GBP/USD – British pound edges higher, investors eye UK job numbers

The British pound has recorded slight gains in the Monday session. In North American trade, the pair is trading at 1.3266, up 0.24% on the day. On the release front, British Rightmove HPI surprised with a decline of -0.1%, its first decline since December. In the U.S, core retail sales dropped to 0.4%, matching the estimate. Retail sales dropped to 0.5%, edging above 0.4%. On Tuesday, BoE Governor speaks before the Treasury Select Committee, and the U.K will release wage growth and unemployment rolls. In the U.S, Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.

The U.S economy is firing on all cylinders and received a vote of confidence from the head of the Federal Reserve. On Thursday, Powell said that the economy is “in a really good place”, pointing to President Trump’s massive tax cut scheme and increased spending as key factors in boosting economic growth. Powell did not address monetary policy and said he was uncertain as to the effects of the current trade disputes which has embroiled the U.S and its trading partners. The Fed will likely press the rate trigger in the second half of the year, but it is an open question as to whether we’ll see one hike over the next six months. The Fed is projecting growth of 2.8% in 2018, compared to 2.3% in 2017. Powell will be in the spotlight next week when he appears for his semi-annual testimony before Congress.

Trade policy is not part of the Federal Reserve’s mandate, but Fed policymakers continue to voice concern about the escalating trade war between the U.S and its major trading partners, particularly China. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his outlook if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability.

As the Brexit deadline creeps ever closer, both sides are making contingency plans for a ‘hard Brexit’, in the event that the parties fail to reach an agreement. On Thursday, the British government released a white paper, which is a blueprint for trade arrangements with the EU when Britain leaves the club in March 2019. The proposal suggests that the UK and the EU will enter into an “association agreement”, which maintains current agreements with regards to goods but not services. This could have a significant negative impact on London’s financial hub, which is already facing the loss of hundreds of financial jobs from London to the continent. Prime Minister May is facing strong opposition from hardliners in her cabinet, who argue that the white paper leaves the EU too much control over British trade policy and could hamper British trade deals. Will the Europeans buy what May is selling? EU policymakers are reviewing the white paper and if it is rejected, investors could get panicky and send the pound lower.

  Trade ,earnings ,teapots and the US dollar

China Q2 GDP growth as expected, though lower than Q1

 

GBP/USD Fundamentals

Sunday (July 15)

  • 19:01 British Rightmove HPI. Actual -0.1%

Monday (July 16)

  • 8:30 US Core Retail Sales. Estimate 0.4%. Actual 0.4%
  • 8:30 US Retail Sales. Estimate 0.4%. Actual 0.4%. Actual 0.5%
  • 8:30 US Empire State Manufacturing Index. Estimate 20.3. Actual 22.6
  • 10:00 US Business Inventories. Estimate 0.4%

Tuesday (July 17)

  • 4:00 BoE Governor Mark Carney Speaks
  • 4:30 British Average Earnings Index. Estimate 2.5%
  • 4:30 British Claimant Count Change. Estimate 2.3K
  • 4:30 British Unemployment Rate. Estimate 4.2%
  • Tentative – British NIESR GDP Estimate
  • 9:15 US Capacity Utilization Rate. Estimate 78.4%
  • 9:15 US Industrial Production. Estimate 0.5%
  • 10:00 US Federal Reserve Jerome Powell Testifies
  • 10:00 US NAHB Housing Market Index. Estimate 69
  • 16:00 US TIC Long-Term Purchases. Estimate 34.3B

*All release times are DST

*Key events are in bold

 

GBP/USD for Monday, July 16, 2018

GBP/USD July 13 at 10:25 DST

Open: 1.3235 High: 1.3293 Low: 1.3224 Close: 1.3266

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3088 1.3186 1.3263 1.3494 1.3613 1.3712

GBP/USD posted small gains in the Asian and European sessions. The pair is showing little movement in North American trade

  • 1.3263 has switched to a support level after gains by GBP/USD on Monday. It is a weak line
  • 1.3494 is the next of resistance
  • Current range: 1.3263 to 1.3494

Further levels in both directions:

  • Below: 1.3263, 1.3186, 1.3088 and 1.2996
  • Above: 1.3494, 1.3613 and 1.3712

EURUSD still depends on dollar sentiment

EURUSD still depends on dollar sentiment

BRENT CRUDE OIL TVC:UKOIL


EURUSD             declined last week after three weeks of gains. The pair looks neutral on Monday, changing hands around the 1.17 threshold, which serves as the key barrier for short-term buyers. USD index looks quite stable, but has started the week mainly on the back foot, which raises a chance for a more sustainable rebound in the single currency.

