Daily Company News by ForexMart

[Luis ForexMart]

Debt Relief for Greece Still in Progress, No Deal Yet

Intercontinental lenders in Greece has a comprehensive meeting discussing debt sustainability on Monday. The meeting ended failing to reach an agreement about additional debt relief for Greece. Ministers disagreed to grant new loans to Athens but the head of Eurogroup, Jeroen Dijsselbloem says otherwise. He said that they are deliberating and making progress on the next disbursement targeting before summer to be able to pay due debts in July.

In their next meeting, they are optimistic that they will settle a deal in doling out bailout funds to the country on June 15. They are aiming for a more sustainable agreement which the International Monetary Fund commended and hoping that E.U. governments will support this deal. Although, the deal is not yet ready and will most likely be implemented once the current bailout program has ended next year.

 

[Luis ForexMart]

Canada And Brazil Set to Increase Oil Production
The Organization of the Petroleum Exporting Countries together with its partners are about to unveil further details regarding the extension of output cuts while the main focus of the oil markets is on the production growth of U.S. shale oil.
While experts are analyzing the statistics and predictions concerning the level of increase in U.S. manufacturing and its ability to disrupt the OPEC’s effort in correcting the market’s supply side.
Aside from the United States, another two major oil producers in the country are preparing to make an increase within this year namely Brazil and Canada. This rise in production was already anticipated by the intergovernmental organization, which would likely boost the US supply.
Based on the projections of IEA, the product volume will gain 5.6 million BPD in the year 2022. While the combined global growth estimates for the three countries will account for 60 percent.
The light tight oil (LTO) of US manufacturing is expected to have continuous expansion until 2022, acquiring 1.4 million BPD throughout the period, even when the oil cost did not break the US$60/barrel, according to 2017 oil report of IEA.
As stated to the predictions of the Paris-based agency, Canada would likely obtain a 900,000 bpd of output and on the other hand, the production in Brazil will get 1.1 million bpd in the next five years.

 

[Luis ForexMart]

UK Economy Faces Fastest Inflation Growth in 4 Years
British people could possibly face a period of living squeeze as the UK consumer prices are now recording its fastest growth ever within a 4-year period, in addition to the onslaught of the upcoming general elections as well as the Brexit negotiations. UK’s per annum inflation rate rose by 2.7% last month as compared to 2.3% last March, which is the fastest rate of inflation for the country since 2013. UK inflation rates started increasing immediately after the Brexit referendum, wherein the sterling pound exhibited a depreciation immediately after the referendum. This recent surge in UK inflation rates mirrors an international trend of sudden inflation growth after a long period of muted price action prompted several central banks to resort to more radical stimulus policies.

 

[Luis ForexMart]

U.S. Business Activity had a Slight Recovery, according to Markit
Two surveys conducted by American businesses this month and showed that the US economy continued to have a steady growth, despite the fact that manufacturers who served plenty of blue-collar jobs had constrained for the past months.
According to the readings of IHS Markit, the manufacturing PMI dropped to 52.5 in May versus the previous 52.8 which marked an eight-month low.
The manufacturers witnessed an increase that started in the latter part of 2016 and resumed earlier this year prior the recent ease up. While companies tend to slow down their production later on, in order to fend off too much inventory buildups.
Any reading that exceeds 50 and above would indicate that many executives are optimistic enough that business setting will improve.
Markit also mentioned that the services index of the United States climb higher reaching its 4-month high at 54, compared with the former 53.1.
The service sector of the economy takes up four out five workers in the US over different fields like banking, medical care, real estate, retail, and travel.
Apart from the slide of the manufacturing industry, the economy of U.S. shows a momentum recovery during the Q2 in spite of its lack of success in 2017.
Moreover, the MarketWatch polled some economists to project the growth in the state, saying that it will surge up gaining 3% in the spring versus the 0.7% in the Q1 while there other predictions that it will expand to 4%.

 

[Luis ForexMart]

Trump Proposed 45 Percent Cut in Mexico Aid from U.S. Spending
On Tuesday, the U.S. spending reserved for foreign aid for Mexico and Central America are to be reduced as proposed by the President Donald Trump. The budget was proposed to trim as much as $3.6 trillion government spending in the following ten years for 2018 budget proposal.Although, this may not get a legislative approval as to how it is currently with other departments cuts especially in the State department.
Mexican aid worth $87.66 million will be lessened over 45 percent from the 2016 expenditure when Trump's proposal is approved. The budget cut will be transferred to the Mexican military including counterterrorism funds and other government programs. One of the officials commented that these deals are focused on bolstering border security and fight against corruption that may have hindered transnational criminal organizations. There will be a meeting to discuss the employment and security concerns in Central America in June.

