[Android App] Newsensus is back 1-Feb-2021

 It has been a long while since Newsensus App was unpublished from Google Play. The latest version is being available on Google Play, coming with some security updates. 

Why Newsensus?

Newsensus is a free app available on Google Play. The features which differentiates from others are that 1) news sources are geologically diversified, 2) the radar charts indicate the trends of each topic and 3) the app allows you to switch the story from one economic zone to another.

For the sake of News, it is inevitable for ones to see a story as fairly sophisticated while for someone else to see the story as biased or even a fake. Checking biases is much harder than checking facts because the facts are more objective than the biases which are rather subjective. Our answer to this is to quantify such biases by referring different stories from the world. If the biases are inevitable, you'd better to know them at least before reading the stories.

Here is the short slides briefly showing how Newsensus works.

Check out Newsensus on Google Play.

Coronavirus blasting all the goddamn markets

The Underboss (from Wikipedia)

The Godfather's son was so temper as he killed himself consequently.

Sonny Corleone:

... So why don't he just blast whoever's in the goddamn car?

Since the later last month, the global stock markets overwhelmingly plunged as if we are at verge of a new great recession or so. US's DJIA had the record drop yesterday at nearly 3,000 points. The commodity markets were also down.

While Fed finally set their target rate at around zero, the market reaction was pessimistic. First, the financial policy cannot be a breakthrough against the epidemic. Second, the investors woke up, recognizing how serious of the economic damage. Third, the stock markets were overvalued (Bubble) until Coronavirus outbreak.

Coronavirus brought anxious tension among people in the world where no one is virtually away from the threat of Coronavirus. Once it started spreading into the countries outside of China, the economic and social activities have gradually shrunk. Many events were banned. Bars or nightclubs were closed. Tougher boarder controls. Details of such rules are different between countries, but it continues for a month to a few months at least.

As mentioned in the last post, the airline operators are highly likely at risk because of non essential travel bans. The measure has escalated since then.

BBC: Coronavirus: Europe plans full border closure in virus battle
The European Commission is planning to ban all non-essential travel throughout Europe's Schengen free-travel zone as more countries close their borders to try to limit the spread of coronavirus.

Commission President Ursula von der Leyen said she would ask leaders to implement the measures on Tuesday.

"The less travel, the more we can contain the virus," she said.

FTSE 100
Financial crisis (2007 - 08), down 40% from peak

People are cashing out rather than holding shares, and some goes for panic buying. Even if shelfs in supermarkets become empty, you will see new stocks arrived there next day as far as supply chain works and production of goods continues. In other words, if the supply chain or production were limited or halted as the tougher measure, it could be disastrous. People rush to buy limited stock of foods, hygiene sprays or toilet rolls. Hyperinflation or stagflation could be possible in such situation.

FTSE 100
Last 2 years, down 33% from peak.
Another 10% brings larger dip than financial crisis 2007-08

When it comes to the financial markets, FTSE 100 was at 6,580 on 1-Mar and now marked at 5,217, about 33% down from the peak in last 2 years. During the last financial crisis in 2007-08, FTSE 100 was down by 40% from the peak. Today's market, the index has dropped 33% from the peak in less than a month. It looks just a matter of time until the latest crisis surpasses the one in 2007-08.


In the future when the world finally defeat the Coronavirus threat, financial markets and people's activities would be back in normal manners. But by that time, all the goddamn markets might be blasted in unprecedented scale.

Caporegime says: These things gotta happen every five years or so, ten years.

The Caporegime (from Wikipedia)

The Godfather had many friends with loyalty.

Peter Clemenza:

These things gotta happen every five years or so,... ten years. Helps to get rid of the bad blood. Been ten years since the last one.

In contrast with the consecutive downfalls of global stock prices in last week, it has been on a bumpy ride this week in US market particularly, partially because of Fed rate cut which was unexpected and little explained and Super Tuesday's outcome.

Meanwhile, it is a time to back in reality, isn't it?  After Fed rate cut and Mr.Biden's revival on Super Tuesday, there is no pragmatic solution combating Coronavirus. What is a kind of solution is a vaccine development whose production is expected after months to more than a year. So far, it looks good news are lasting and shadow of bad news ahead.

Flybe, one of the largest regional airlines in Europe, is dragged into administration. Even before the Coronavirus outbreak, Flybe has 40 years of its history and had expected to have a rescue deal to manage the difficult situation. Its employees' jobs are at risk.

China is pushing their business back to normal as much as possible, but the recovery is not enough for global economy. Outbreaks in other parts of the world are spreading faster and faster.
After all, consumers' demands are fading day after day as Coronavirus spread, except for panic buying at some supermarkets. The new James Bond film, which was planned to be released on April, was postponed until November.