The general sentiment around the greenback remains the key river for the pair. As trade-war fears have abated somewhat, the overall sentiment in the global financial markets remains cautious, which supports safe-haven USD demand. In the short term, US June retail sales data will be in market focus. Should the numbers disappoint, the euro             could regain the 1.17 mark and target the 1.1760 area which comes as the intermediate resistance on the way to 1.18. As long as the price remains below this barrier, downside risks will prevail.

As the broader picture shows, EURUSD             remains within a bearish trend , and there is a risk of a decline towards the lows around 1.15 as the buck could regain the impetus due to trade-war jitters and further “hawkish” signals from the Fed down the road.

USD/CAD- Canadian dollar subdued as U.S retail sales within expectations

The Canadian dollar is almost unchanged in the Monday session. Currently, USD/CAD is trading at 1.3145, down 0.07% on the day. On the release front, Canadian Foreign Securities Purchases dropped sharply to C$2.18 billion, well short of the estimate of C$7.03 billion. This marked a 5-month low. In the U.S core retail sales dropped to 0.4%, matching the estimate. Retail sales dropped to 0.5%, edging above 0.4%. 

In the U.S, the focus is on consumer spending reports, with both retail sales and core retail sales expected to drop to 0.4%. On the manufacturing front, Empire State Manufacturing Index is forecast to drop to 20.3 points. On Tuesday, Federal Reserve Chair will testify before the Senate Banking Committee and Canada releases Manufacturing Sales.

The U.S economy is firing on all cylinders and received a vote of confidence from the head of the Federal Reserve. On Thursday, Powell said that the economy is “in a really good place”, pointing to President Trump’s massive tax cut scheme and increased spending as key factors in boosting economic growth. Powell did not address monetary policy and said he was uncertain as to the effects of the current trade disputes which has embroiled the U.S and its trading partners. The Fed will likely press the rate trigger in the second half of the year, but it is an open question as to whether we’ll see one hike over the next six months. The Fed is projecting growth of 2.8% in 2018, compared to 2.3% in 2017. Powell will be in the spotlight next week when he appears for his semi-annual testimony before Congress.

Trade policy is not part of the Federal Reserve’s mandate, but Fed policymakers continue to voice concern about the escalating trade war between the U.S and its major trading partners, particularly China. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his outlook if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitcal instability.

  Trade ,earnings ,teapots and the US dollar

China Q2 GDP growth as expected, though lower than Q1

Monday (July 16)

  • 8:30 Canadian Foreign Securities Purchases. Estimate 7.03B. Actual 2.18B
  • 8:30 US Core Retail Sales. Estimate 0.4%. Actual 0.5%
  • 8:30 US Retail Sales. Estimate 0.4%. Actual 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 20.3
  • 10:00 US Business Inventories. Estimate 0.4%

Tuesday (July 17)

  • 8:30 Canadian Manufacturing Sales
  • 9:15 US Capacity Utilization Rate. Estimate 78.4%
  • 9:15 US Industrial Production. Estimate 0.5%
  • 10:00 US Federal Reserve Jerome Powell Testifies
  • 10:00 US NAHB Housing Market Index. Estimate 69
  • 16:00 US TIC Long-Term Purchases. Estimate 34.3B

*All release times are DST

*Key events are in bold

USD/CAD for Monday, July 16, 2018

USD/CAD, July 16 at 8:35 DST

Open: 1.3157 High: 1.3167 Low: 1.3137 Close: 1.3145

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 1.2970 1.3067 1.3160 1.3292 1.3436

USD/CAD posted small losses in the Asian and  European sessions. The pair has posted slight gains early in the North American session

  • 1.3067 is providing support
  • 1.3160 was tested earlier in resistance. It remains a weak line
  • Current range: 1.3067 to 1.3160

Further levels in both directions:

  • Below: 1.3067, 1.2970 and 1.2831
  • Above: 1.3160, 1.3292, 1.3436 and 1.3530

UAE-backed Haftar in takeover of Libya’s oil ports

Officials from the United Arab Emirates have been involved in secret talks with renegade Libyan General Khalifa Haftar to facilitate the export of oil outside of UN-approved channels, an investigation by the Wall Street Journal has revealed.

Haftar’s forces moved to take control of several ports in the country’s oil crescent last month, cutting off exports of some 850,000 barrels a day. This pushed the price up to $80 a barrel to be exported through a breakaway company, which the UAE is alleged to have supported.

