Day: September 11, 2024

European Economic News Preview: UK GDP Data Due

Posted on by RTT Staff Writer

Monthly GDP and foreign trade figures from the UK are due on Wednesday, headlining a light day for the European economic news.

At 2.00 am ET, the Office for National Statistics releases UK GDP, industrial output and foreign trade figures. The economy is expected to grow 0.2 percent in July after staying flat in June.

Economists forecast UK industrial output to grow 0.3 percent after June’s 0.8 percent increase. The trade surplus is seen at GBP 18 billion in July compared to a shortfall of GBP 18.9 billion in the prior month.

In the meantime, retail sales data is due from Turkey. Sales had increased 1.7 percent in June.

At 5.00 am ET, final inflation data is due from Portugal.

Amazon To Invest GBP 8 Bln In UK To Expand AWS Data Centers

Posted on by RTT Staff Writer

Amazon Web Services or AWS, the cloud computing division of e-commerce giant Amazon.com Inc., announced plans to invest 8 billion pounds or around $10.45 billion over the next five years, to build, operate and maintain data centers in the U.K.

The move is estimated to contribute 14 billion pounds to the UK’s total Gross Domestic Product or GDP over the next five years through to 2028.

The investment will also add more than 14,000 full-time equivalent jobs annually at local UK businesses. The expected positions would be part of the AWS data centre supply chain. This would range from construction, facility maintenance, engineering, telecommunications, and other jobs within the broader local economy.

AWS, which first launched an AWS Region in the UK in December 2016, has continued to expand the Region over the last few years. At present, there are three Availability Zones, two WaveLength Zones, two Edge Locations, and a Regional Edge Cache in the region.

AWS noted that organisations of all sizes and across all industries are using its Cloud computing services to lower costs, become more agile, and innovate faster. AWS’ major customers in UK include AstraZeneca, Cancer Research UK, Deliveroo, easyJet, EDF, Genomics England, Just Eat, Monzo, Natural History Museum, NatWest Group, and Sainsbury’s, among others.

Since 2020, AWS has invested over 3 billion pounds in the UK, which is estimated to have supported an average of more than 6,000 FTE jobs at local businesses.

With the latest investment, AWS’s total planned investment in the UK from 2020-2028 would be more than 11 billion pounds.

According to Tanuja Randery, Vice President and Managing Director, Europe, Middle East & Africa at AWS, the next few years could be among the most pivotal for the UK’s digital and economic future as organisations of all sizes increasingly embrace technologies like cloud computing and AI, to boost innovation, productivity, and competetion.

In recent developments, AWS in June announced that it is launching an infrastructure region in Taiwan by early 2025, with plans to invest billions of dollars in the country over the next 15 years.

Earlier in May, Amazon, as part of France’s annual “Choose France” business summit, said it plans to invest more than 1.2 billion euros or $1.3 billion in its French operations for AWS to increase cloud infrastructure to support generative AI opportunity, and logistics infrastructure.

UK GDP Unexpectedly Stagnates In July

Posted on by RTT Staff Writer

The UK economy unexpectedly stagnated in July as falls in production and construction was offset by an increase in services output, official data revealed Wednesday.

Real gross domestic product showed nil growth for the second straight month, the Office for National Statistics reported. GDP was forecast to grow 0.2 percent.

The 0.1 percent rise in services output was offset by decreases of 0.8 percent in production output and 0.4 percent in construction output.

In the three months to July, GDP advanced 0.5 percent with strong contribution from services output. Services output gained 0.6 percent and construction climbed 1.2 percent, while production output was down 0.1 percent.

In a separate report, the ONS said the monthly fall in industrial output resulted primarily from a decrease of 1.0 percent in manufacturing, supported by smaller contributing decreases in electricity and gas, and water supply and sewerage. These rises were partially offset by a 3.9 percent rise in mining and quarrying, the ONS said.

Although the economy stagnated in July, it does not mean the UK is on the cusp of another recession, Capital Economics’ economist Ruth Gregory said.