 

[Luis ForexMart]

FOMC Minutes Signal Interest Rate Hike Next Month
Fed officials are now more than ready to raise its short-term interest rates after stating in their meeting last month that increasing its rates are now “more than appropriate”. The central bank also moved to begin cutting back on its Treasury and mortgage securities holdings, which is currently worth $4.5 trillion. The Fed also stated in its minutes that they will be allowing an accumulation of these said securities in the long run without having to reinvest its proceeds to other assets. The Fed’s next policy meeting is scheduled this coming June 13-14 and will be immediately followed by a press conference from Fed Chair Janet Yellen.

 

[Luis ForexMart]

China’s Debt-rating Downgraded by Moody’s to A1 from Aa3
The credit rating of China was downgraded by Moody’s Investors Service on Wednesday, the previous Aa3 (Double A-3) were down to A1 which means that the Chinese economy is going to grind lower for the next years as the country showed slow growth and its debt continuously increase. The downgrade is done due to the financial pressure that the government faces after years of credit-driven stimulus.
Craig Erlam, a Senior Market Analyst of Oanda, said in an interview, “Because talk of Chinese debt and concerns about the size of Chinese debt has been going on for the last few years. They seem to be very reliant on these high levels of growth, which has been slowing.” He further added that the credit downgrade does not surprise him at all.
The second largest economy in the world gained 6.7 percent last year and 6.9 in 2015, this pace is the slowest based on the records since 1990 by which Erlam believes that the following years appears to be challenging.
The bond credit rating company has expectations that the direct debt burden of China’s government will climb higher reaching 40 percent of 2018’s Gross Domestic Product which is close to the 45 percent as the decade ends. However, it remains lower to the 60 percent for the European Union.
The Finance Ministry of the republic claims that the downgrade is based on an improper approach that overestimated the risks on the increasing debt.

 

[Luis ForexMart]

NZ’s Budget Surplus Apportioned to Infrastructures
New Zealand anticipates exceeding the budget excess prediction for 2017. The former projected amount to NZ$473 million surpluses in December and significantly increased to NZ$1.62 billion for the first six months. These figures are crucial yet the government has cope with the cost of a huge new capital investment that the authorities consigned to.
These higher-than-expected results were supported by potent corporate levies and pending rehabilitation following the November earthquake. The government targets to trim the net credit budget up to 10 to 15 percent the forecasted 23.2 percent for the first half of the year.
The country also intends to invest the excess money in infrastructure to further enhance the progressing economy according to the Finance Minister Steven Joyce. The budget amounts to NZ$11 billion allocated for infrastructures including road, train railways, prison and housing in the succeeding four years. Part of this allocation as much as NZ$6.5 billion aims to raise family incomes through modification of tax threshold and grants from the government.

 

[Luis ForexMart]

EU in Need of Additional ECB Stimulus, Says Draghi
ECB President Mario Draghi stressed in a statement made last Monday that the eurozone is still in need of more monetary stimulus from the central bank in spite of the region’s apparent economic recovery. Draghi warned that the underlying inflation in the EU economy minus highly volatile food and energy prices are still too insignificant for the ECB to make any actual adjustments with regards to its current monetary policy. The central bank is currently facing mounting pressure from several EU politicians as they call for the ECB to instigate a full-on policy reversal as the European Union enters a new era of increased inflation rates and a recovering economic status.

 

[Luis ForexMart]

Germany Negotiate Wages Increased by 2.8 Percent
The negotiated wages in Germany climbed by 2.8 percent in the first quarter which has significantly improved than the previous year according to the data released on Tuesday. These wages comprise of basic pay, one transaction settlement, yearly bonuses and back remuneration from salary deals. An estimated 17 million workers in Germany from companies who transact every one to two years.
In comparison, the present 2.8 percent growth from January to March is more than the long-term average of 2.5 percent than the last quarter of 2016. It also ascended at a faster rate than the 2.5 percent for the past five years indicating a rise in wage growth from a 2.2 percent elevation in the fourth quarter last year. It exceeded that increase in consumer costs augmenting by 1.9 percent in the same period implying that households have more disposable income amid a rising inflation.