Forex News

The economy of Panama grew 40.4% year-on-year in the second quarter of 2021, the biggest gain ever, after a record slump a year earlier due to the coronavirus crisis. Government support and the vaccination progress allowed health authorities to reduce or eliminate the restrictions. Main increases were seen for transport and communications (29.8%); trade (23.9%); real estate (15.3%); rice (5.2% ) and corn (7.7%); cattle (16.2%), pigs (24.1%) and poultry (19.4%). On the other hand, financial services decreased 5.3%.

The Ibovespa sank 2.1% to 111439 on Friday, the lowest since March 9th, and booking a 2.5% loss on the week after President Jair Bolsonaro signed a decree to raise taxes on financial transactions for three months to pay for the so-called Auxílio Brasil pandemic welfare program. The discussion around "Precatorios", payments ordered by the top court in cases lost by the federal government, also remains in the spotlight. At the same time, investors turned more cautious ahead of the next week's central bank policy meetings, including those from the Federal Reserve and the Brazilian central bank.

Gold ended around $1750 an ounce level on Friday, close to levels not seen in a month, and booking a 1.9% fall on the week, amid a dollar surge ahead of the FOMC meeting next week. The bullion dropped for a second consecutive week as traders await more details from the Fed next week on when tapering will begin. Recent data for the US painted a mixed picture. The Michigan consumer sentiment was slightly below expectations, raising fresh questions about the pace of economic growth and the inflation outlook. Also, retail sales unexpectedly grew in August while the number of Americans filing new claims for unemployment benefits rose to 332K last week from a pandemic low of 312K. Meanwhile, the spread of the Delta variant and worries over the impact it will have on the economic recovery capped some losses.

The S&P/TSX ended 112 points or 0.5% lower at 20490 on Friday, the lowest since August 23rd and booking a 0.7% loss for the week, tracking a general risk-off sentiment as investors worry over a slowdown in global growth, risks from China, the spread of the coronavirus delta variant, and uncertainties over the Fed's next steps. A drop in oil prices also pushed energy shares down. On the other hand, shares of Canadian National Railway surged 2.4% as the company will resume a previously approved share buyback. On the political front, all eyes are on the next week's election. Canadians vote on their next federal election this coming Monday, with polls offering a dead heat in between incumbent Trudeau’s Liberals and O’Toole’s Conservatives.

US stocks finished sharply lower on Friday, with the Dow Jones losing 166 points to 34585, close to levels not seen in 2 months. The S&P 500 dropped 41 points to a one-month low of 4433 dragged down by materials and technology sectors and the Nasdaq declined 138 points to a near 3-week low of 15044. Investors are cautious ahead of a highly-anticipated FOMC meeting next week when the Fed is expected to provide more details on the tapering timeline. Recent economic data painted a mixed scenario, increasing doubts on when the Fed will start cutting stimulus. The Michigan consumer sentiment disappointed and continued to point to the least favorable economic prospects in more than a decade. Also, retail sales unexpectedly rose and inflation eased more than expected while jobless claims were above forecasts and the payrolls report disappointed. On the week, the Dow lost 0.1%, a 3rd straight week of losses. The S&P 500 fell 0.6%, its second consecutive drop. The Nasdaq declined 0.5%.

The economy of Azerbaijan grew 3.6 percent year-on-year in the January-August period of 2021, compared to a 3 percent contraction a year ago. It was the fastest economic expansion during the first eight months of the year since 2015. From the production side, the strongest contributions came from retail trade (2.7 percent) and industries (2.6 percent). Additional support was seen in information & communications (6.1 percent) and agriculture (5 percent). Excluding oil & natural gas output, the economy advanced 5.7 percent during the period.

Colombia’s trade deficit widened to USD 1.5 billion in July of 2021 from a USD 1.1 billion deficit in the corresponding month of 2020. Exports surged by 27.4 percent over a year to USD 3.3 billion, as outward shipments grew mostly for manufactured goods (42.4 percent), fuels and extraction industries (36.2 percent), and food, beverages, and agriculture (17.8 percent). Similarly, imports jumped 31.7 percent over a year ago to USD 4.8 billion, amid increases in extraction industries (44.2 percent), manufacturing (32.5 percent), and food, beverages, and agriculture (22.9 percent). The largest export partners were the US (28.6 percent), China (10.3 percent), and Ecuador (6.2 percent), while the largest import partners were the US (19.5 percent), Mexico (6.2 percent), and Brazil (4.9 percent).

Italy Stock Market dropped 254 points. Losses were led by Stellantis N.V. (-3.45%), Tenaris S.a. (-3.21%) and STMicroelectronics (-2.74%). Offsetting the fall, top gainers were Moncler (2.53%), CNH Industrial (1.92%) and Atlantia (1.89%).

France Stock Market fell 53 points. Leading the losses are Stmicroelectronics (-3.09%), Air Liquide (-2.62%) and Schneider Electric (-2.49%). Top gainers were FAURECIA (2.33%), Kering (1.85%) and Air France-KLM SA (1.70%).

United Kingdom Stock Market dropped 51 points. Losses were led by Anglo American (-8.11%), BHP Group (-4.80%) and Rio Tinto (-4.28%). Offsetting the fall, top gainers were TUI (5.78%), IAG (4.79%) and Easyjet (3.53%).

Imports to Colombia were up 31.7 percent over a year ago to USD 4.801 billion in July of 2021, following a 69.8 percent surge in the previous month. Despite the high reading, imports increased at a slower pace for fuels and extraction industries (44.2 percent vs 267.2 percent in June), manufacturing (32.5 percent vs 66.3 percent), and agriculture, food, and beverages (22.9 percent vs 45.7 percent). Among major trading partners, imports went up the most from Argentina (315.9 percent), and India (102.9 percent).

