Month: January 2014

By CentralBankNews.info
    Kenya’s central bank held its Central Bank Rate (CBR) stable at 8.50 percent to “encourage a full impact of this monetary policy path to be felt throughout the economy.”
    The Central Bank of Kenya (CBK), which has maintained its rate since May last year after cutting it by 250 basis points in the first few months, said its policy stance had anchored inflationary expectations and continues to result in the desired objective of price stability.
    Kenya’s inflation rate eased further to 7.15 percent in December from November’s 7.36 percent, continuing the drop since September’s 8.29 percent when it breached the central bank’s upper limit. CBK targets inflation of 5.0 percent, plus/minus 2.5 percentage points.
    Inflation jumped in September after a 16 percent value-added-tax (VAT) was added to a wide range of goods.
    The central bank said confidence in Kenya’s economy remains strong, with remittances from abroad resilient and averaging US$ 110.6 million a month from July to November a and market perceptions’ survey from December showing that the private sector expects inflation and the exchange rate to remain stable and growth strong in 2014.
    The central bank also said the recent visit and statements by International Monetary Fund (IMF) Managing Director Christine Lagarde had provided a “positive signal to potential investors.”
    Kenya is preparing to launch its first Eurobond, hoping to raise as much as $2 billion, and the CBK said this would further bolster the country’s foreign exchange reserves and support exchange rate stability.
    The central bank’s foreign exchange reserves rose to $6.164 billion at the end of December from 5.868 billion end-October with the bank attributing the build-up of reserves to the disbursement of $110 million by the IMF.
    Kenya’s shilling has been largely stable since the central bank’s last meeting in November, fluctuating in a range from 85.72 and 86.72 against the U.S. dollar in December. Last year the shilling rose strongly in the first few months of the year from 86.76 to the dollar end-2012 but then dropped in early May as investors reassessed the prospects for emerging markets.
    Kenya’s Gross Domestic Product expanded by 1.6 percent in the third quarter from the second quarter for annual growth of 4.4 percent, slightly up from 4.3 percent in the second quarter.
    During her visit to Kenya, Lagarde on Jan. 6 said the country’s economic gains over the past few years “have been nothing short of remarkable” and economic reforms had laid the foundations to lift the country to middle-income status within the next decade.
    Lagarde added that sub-saharan Africa remains the second-fastest growing region in the world and the IMF expects this region to enjoy growth of close to 6 percent in 2014.
    “A more modern framework for monetary policy has helped keep inflation expectations in check, despite adverser shocks,” Lagarde said about Kenya’s monetary policy, adding this had put the country in a favorable condition to tap international financial markets with its planned Eurobond.
    But as the country becomes more integrated into the global economy, it will also be more exposed to external shocks through spillovers from trading partners’ economies or volatility in financial markets, with stronger foreign exchange reserves and a lower debt helping ensure the country can remain resilient to such shocks.

    www.CentralBankNews.info

The EURUSD Is Unable to Continue Growing

The EURUSD increased to 1.3687 on weak non-farms and ended the week slightly below this level. With a start of the new trading week the pair has not managed to continue increasing, instead of this it consolidated in a tight range. Attempts to decline were limited by support around the level of 1.3637. Inability to grow above current resistance creates risks for a downward momentum resumption. A breakout of support at 1.3618 will lead to a decline of the pair`s currency rate to 1.3569—1.3545. A loss of the latter will put passing of 1.3475 at risk. To improve prospects the bulls should overcome the 37th figure and consolidate higher.

With a start of the new trading week the GBPUSD pair has attacked the 65th figure, but it failed again. After testing 1.6507 the British pound was sold out that led to a breakout of support at 1.6380 and a fall to 1.6346. Now pullbacks are attracting a buying interest and they are limited by resistance near the 64th figure. A loss of current support will lead to a decline to 1.6306 and a breakout of the level will open the way to the 62nd figure. On the whole, short term outlooks look bleak and in order to improve them the bulls need to return and consolidate above the 64th figure.

