Fundamental Analisis By InstaForex

[IFX Darika]

Singapore Consumer Prices Fall Further In August

Singapore's consumer price index dropped 0.3% year-on-year in August, slower than than a 0.5% fall in the preceding month, a report by Statistics Singapore said Wednesday. Economists expected a 0.4% fall.

Housing costs fell 1.6%, due to lower electricity and gas tariffs and cheaper liquefied petroleum gas (LPG). Transport and communication costs fell 0.4%, mainly due to cheaper petrol prices. Excluding accommodation costs, the consumer price index declined 0.9%.

Month-on-month, consumer prices were up 0.4%, owing to higher costs of transport and communication, clothing and footwear, as also housing and stationery items. Excluding accommodation costs, consumer prices were up 0.5%. Meanwhile, after adjusting for seasonal effects, consumer prices were up 0.4% on a monthly basis in August.

In the first eight months, consumer prices rose 0.5% compared to last year.

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[IFX Svetlana]

Pound Climbs To Multi-day Highs Against Majors.

Extending its early European session rally, the UK currency advanced further against its major counterparts ahead of the North American session on Tuesday.

The pound jumped to a 5-day high of 0.9106 against the euro and 1.6617 versus the Swiss franc by 8:00 am ET, compared to 0.9207 and 1.6408, respectively hit late New York Monday.

The pound also advanced to a 4-day high of 1.5992 against the US dollar and 143.85 versus the Japanese yen around this time, compared to yesterday's closing values of 1.5887 and 142.44, respectively.

As of now, the sterling is trading at 143.65 against the yen, 1.597 versus the greenback, 1.6597 versus the Swiss franc and 0.9116 against the euro.

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[IFX Darika]

Malaysia Trying To Broaden Tax Base: PM

Tuesday, Malaysian Prime Minister Najib Razak said the government intends to reduce operating expenditure and to broaden its tax base. However, the reduction in expenditure would not affect the efficiency of the government, said Najib.

The government's pump priming measure is currently costing a billion ringgit a month. The government is set to present its 2010 budget next month.

Najib, who is also the finance minister, told reporters that the government is mindful of the need to rein in the fiscal deficit. The government expects the budget deficit to fall to 7.6% of GDP this year.

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[IFX Darika]

Euro Mixed In Trading Against Majors Amid French PPI Report

Following the release of the French August PPI report, the euro showed mixed trading against its major counterparts. While the euro fell against the pound and the yen, it rose versus the franc. Against the dollar, the euro was little changed during this time.

Currently, the euro is worth 0.9095 against the pound, 1.4618 against the dollar, 131.20 against the yen and 1.5114 against the franc.

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[IFX Svetlana]

Unemployment Hits 26-Year High As Job Losses Soar In September.

Job losses in September were sharper higher than economists had expected, driving the unemployment rate to its highest level in 26 years and pushing the number of people out of work above 15 million.

The U.S. Labor Department revealed Friday that non-farm payrolls dropped 263,000 in September. Economists had expected a decline of 170,000 jobs, though some disappointing employment news over the last few days raised doubt about whether the result could meet expectations.

The report included revised data for the last couple months as well, showing that payrolls dropped by 201,000 in August and 304,000 in July.

The unemployment rate for September came in at 9.8% compared to 9.7% in the previous month. This represented the highest unemployment rate since mid-1983.

September saw the number of unemployed rise to 15.14 million, compared to 14.93 million in August. There were about 7.6 million unemployed at the end of 2007, when the recession officially began.

The construction sector lost 64,000 jobs in September, while manufacturing lost 51,000. There was a 38,000-job decline in retail. Professional and business payrolls slipped 8,000 and job in the leisure and hospitality sector declined by 9,000.

There were losses on the government payroll as well, with a decline of 53,000 for September.

Education and health jobs were up slightly in the month, edging higher by 3,000.

The average work week dipped to 33 hours after coming in at 33.1 in August. Average hourly earnings ticked up to $18.67 from $18.66.

Earlier this week, payroll processor ADP released its figures for private-sector employment. The report came in worse than expected, with payrolls dropping 254,000.

This was followed on Thursday by a disappointing report on weekly jobless claims. A Labor Department report showed that the number of people filing first-time unemployment claims climbed 17,000 last week to 551,000. Economists were looking for a reading around 535,000.

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[IFX Svetlana]

German Construction Sector Drops In September.

Germany's construction sector activity dropped for a nineteenth straight month in September, a report by the Markit Economics said on Tuesday.

The seasonally adjusted Construction Purchasing Managers' Index or PMI rose to 43.8% from 43.6 in August. The PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.

In September, the construction companies were again pessimistic about the twelve-month outlook for activity, the Markit said.

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[IFX Darika]

Financial Professionals Say U.S. Economy Still In Recession

Financial professionals hold the view that the U.S. economy remains in a recession, despite signs of stability in recent months, a survey said Tuesday. The survey was conducted amongst attendees of the 2009 annual conference of the Association for Financial Professionals on October 5.

Around 20% of respondents assessed that the recession will end before of the year, while 69% expect the recession to continue well into 2010. Nearly 22% expect company payrolls to shrink further, while just 14% anticipate their organization to resume hiring over the next six months.

Only 21% of financial professionals said their organization will increase capital spending in the months ahead. Majority of survey respondents expect to either maintain or further cut capital spending over the coming six months.


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[IFX Svetlana]

UK Sept. Output Prices Rise Unexpectedly.