The atmosphere surrounding the world is becoming reminiscent of the financial crisis in 2007-2008. The financial crisis 2007-2008 stemmed from credit crunch. The recent financial uncertainty is caused by the fear of epidemic and its economic effects. But the epidemic could not only lead travel industries including Airline companies like Flybe into the dark, but also cause domino effects in other industries, including financial industries.
Airline operators are financed through Structured finance, so called Aviation finance or Aircraft finance. They rise funds in both equity and debt for multi-billion dollars to purchase their Aircrafts to operate. The expected revenue is a source of the repayment and is supposed stable without such pandemics or wars. Reduction of the scheduled flights leads to their revenue cuts. Apart from the basic measures, business insurance or collaterals to avoid delinquency, they may have to cut labor costs. It has started already. (See below)

Sky News: Virus turbulence could give airlines cover to make cuts
Lufthansa, Germany's largest airline and the third-largest in Europe by stock market value, unveiled a cost-saving programme in which it will suspend new hires and offer employees unpaid leave in an attempt to mitigate the financial impact of coronavirus.
...
And it was revealed that KLM, which is the Dutch arm of Air France-KLM, Europe's fifth-largest carrier by market value, is to delay all IT and property projects that have not yet got underway and will be suspending hiring in certain departments.

Even such big names like Lufthansa and KLM struggle due to the Coronavirus outbreak, needless to say that the smaller operators suffer badly. In case that cost cutting is not sufficient, the subordinated debt repayments are first affected and the operator maybe forced into insolvent when senior debt repayments are failed. The insurance companies have to recover the loss, but the pandemic bring such unfortunes for virtually all the airline operators and travel related industries as chain effects. It can be a global credit crunch that we don't know the exact figure yet.

The financial markets have experienced some sharp up and downs for the last 10 years, but they are nothing more than the financial crisis 2007-2008, aren't they?  The Caporegime knows what happens now, perhaps.

Mr.Johnson won decisive majority, but the market doesn't look optimistic enough?

[EURGBP is approaching the level near Brexit referendum 2016]

The UK election yesterday resulted a big trophy for Tory and Mr.Johnson, and British pound scarcely reacted stronger before the exit polls released. While the FX market responded optimistically as concerns over the hung parliament faded away, it doesn't mean No-deal Brexit is ruled out from the plan.

On the Brexit day which is no later than 31-Jan-2020, UK actually doesn't get Brexit done, but they just start the trade talk with EU. The trade deal is expected to be agreed and ratified by Dec-2020, otherwise the consequence could be No-deal Brexit on Jan-2021 unless the extension is given.

Observing EURGBP market, GBP moved stronger yesterday but it is still weaker than the level before Brexit referendum 2016. It also implies that the market cannot be as optimistic as it was before the referendum. Perhaps, No-deal possibility is still priced in.

Ref. BBC News: Brexit: What happens now?

European Banks continue cutting jobs

It has been for about two years since I summarized job cut announcements by European banks. These days, the glooming trend still continues with a bunch of job cut announcements from large European banks.
As mentioned in the past post, digitalization play a role to automate the internal processes which were once handled by the employees whose salaries were relatively higher. More and more you get benefit from your retail banking on your smart phones or laptops, banking jobs not only of traditional services at the local branches, but also the intermediate process such as risk assessment are tightened. (Perhaps, no longer needed.)  This phenomenon seems be irreversible, and therefore this is considered as a structural change in the banking industry. Where the bankers goes after dropping out?

As if joining to the trend, the car industry is also about to squeeze jobs, attributing to a rise of the electric vehicles. A recent story tells that Audi plans massive job cuts in their home country Germany, a champion of the industry.

BBC: Audi to cut 9,500 jobs to fund electric car push
Carmaker Audi is to cut 9,500 of its 61,000 jobs in Germany between now and 2025 to make more money available for electric vehicles and digital working.
The cuts - which aim to save €6bn (£5.1bn) - will be achieved through an early retirement programme.
But the Volkswagen-owned firm also said its move into electric cars would mean the creation of up to 2,000 jobs.
It comes less than a fortnight after Daimler said it would cut more than 1,000 jobs by the end of 2022.
The car industry is facing a downturn in key markets, including China, as well as increased costs as it meets tougher European Union emissions regulations and the costly switch to electric vehicles. Audi saw falling sales, revenues and operating profits in the first nine months of 2019.

And some stories of job cut announcements in banking industry, too.

FT: Europe’s banks slash 60,000 jobs as outlook turns negative

Bloomberg: Global Bank Job Cull Tops 75,000 This Year as UniCredit Cuts

IBT: Italy's Largest Bank In Trouble? UniCredit To Layoff 8,000 Jobs Amid Western Europe Struggles

Some says it is "Japanification", the deja vu which Japan have experienced decades of economic stagnation. But we are facing structural changes in the industries rather than the market bubble. In Europe, it seems be even worse than Japanese deja vu in the last decade.