The USDCHF continued declining yesterday but found support around the level of 0.8985. Now it is trying to develop growth above 0.9000. Ability to consolidate above this level will indicate that the bulls continue to control the situation and then growth should be expected to continue and testing of the 91st figure. A loss of current support will worsen prospects of the dollar and will open the way to the 89th figure. So far the dollar has failed to consolidate above 0.9100, risks of the fall resumption are kept.

Pressure on the USDJPY has remained that led to the rate decline to the level of 102.85, where the pair was able to find support. Now the dollar is trying to rise above the 103.56 level ( which serves as support) but unsuccessfully. Undoubtedly, a current fall of the pair is corrective. The yen has oversold heavily, so its rise can be a large-scale, but still the dollar is trading above 102.00—101.59, an uptrend is not at risk. A loss of the last level will significantly weaken positions of the bulls to a decline to 100.68-100.00.

By HY Markets Forex Blog

Crude oil futures were little changed on Tuesday after losing 1% yesterday, the most since Jan 8. The Western powers and Iran reached an agreement over the Persian nation’s nuclear program on Sunday.

North American WTI for February delivery rose 0.13%, trading at $92.13 per barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark Brent crude for February settlement added 4 cents to $106.79 per barrel on the ICE Futures Europe exchange.  Brent was at a premium of $14.87 to WTI.

WTI – US Supply

The US crude oil stockpiles report is expected to be released by the Energy Information Administration on Wednesday. Analysts are predicting the report to show a drop by 1.15 million barrels in the week ended January 10, following the previous decline of 2.7 million barrels in the previous week.

The North American WTI crude dropped to an eight-month low of $91.66 per barrel on Jan 9 as production rose by 24,000 barrels a day to 8.15 million in the week ended Jan 3, according to reports from the EIA.

Distillate inventories, including diesel and heating oil is expected to show a rise by 1.38 million barrels last week. While Gasoline supplies are predicted to have advanced by 2.2 million.

A separate report from the American Petroleum Institute is expected to be released later during the day.

WTI – Iran Agreement

Over the weekend, the Western powers including the US, China, Russia, France, Germany and the UK finalized a six-month deal with Iran, over the country’s nuclear program; which will be implemented from January 20. As part of the deal, the Persian nation will scale back its nuclear developments, while the US will ease economic sanctions.

“Iran will also continue to take steps throughout the six months to live up to its commitments, such as rendering the entire stockpile of its 20% enriched uranium unusable for further enrichment,” Secretary of State , John Kerry said.

Iran have only been producing approximately 1 million barrel a day, the lowest in nearly 30 years; due to the sanctions imposed on the country.

WTI – Libya

Libya’s production has risen to 650,000 barrels per day (bdp) as the country’s largest oil fields, El Sharara restarted and production reached 300,000 barrels per day. However, production in the country is still below July’s level of 1.2 million barrels.

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The post WTI Little Changed Ahead US Stockpiles Report appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

The Japanese yen dropped from its recent gains against all of its 16 major peers including the US dollar and the euro after Japan’s current account widened in November.

The yen traded 0.3% lower at 103.39 yen against the US dollar at the time of writing, after touching 103.51 yen earlier in the day.

The USD/JPY currency pair opened the session 103.10 yen, dropping from previous gains of 102.86 yen, and the highest level since December 18, following the Federal Reserve (Fed) announcement to reduce its $85 billion monthly purchases by $10 billion.

The greenback marked a third-session decline against the yen on Monday, dragged lower by the disappointing non-farm payrolls data.

The yen dropped 0.32% to 141.19 yen against the euro. The EUR/JPY currency pair reached 141.46 yen earlier in the day, following the release from the Ministry of Finance. The yen later dropped from its previous gains against the shared currency.

Yen – Japanese Data

The nation posted its current account balance for November, dropping more than analysts forecasted, according to the Ministry of Finance. Japan posted a record of 592.8 billion yen, after showing a deficit of 127.9 billion in the previous month.

A separate data released revealed the nation’s economy bought a new 1.48 trillion yen of dollar bonds in November. The data also revealed that investors in Asia increased holdings of dollar bonds for the fifth month in a row, while analysts predict the Bank of Japan will increase asset purchases this year.