The DAX 30 sank 1% to a 2-month low of 15490 on Friday, as global growth concerns, the lingering threat of COVID-19 and tighter regulation of Chinese firms continue to weigh on sentiment. Investors are also bracing for next week's central bank policy meetings, including those from the Federal Reserve and Bank of England, as a batch of economic data from the US and UK released this week casted doubt on the central banks' timeline to begin asset tapering. On the week, the DAX 30 lost 1.3%.

Uranium futures skyrocketed to almost $50 a pound, the highest since August 2012 after Sprott Physical Uranium Trust resumed purchases after Canadian securities regulators approved the expansion of the equity sales program allowing the fund to purchase up to $1 billion in additional uranium in the next few months. The futures are up more than 50% since the beginning of August after the fund started aggressively buying physical uranium. The commodity is projected to be in high demand as governments from the US to China see a role for nuclear power in their clean energy programs. Meanwhile, the supply remains tight. Euratom Supply Agency said that the Coronavirus pandemic has significantly influenced the market as several companies announced in the second quarter of 2020 measures leading to an important decrease in production and related services. Also, Kazatomprom, the world's largest uranium producer decided to keep production flat in 2022 and 2023.

The Brazilian real was trading around 5.3 per USD in the third week of September, its lowest since August 24th, amid a stronger dollar and caution ahead of Brazil's central bank's policy meeting next week. Traders turned cautious after central bank chief Roberto Campos Neto earlier this week said he would not change his plans with every indicator showing high inflation pressures. At the same time, concerns are mounting that President Bolsonaro might pursue populist measures harmful for the economy, given its weakened position ahead of elections next year. Elsewhere, worries persist that the spread of the Delta variant and possible new strains could derail a global economic recovery, along with doubts on when major central banks will start to reduce massive monetary stimulus.

Iron ore with 63.5% iron content for delivery to Tianjin fell further to almost $110 a tonne, less than a half of a record high of $230 hit in May and the lowest level since August 2020 after China, the world’s biggest steelmaker doubled down on production curbs and as a sharp downturn in China’s property sector brought down the demand. The Chinese city of Handan became the latest region to implement restrictions on steel output after provinces of Anhui, Gansu, Fujian, Jiangsu, Jiangxi, Shandong, and Yunnan were told to limit their production to 2020 volumes amid China’s efforts to curb carbon emissions. Meanwhile, home sales in China slumped 20%, according to Bloomberg calculation, and one of the biggest property developers Evergrande is on the brink of default.

The Central Bank of Azerbaijan raised its official discount rate by 25 basis points to 6.5% on September 17th 2021, citing an intensification of inflationary pressures in the global economy, namely in prices of food, raw materials, transportation and logistics. The 12-month inflation rate climbed to 6.7% in August, deviating from the central bank target range of 2% to 6%, driven mostly by prices of food and services. Nonetheless, GDP advanced 3.6% in the January-August period of 2021 over the same period a year earlier, showing the economy remained on the growth trajectory amid ongoing macroeconomic stimuli and rising external and domestic demand. Looking ahead, policymakers said global commodity prices, import prices, pandemic-related production and logistical issues, and a faster growth rate of aggregate demand all constituted risk factors that could lead to stronger inflationary pressures.

The Baltic Exchange Dry Index rose 1.4% to 4,275 on Friday, its highest since November of 2009, unerpinned by gains across all vessel segments and ongoing shipping constraints. The capesize index, which tracks iron ore and coal cargos of 150,000-tonnes, advanced 1.8% to 6,420, not far from a 12-year peak scaled on September 14th; and the panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and grains, rose for a seventh straight session, adding 1.4% to 3,904, its highest in three weeks. Among smaller vessels, the supramax index increased 24 points to 3,307. The Baltic Dry Index climbed 10.6% in the third week of September, its first weekly gain in three.

The CAC 40 lost its momentum to close 0.8% lower at 6,570 on Friday’s quadruple witching day, a level not seen in over seven weeks, amid a growing risk aversion sentiment due to persistent concerns about the pandemic and the strength of the economic recovery. Still, gains in heavyweight luxury stocks Hermes (+1.1%) and Kering (+2.4%) prevented the index from ending lower. On corporate news, Vinci won an appeal in the Paris Court for a €3 million fine to be paid by Bloomberg over false news about the infrastructure company. Additionally, Renault announced it will sack 2,000 engineering and support jobs and recruit 2,500 new workers in France, amid a mass transition toward EVs. For the week, the index ended 1.5% lower.

The S&P/TSX composite traded in the red on Friday to a 3-week low of 20,466.11, in line with a global cautious sentiment as investors worry over slowing growth and the spread of the coronavirus delta variant. Energy, mining, and utilities were among the biggest losers while financials fell to a lesser extent and industrial stocks booked marginal gains. Meanwhile, Canadians vote on their next federal election this coming Monday, with polls offering a dead heat in between incumbent Trudeau’s Liberals and O’Toole’s Conservatives.

The dollar index rallied to around 93.2 on Friday, the highest since August 22nd, after the Michigan Consumer Sentiment came below forecasts, raising further uncertainty on when the Federal Reserve will start cutting stimulus. Early in the week, fresh data showed retail sales unexpectedly rose in August and the inflation slowed more than forecasted but remained high. Investors now await the FOMC meeting next week for further clarity on when the Fed will start cutting stimulus. On the week, the dollar gained 0.7%, a second straight week of rises.