UK election and GBP on 12-Dec-2019

UK election is ahead on 12-Dec-2019, which held first time on December since 1923.
According to the latest polls, it predicts Tory's majority while it's not comfortable enough to avoid a hung parliament.

Evening Standard: UK opinion polls: Conservatives set for majority of 28... but hung parliament possible as support drops
YouGov has interviewed approximately 100,000 people about their voting intentions in the past seven days.
It said the margin of error could put the final number of Tory seats anywhere between 311 and 367, suggesting a hung Parliament cannot be ruled out.
Sterling fell by around a third of a cent against the US dollar after the news. Financial markets fear a hung parliament would extend the uncertainty over if or when Britain will leave the European Union, which it is currently due to do on January 31,

As mentioned on the above story, outcome of the hung parliament will drag GBP down sharply as the uncertainty over Brexit consequence.
EURGBP is currently near the level after the Brexit referendum 2016.
If British constituencies successfully avoid the hung parliament, the Tory's Brexit deal is expected to be passed before 31-Jan. (some days of technical extension maybe in the worst case.) In this case, GBP will be stronger, approaching toward the level before the Brexit referendum (EURGBP below 0.80).
If it resulted as a hung parliament, EURGBP could jump to around 0.90 - 0.92 up to the highest in 2019.

In the meantime, today's trend and momentum of EURGBP indicates the upward direction in a coming week including the UK election date, which implies the possible hung parliament outcome...
While we recommend to watch out the latest polls, it is also interesting to see if the indicator still reasonably work under the critical event against the market. Let's see tomorrow.


To check Forex trading signals, download Forex Signal by QROSS X.

Canadian Dollar trend reversed shortly even though BoC turned to be dovish stance? 2-Nov-2019

Canadian Dollar (CAD) has weakened against major currencies including GBP and EUR in the last week. Bank of Canada kept the interest rate at 1.75% while they turned dovish, concerning about global trade conflict.

Reuters: Canadian dollar hits two-week low as Bank of Canada takes dovish turn
Canada’s central bank held interest rates steady at 1.75% as expected but left the door open to a possible cut over the coming months to help the economy weather the damaging effects of global trade conflicts.

“The loonie has sold off post-statement due to the fact that the BoC is beginning to witness the effects of external headwinds on the Canadian economy,” said Simon Harvey, FX market analyst for Monex Europe and Monex Canada.

The central bank’s “dovish stance” raises expectations for policy easing, “especially if the economic data and external climate deteriorates further,” Harvey said.

Money markets moved to fully price in a rate cut as early as July. Before the announcement, chances of a cut next year were seen at less than 50%. BOCWATCH

It seems that expectations of the rate cuts next year is taken into account in the price, and BoC still kept 'Neutral' stance on the rates. Natural bounce back can be expected shortly against the overheated mood in FX market. (Of course, there is a possibility BoC may withdraw neutral stance, changing to pessimistic as their concerns in the future.)

BNN Bloomberg: Bank of Canada holds rates, warns economy will be 'tested'
The statement and the fresh batch of more pessimistic growth forecasts will raise questions about the central bank’s commitment to a neutral stance on rates, particularly in the face of global easing in many other countries that has made the Bank of Canada an outlier. If the Federal Reserve lowers its interest rates later today, as expected, the Bank of Canada would have the highest policy rate in the industrialized world.

In the meantime, our trend and momentum signals indicate CAD surging against GBP and EUR in a coming week.

GBPCAD Trend and Momentum

EURCAD Trend and Momentum

To check Forex trading signals, download Forex Signal by QROSS X.

Upcoming (Geo)political events (Brexit, Elections)

Brexit, US-NorthKorea summit, US-China trade war,... Several geopolitical uncertainties are surrounding the global economy. Here is just a list of upcoming events that could fluctuate the market in coming months. Some more events maybe added.

12-Mar-2019 The meaningful vote on Brexit deal (Downing Street insists)
 Guardian: Brexit meaningful vote will go ahead, says No 10, despite talks stalling
 >> Downing Street said the talks had been “difficult”, but stressed the vote would take place on Tuesday, as committed by May. If it is lost, MPs will vote on successive days on whether to block a no-deal Brexit and whether to extend the departure date.

29-Mar-2019 Brexit or the departure date extended?
>> After the meaningful vote on the Brexit deal, It will be clear whether Brexit happens on 29-Mar or is delayed.

9-Apr-2019 Israeli general election
>> The current PM Mr.Netanyahu is facing accusation of corruption, who have been PM since 2009. 

