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Number of messages : 19
Points : 583
Date of Entry : 2016-05-25
Year : 37

BDSWiss Headlines

on Wed Jun 01, 2016 10:45 am
Australian GDP rises sharply 

Main points:

- The uncertainty over the outcome of the June 23rd referendum is hanging like a dark cloud over the European markets. At the moment, surveys are showing that proponents of an exit from the EU by Great Britain are in the lead. After five days of posting sizeable gains, equity indices posted losses yesterday. The broad-based ESTOXX50 fell by almost 1% and closed at 3063.48 points.

- Deutsche Bank CEO John Cryan wants to sell Postbank, even to Chinese investors if necessary. At this point he would be willing to accept any solution that results in the complete sale of Postbank. The main reason for this would by improving Deutsche Bank’s debt rate which is currently at 3.4%. In addition, Deutsche Bank has been phasing out their retail business.

- In Asia, many market participants are now expecting a further easing of the monetary policy due to poor economic data that has been released in recent weeks. Now the Austrailan - -GDP increased more than was expected from 0.7% to 0.8%. Markets were up by 1.1% as of 03:30 GMT+1.

Watch-List today:

- The British Pound (GBP) is now also under pressure. The USD was able to gain l.4 US cents in value against the GBP yesterday. Fluctuation was so high that there was at one point a change of 2.5 US cents. In the coming weeks, new survey results will likely have a strong impact on the currency exchage rates. At the moment it is unclear whether Britian’s exit would be good or bad for the GBP, it is this uncertainty that will continue to cause the value to fall.

- Retail banking has become less appealing in recent years due to stricter regulations and lower interest rates. This is one of the reasons that the sale of Postbank has been so difficult. There is little demand for a bank that is purely focused on retail banking. Investors should not expect a rise in share prices.

- Very good news for the economy of Australia, which should have had a positive affect on the local companies. However, the rise in local share prices didn’t occur, due to the fact that a further sinking of the interest rate became less likely. Thus good news can quickly turn into bad news.
Number of messages : 19
Points : 583
Date of Entry : 2016-05-25
Year : 37

Re: BDSWiss Headlines

on Thu Jun 02, 2016 12:18 pm

OPEC meeting in focus!

Main Points

Today, the ECB will hold their June meeting and announce their interest rate decision at 13:45 (GMT +1). Market participants are not expecting any surprises from the announcement. The end of the interest rate cuts has already happened, as the EU does not want to follow the example of Japan and introduce negative interest rates. The deposit interest rate for banks is also not expected to change as it is currently at -0.4%, which is very low.

Oil prices fell during trading yesterday afternoon, however, statements made by OPEC caused the trend to change and the losses were quickly recovered. OPEC is now considering a limitation on how much oil its members produce, which is something that Saudi Arabia, as the biggest producer/exporter wants. A final decision is expected to come at the meeting today (Thursday) in Vienna.

The main reason for the strengthening of the Japanese Yen is the controversial monetary policy of the Bank of Japan. According to experts, the combination of quantitative easing and negative interest rates should damage the national economy, as opposed to helping it. On Monday, the exchange rate with the US dollar was more than ¥111, however, it is currently at a it over ¥109.

Watch-List Today

In anticipation of the announcement, the Euro rose against the US dollar and is currently at around $1,12. In particular, the press conference from Mario Draghi will be important, as it should give investors insight about the current state of the European economy and the fight against deflation. The press conference starts at 14:30 (GMT+1) and will be streamed live on the ECB homepage.

A similar deal could have happened in April. At the OPEC meeting in Doha, Saudi Arabia had seemingly convinced all the other member states that limiting production was a good idea. However, the refusal of Iran to participate in the plan caused it to fail.

Following the rise in value by the Yen, the Nikkei once again suffered losses. At the moment, the Nikkei has already lost 2.5%, as the strong Yen causes a decrease in the profits from Japan’s exporting companies, despite there being nothing they can do to stop it.
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