“The current-account deficit is one of the reasons why yen won’t strengthen,” said Daisuke Karakama, a market economist in Tokyo “People are wondering when the BOJ will expand monetary easing, so yield differentials will only continue to widen between Japan and the U.S,” he added.

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The post Yen Drops From 3-day Rally on Current Account Deficit appeared first on | HY Markets Official blog.

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Article By RoboForex.com

Analysis for January 14^th, 2014

EUR/USD

Euro is falling down a little bit; this movement may be considered as correction towards ascending structure formed last Friday. We think, today price may continue growing up to break level of 1.3686, form consolidation channel near this levels, and then continue moving upwards to reach target at 1.3800.

GBP/USD

Pound is still being corrected. We think, today price may continue falling down towards level of 1.6265, move upwards to reach level of 1.6440, and then complete this correction by finishing its fifth wave at level of 1.6185. Later, in our opinion, pair may form reversal pattern to start new ascending structure inside up trend.

USD/CHF

Franc is still consolidating; market is forming continuation pattern to continue falling down. Price has already formed central structure near level of 0.9015. We think, today pair may continue moving downwards to reach level of 0.8920.

USD/JPY

Yen is still forming the third descending structure with target at 102.74. We think, today price may reach this target and then move upwards to 104.00. Later, in our opinion, pair may complete this correction by forming the fifth descending structure to reach level of 102.60 and then start new ascending movement to return to level of 104.00.

AUD/USD

Australian Dollar started forming new impulse to continue descending movement. We think, today price may fall down towards level of 0.9000, return to 0.9045, and then start forming another descending structure inside down trend. Main target of this wave is at 0.8400.

GOLD

Gold is still consolidating; market has formed central part of continuation pattern near level of 1248.88. We think, today price may continue forming this ascending structure towards level of 1277.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

Analysis for January 14^th, 2014

EUR/USD

Just as we expected, Eurodollar continued moving upwards and reached new maximum. Yesterday I opened buy order; stop is already in the black. Closest target is at correctional level of 50%. If price rebounds from it, pair may reverse downwards.

At H1 chart, local correction reached level of 38.2% and then pair rebounded from it. According to analysis of temporary fibo-zones, predicted target at level of 50% may be reached during the next several hours.

USD/CHF

Franc is also still being corrected; target is at level of 50%. If later price rebounds from it, market may start new ascending movement.

Correction reached local level of 50%. Bears’ first attempt to break minimum failed, but they may try again and succeed in the nearest future. Possibly, price may reach its main target during the day.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article by Investazor.com

Yesterday I mentioned the EURUSD – Short term Rectangle Pattern analysis that near the 1.3630 support area it might be some good buying potential. It seems that the Euro bounced really nice from the 1.3636 low and touched today 1.3697. This morning rally was mainly caused by the declaration of ECB’s Nowotny who said that the outlook for Europe as a whole is much better than a year ago and that the monetary policy has contributed substantially to economic recovery.

In the economic calendar today are scheduled to be released the European Area Industrial Production and for the United States the Core Retail Sales and Retail Sales, Import Prices, Business Inventories and the FOMC members Plosser and Fisher speeches.

From the technical analysis point of view, the Euro bounced from a good support area and gave some good reasons for bulls to continue buying. A close on the 60 minutes chart above 1.3685 would be a good bullish signal which could lead to a test on 1.3700 or, why not, if fundamentals sustain the Euro, a rally to 1.3720.

The post EUR/USD – 14 January Morning Overview appeared first on investazor.com.

USDCAD remains in uptrend from 1.0588, the fall from 1.0945 could be treated as consolidation of the uptrend. Range trading between 1.0800 and 1.0945 would likely be seen in a couple of days. Key support is at 1.0800, as long as this level holds, the uptrend could be expected to resume, and one more rise towards 1.1000 is still possible. Only break below 1.0800 support could signal completion of the uptrend.