28-Apr-2019 Spanish general election
>> The right wing populist party Vox is rising while People's Party (PP) which is the current majority is likely to struggle. The centrist party Ciudadanos have not seemed to appeal enough to get majority at the parliament.

23 and 26-May-2019 European Parliament election
 The Economist: Volt wants to become the first pan-EU political party
 >> Volt, now has thousands of members across 30 countries (the eu28 plus Albania and Switzerland), and will run in the European Parliament elections next year. On October 27th about 450 delegates met in Amsterdam to approve the party’s programme, in a sea of youthful optimism and multilingual policy wonkery.

Energy Transition long way to be real

Energy Transition whose concept includes the matters of energy technology or fuel sources, is naturally posed with "Climate Change". Fossil fuels are typically targeted in such discussion because of Carbon dioxide (CO2) being produced and pollution, too.
While the Energy transition is an idealistic concept, the reality seems be that people on this planet continue reliant on fossil fuel including oil as much as now. According to the report OIL 2018, it indicates that world oil demand increases by more than 5.5% until 2023. World Oil Outlook of Opec in 2017 has also indicated that Eurasia primary energy demand of oil, coal and gas increase 0.6%, 0.5% and 0.7% per year respectively by 2040. Nuclear energy demand is expected to outpace those energy sources, but it is behind higher risk at accidents, which was reminded from Fukushima disaster in 2011.

Big players in the market, are ironically investing into the oil production infrastructures these days, according to the below sources. Perhaps, it is too early to restructure your portfolio, adapting to Energy transition, unless your investment horizon is beyond next 50 years?

[Bloomberg] KKR, BlackRock Are Set to Invest $4 Billion in Adnoc Pipeline
KKR & Co. and BlackRock Inc. are set to invest in Abu Dhabi National Oil Co.’s pipeline network in a deal valued at $4 billion to $4.5 billion, according to people familiar with knowledge of the matter.

[The Economist] ExxonMobil gambles on growth
A fossil-fuel titan’s strategy is at odds with efforts to hold back climate change
.....
On February 1st the company announced annual results, declaring itself on track for ambitious growth. By 2025, oil and gas production will be 25% higher than in 2017.

Banking job cuts announced in a last few years

After the financial crisis in 2008, many of large banks had introduced job cuts though some might have hired back as the market recovered. Investment banking division supposed to be in a main focus of the layoffs that time.

In a last few years, 2016 - 2017 particularly, job cuts have been introduced from retail sector to investment banking. Some European banks plan to cut thousands jobs, including German, Italian and Dutch banks. Japanese banks, which are usually unwilling to cut jobs, plan to cut multi thousands of jobs in next 10 years, and AI is likely to play a part of roles used to be operated by bank staffs. CEO at UBS also hinted 30,000 workers could be shed in the years ahead due to the technological advances.
Some of you who has been looking for banking jobs in recent years could feel how banking job offers have disappeared from the job boards.

Actually, some bankers tell that many staffs in Front Office to Back Office play on the middle of business flows, scrolling, typing and clicking on business softwares. It sounds that these jobs could be replaced by more advanced softwares which directly connect from business front to the end. One software could shed dozen of jobs in each department. Complex risk calculation is just a pile of mathematical formulae, but it would not be difficult to write in source codes.

Here are some stories about the banking job cuts, published since 2016.

Nordea Bank’s 6,000 Job Cuts Are Just the Beginning, Union Says
Nordea has just said it intends to get rid of 4,000 full-time employees and 2,000 consultants. Those announcements will be made internally and department by department at regular intervals over the coming years, the bank has said.

Commerzbank to cut 7,800 jobs in Germany: Handelsblatt
Commerzbank said last September it planned to cut 9,600 jobs, more than a fifth of its workforce, but trade union Verdi has said the total would actually end up being lower due to already agreed cuts and the usual process of staff attrition.

Deutsche Bank's CEO Hints at Thousands of Job Cuts
Cryan has warned repeatedly that technology will allow big savings across his sprawling empire, and recent media reports suggest he’s under increasing pressure from shareholders to deliver, having also suspended the bank’s regular dividend. Only 4,000 of the 9,000 job cuts promised under a five-year restructuring plan–announced in late 2015–have so far taken place.

ABN Amro Slashes 60% of Senior Management After Staff Cuts
ABN Amro, which is 70 percent owned by the Dutch government following a state rescue, said in November it would cut 1,500 jobs as it steps up cost reductions. The bank, which employed 26,500 people last year, said its total workforce is expected to decline by 13 percent by 2020. The Dutch government has said it plans to gradually exit its holding in the bank.