Friday, the Office for National Statistics said UK's output prices rose 0.4% in September from the previous year, reversing a fall of 0.3% in August. Consensus forecast was for a 0.1% fall.

Reflecting price rises in petroleum and other manufactured products, output prices climbed 0.5% month-on-month, larger than the 0.3% increase seen in August and 0.1% expected by economists.

The input price index for materials and fuels purchased by manufacturing industry fell 6.5% annually in September, following a 7.7% drop in August. On a monthly basis, input prices slipped 0.5% in September. Economists were expecting an annual 6.8% fall and a monthly drop of 0.8%.

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[IFX Svetlana]

Euro Eases From 14-month High Against Dollar.

In European deals on Thursday, the euro eased from a 14-month high against the dollar amid a report that showed Euro-zone's annual CPI fell in September. The euro also plummeted to a 6-day low against the pound and an 8-day low against the franc.

But the euro strengthened to a fresh 3-week high against the yen due to across the board weakening of the latter.

The Eurostat said in a final report that Eurozone's consumer price index or CPI dropped 0.3% year-on-year in September, after falling 0.2% in August. The statistical office confirmed its preliminary estimate for inflation.

The core inflation, which excludes food and energy prices, remained at 1.2% in September, slower than the 1.3% growth the previous month.

On a monthly basis, the CPI remained unchanged in September, while core inflation stood at 0.2%.

The euro, which closed yesterday's trading at 0.9346 against the pound slipped to a 6-day low of 0.9196 in early deals on Thursday. The next downside target level for the euro-pound pair is seen at 0.908.

The pound rose on speculation the Bank of England policy makers may pause their asset-purchase program in the near future as the economy shows signs of recovering from the recession.

In an interview to the Financial Times newspaper, Paul Fisher, Bank of England's executive director for markets said he feels more confident now that the asset purchase programme is having the scale and speed of impact that was hoped for when the programme was started.

"But we are still only seven months into the programme from when it started with the first purchases, so it is still very early days," he told the newspaper. According to him, the increase in unemployment is still "pretty dreadful". But it is just not as bad as it could have been, given a 6% fall in output. And that may be one of the aspects of the asset purchase scheme working, he said.

During early trading on Thursday, the euro declined to an 8-day low of 1.5131 against the Swiss franc. This may be compared to Wednesday's close of 1.5150. If the euro-franc pair drops further, it may test support around the 1.509 level.

The franc advanced as Switzerland's ZEW economic expectations index continued to rise in October. The economic expectations index for Switzerland increased to 65 in October from 58 points in the previous month, results of a survey conducted by the Centre for European Economic Research and Credit Suisse revealed today.

The euro weakened against the dollar after reaching a 14-month high of 1.4969 at 2:10 am ET Thursday. Presently, the euro-dollar pair is trading at 1.4913, down from yesterday's close of 1.4930. The near term support for the pair is seen at 1.487.

In early deals on Thursday, the euro surged up to a new 3-week high of 134.32 against the yen. On the upside, 135.5 is seen as the next target level for the European currency. At yesterday's close, the euro-yen pair was quoted at 133.50.

The Bank of Japan upgraded its economic assessment for the second consecutive month, the latest Monthly Report of Recent Economic and Financial Developments showed today.

The BoJ said the Japan economy has started to pick up compared to its last month's view that economic conditions are showing signs of recovery. Looking forward, the central bank said economic conditions are likely to improve gradually. Last month, the BoJ said economic conditions are likely to start improving in the near future.

In the upcoming North American session, the U.S. consumer price index for September, weekly jobless claims report for the week ended October 10th and the results of the New York Federal Reserve's empire state manufacturing survey for October are scheduled for release.

The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10:00 am ET.

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[IFX Darika]

Dollar Edges Lower Versus Euro, Sterling

The dollar touched a fresh yearly low versus the euro on Tuesday, even after European Central Bank President Jean-Claude Trichet and finance ministers of the sixteen Eurozone countries expressed "worries" about forex movements and voiced support for a strong U.S. dollar.

Its been a brutal stretch for the dollar of late, particularly against the euro. Amid expectations that the interest rate gap between the US and other industrialized nations will widen rapidly once the economic recovery takes hold, the dollar has fallen almost 25 cents from its 2009 highs against the euro, set back in March.

Late Monday night, the dollar dropped to 1.4993, its lowest level in more than fourteen months. The pair was little changed from that mark approaching 8 am ET.

The dollar barely budged versus most other majors ahead of data on US housing starts and producer prices. The Bank of Canada's interest rate decision may also be in focus.

While most economists expect the BoC to maintain its current overnight call rate, Australia, another resource-based economy, surprisingly hiked its key interest rate earlier this month.

Earnings news will also garner attention as participants continue to look for signs that corporations are able to grow revenues.

The dollar was stuck in the mud versus the loonie ahead of the BoC decision, inching slightly higher to C$1.0320. A surprise from central bankers in Ottawa could drive the dollar to parity with the loonie.

Against the sterling the dollar extended its 6-week low, touching 1.6446. With the loss, the buck moved further away from last week's 5-month high near 1.5700.

Choppy trading kept the dollar above the 90 mark versus the yen. Speculation that Japanese officials may intervene to weaken the yen has helped the dollar rebound after testing a 1995 low of 87.08.

Japan's leading index stood at 83.2 in August, down from the initial estimate of 83.3, the Cabinet Office reported Tuesday. However, the leading index improved for the sixth month in a row. In July, the reading was 82.5.

News are provided by InstaForex.