stimulus.
Brent oil extended gains and was at session highs in afternoon trading. Brent was last up 97 cents at $108.70 while U.S. crude oil was up 76 cents at $105.67 a barrel.
Weekly outlook: July 15 - 19 :
The dollar was higher against the other major currencies on Friday, recovering from a sell-off earlier in the week after comments by Federal Reserve Chairman Ben Bernanke saw traders reassess expectations on the timing of a possible reduction to the bank’s easing program.The euro was lower against the dollar, with EUR/USD sliding 0.21% to settle at 1.3068, trimming the week’s gains to 1.62%.The euro came under pressure after ratings agency Fitch downgraded France from its triple-A rating on Friday, citing growing government debt levels and the weak outlook for economic growth.The dollar was also higher against the pound and the yen, with GBP/USD down 0.51% to 1.5107 at the close and USD/JPY climbing 0.28% to 99.25. The pound ended the week 1.16% higher, while the yen was up 1.68% for the week.The dollar fell sharply on Wednesday after Bernanke said the Fed will continue to maintain accommodative monetary policy for the foreseeable future, citing low levels of inflation and the high unemployment rate.Bernanke said the bank will not raise interest rates until the U.S. unemployment rate hits 6.5%.The comments came after the minutes of the central bank’s June policy meeting showed that Fed policymakers remain divided over when to begin tapering its USD85 billion-a-month asset purchase program.Around half of Fed policymakers believe the bank should start to scale back bond purchases by the end of the year, while many others believe the labor market still remains too weak.Data on Friday showed that U.S. consumer sentiment ticked lower in July, with the University of Michigan’s consumer sentiment index slipping to 83.9 from 84.1 in June, compared to expectations for a reading of 85.0.Elsewhere, the Australian dollar fell to three-year lows against the greenback on Friday amid concerns over a slowdown in growth in China.AUD/USD hit session lows of 0.8999, the lowest since September 2010, before settling at 0.9050, down 1.52% for the day and ending the week 0.77% lower.In the week ahead, investors will be looking ahead to U.S. data on retail sales, consumer inflation and housing sector activity. Monday’s data on Chinese economic growth will be closely watched and a monetary policy decision by the Bank of Canada on Wednesday will also be in focus.Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.Monday, July 15Markets in Japan are to remain closed for a national holiday.Australia is to publish government data on new vehicle sales, a leading indicator of consumer confidence.China is to release official data on second quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. Beijing is also to produce data on industrial production and fixed asset investment.Switzerland is to publish government data on producer price inflation.Later Monday, the U.S. is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish the Empire state manufacturing index and a report on business inventories.Tuesday, July 16New Zealand is to release official data on consumer price inflation, which accounts for the majority of overall inflation.The Reserve Bank of Australia is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.The U.K. is to release official data on consumer price inflation, as well as reports on producer price inflation and retail price inflation.The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro zone.The euro zone is to release official data on consumer price inflation.Canada is to publish official data on manufacturing sales, a leading economic indicator.The U.S. is to release official data on consumer price inflation, industrial production and the capacity utilization rate.Wednesday, July 17The Bank of Japan is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings.The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank is to hold a press conference after the rate announcement.Canada is to release government data on foreign securities purchases.The U.S. is to release official data on building permits, a leading indicator of future construction sector activity, as well as data on housing starts. The Federal Reserve is to release its Beige book.Thursday, July 18Australia is to publish an index of leading economic indicators and a private sector report on business confidence.The U.K. is to publish government data on retail sales.In the euro zone, Spain and France are to hold auctions of 10-year government bonds.Canada is to produce official data on wholesale sales, a leading indicator of consumer spending.The U.S. is to release the weekly government report on initial jobless claims and the Philly Fed manufacturing index.Friday, July 19In the euro zone, Germany is to release official data on producer price inflation.The U.K. is to release government data on public sector net borrowing.Canada is to round up the week with official data on consumer price inflation.
2013-07-15 02:00 GMT | [CNY - Gross Domestic Product (GDP)]
If actual > forecast = good for currency
China GDP Up 7.5% On Year In Q2 :
China's gross domestic product expanded 7.5 percent on year in the
second quarter of 2013, the government said on Monday - matching
forecasts and slowing from 7.7 in the previous quarter.
On a quarterly basis, GDP added 1.7 percent - missing expectations for 1.8 percent but up from 1.6 percent in Q1.
industrial production was up 8.9 percent on year in June, shy of
forecasts for 9.1 percent and down from 9.2 percent in May.
sales jumped an annual 13.3 percent, beating expectations for a 12.9
percent increase - which would have been unchanged from the previous
Fixed-asset investment for the period of January to June
was up 20.3 percent on year versus expectations for 20.2 percent and
down from 20.4 percent in the month prior.
Aussie dollar edges up after China GDP meets expectations :
dollar clawed higher on Monday after China's second-quarter economic
growth matched market expectations, easing worries that the world's
second-largest economy could be slowing faster than expected.
The Aussie dollar touched an
intraday high of $0.9110 after the release of China's second quarter
gross domestic product (GDP) data, and last stood at $0.9097, up 0.5
percent from late U.S. trade on Friday.
Australian dollar rose since there had been fears that the number might
come in lower. But at the same time, the data wasn't spectacularly good
either," said Satoshi Okagawa, senior global markets analyst for
Sumitomo Mitsui Banking Corporation (SMBC) in Singapore.
annual economic growth slowed to 7.5 percent in the second quarter of
2013 from 7.7 percent - the second straight quarter of slower growth,
official data showed on Monday.
Chinese economic indicators released along with the GDP were mixed,
with retail sales exceeding expectations but industrial output and
fixed-asset investment coming in below market forecasts.