UK Stocks Head for Positive Start
Contracts on the FTSE 100 futures traded higher on Thursday as the earning season gets rolling while travel shares were boosted by England’s decision to scrap quarantine for fully vaccinated EU and US visitors. Royal Dutch Shell boosted its dividend and launched a $2 billion share buyback programme after second-quarter profits jumped to their highest in over two years following a sharp rise in oil and gas prices. Meantime, the UK government announced that people who were fully vaccinated in the EU or US will not need to isolate when coming to England, Scotland and Wales from an amber list country. Globally, investors react to the US Federal Reserve’s reiteration of its dovish policy stance, with Powell saying that although the economy has made progress, it still has some way to go before the central bank would look to tighten its accommodative monetary policy stance.
The Nikkei 225 Index went up by 0.63%
Japan Stock Market gained 173 points. Gains were led by Nissan (8.79%), Advantest (6.24%) and Sony (4.18%). Biggest losers were CyberAgent Inc (-9.45%), TDK (-4.82%) and Yahoo Japan (-3.14%).
European Shares Set to Open Higher
European futures pointed to gains at the open on Thursday, as investors react to another round of earnings and the latest Fed decision. Volkswagen posted record earnings in the first half of the year; Royal Dutch Shell’ second-quarter profit was the highest in over 2 years and Europe’s Airbus reported better-than-expected half-year results. Meantime, Credit Suisse reported second-quarter earnings that missed expectations. Elsewhere, the UK government announced that people who were fully vaccinated in the EU or US will not need to isolate when coming to England, Scotland and Wales from an amber list country. Globally, investors react to the US Federal Reserve’s reiteration of its dovish policy stance, with Powell saying that although the economy has made progress, it still has some way to go before the central bank would look to tighten its accommodative monetary policy stance. On the economic calendar, the Eurozone business survey and Germany inflation rate will be in the spotlight.
Danish Business Confidence Strongest in 4 Years
The manufacturing confidence indicator in Denmark increased to 6 in July 2021 from 4 in the previous month. It was the strongest reading since July 2017, as sentiment improved were seen in production (24 vs 23 in June) and stock of orders (-6 vs -9), amid easing the lockdown measures to combat the spread of the coronavirus. Meantime, expectations of stocks of finished goods deteriorated (-1 vs 1).
South Africa Private Credit Unexpectedly Falls
South Africa's private sector credit unexpectedly declined by 0.64 percent year-on-year in June 2021, missing market consensus of a 0.4 percent gain and after a 0.42 percent fall a month earlier. This marked the fourth straight month of negative reading since February. Meantime, expansion in the broadly defined M3 measure of money supply increased by 0.12 percent in June, compared with forecasts of a 1.7 percent rise and after a 1.82 percent increase in May.
German Jobless Rate Stays at 13-Month Low
The seasonally adjusted unemployment rate in Germany stood at 3.7 percent in June 2021, unchanged from the previous month. Still, it was the lowest jobless rate since April 2020, as the number of unemployed declined 1.2 percent to 1.58 million while employment edged up 0.1 percent to 41.42 million. Still, the number of persons in employment in June was down by 1.3 percent, or 573,000 on February 2020, the month before restrictions were imposed due the coronavirus pandemic in Germany. The youth unemployment rate, measuring job-seekers under 25 years old, declined to 7.5 percent from 7.7 percent.
US Dollar Eases
The dollar index was at a more than two-week low of 92.1 on Thursday after the US Federal Reserve said that the economic recovery is on track despite a rise in COVID-19 infections and that the central bank is in no rush to withdraw stimulus. Policymakers mentioned they were moving ahead with discussions about tapering stimulus but did not set a timeline. On the price front, the central bank reiterated inflation has risen due to transitory factors. The dollar topped a 4-month high of 93.19 early in July, extending a rally from mid-June after the Fed sharply raised its forecasts for inflation this year and brought forward the time frame on when it will hike interest rates and as the rapid spread of the coronavirus delta variant prompted growth concerns.
Indian Rupee Hits 4-week High
USDINR decreased to a 4-week low of 74.233
Gold Prices Rise to Near 2-Week High
Gold prices jumped 0.9% to a near two-week high of $1,815 an ounce on Thursday, amid softening dollar and signal by the US Federal Reserve that the central bank is in no rush to taper stimulus as the central bank on Wednesday left the target range for its federal funds rate unchanged at 0-0.25% and bond-buying at the current $120 billion monthly paces. Meantime, the US dollar fell to a more than two-week low, amid a more dovish Fed statement. Traders now anticipate the US weekly jobless claims data later in the day.