The economist said the stickiness of inflation will keep the central bank on hold in September. But today’s data has made an interest rate cut next Thursday a bit more likely.

In July, the visible trade deficit widened to GBP 20.0 billion from GBP 18.9 billion in June, the statistical office said in a separate report.

The surplus on services narrowed to GBP 12.5 billion from GBP 13.6 billion a month ago. As a result, the total trade gap widened to GBP 7.5 billion from GBP 5.3 billion in June.

Yen Rises After BoJ Junko Nagakawa Comments

Posted on by RTT Staff Writer

The Japanese yen strengthened against other major currencies in the Asian session on Wednesday, after the Bank of Japan policymaker Junko Nagakawa signaled about on potential interest rate hikes.

The BoJ board member Nagakawa stated that the central bank may adjust the extent of its monetary easing if the economy and prices align with its projections.

“When considering adjusting the degree of monetary easing further, we must look back upon market developments after our policy shift in July, and carefully assess how the market’s changes affect our economy and price outlook,” she said.

Asian stocks traded lower, with Chinese, Hong Kong and Japanese markets leading regional declines as worries persisted about the health of the Chinese economy.

The focus now shifts to the U.S. consumer price inflation reading later in the day that could offer fresh insights into the central bank’s interest rate plans.

There is fair amount of uncertainty around the size of the cut at next week’s Federal Reserve meeting. Markets are pricing in one out of three chances of a 50-basis point cut and anticipate 114 bps of easing this year.

In the Asian trading today, the yen rose to nearly a 9-month high of 140.72 against the U.S. dollar and nearly a 5-week high of 184.48 against the pound, from yesterday’s closing quotes of 142.23 and 186.28, respectively. The yen may test resistance around 138.00 against the greenback and 179.00 against the pound.

Against the euro and the Swiss franc, the yen advanced to more than 5-week highs of 155.50 and 167.04 from Tuesday’s closing quotes of 156.94 and 168.16, respectively. If the yen extends its uptrend, it is likely to find resistance around 153.00 against the euro and 165.00 against the franc.

The yen climbed to a 5-week high of 86.47 against the NZ dollar, from Tuesday’s closing value of 87.57. On the upside, 83.00 is seen as the next resistance level for the yen.

Against the Australia and the Canadian dollars, the yen jumped to more than 5-week highs of 93.65 and 103.50 from Tuesday’s closing quotes of 94.77 and 104.64, respectively. The next possible upside target for the yen is seen around 90.00 against the aussie and 101.00 against the loonie.

Looking ahead, U.S. CPI data for August and U.S. EIA crude oil data are slated for release in the New York session.

Billionaires Shift from Nvidia to Bitcoin as $20 Billion Flows into Crypto

Posted on by Arslan Butt

A significant shift is taking place among billionaire investors, as many of them are selling off Nvidia stock and reallocating funds into Bitcoin.

The introduction of brand-new spot Bitcoin ETFs in January 2024, which offer institutional investors an easier, more regulated way to gain exposure to digital assets, has been a major driving force behind this movement.

According to CoinShares, nearly $20 billion has flowed into Bitcoin this year, vastly outpacing investment in any other cryptocurrency.

Continue reading “Billionaires Shift from Nvidia to Bitcoin as $20 Billion Flows into Crypto” →

Election 2024: Crypto’s $119 Million Influence and Where Trump and Harris Stand

Posted on by Arslan Butt

Cryptocurrency has gone from niche to mainstream, especially in the political arena. In the 2023-2024 election cycle, crypto companies and investors have poured more than $119 million into federal election campaigns, with a majority of that going to Fairshake, a super PAC designed to support pro-crypto candidates.

This push for influence is an attempt to sway regulatory decisions in favor of the industry, especially as the regulatory landscape remains uncertain.

Companies like Coinbase and Ripple are at the forefront of this movement, accounting for nearly 48% of corporate donations in 2024.