The move caused widespread concern internationally, with the US, Britain, France, Germany and Spain vowing to take action against any effort to sell Libyan oil from any outlet other than the National Oil Corporation of the UN-backed government in Tripoli.

Whilst the UAE publicly supports UN resolutions, its backing of Haftar has been attributed to the desire to bolster the Libyan commander as an alternative to the Islamist forces in the region, which are thought to be backed by Qatar and Turkey. Forces loyal to Haftar battled with east Libya warlord Ibrahim Jadhran for control of the ports last month; they handle more than 80 per cent of the country’s oil exports.

UAE government officials have attempted unsuccessfully to facilitate independent oil sales through Emirati companies for the past two years, Libyan, Emirati and European officials have said, but support from the Emirates has emboldened Haftar to attempt to cut out the National Oil Corporation. However, after international pressure, Haftar relented last week and handed over the management of the ports to the Corporation, which subsequently resumed export operations.

Read: Libya’s Haftar had lengthy meeting with Israeli intelligence officer

The move came after US President Donald Trump allegedly sent a strongly-worded letter to Libyan officials, criticising the Speaker of the House of Representatives, Aqailah Saleh, and the Chairman of the Presidential Council, Fayez Sarraj, for being unable to solve the crisis. In the letter, Trump reportedly warned both Libyan officials that they could face international prosecution as a first step, to be followed by threats of force if the issue was not resolved.

The UAE is known to have provided direct political and financial backing to General Haftar on multiple occasions since 2014. Leaked emails from UAE Ambassador to the US Yousef Al-Otaiba and seen by MEMO have indicated that his country has purchased weapons from North Korea and delivered them to Haftar’s forces, violating the UN sanctions in operation on both countries. The UAE is also believed to be establishing an airbase in the east of the country, according to a UN team of experts.

A report last month also suggested that the UAE is funding candidates in Libya’s election who support Haftar. The country is preparing for the election later this year under the auspices of the UN. Emirati officials have reportedly held many meetings in Egypt, Tunisia and Oman to assess the possible candidates based on their opinion of the military commander.

After Libya was divided in 2014, Haftar emerged gradually as the dominant figure in the east aligned with a regional parliament and government, and in opposition to the internationally-recognised government in the capital, Tripoli.

The UN and human rights groups have repeatedly accused forces loyal to Haftar of carrying out mass executions in Libya. A UN report has also detailed how he has been providing military support for Sudanese rebel groups since his armed forces took control of Al-Jufra and Brak Al-Shati in Libya.

Read: Libya’s Sharara oilfield cuts output after workers abducted

The post UAE-backed Haftar in takeover of Libya’s oil ports appeared first on aroundworld24.com.

Egypt parliament approves granting citizenship in exchange for financial deposit

The Egyptian parliament has approved a controversial draft bill which allows granting Egyptian citizenship to foreigners in return for a financial deposit.

The bill, introduced by the Egyptian government, allows foreigners residing in Egypt to obtain Egyptian citizenship in exchange for a deposit of at least EGP 7 million ($391,000) or its equivalent in another foreign currency over five years.

Last year the Egyptian government introduced a draft bill which gave the interior minister absolute power to determine the amount of money to be deposited as well as conditions for applying for the Egyptian citizenship in violation of Article 6 of the Constitution, which stipulates that citizenship is the birth right of anyone born to an Egyptian man or woman.

Egypt: Bank manager flees with $10m from bank coffers

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Bitcoin stuck in limbo

Bitcoin stuck in limbo

Bitcoin / Dollar BITFINEX:BTCUSD


BTCUSD             had a viable weekend, with the pair has appreciated and thus has trimmed its weekly losses. Nevertheless, the coin remains stuck in limbo, being shut in a limited range of $6,000-$6,400 for the last six days. The market obviously lacks fresh catalysts and headlines to stage a more vivid movement in either direction.

The digital currency returned most of its previous July gains last week, mainly due to some negative comments by prominent names and another exchange hack. Besides, US authorities arraigned twelve Russian officials for using the virtual currency in interfering with the 2016 elections. All these developments derail the buyers’ attempts to push the price of bitcoin             out of the boring range.

Technically, the coin shows some signs of bullishness as the price remains reluctant to get below the $6,000 key immediate support. Therefore, should the upcoming week doesn’t bring fresh negative developments and headlines, BTCUSD             could try to challenge the $6,400 region which has been limiting the recovery attempts since last week.

Rape crimes by unemployed persons increase by 425% in Jordan

The number of known crimes committed by unemployed persons in Jordan has increased by 32 per cent, a new report by the Criminal Information Department has revealed. There were such 2,678 crimes in 2017 compared with 2,030 crimes in 2016.