Provided by ForexCycle.com

By MoneyMorning.com.au

My colleagues and I are a little worried about overvaluation of a lot of biotech stocks, especially some of the new initial public offerings this year.

Those who warn of a biotech bubble are correct to think that a lot of biotech stocks seem to keep going up without any good reason. Despite mightily thin pipelines and drugs still stuck in Phase 2 trials, a lot of biotechs seem to have climbed on pure hope. But my experience with biotech stocks is that it’s not wise to think of them as a group. As is true with most things, generalizations don’t offer good information – specifics do.

So yes, this was a banner year for IPOs of biotech companies – at least 34 of them, at last count. But frankly, I wish it had been more of a blowout and that the blowout had started five years ago. Biotechs have been depressed for a decade. The truth is that there are hundreds of small startup companies that have great ideas, great products and great futures – but they haven’t gone public. In many cases, the reason is purposeful – so they won’t get gobbled up by a Big Pharma company before they’ve had a chance to show what they can do.

Many of the researchers and scientists developing new drugs and procedures and instruments are immensely proud of their accomplishments and have a passion to prove their ideas are correct. They don’t want to lose control of their direction and their work.

Examples abound of companies with great drugs that went public too soon and got eaten by a pharma giant. Then the originators watched helplessly as their drug – which actually worked and was sailing through to Food and Drug Administration approval – was canned by marketing pros and bean counters who decided the return on investment just wasn’t good enough. Big companies think very differently from startups.

Biotech IPOs: Don’t Lose Sight of These Two Takeaways

What’s lost in the hubbub about all these new IPOs soaring are two things.

First, a lot of them have gone down in value, not up.

Second, and more importantly, the surge of IPOs now only reflects the dearth of biotech IPOs in the last 10 years. It has been a desert out there for investors in this critical field. And 35 or so IPOs in one year for biotechs may seem like a lot, but averaged out over the last 10 years, it’s nothing. Predictions are for another 35-40 to go public in 2014.

Having said all that, I too am worried about a January-April sell-off in 2014 of the overall market. And we all know that stocks floating on hope get hit the hardest in downturns.

If there’s a market downturn, almost all biotech stocks will drop for the time being. But that may also represent another buying opportunity, and that reminds me of one of Warren Buffett’s most famous speeches, supposedly given during a talk at Columbia University when he was 21:

‘A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful… Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month or a year from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.‘

Even in a severe downturn, specific biotech stocks can move dramatically upward, because success in this area depends on success in trials research and FDA decisions.

Regards,

Stephen Petranek
Contributing Editor, Money Morning

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By MoneyMorning.com.au

By MoneyMorning.com.au

Last week we told you about a major story that was set to break in the world’s metals markets.

Not only that, but it could have a big impact on a select few Aussie mining stocks.

As it turns out, what we thought would happen has happened.

And now it’s up to these Aussie stocks – and one stock in particular – to make the most of it.

Here’s the lowdown…

As we revealed last week, Indonesia had threatened to slap a ban on the export of certain minerals. One of the minerals included in the ban is bauxite. Bauxite is the mineral ore for aluminium.

Any such ban would be a big problem for China, which is the world’s largest consumer of bauxite. It relies on Indonesia for around 20% of its bauxite supply.

Well, yesterday Indonesia did what few truly expected it to do – it went through with the mineral export ban. Now China has to find a source for one-fifth of its bauxite demand.

Indonesia’s Ban is Great News for Small-Cap Aussie Miner

The initial knee-jerk reaction by many folks will be to go on about how this is terrible news for China. They’ll say how the Chinese economy could collapse as prices rise for metals and demand for consumer goods falls.

The alternative is to look at the positives. That’s what we prefer to do.

And when it comes to the positives, well, to state the obvious, there’s a lot to be positive about…especially for Aussie mining firms that could be in a great position to benefit from the Indonesian shutdown.

If you add this shutdown to the expected huge growth in demand for aluminium from carmakers looking to make lighter cars, it should be perfect timing for any company that’s close to production. That includes the tiny Aussie mining stock we keep close tabs on in Australian Small-Cap Investigator.