ING announces 7,000 job cuts as unions condemn 'horror show'
ING’s plans to shed 7,000 jobs and invest in its digital platforms to make annual savings of €900m by 2021 has drawn swift criticism of the Netherlands’ largest financial services company from unions.
The layoffs represent slightly less than 12% of ING’s 52,000 workforce, because nearly 1,000 are expected to come at suppliers rather than at the bank itself.

Barclays axes 13,600 jobs in 9 months
Staley said at a conference in March that more than 6,000 positions had gone in his first 100 days in charge, marking a sharp acceleration in job reductions in the past four years, and his latest estimate shows the pace of cuts has continued.
Staley, who started in December, cut 1,200 jobs in the investment bank in January as he pulled back from Russia, Brazil and seven countries in Asia.

BNP Paribas to cut 5 percent of investment banking jobs in UK - source
BNP plans to axe 233 British jobs but will also be hiring 60 employees there -- bringing the net headcount down to 3,105 in 2016 from 3,278 in 2015, the source said without giving details on where the job cuts would come from.
A similar net number, 179 in all, will be hired in lower-cost Poland, increasing its staff there by about half to 507 employees.

SocGen to Deepen French Job Cuts, Takes $678 Million Charge
As many as 900 reductions may take place as the domestic retail banking business cuts branch numbers, resulting in a charge of about 400 million euros, SocGen said in a statement. That’s on the top of the 2,550 positions the bank has already said it will eliminate. SocGen will book another exceptional expense related to three tax changes.

Banco Santander to reduce number of job cuts in Popular integration, union says
Banco Santander has reached an agreement with unions to reduce the number of staff affected by planned job cuts relating to the integration of Banco Popular by around 900, a union said on Tuesday.
Santander was originally planning more than 2,000 job cuts, of which 575 the bank was looking to accommodate within its other businesses, the Comisiones Obreras union said in early November.

More IT job cuts at HSBC
After laying off 120 IT staff in March, HSBC reportedly hit the same department with another round of job cuts yesterday. According to Apple Daily the bank has made a number of IT employees redundant.
The Hong Kong Banking Employees Association confirmed yesterday’s IT job cuts which affected around 10 employees. Although the scale of the cut is relatively small, the association condemned it and added it believes there will be more job cuts to come at the bank in the future.

No end in sight for Deutsche Boerse hiring freeze
The Frankfurt stock exchange suspended hiring at the end of February after revenues for the first two months of the year proved weak, but a person close to the process said there was still "no date for an end yet".

Credit Suisse to cut further 1,500 jobs in cost-cutting drive, sources say
Credit Suisse is to axe 1,500 jobs in London by the end of the year as the Swiss bank continues its ruthless cost-cutting drive, it is understood.
Some 2,500 London staff cuts took place last year as part of a major restructuring introduced by chief executive Tidjane Thiam in a bid to shave costs to less than 17 billion Swiss francs (£13.6 billion).
This brought the number of Credit Suisse employees in the City from over 9,000 in November 2015 to 6,500 by the end of last year.

National Australia Bank to Cut 4,000 Jobs in Automation Push
National Australia Bank Ltd. announced plans to eliminate 4,000 jobs, or about 12 percent of its workforce, joining the ranks of global lenders cutting costs and shedding staff in the face of advancing technology. 
“As we simplify, we automate processes and things move to digital channels, we will need less people,” National Australia Chief Executive Officer Andrew Thorburn told reporters in Sydney on Thursday. “The reshaping of the workforce is going to be significant.”

RBS to axe 680 jobs as it closes 259 branches
The bailed-out lender said 62 Royal Bank of Scotland and 197 NatWest branches would shut as customers increasingly turned to online banking.
The Unite union said 1,000 roles faced the axe, although the bank – which is 71% owned by the taxpayer – said the move would result in 680 redundancies after redeployment.

Royal Bank of Canada to Cut About 450 Jobs in Toronto Area
Canadian banks have announced more than 5,000 job cuts tied to restructurings during the past three years, though the number is probably higher since many announcements, including those by Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, didn’t disclose job figures. The country’s six largest lenders collectively employed about 363,600 workers as of the end of April, including 75,281 at Royal Bank, according to company disclosures.

Two decades after Japan’s financial crisis
In recent months, the megabank groups have announced plans to cut thousands of jobs and close outlets over the next several years. Mizuho Financial Group says it plans to reduce its employees including part-time staff, who numbered 79,000 at the end of last March, by roughly 19,000 by the end of fiscal 2026, and cut the number of the group banks’ outlets nationwide by about 100 to some 400 by the end of March 2025. Similarly, Mitsubishi UFJ Financial Group will cut its 40,000-plus workforce by 6,000 by the end of the 2023 business year. Combined with Sumitomo Mitsui Financial Group, which earlier said its would slash the workload equivalent of 4,000 jobs by the end of fiscal 2019, the total number of jobs cut could add up to some 30,000 among the major banking groups.

