Two recent straws in the fair winds enjoyed by the eurozone: Jean-Claude Juncker’s upbeat state of the union speech to the European Parliament last week, and the return of Portugal’s public debt to the “investment grade” division of bond markets. The doom-mongers who claimed Europe was condemned to stagnation unless and until it “completes” its monetary union are being proved more incorrect with each day that brings improved economic news, showing that it was not impossible for euro countries to rack up proper growth after all. In fact, once the last eurozone downturn ended at the start of 2013, there is nothing to distinguish the eurozone growth experience from the first four years of the post-crisis recovery in the US, the only other comparably large advanced economy. As an academic business cycle dating committee pointed out last month, in 17 quarters since it bottomed out, the eurozone economy grew by just over 7 per cent (including second-quarter data for 2017, this now amounts to 7.8 per cent), not far below the 8.1 per cent the US economy racked up in the same amount of time after its low point in spring 2009 (or 9 per cent after 18 quarters). In fact, taking into account the different rates of population growth, the eurozone outperformed the US. In the first four years of the current recovery, the population of euro member countries grew 1.5 per cent (from 336m to 341m), while that of the US grew twice as fast, by 3 per cent (from 307m to 316m). If anything, Europe’s monetary union edged ahead of the US in terms of improving GDP per person, which is a better measure of living standards. A similar story can be told for employment. In four years of recovery, 5.5m more jobs were created in eurozone countries, bringing the total to 143.5m, from 138m at the start of 2013. The US, in contrast, continued to lose jobs at the start of its recovery, and had only added a net 4m jobs after four years: from 140m to 144m civilian employees. Counting four years from when employment bottomed out, the US did better, going from 138m at the end of 2009 to 144m at the end of 2013. But even that does not quite match the eurozone’s rate of jobs growth if you take the US’s faster population growth into account. We should ask two questions. The first is whether the eurozone can keep up its current pace. Looking at the US example, the answer seems to be “yes”. The American economy has kept growing and adding jobs at an even faster rate since 2013 without fizzling out. It should be quite possible for the eurozone to do the same. The second is why it took the eurozone so long to start a recovery that it was evidently fully capable of (pace the view of the single currency as a millstone around its members’ necks). The answer comes down to policy. A few years ago, Free Lunch reported on research estimating how much worse the US crisis experience would have been in the absence of its chosen policies in the area of fiscal stimulus, monetary loosening and financial sector policies. We concluded then that the degree to which the eurozone fell short of the US’s policies fits well with the degree to which the euro’s economic performance fell short of America’s. Conversely, by 2013 the eurozone got its policies right: adopting a neutral fiscal policy in the aggregate, a gradual move towards ever-looser monetary policy and belated action to fix broken banking systems. A recovery as good as that of the US one was the result. The lesson, then, is that a sustained eurozone recovery was always there for the taking. So, today, is its continuation. Source: The International THE NEWS (25/09/2017)
Thailand's agriculture minister said on Friday that Vietnam will join the International Tripartite Rubber Council (ITRC), representing the world's top natural rubber producers, in an effort to ensure stability amid global price concerns. The members of the ITRC - Thailand, Malaysia and Indonesia - met and approved the move at a gathering in Bangkok this week, said Chatchai Sarikulya, Thailand's agriculture minister. The original members already produce nearly 70 percent of the world's natural rubber, and with Vietnam the council will account for almost 80 percent of global production. "All three countries agreed on welcoming Vietnam as a member of the ITRC," the minister said, speaking to reporters after a ministerial meeting. "Vietnam's joining will increase ITRC's capability in creating stability for the rubber industry." At last year's meeting, the council agreed to cut exports by the world's top three producers by 615,000 tonnes to stabilise prices. The council did not decide to curb exports on Friday, but Chatchai said the ITRC is closely monitoring rubber price trends and the measure remains an option. "If prices drop to a concerning level, the measure (export curbs) might be necessary to boost prices," Chatchai said, without giving more details. Rubber prices, which have suffered in recent years from oversupply, surged late last year after floods in key growing regions, but have since largely subsided. Officials expect rubber output from Thailand and Malaysia to decline this year due to low rubber prices and bad weather, including heavy rain and floods in northern Thailand. (Reporting by Suphanida Thakral; Additional reporting by Panarat Thepgumpanat and Patpicha Tanakasempipat; Writing by Patpicha Tanakasempipat; Editing by Kenneth Maxwell). Source: reuters (25/09/2017)
The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery finished 2.0 yen, or 0.9%, lower at 210.2 yen (US$1.87) per kg, after rising as far as 217.4 yen earlier in the session. The close was the lowest since Aug. 14.