Singapore Producer Prices Rise the Least in 3 Months
The Domestic Supply Price Index in Singapore increased 16.8 percent from a year earlier in June 2021, slowing from a downwardly revised 18.0 percent gain in the previous month. This was the fourth straight month of increase in domestic supply prices and the weakest pace since March, as mineral fuels prices increased much less (76.1% vs 109.5%), while crude materials excluded fuels prices continued to rise (5.7% vs 4.0%). Also, prices advanced softer for both animal & vegetable oils (52.6% vs 57.2%) and chemicals & chemical products (9.9% vs 12.2%). In addition, prices of beverages & tobacco fell faster (-0.8% vs -0.5%). On the other hand, prices of manufactured goods rose more (9.3% vs 6.8%), while prices rebounded for both food & live animals (1.5% vs -0.3%) and machinery & transport equipment (1.3% vs -1.1%). Meantime, prices of miscellaneous manufactured articles continued to drop (-0.3% vs -1.4%).
Oil Extends Gains
Oil prices rose on Thursday, increasing for the second straight day, amid a larger than expected inventory draw and expectations of stronger demand. Both EIA and API reports show a bigger than expected drop in US crude oil stocks in the latest week. Risk appetite was also lifted by a statement by the Fed Wednesday that the US economic recovery is still on track despite the rise in COVID-19 cases. Meantime, President Joe Biden today is expected to announce his administration will require federal workers to be vaccinated or else submit to strict testing measures, and launch new steps to boost the US vaccination rate. Meantime, the IMF expects the global economy to grow 6% this year from the 3.2% contraction in the pandemic year of 2020, amid massive spending plans in advanced countries, particularly in the US. At around 04:30 AM GMT, WTI oil was up 0.3% to trade around $72.6 a barrel. Brent crude also added 0.3% to around $75 a barrel.
Qatar Trade Surplus Largest Since 2018
The trade surplus in Qatar sharply widened to QAR 16.7 billion in June 2021, the largest since October 2018, from QAR 5.9 billion in the same period last year. Exports soared 96.3 percent to QAR 25.0 billion, amid a low base effect from the pandemic’s outbreak. Higher sales volumes were recorded for petroleum gases and other gaseous hydrocarbons (91.5% vs 70.1% in May), and crude petroleum oils & oils obtained from bituminous minerals etc. (185.8% vs 201.5%). Among major key trade partners, exports surge to China (64.8%), India (65.8%), Japan (111.5%) South Korea (103.0%) and Singapore(218.9%). Meantime, imports grew at a much slower 21.1 percent to QAR 8.3 billion, with purchases jumping for turbojets, turbo propellers & other gas turbines; parts thereof (100.3% vs 66.3%) and motor cars & other motor vehicles (153.9% vs 140.4%). Imports were up from China (11.5%), the US (6.6%), the UK (80.0%) and Italy (105.2%) while declining to Germany (-0.9%).
Dutch Business Morale Hits Fresh Record High
The Netherlands' business confidence indicator rose to 12.3 in July 2021 from 11.5 in the previous month. This was the highest reading since the series began in 1985, as manufacturers were more optimistic about future production (15.0 vs 14.9 in June), order books (18.8 vs 18.1) and stocks of finished products (3.3 vs 1.3).
US Stock Futures Trade Flat
US stock futures were little changed on Thursday after Wall Street fluctuated between slight losses and gains the day before. The US central bank on Wednesday kept its key interest rate at a record-low level of near-zero and the pace of the quantitative easing program unchanged. Policymakers noted that the economy had made progress towards inflation and employment goals and signaled tapering talks could start soon while stressing risks to the economic outlook remain. On the corporate side, earnings announced by Apple, Alphabet, and Microsoft showed demand for digital services and gadgets continued to soar. Pfizer's quarterly results were also better than expected, and the company raised its 2021 sales forecast for the vaccine to $33.5 billion from $26 billion. The Dow fell 128 points, or 0.4%, to 34,931, led by a decline in McDonald’s Corp. The S&P 500 closed virtually flat. Meanwhile, the Nasdaq Composite rose 0.7% to 14,763.