Technology could help UBS cut workforce by 30 percent: CEO in magazine
Swiss bank UBS (UBSG.S) could shed almost 30,000 workers in the years ahead due to technological advances in the banking industry, Chief Executive Sergio Ermotti said in a magazine interview.

AUDCAD trend & momentum, economic figures released in a coming week 7-Dec-2015

AUDCAD stays around 0.9816 now, and it has steeply gone up for a last week. The latest trend and momentum signal indicates AUDCAD is expected to be reversed into downward trend for a coming week. Keep in mind that economic figures will be released over the week in both Australia and Canada. While technical analysis works under economic events, checking the predictable events maximizes your profit from trading activity.

The Sydney Morning Herald >> Flood of leading indicators arrive this week
The ANZ job ads, National Australia Bank's business confidence and conditions, and the Westpac-Melbourne Institute consumer sentiment index come in early this week.
The business and consumer confidence figures will be watched for signs that a wave of approval following Malcolm Turnbull's appointment in September as Prime Minister was more than just a honeymoon period. Westpac-MI's consumer sentiment index in particular read 101.7, a near two-year high, last month. A number over 100 signals that optimists outweigh pessimists.

Wall Street Journal >> Key Canada Events: Week of December 7 to 11
Highlights on this week’s Canadian events calendar include a speech by Bank of Canada Governor Stephen Poloz, the latest read on the country’s housing market and earnings from a few big retailers.

Stephen Poloz, governor of Canada’s central bank, is scheduled to deliver a speech in Toronto on Tuesday. The topic of his speech, after which Mr. Poloz will take questions, is entitled “The Evolution of Unconventional Monetary Policy.” The governor’s appearance comes less than a week after the central bank held its key interest rate steady at 0.5% and said Canada’s economy faces a “complex and lengthy” transition amid lower commodity prices.

Also on Tuesday, Canada’s main housing agency – Canada Mortgage and Housing Corp. -- will release housing starts for November. National Bank said it expects a softening in starts to around 195,000, based on declining building-permit applications. Building permits unexpectedly declined in September -- the latest reading -- on weaker demand to construct condominium units and single-detached homes. Housing starts in October fell 14.4% to an annual rate of 198,065.

Bank of England will reveal Financial Stability Report+ on 1-Dec Tuesday 29-Nov-2015

Bank of England will release Financial Stability Report on Tuesday, which include stress tests for high-street banks such as HSBC, RBS or Barclays. Those high-street banks are expected to pass the stress tests without failing, according to the analysts.

the guardian >> Forget Black Friday. Forget Super Thursday. It’s Mark Carney’s Super Tuesday!
Super Tuesday, as some City analysts have decided to call it, brings together the Bank of England’s annual MOT of banks’ financial strength with its twice-yearly assessment of risks to the financial system. It’s not to be confused with Super Thursday – the Bank’s quarterly bombardment of economists with information on inflation and interest rates.

Central banking used to be rather a dull business, but the dry data releases and policy pronouncements are now treated almost like the announcement of Adele’s next tour. Mark Carney, the Bank’s governor, is supposedly either a rock star or a George Clooney lookalike, depending on who you talk to.

The so-called stress tests cover the high street banks – HSBC, Royal Bank of Scotland, Barclays and Lloyds – plus Santander UK, Standard Chartered and Nationwide building society.

Analysts don’t think any of the lenders will fail the main test. The real action could be a clampdown on consumer lending after the Bank’s chief economist, Andy Haldane, said the Bank was keeping an eye on rising household debt. Maybe Tuesday won’t be all that super for the banks.

Mentioned in the guardian's articles, household debt has to be kept on eye because mortgage loan is vulnerable to the interest rate rising. Once concerns raised about if rate rising will suffer household debt, Bank of England probably hesitate to increase the interest rate. Similar story was seen in Australian mortgage a year ago.
Anyway, if expectation for upside of the interest rate wiped off, GBP could decline for a while.

Market events from 23-Nov-2015

The market events which are likely to affect to FX market. Find out more at QROSS X.

18:00 23-Nov, GMT, US 2 year Note Auction;
    Key currency >> USD

00:05 24-Nov, GMT, Australia RBA Governor Glenn Stevens speech;
    Key currency >> AUD

09:00 24-Nov, GMT, UK Inflation Report Hearings;
    Key currency >> GBP

15:30, 24-Nov, GMT, Canada Bank of Canada Review;
    Key currency >> CAD


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GBPNZD, economic figures released next week in UK and NZ, Trend & momentum 14-Nov-2015

GBPNZD closed at around 2.329 yesterday, which is near the highest level at the beginning of this month.