The most-active rubber contract on the Shanghai futures exchange for January delivery plunged 460 yuan to finish at 14,515 yuan (US$2,201) per tonne. It hit the lowest since July 26 of 14,440 yuan earlier in the session, reversing from an overnight gain.
“The TOCOM was dragged down by a continued Shanghai slide,” said Hiroyuki Kikukawa, general manager of research at Nissan, adding a weaker yen could not offset selling pressure.
The dollar rose to a two-month high against the yen after a hawkish-sounding Federal Reserve heightened expectations for an interest rate hike in December.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
“It doesn’t look that Shanghai market has hit a bottom yet and it may test the next support of 14,000 yuan mark,” Kikukawa said, adding that TOCOM may fall to as low as 210 yen.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 150.7 US cents per kg, down 4.1 cents.
(US$1 = 112.4500 yen)
(US$1 = 6.5945 Chinese yuan)
Source: globalrubbermarket (21/09/2017)
Investing.com - Gold prices regained some ground on Friday, pulling away from the previous session's more than three-week lows as threats from North Korea encouraged investors to flock to safe-haven assets. Comex gold futures were up $6.81 or about 0.53% at $1,301.69 a troy ounce by 03:00 a.m. ET (07:00 GMT). Market sentiment weakened after North Korean leader Kim Jong Un said on Friday that Pyongyang will consider the "highest level of hard-line countermeasure in history" against the U.S. in response to President Donald Trump's threat to destroy the country. Shortly after, North Korea's Foreign Minister Ri Yong Ho said his country could conduct a hydrogen bomb test in the Pacific Ocean of an unprecedented scale. In his first speech before the United Nations General Assembly on Tuesday, Trump said "the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea." The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasdown 0.21% at 91.78,off Thursday's one-week highs of 92.42. Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency. The dollar had strengthened broadly after the Federal Reserve on Wednesday indicated that one more interest rate hike is likely this year and said it will begin to unwind its $4.5 trillion balance sheet in October. The greenback was also briefly supported by a string of upbeat reports U.S. jobless claims and manufacturing activity in the Philadelphia area released on Thursday. Elsewhere on the Comex, silver futures gained 0.43% to $17.09 a troy ounce. Source: investing.com (21/09/2017)
Investing.com - The yen gained sharply in Asia on Friday as investors they digested an alarming report that North Korea could test a nuclear weapon over the Pacific Ocean with other attention onfixed on a policy speech on Brexit later in the day. North Korean Foreigh]n Minister Ri Yong Ho said on Friday he believes the North could consider a hydrogen bomb test on the Pacific Ocean of an unprecedented scale, South Korea's Yonhap news agency reported. Ri was speaking to reporters in New York when he was asked what North Korean leader Kim Jong Un had meant when he threatened in an earlier statement the "highest level of hard-line countermeasure in history" against the United States. North Korea could consider a hydrogen bomb test, Ri said, although he did not know Kim's exact thoughts, Yonhap reported. USD/JPY changed hands at 112.02, down 0.40%, while AUD/USD traded at 0.7933, up 0.03%. GBP/USD was last quoted down 0.02% to 1.3579. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.12% to 91.86. Overnight, sterling added to earlier gains against the greenback rising as market participants look ahead to a key speech from British Prime Minister Theresa May on Brexit slated for Friday. The dollar fell against a basket of major currencies as the post-Fed rally faded despite a duo of economic reports showing manufacturing and labor market activity topped expectations. The bullish manufacturing report beat forecasts for a reading of 18 amid economists' expectations that disruption due to Hurricane Harvey would dent national manufacturing. The Philadelphia Fed said Thursday its manufacturing index rose to a reading of 23.8, a three-month high, from 18.9 in August. Meanwhile, initial jobless claims decreased by 23,000 to 259,000 in the week ended Sept. 16, beating forecasts of a 18,000 decline, the U.S. Department of Labor reported Thursday. The negative session for the greenback comes a day after it made strong gains following a somewhat hawkish Federal Reserve statement which stoked expectations for a year-end rate hike. The "dot plot," part of the FOMC's Summary of Economic Projections, indicated that the central bank saw rates rising to between 1.25% and 1.5% by the end of the 2017. With rates steady at 1-1.25%, that points to one further rate hike this year. The majority of traders - more than 70% - expect the rate hike in December, according to Investing.com's Fed rate monitor tool. Losses in the greenback were limited, however, as the yen weakened in the wake of the Bank of Japan’s overnight decision to leave interest rates unchanged. Source:investing.com (21/09/2017)