Of course, it’s not as easy as turning on a machine to begin churning out bauxite and turning it into aluminium. There’s the issue of project finance, offtake agreements, plant construction, and then mining the stuff.

Even so, China understands how much it relies on stable and regular imports from overseas. The actions by Indonesia’s government will likely cause the Chinese government to diversify its import partners.

Australia is already a big exporter of bauxite. Australia also has one of the world’s biggest reserves of bauxite. So for all the strained relations between Australia and China in the past, Aussie mining stocks are still in a strong position to benefit from what’s going on in Indonesia.

But it’s not just about Chinese demand and Indonesian export bans. One of the world’s biggest car producers has just potentially set off a rocket under the aluminium market…

Ford’s Weight Loss Program

We woke up this morning to see the news on Ford’s [NYSE: F] latest F-150 truck. The F-150 is the top selling vehicle in the US. If you’ve seen any of Ford’s F Series trucks you’ll know they’re big. Think of a Toyota Hilux and then imagine something roughly 20% bigger. That’s how big they are.

But now, thanks to Ford’s planned use of aluminium in its body panels, the 2015 model F-150 is about to shed a whole bunch of weight compared to the current model:

‘The 2015 Ford F-150 pickup truck is on target to shed 700 pounds thanks to aluminium body panels and will get as much as 30 mpg in highway driving, Ford says. It will also get virtually every driver assist Ford offers on passenger cars: blind spot detection, lane departure warning, surround-view cameras, adaptive cruise control, collision warning, LED headlamps, and automated parallel parking.‘

This goes back to what we’ve explained for a while now. You can take almost any company or industry in the economy and you’ll find that it’s just as much a technology business as it is a manufacturer, retailer or other service company.

This move by Ford is important. Ford is still one of the biggest car companies in the world. This could be a bombshell for the car sector as it will no doubt encourage other firms to make lighter and more fuel efficient cars.

Of course, Japanese carmaker Honda [TYO: 7267] is already ahead of the game. It has developed what we call a ‘wonder weld‘ that combines steel and aluminium to produce a compound that’s stronger and lighter than using steel by itself.

This looks set to be a great boon for the resource sector, and flies in the face of those who claim resource stocks will never recover.

Enough Opportunities for Two Years of Ideas

Last week we sat down for a strategy meeting with Diggers and Drillers resource analyst Jason Stevenson.

We told Jason to bring his brain and nothing else. If you read the headlines surrounding the resource sector you’d probably think we had a glum, woe-is-me type of meeting.

Nothing could be further from the truth.

Everywhere you look folks are talking down the prospects of the resource sector. They’re talking about China’s supposedly slowing economy. They’re talking about the potential for falling iron ore and gold prices. And they’re talking about the resource sector never recovering after the boom.

And yet within five minutes of sitting down for our strategy meeting, we’d come up with more than a dozen exciting opportunities in the resource market. By the end of our meeting an hour later we had racked up more than two dozen exciting opportunities .

That should be enough to keep Diggers and Drillers readers in investment ideas for the next two years.

So much for the notion that the resource sector is dead. Far from it.

The reality is that the current market action is what you should expect after a boom. Prices fall, and overcapacity and overinvestment need to be purged from the market. You’ve seen that happen. So it should be no surprise. That’s why the Newcrest [ASX: NCM] share price has fallen 78% since the 2011 peak.

It’s why small-cap mining stock Discovery Metals [ASX: DML] is down around 97% from its peak. During a boom, investors get overexcited and make bad investment decisions.

Now is the time for investors to get on the other side. Resource stocks won’t go down forever. In fact, some have already started to bounce. Newcrest has gained 24% since early December.

In short, there are plenty of people around who will tell you that you can’t make money from stocks today, because the market is too risky. We take a different view. We say you can make money from stocks (potentially a lot of money) for the precise reason that it’s a risky market.

When investors are scared they tend to panic and sell. If you’re in the buying mood that gives you a great opportunity to buy select stocks on the cheap.

Cheers,
Kris+

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By MoneyMorning.com.au