From next Monday, economic figures will be released in both of UK and New Zealand. Particularly, GBPNZD is expected more volatile on Tuesday as NZ inflation expectations will be revealed by RBNZ and a lot of figures will be released in UK, including Consumer Price Index.

Generally, if the inflation figure is lower than expected, need for monetary easing, such as rate cut or quantitative easing, is increased. It leads to the local currency being cheaper. On the other hand, if the inflation is higher enough than expected, monetary policy is expected eventually tighten, which means the currency value is going to relatively higher.
Those fundamental factors drive Forex market sharply more than the natural trend.

Watching at the energy and commodity market, Crude oil price has approached to near the lowest level in last Aug since the beginning of Nov, Copper price has reached at the lowest level for last 6 years. In the sense of dropped market in this month, the inflation figures will be lower and it could be  lower than anticipated. There is time lag between the figures released, and the FX could jump from the eastern market opening to the earlier western market opened during next Tuesday.

Although the last inflation figure for NZ indicated slightly higher than anticipated, it is still unclear to see if the inflation is recovered.
ECONOTIMES >> New Zealand Consumer price inflation was slightly stronger than anticipated
see if the inflation is recovered.
Stuff.co.nz >> Ongoing low interest rates needed to meet inflation target

In UK, Bank of England is expected to keep their interest rate lower. It implies the economic recovery and inflation are not enough from their view.
BBC >> Bank of England dampens prospects of early UK rate rise

By the way, the trend and momentum for GBPNZD indicates it is sharply lower towards the middle of next week. It implies UK inflation could be more disappointed? Let's see:)

USDCAD Trend & momentum 11-Nov-2015

USD has been up and down for some weeks because of uncertainty whether Federal Reserve increase their interest rate by the end of 2015.

GBP was another currency whose interest rate had been expected going up. However, in earlier this month, Bank of England governor Mark Carney hinted their interest rate will stay lower for longer. GBP has gone down sharply against major currencies including USD and JPY.

The Telegraph >> Mark Carney suggests interest rates will stay lower for longer

Bank of England governor Mark Carney has said he still sees the need for gradual interest rates rises to bring inflation back to target, but latest forecasts signal a hike in the cost of borrowing may not come for another year.

Mr Carney, who previously said the decision on whether to raise rates would come into "sharper relief" around the turn of the year, said the economic picture had changed in recent months as the global economy has slowed.

He warned the outlook for global growth had weakened since the Bank's last inflation report in August and added that there was a risk of a "more abrupt slowdown in China", which could hit UK growth.

His comments follow the Bank's decision once more to keep interest rates at 0.5%, where they have remained for more than six years.

By the way, the trend and momentum for USDCAD indicates it is expected going down in a coming week. Fundamentally, expectation for the rate rise is a driving factor to USD in short term. If the market consensus expect the rate will not rise by the end of this year, USD could go down sharply against major currencies.

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How difficult situation to lift interest rate? 13-Sep-2015

It has been a while since discussion was started about lifting the interest rate. Watching the market consensus, it seems that the rate hike is triggered by US or UK.

For a last few years, however, the market has moved against the rate rise. There have been multiple factors, listed below, preventing US, UK or others to lift their interest rate in the global economy.

1. Rate cutting in other nations
Particularly in the last year, but for a last few years, the policy rates have been cut remarkably in several nations, such as Australia, New Zealand, Canada, Sweden, Denmark, Switzerland, ...  Some of them has reached at negative rates. As a result of those rate cutting, USD and GBP has been stronger against currencies, particularly against AUD, NZD and CAD.
In the current market, US or UK rate hike will lead to their currency value gone up. It may be good for importer in those nations, but it would suffer the exporter as USD and GBP are already expensive than other currencies relatively.
There is certain level of concern about deflation risk as their currency values are already higher and rate hike lift the currency value further.

2. Price for oil and natural resources down sharply
WTI crude oil price currently stays around 44.6, and it was around 90 just a year ago. While media have mainly broadcasted that the crude oil price has been going down, other natural resources, such as Iron Ore, the price has gone down in parallel with the oil price. Chinese demand for the oil and natural resources have been shrink for a last few years due to their growth slowing down.
The lower price is not bad for consumers and importers, but it still brings deflation risk into the world. For the exporters such as Australia or Canada, weak demand for oil and natural resources suffer their economy.

Local 10  >>  Goldman Sachs: Oil could hit $20
Forget $40 a barrel oil. Prices could plummet to $20 as a massive supply glut persists until the end of next year.

That's the view of Goldman Sachs, which published an oil report Friday headlined "Lower for even longer."

The bank's commodities team slashed its forecast for average prices in 2016 to $45 per barrel from $57, but said the risks of a collapse to $20 were growing.

Under the risk at deflation, it is difficult decision whether rate hike or not. But at the same time, keeping loose monetary policy, there is eventually a room that inflation badly suffer the people's life.