Their aim? To shape policies that allow for greater crypto adoption and fewer restrictions from regulators like the Securities and Exchange Commission (SEC). With cryptocurrency rapidly gaining political clout, the question remains: where do presidential candidates Donald Trump and Kamala Harris stand on the issue?

Continue reading “Election 2024: Crypto’s $119 Million Influence and Where Trump and Harris Stand” →

WTI Crude Oil Price Forecast: Hurricane Francine Disruption & OPEC Demand Cuts to Weigh on $66.88 Price

Posted on by Arslan Butt

WTI Crude Oil is currently trading at $66.88, attempting to recover after a sharp decline earlier in the week. Concerns about Hurricane Francine’s disruption of oil output in the Gulf of Mexico have provided some support for prices.

USOIl
USOIl

According to the U.S. Bureau of Safety and Environmental Enforcement (BSEE), approximately 24% of crude oil production and 26% of natural gas output in the Gulf were offline due to the storm, amplifying supply concerns.

Continue reading “WTI Crude Oil Price Forecast: Hurricane Francine Disruption & OPEC Demand Cuts to Weigh on $66.88 Price” →

Wall Street Faces Volatility as Yen Surges, Oil Sinks, and Tech Stocks Slide

Posted on by Arslan Butt

The first trading session of September opened with a broad selloff across Wall Street, marking a challenging start to what is historically a volatile month.

The S&P 500 dropped by 1.6%, while small-cap stocks plummeted 2.7%. Even the Nasdaq 100 was down 2.5%, recording its worst one-day drop since August.

Continue reading “Wall Street Faces Volatility as Yen Surges, Oil Sinks, and Tech Stocks Slide” →

Will Today’s US CPI Inflation Send USD to 140?

Posted on by Skerdian Meta

USDJPY has been bearish since early August, but has found support above 142, however today  US inflation CPI might send this pair down there. However, risks are skewed for both sides, so we will be following closely the August inflation report and analyze it when it is released.

Inflation risks for the USD tilt to the downside
Inflation risks for the USD tilt to the downside

Continue reading “Will Today’s US CPI Inflation Send USD to 140?” →

NIKKEI225: BoJ Policymaker Reiterates Stance on Rate Hikes

Posted on by Gino Bruno D'Alessio

nikkei 225 loses ground after hawkish bank of japan comments

Junko Nakagawa, former chair of Nomura Asset Management, said that the central bank would continue to raise rates if inflation remained in line with their expectations.

The comment reaffirms previous comments from BoJ officials regarding further interest rate hikes after the rout caused by their latest move. I see statements of this kind as forward guidance, to prepare the market for what is to come.

The previous hike at the end of July took the market somewhat by surprise and created undesired volatility. The rout was also helped by the weak NFP data from the U.S. released early August raising concerns for Japan’s reliance on exports.

In her speech overnight to business leaders she stated that:

“Given real interest rates are currently very low, we will adjust the degree of monetary support, from the standpoint of sustainably and stably achieving our 2% inflation target, if our economic and price forecasts are met.”  

[[NIKKEI225-graph]]

The Yen & Market Expectations

The [[NIKKEI225]] has had a subdued reaction, down 0.72% on the day, as investors weigh the effects of higher rates and the economic performance overall. The yen has continued to strengthen after the comments with the [[USD/JPY]] falling by 0.75% to 141.30.

Nakagawa also mentioned that data released since the central bank’s last meeting in July showed that economic and price predictions seem to be on track. Consumer inflation hit 2.7% in July and has been above or at the BoJ’s 2% target for 27 months.

The GDP Growth rate YoY showed a sharp rise from -2.3% for Q1 2024 to 2.9% for Q2 2024. However, she also added that she had no pre-set timing for further interest rates, and that the markets remained unstable.

The market expects the BoJ to keep interest rates on hold at their next meeting on September 20. However, the conviction of further hikes before the year-end is rising.

Given the various comments indicating clearly the BoJ’s intentions, I would say that more hikes will follow if inflation stays at or above 2% and the economy shows signs of expansion.