Saturday 20th January 2018
January 19th 2018: The Deferred Action for Childhood Arrivals (DACA) programme looks to be a continuing stumbling block for Democrats who were expected to ink the US government spending bill, with an attendant effect on the US dollar. According to Miles Eakers, chief market analyst at Centtrip the dollar continues to show weakness ahead of possible US government shutdown. “Late last night the House of Representatives passed concessions on a major increase in defence spending and a hardline immigration bill. But Senate Democrats said they would likely block the measure unless President Donald Trump and Republicans include protection for young immigrants. An impasse could result in Trump celebrating his first anniversary in office with the first shutdown in four years, despite his party holding a majority in both houses. After reports of the vote, [the market] saw continued, but muted, dollar weakness, pushing the GBP/USD pair back above $1.39 and EUR/USD nearer the $1.23 resistance level.” The question is now whether a short=term patch will be agreed today, or whether the Republicans and the White House will be compelled to get serious about a longer-term solution. The last time a short-term bill was passed was December last year, which passed by a grand majority of 66 votes to 32. This time round it looks more difficult - Mike van Dulken, Head of Research at Accendo Markets commented to clients this afternoon: “Equities are positive to close out the week, rebounding from a negative US close and ahead of a key Senate vote to stave off a government shutdown tonight. Weaker than expected UK Retail Sales have seen the UK’s blue-chip index take a leg higher, benefiting from Sterling's retreat from fresh post-referendum highs earlier this morning. Interestingly, Germany’s DAX is the rank outperformer, this in spite of additional Euro strength after hawkish ECB comments, whilst US equities point towards a positive open this afternoon. The FTSE has climbed higher thanks to GBP weakness benefiting names such as ULVR, BATS, SHP, RELX, CCL and GSK, while Miners are embracing the weaker USD's fillip for metals. This is easily offsetting weakness for BP (Oil lower on IEA report), HSBC (US forex fine), BT (pension scheme deal) and KGF (Carpetright profits warning). Germany’s DAX outperforms with just Linde in the red, as Thyssenkrupp, Adidas, BASF and Fresenius lead the way higher. The FTSE 100 has broken back above 7715. The DAX 30 has broken above 13350 to flirt with a 13420 breakout. Dow Jones Futures have rebounded to re-test 26055. Gold has broken back above $1332.” --

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In the wake of Shinzo Abe’s election win, the Japanese equity market could be the big surprise of the new year if the government lives up to expectations, claims Patrick Moonen, senior equity strategist at ING Investment.  “For over twenty years, international investors have linked Japan to three afflictions: a lack of nominal economic growth, an expensive yen and structural price decreases,” says Moonen. According to him, the Japanese economy illustrates that deflation, once it kicks in, has a stubbornness which defies the imagination.

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Thursday, 25 April 2013

UK avoids triple-dip recession

The UK has narrowly avoided a triple-dip recession after the economy grew by 0.3% in the first three months of the year, according to estimates by the Office for National Statistics. After fears that the UK would enter its third recession in five years and recent ratings cuts by Moody’s and Fitch, Chancellor George Osborne says the figures are encouraging and progress is being made. 

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Germany’s Commerzbank says it is preparing for ongoing pressures on revenue and increasing costs this year after it posted €94m net loss in the first three months of 2013. The loss compared with a €355m profit in the same quarter last year.

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Michael O’Higgins, chairman of The Pensions Regulator, says he wants to see pension trustees agree long-term strategies to protect the interest of savers - but that schemes should continue to allow room for growth. O'Higgins made the comments as the regulator published its 2013 funding statement today. The annual document is designed to help trustees and sponsoring employers agree valuations and deficit recovery plans to protect the interests of retirement savers.

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India has appointed Goldman Sachs Asset Management to create and launch an exchange-traded fund designed to raise money from investors and invest in state-run companies, a senior finance ministry official said on Friday.

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A new report by Llewellyn Consulting and Pension Insurance Corporation has called for a major shift in the UK government’s understanding of institutional investors’ requirements. Both firms say policymakers have the potential to create jobs and enhance economic growth by attracting pension funds and insurance companies to take significant direct exposure to infrastructure investments.  

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The Government must be willing to pick up a ‘regulatory stick’ to drive implementation of the Kay Review, says the UK’s special parliamentary committee on Business, Innovation and Skills in a report published today, that compiles the main elements of the Kay Review and market responses to it.

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Moody's Investors Service has lowered its outlook on Brazil's Baa2 government bond rating from stable to negative due to sustained low growth in the country and worsening debt metrics. 

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