Investing.com - The People's Bank of China set the yuan mid-point at 6.5867 against the dollar on Friday, compared to the previous close of 6.5922. The China Foreign Exchange Trade System sets the weighted average of prices given by market makers. The highest and lowest offers are excluded from the calculation. The central bank allows the dollar/yuan rate to move no more than 2% above or below the central parity rate. Market watchers see a yuan level of 7 against the dollar, USD/CNY, as a key touchstone for sentiment in the near term. Source: investing.com (21/09/2017)
Investing.com - The dollar moved lower against other major currencies on Friday, despite recent upbeat U.S. data and the possibility of another rate hike by the Federal Reserve this year, as tensions between the U.S. and North Korea re-emerged. The dollar strengthened broadly after the Fed on Wednesday indicated that one more interest rate hike is likely this year and said it will begin to unwind its $4.5 trillion balance sheet in October. The greenback was also supported by a string of upbeat reports U.S. jobless claims and manufacturing activity in the Philadelphia area released on Thursday. But market sentiment weakened after North Korean leader Kim Jong Un said on Friday that Pyongyang will consider the "highest level of hard-line countermeasure in history" against the U.S. in response to President Donald Trump's threat to destroy the country. Shortly after, North Korea's Foreign Minister Ri Yong Ho said his country could conduct a hydrogen bomb test in the Pacific Ocean of an unprecedented scale. In his first speech before the United Nations General Assembly on Tuesday, Trump said "the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea." The safe-haven yen and Swiss franc were higher, with USD/JPY sliding 0.37% to 112.03, off the previous session's two-month peak of 112.72, while USD/CHF fell 0.20% to trade at 0.9688. Elsewhere, EUR/USD rose 0.23% to 1.1969, while GBP/USD held steady at 1.3591, not far from Monday's 15-month highs of 1.3620. Market participants were looking ahead to a string of data on manufacturing and service sector activity data from the euro zone, due later Friday. Investors were also eyeing two separate speeches by European Central Bank President Mario Draghi and UK Prime Minister Theresa May, scheduled later in the day. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasdown 0.21% at 91.78 by 02:15 a.m. ET (06:15 GMT),off Thursday's one-week highs of 92.42. Source: investing.com (21/09/2017)
SEOUL (Reuters) - Oil prices held steady in early Asian trade on Friday as the market waited to see whether major oil producers would extend supply cuts beyond March at a meeting in Vienna later in the day. International benchmark Brent crude futures were at $56.40 a barrel at 0046 GMT, down 3 cents, or 0.05 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were up 7 cents, or 0.14 percent, at $50.62 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers are set to meet in Vienna at 0800 GMT on Friday to discuss a possible extension of an oil supply cut deal to prop up prices. There will be some focus on whether Nigeria and Libya, who have been exempt from the curbs, will join any future cuts. The two OPEC members have both been invited to the meeting. "The market is still split as to whether the meeting will bring fresh supply cuts to the table," ANZ bank said in a note. "With U.S. stockpiles remaining elevated, a firm signal about lower supply is likely needed for price momentum to remain positive." OPEC and some non-OPEC producers including Russia first agreed in November last year to cut their output by around 1.8 million barrels per day (bpd) to clear global oversupply and support prices. Despite their concerted efforts - the oil cartel extended their supply cuts until the end of March - prices have remained depressed amid increasing U.S. oil production. The Energy Information Administration (EIA) reported on Wednesday that U.S. crude production reached 9.51 million bpd in the week ended Sept.15, up from 8.78 million bpd a week ago. [C-OUT-T-EIA] Source: investing.com (21/09/2017)