China Stocks Climb as Govt Calms Nerves
The Shanghai Composite Index rose 34 points or 1% to 3,395 in early trade on Thursday, trying to recover from the recent sell-off related to Beijing's regulatory crackdowns after the China Securities Journal said that the market correction was a short-term event shock, rather than a reversal caused by changes in fundamentals. Meanwhile, the China Securities Regulatory Wednesday held a meeting with global investment banks with the aim to calm financial markets. In the US, the Fed kept its key interest rate at near-zero and the pace of bond-buying unchanged while signaling it was in no rush to taper stimulus. Adding to the bullish tone, earnings announced by Apple, Alphabet, and Microsoft showed that demand for digital services and gadgets continued to soar. Locally, China's banking and insurance regulator said it will guide insurers to increase investment in natural disaster insurance and enrich product offerings.
Vietnam Tourist Arrivals Sink 46.4% YoY
International arrivals to Vietnam tumbled 46.4 percent year-on-year to 7.5 thousand in July of 2021, after a 18 percent fall in the prior month, dragged down by the latest surge of COVID-19 infections in the country. Visitors from Asia plunged (-54.7 percent), mostly China (-60.3 percent). On the other hand, visitors rose from America (175.5 percent), namely the US (294.3 percent); Europe (80.3 percent), of which, the UK (132.1 percent), France (257.9 percent), and Germany (410 percent); and Australia (180 percent). Considering the January to July period, tourist arrivals plunged 97.5 percent to 95.7 thousand people.
Vietnam Retail Sales Drop the Most in 15 Months
Retail sales in Vietnam slumped 19.8 percent from a year earlier in July of 2021, after a 6.6 percent drop in the previous month. This was the third straight month of decline in retail trade and the steepest pace since April 2020, as consumption deteriorated due to a resurgence of local COVID-19 cases. Sales contracted for all categories: goods (-11.4 percent vs -1.3 percent in June), accommodation and food services (-53.8 percent vs -31.1 percent), other services (-43 percent vs -20.3 percent), and travel (-92.6 percent vs -80.4 percent). Considering the first seven months of the year, retail trade went up 0.7 percent over the same period of 2020.
Vietnam Industrial Output Growth at 5-Month Low
Vietnam's industrial production rose by 2.2 percent year-on-year in July of 2021, slowing from a downwardly revised 4.9 percent gain a month earlier. This was the weakest pace of expansion in industrial output since February, amid the latest wave of local COVID-19 infections, with output growth easing for both manufacturing (2.9 percent vs 6 percent in June) and electricity, gas supply (6.2 percent vs 6.7 percent). In addition, mining production fell at a steeper rate (-8 percent vs -4.9 percent). Meantime, the output of water supply and waste treatment increased by 4.4 percent after falling 0.1 percent in June. Considering the first seven months of the year, industrial output expanded 7.9 percent over the same period of 2020.
Vietnam Trade Balance Swings to Deficit
Vietnam posted a trade deficit of USD 1.7 billion in July of 2021, shifting from a surplus of USD 2.78 billion in the same month a year earlier, a preliminary estimate showed. Exports grew 8.4 percent from a year earlier to USD 27.0 billion, while imports jumped 29.9 percent to USD 28.7 billion. For the first seven months of this year, the trade goods a recorded of USD 2.70 billion deficit, as exports surged 25.5 percent to USD 185.33 billion while imports soared 35.3 percent to USD 188.03 billion.
Japan Shares Attempt to Recover
The Nikkei 225 gained 112 points or 0.4% to 27,694 in early trade on Thursday after closing 1.4% lower in the prior session, lifted by Fed Chair Powell's statement Wednesday that recent US inflation data is a reflection of price spikes in a narrow range of categories that have been distorted by temporary supply shortages resulting from the economy’s swift reopening. The US central bank left the target range for its federal funds rate unchanged at 0-0.25% and bond-buying at the current $120 billion monthly paces. On the COVID-19 front, Tokyo saw a record 3,177 virus infections Wednesday, topping the 3,000 marks for the first time. Nissan Motor climbed 7.6% after the company said it expects to return to the black in FY 2021 through March for the first time in three years, helped by restructuring and a recovery in demand. Advantest Corp, meantime, surged 7.4% after reporting its net income attributable to owners of the parent in Q1 climbed 83.4% yoy to 19.34 billion.
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