Even in such situation, Bank of England is likely under pressure to lift their interest rate, as BOE announced the rate must rise relatively soon.

CITY A.M.  >>  Interest rates must rise "relatively soon" says Bank of England's Martin Weale
Interest rates will need to rise "relatively soon", Bank of England rate setter Martin Weale has said.
The hawkish member of the BoE's monetary policy committee (MPC) has said inflation is likely to rise above the central bank's two per cent inflation target "in two to three years' time", which needs to be reflected in policy now.

Weale is the second BoE official in as many days to point to a rate rise. Fellow member of the nine-strong MPC, Kristin Forbes, said on Friday rates will rise sooner rather than later, because the appreciation of sterling may be less of a drag on inflation and import prices than first thought.


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[England] Interest rate rise will not be derailed according to Bank of England governor 29-Aug-2015

Since Chinese stock market crashed this month, the global market have become bearish as risky asset sold sharply. This event brought the discussion if rate rise in US and UK is expected to be delayed. The market reacted as USD had been weaken against other currencies such as EUR or JPY until 24-Aug. GBP had been weaken in the same period as USD but it has not been recovered yet.

Today, Bank of England governor, Mark Carney said China’s financial woes will not derail plans to raise interest rates.

The Telegraph >> China's 'Black Monday' will not derail rate rises, says Mark Carney

Speaking at the Economic Policy Symposium hosted by the Federal Reserve Bank of Kansas City, in Jackson Hole, Wyoming, today, Mark Carney acknowledged that the dramatic decline in Chinese stocks had sparked volatility in Western markets but claimed that it would not knock his economic plans off course.
“The direct exposure of the UK economy to China is relatively modest,” he told delegates. “Developments in China are unlikely to change the process of rate increases.”

This discussion was held after the Forex market closed on Friday, and it implies GBP will be stronger against other currencies at the market opening on Monday, though it is Bank holiday in England, by the way.

Trend & momentum for GBPJPY indicates it is expected upside in early next week. JPY has been stronger while the stock market was going down.

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Chinese stock market is under necessary adjustment, according to IMF 23-Aug-2015

It has been mentioned in the last post, whether too soon to call the situation as Crisis. Yesterday, IMF said economic slowdown and stock market falling are necessary adjustment.

Reuters >> IMF official says 'premature' to speak of Chinese crisis

China's economic slowdown and a sharp fall in its stock market herald not a crisis but a "necessary" adjustment for the world's second biggest economy, a senior International Monetary Fund official said on Saturday.

Fresh evidence of easing growth in China hammered global stock markets on Friday, driving Wall Street to its steepest one-day drop in nearly four years.

"Monetary policies have been very expansive in recent years and an adjustment is necessary," said Carlo Cottarelli, an IMF executive director representing countries such as Italy and Greece on its board.

"It's totally premature to speak of a crisis in China," he told a press conference.

Even though the stock market has fallen sharply, the stock index, such as SSE Composite Index, is above the level at beginning of 2015. Numeric figure also implies it is premature to say "Crisis".


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Too soon to call it "Crisis"? 22-Aug-2015

SSE Composite Index in CNY and USD

Stock price has steeply gone down in major economic zones in the world, lead by Chinese market, followed by such US, UK, Western Europe, Asia and Pacific.

Without particular events, such as Sub-prime loan crisis or Lehman crisis, the crisis is defined after the stock market crashed into bottom. Although the stock market has plunged sharply, in SSE Composite Index, the current level is still almost same or slightly above the level at the beginning of this year.

This is both in CNY and USD.

S&P/ASX 200 in AUD and USD

It means, even though CNY itself has been devalued this month, the stock index is still higher than the value at beginning of the year.

However, looking at Australian stock index S&P/ASX200, the level is already record low within last 4 - 5 years in USD, while it is still above the level at beginning of 2015 in AUD. This is because of weakness in AUD in last 3 years.

The stock market is highly correlated as realized last October or movement in this month.

CITY A.M. >> Chaos on European markets as FTSE 100 tumbles, while S&P 500 crashes below 2,000 points

There still seems be room where Chinese stock market is going down, the correlation could bring more chaos into other economic zones than China itself.

See Stock indexes for other economic zones.

Check international business news on Newsensus. Available on GooglePlay

EURJPY Trend & momentum 11-Aug-2015

Expectation of Greek deal bring positive sentiment into the market, and EUR has been steady for last days. In Asia and Pacific market, since CNY (CNH as offshore) was devalued as poor economic figure, AUD also became weaker, which implies Australian dependence on Chinese economy.

Reuters >> China devalues yuan after poor economic data

The trend and momentum indicates EURJPY is expected downward trend in a coming week while EURJPY have been steeply going up by now.

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