TOKYO (Reuters) - Asian stocks fell and the Japanese yen and Swiss franc gained on Friday after North Korea said it might test a hydrogen bomb in the Pacific Ocean and escalated a war of words with U.S. President Donald Trump. Spreadbetters expected European stocks to start lower amid a chill in risk appetite, forecasting Britain's FTSE (FTSE) to open down 0.3 percent, Germany's DAX (GDAXI) to open 0.2 percent and France's CAC (FCHI) to start 0.05 percent lower. North Korean Foreign Minister Ri Yong Ho said on Friday he believes the North could consider a nuclear test on an "unprecedented scale" in the Pacific Ocean, South Korea's Yonhap news agency reported. MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) handed back earlier gains and was down 0.7 percent. The index rose to a decade high on Tuesday, lifted as Wall Street advanced to record levels, but fell back after the Fed heightened expectations for a third interest rate hike this year. South Korea's KOSPI (KS11) fell 0.9 percent on the latest bout of geopolitical tensions. Australian stocks (AXJO) managed to advance 0.3 percent while Japan's Nikkei (N225) slipped 0.4 percent following a rise to a two-year high on Thursday. "The headline about North Korea's nuclear test gave a little shock to the market," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo. "Though the market is not expecting that there will be an immediate military action, it has triggered a profit-taking opportunity since the Nikkei had risen sharply recently." Hong Kong's Hang Seng (HSI) shed 0.8 percent and Shanghai (SSEC) was down 0.5 percent after S&P Global Ratings downgraded China's long-term sovereign credit rating on Thursday, less than a month ahead of one of the country's most sensitive political gatherings, citing increasing risks from its rapid debt build-up. The dollar dropped 0.6 percent to 111.785 yen , pulling away from a two-month high of 112.725 touched on Thursday when U.S. yields spiked on the back of the Fed's hawkish stance. The 10-year Treasury yield (US10YT=RR) declined about 3 basis points to 2.251 percent as risk aversion favoured government bonds. It had risen for nine consecutive sessions prior, brushing a six-week high of 2.289 percent. The Swiss franc rose 0.2 percent to 0.9687 franc per dollar . The yen and franc are often sought in time of broader risk aversion. Safe-haven gold ticked up, with spot prices up 0.5 percent at $1,297.11 an ounce , after marking its lowest since Aug. 25 at $1,287.61 in the previous session on a firmer dollar. [GOL/] Apart from geopolitical risks, the focus was on how the region's markets would fare when the Federal Reserve takes a step towards normalising monetary policy, as it projected on Wednesday following its policy meeting. "It is difficult to pass a verdict on the Fed's stance until it actually starts its balance sheet reduction and the markets can gauge its effects," said Kota Hirayama, senior economist at SMBC Nikko Securities in Tokyo. "Fundamentals continue to support emerging markets including those in Asia, although the Fed's latest stance did add a layer of uncertainty going forward." In currencies, the Australian dollar was down 0.1 percent at $0.7926 after sliding 1.2 percent the previous day when Reserve Bank of Australia Governor Philip Lowe said the central bank does not have to follow a general move globally to raise interest rates. A sharp drop in the price of iron ore, Australia's main export commodity, to a two-month low, has also weighed on the currency. The New Zealand dollar was down 0.3 percent at $0.7284 on jitters ahead of a hotly-contested general election on Saturday. [AUD/] The euro inched up 0.1 percent to $1.1954 and on track to end the week 0.8 percent lower. The dollar index against a basket of six major currencies was down 0.2 percent at 92.052. Crude oil prices were little changed amid a wait-and-see mood as ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers meet later on Friday to discuss a possible extension of supply cuts. [O/R] Brent crude (LCOc1) was down 0.1 percent at $56.39 a barrel after reaching a five-month high of $56.53 overnight. Source: investing.com (20/09/2017)
Japan’s Toyo Tire & Rubber Co., Ltd. has unveiled an airless tyre concept that features 50 sets of cross-shaped resin supporting rods lined up in a circle in place of air to bolster the weight of a vehicle and absorb shocks from the road. The “noair” tyre model was designed to eliminate the risk of a flat tyre and time to pump air. The company has not decided on when to put the airless tyre into practical use but is working to market the prospective next-generation product at an early date, company officials said. The company has been working on the product since 2006 to improve durability and reduce noise. While the previous prototypes ran at a low- to moderate-speed, the latest one is capable of operating at a high speed up to some 120 kilometres per hour, the officials said. The durability of the latest prototype has increased by more than eightfold compared with the previous pilot models, the company said. Toyo Tire conducted a demonstration run using a passenger car at a park in Osaka, western Japan, saying it has become the first company in the tyre industry to hold such a test in public. However, airless tyres cannot currently be used on public roads as the Japanese road traffic law has no regulation regarding such tyres. Other tyremakers including Bridgestone Corp. are also in the race to develop airless tyres which have capabilities similar to conventional tyres. Source: rubberjournalasia (20/09/2017)