According to the country’s Sisterhood Is Global Institute (SIGI), sex crimes including rape committed by unemployed people have increased by 425 per cent, with 42 incidents last year compared with 8 in the previous year.

According to the statement, unemployed people committed 29 kidnappings in 2016 and 2017. So-called “honour crimes” by the unemployed fell to 190 in 2017, whereas the figure was 249 in 2016. Rape was committed by 29 unemployed people; there were 145 reported rapes in Jordan last year.

The Institute noted that the figures do not necessarily reflect the reality of the number of crimes since some of them are still under investigation.

According to the report, unemployment in Jordan has reached 18.4 per cent in the first quarter of this year, an increase of 0.2 percentage points over the first quarter of 2017.

Read: Jordan gets £500m for reforms from World Bank

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DAX ticks lower as investors look for cues

The DAX index has ticked lower in the Monday session. Currently, the DAX is at 12,521, down 0.12% on the day. On the release front, there are no major German or eurozone events. In economic news, the eurozone trade surplus slipped to EUR 16.9 billion, short of the estimate of EUR 17.6 billion. This marked the lowest surplus since January 2017.

European equity markets showed little change last week and the DAX continues to trade quietly on Monday. Still, the trading tensions hovering in the air have many investors wondering if this is the calm before the storm. On Tuesday, the Trump administration said it was considering imposing tariffs on some $200 billion in Chinese goods, which would be a significant escalation in the trade war between the two economic giants. China has promised to respond with “firm and forceful measures”, but hasn’t provided any details. With neither side showing any flexibility, the markets could be heading for stormy waters if China retaliates.

Trade policy is not part of the Federal Reserve’s mandate, but Fed policymakers continue to voice concern about the escalating trade war between the U.S and its major trading partners, particularly China. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his outlook if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability.

 

Economic Calendar

Monday (July 16)

  • 5:00 Eurozone Trade Balance. Estimate 17.6B. Actual 16.9B

*All release times are DST

*Key events are in bold

 

DAX, Monday, July 16 at 7:40 DST

Previous Close: 12,540 Open: 12,534 Low: 12,523 High: 12,605 Close: 12,525

Trump arrives to go 1-on-1 with Putin at Helsinki summit

Author: 
AP
ID: 
1531740432138072200
Mon, 2018-07-16 (All day)

HELSINKI: President Donald Trump and President Vladimir Putin arrived Monday at Helsinki’s presidential palace for a long-awaited summit, hours after Trump blamed the United States, and not Russian election meddling or its annexation of Crimea, for a low-point in US-Russia relations
The drama was playing out against a backdrop of fraying Western alliances, a new peak in the Russia investigation and fears that Moscow’s aggression may go unchallenged.
“Our relationship with Russia has NEVER been worse,” Trump tweeted Monday morning, blaming “many years of US foolishness and stupidity and now, the Rigged Witch Hunt!“
The summit, which was being closely watched by rattled world capitals, was condemned in advance by members of Congress from both parties after the US indictment last week of 12 Russian military intelligence officers accused of hacking Democrats in the 2016 election to help Trump’s presidential campaign. Undeterred, the American president was set to go face to face with Putin, the authoritarian leader for whom he has expressed admiration.
Trump was greeted at the palace by Finland’s president. The summit was starting later than scheduled because Putin arrived in Helsinki about a half hour late in another display of the Russian’s leader famous lack of punctuality. Trump seemed to return the favor by waiting until Putin had arrived at the palace before leaving his hotel. Putin has been late for past meetings with the pope and British Queen, among many others.
Trump and his aides have repeatedly tried to lower expectations about what the summit will achieve. He told CBS News that he didn’t “expect anything” from Putin, while his national security adviser said the US wasn’t looking for any “concrete deliverables.” Trump told reporters during a breakfast Monday with Finland’s president that he thought the summit would go “fine.”
The meeting comes as questions swirl about whether Trump will sharply and publicly rebuke his Russian counterpart for the election meddling that prompted a special counsel probe that Trump has repeatedly labeled a “witch hunt.”
In his tweets, Trump continued to undermine the investigation and blamed his predecessor, Barack Obama, for failing to stop Russia’s efforts to sway the 2016 election in Trump’s favor. He claimed Obama “was informed by the FBI about Russian Meddling, he said it couldn’t happen, was no big deal, & did NOTHING about it.”
The Obama administration did, in fact, take action, including confronting Putin in person as well as expelling nearly three dozen Russian diplomats the US said were actually intelligence operatives and imposing new sanctions.
While Trump was eager for a made-for-TV moment that will dominate headlines like his sit-down with North Korean leader Kim Jong Un last month, the Kremlin’s primary mission was simply to have the summit happen. Putin hopes the meeting, mere hours after he presided over the World Cup finals, will help him forge good personal ties with Trump and focus on areas where Moscow and Washington may be able to find common ground, such as Syria.
The two leaders first meet one on one in the Finnish presidential palace’s opulent Gothic Hall, then continue their discussions with an expanded group of aides and over lunch in the Hall of Mirrors, once the emperor’s throne room. The leaders will conclude by taking questions at a joint news conference.
Observers have raised concerns about the fact that the leaders will be alone during their first meeting, but for a pair of interpreters, meaning there will be no corroborating witnesses to accurately represent what was said during the conversation.
Putin will likely not be shooting for official recognition of Russia’s 2014 annexation of Crimea or easing of the crippling US sanctions, aware that the US Congress would never allow such action. But he would welcome a symbolic end to Western protests over Crimea and Moscow’s attempts to destabilize elections and traditional Western alliances and norms.
Trump unleashed his own attacks on those very institutions before arriving in Finland.
In an interview with CBS News that aired Sunday, Trump described the European Union, a bloc of nations that includes many of America’s closest allies, as a “foe.”
That attack on the alliance came on the heels of Trump’s jarring appearance at a NATO summit in Brussels, where he harshly criticized traditional allies over “delinquent” defense spending only to later confirm his commitment to the military alliance that has long been a bulwark against Russian aggression.
“NATO is now strong & rich!” Trump wrote in a celebratory tweet Monday morning. During his breakfast, he said NATO had “never been more together” and said the summit had been “a little bit tough at the beginning, but it turned out to be love.”
Prior to meeting Putin, who has cracked down on the free press, Trump unleashed fresh attacks on the news media, including from aboard Air Force One as it descended into Helsinki.
“Unfortunately, no matter how well I do at the Summit, if I was given the great city of Moscow as retribution for all of the sins and evils committed by Russia over the years, I would return to criticism that it wasn’t good enough — that I should have gotten Saint Petersburg in addition!” Trump tweeted. “Much of our news media is indeed the enemy of the people and all the Dems know how to do is resist and obstruct!“
“Russia has done nothing to deserve us meeting them in this way,” said Nina Jankowicz, a global fellow at the Wilson Center’s Kennan Institute who specializes in Russia, Ukraine and disinformation. For Putin, she added, “not only is this a P.R. coup no matter what happens, Trump could say nothing and it would help to legitimize his regime.”
Hovering over Helsinki is the specter of the 2016 election interference and ongoing special counsel Robert Mueller’s investigation into possible collusion between Trump campaign officials and Russia.
Trump said in Britain last week — another chaotic stop on his European tour — that he would raise the issue of election meddling with Putin even as he played down its impact.
“I don’t think you’ll have any ‘Gee, I did it. I did it. You got me,’” said Trump, invoking a television detective. “There won’t be a Perry Mason here, I don’t think. But you never know what happens, right? But I will absolutely firmly ask the question.”
Trump also said in the CBS interview that he had given no thought to asking Putin to extradite the dozen Russian military intelligence officers indicted this past week in on charges related to the hacking of Democratic targets.
But after being asked about that by his interviewer, Trump said “certainly I’ll be asking about it” although extradition is highly unlikely. The US doesn’t have an extradition treaty with Moscow and can’t force the Russians to hand over citizens. Russia’s constitution also prohibits turning over citizens to foreign governments.
Putin is likely to strongly reaffirm his denial of any meddling and cast the US charges as unfounded.
The Russian Foreign Ministry rejected last week’s indictment as part of a “shameful comedy” staged by those in the US who try to prevent the normalization of Russia-US ties, arguing that it doesn’t contain evidence to back the accusations.
On Syria, a possible deal could see Moscow helping mediate the withdrawal of Iranian forces and their Hezbollah proxies from the areas alongside Syria’s border with Israel — a diplomatic coup that would reflect Russia’s carefully cultivated ties with both Israel and Iran.
While both Putin and Trump spoke about the need to discuss arms control issues, they are unlikely to make any quick deals. They may underline the importance of continuing the discussions, setting the stage for discussions on expert level.

Main category: 

Trump blames bad Russia ties on FBI ‘witch hunt’Trump arrives in Finland for closely watched Putin summitUS senators on rare visit to Moscow ahead of Putin-Trump summit

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