| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: Feb 18, 2014 - 1:48 PM


Markets: Bank of Japan responds to falling confidence; Falling demand for human Fx traders
By Finfacts Team
Feb 18, 2014 - 1:44 PM

Email this article
 Printer friendly page
Wolfgang Schäuble, German finance minister, in cheerful mood at the Ecofin council of EU finance ministers meeting in Brussels today, Feb 18, 2014.

The Bank of Japan today maintained its expansionary monetary policy and extended special loan programs to help buoy economic growth, signaling its resolve to keep the positive mood generated by premier Shinzo Abe's reflationary policies from fading.

The central bank reiterated its upbeat view on the economy, despite recent signs of slowing growth and suggesting that any additional stimulus will be some time away.

The bank said in a statement that "Japan's economy has continued to recover moderately, and a front-loaded increase in demand  prior to the consumption tax hike has recently been observed. Overseas economies -- mainly advanced economies -- are starting to recover, although a lackluster performance is still seen in part. In this situation, exports have generally been picking up. Business fixed investment has been picking up as corporate profits have improved."

It added: "Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. The year-on-year rate of increase in the CPI, excluding the direct effects of the consumption tax hike, is likely to be around 1¼% for some time."

The bank is targeting a 2% annual price rise to  end 15 years of deflation.

The Bank of Japan has doubled the size of one facility to ¥7tn ($68bn) and said banks can now borrow twice as much money at low rates as previously under the second programme.

The central bank also extended the expiry of both schemes by one year.

The move comes just a day after Japan reported disappointing growth numbers for the October-to-December quarter.

Its gross domestic product rose by 1% on an annualised basis during the period, much lower than analyst forecasts of an expansion of close to 2.8%.

The Nikkei 225 closed up 3.13% Tuesday.

Bloomberg News says a widening probe of the foreign-exchange market is roiling an industry already under pressure to reduce costs as computer platforms displace human traders.

Electronic dealing, which accounted for 66% of all currency transactions in 2013 and 20% in 2001, will increase to 76% within five years, according to Aite Group LLC, a Boston-based consulting firm that reviewed Bank for International Settlements data. About 81% of spot trading -- the buying and selling of currency for immediate delivery -- will be electronic by 2018, Aite said.

German economic sentiment declined in February 2014

European car sales rise -- second lowest for a January since 2003

"Irish" drugs firm Actavis in talks on $25bn takeover of Forest Laboratories

Irish Corporate Tax 2014: How official spin and distortion works - in short-term

Economic View: Peripheral spread tightening continues; Dermot O'Leary, chief economist of Goodbody comments  -- "There was once a time when markets would have been parsing every word of finance ministers in their regular eurogroup meetings. When current political developments in Italy are thrown into the mix, one would expect markets to be showing at least some element of concern. The opposite was the case yesterday.

In Italy, the 10-year bond yield fell to 3.6%, its lowest level in eight years, with the spread over Germany down to below 200bps. Political risks appear to have been ignored, with investors instead focusing on the removal of the negative outlook by Moody’s on Friday evening.

We have noted previously that the absence of market pressure can lead to complacency at a policy level in the euro area. Given the apparent lack of progress at last night’s eurogroup meeting, this accusation can certainly be made. For example, political agreement on direct bank recapitalisation by the ESM was kicked out until March, while outstanding issues remain in relation to the Single Resolution Fund. The adjustment programme remains on track in Cyprus, while a Troika mission will return to Greece this week. Statements on both countries were brief, while there was no mention of Portugal. The statement also said that the economic situation in the euro area overall is expected to continue to improve.

Although complacency is warned against in the statement, one has to say that the lack of market pressure has led to a slowdown in policy implementation, especially with regard to the backstops ahead of the upcoming stress tests. For now, the markets don’t seem to care about the risks (OMT, Italian politics, risk of deflation, Greece), and the peripheral spread tightening continues."

Hibernia REIT Gets off the mark with acquisition of €67m loan portfolio: Eamonn Hughes of Goodbody comments - - "Hibernia announced yesterday that it has signed contracts to acquire a portfolio of loans on residential real estate assets from Ulster Bank for €67m (net of acquisition costs). The total cost is c.€70m and the company intends to spend c.€20m on development works (should take c.16-18 months), whilst non-core assets will be sold. We estimate that the residential component of the transaction equates to c.10% of the potential investment spend of the REIT (estimated at c.€600m).

There are 17 assets of varying size in the portfolio acquired from Ulster, mostly located in Dublin, with two assets outside Dublin, neither of which are material. The largest asset being acquired is 213 partly completed apartments at Wyckham Point, Dundrum, Dublin 16, with Hibernia set to spend a further €20m to complete. There are also 89 completed residential units in various locations in Dublin, office/commercial space of 28,500 sqft and development land of 27 acres.

The deal is the inaugural portfolio acquisition by the company and is likely to be welcomed by investors, coming just 7-8 weeks after it received its IPO proceeds. This gets Hibernia up and running and highlights the potential options for the firm, particularly in off-market deals. The strategy remains focused on the Dublin office market, but this acquisition offers reasonable upside to the very strong prospects for the Dublin residential market. Further deals in due course are likely to be supportive as the market gets line of sight on NAV growth potential. We are positive on the prospects for continued improving commercial and residential prices in Dublin in 2014 and 2015."

Conall Mac Coille, chief economist at Davy, comments - - "European stock indices were little changed on Monday with US markets closed for the President’s Day holiday The euro was relatively stable against the dollar at $1.371, close to its strongest level since the beginning of the year. Today’s key releases include the German ZEW investor sentiment survey, which is expected to show another rise in confidence in February. Perhaps due to weather conditions, the drop in the headline ISM manufacturing survey to 51.3 in January led investors to question the durability of the US recovery. So, today’s Empire manufacturing survey will be closely watched for any hints that the headline ISM will bounce back in February.

Last week saw the Bank of England complete its U-turn from its forward guidance policy linking future interest rate rises to a unemployment rate threshold of 7%. Wednesday’s Inflation Report appeared to provide a new form of guidance with Governor Mark Carney asserting that spare capacity in the UK economy remains and when the time comes for rate rises they will be gradual and limited. However, the MPC did not tie itself to any explicit precondition, in place of the 7% unemployment rate, to be achieved before raising rates. Moreover, on Thursday, Chief Economist Spencer Dale indicated that the market curve for policy rates was plausible. The market is currently pricing in a full 25bps rise to 0.75% by March 2015, and to 1.25% by December 2015."

US Markets

Monday was Presidents’ Day in the US — a federal holiday — and US stock and bond markets were closed.

US benchmark updates

Asia Markets

The MSCI Asia Pacific Index rose 0.9% Tuesday.

Japan's Nikkei 225 rose 3.13%; China's Shanghai Composite fell 0.77%; South Korea's KOSPI added 0.03%; Australia's S&P/ASX 200 advanced 0.18% and in Mumbai, the Bombay Stock Exchange the S&P BSE India Sensex Index rose 0.83%.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600  is down 0.11% in early afternoon trade Tuesday.

“The ZEW report from Germany disappointed this morning,” Arnaud Scarpaci, a Paris-based fund manager at Montaigne Capital, which manages about $271m, said in an interview today, according to Bloomberg. “I have been overweight in Europe this year and now am inclined to reduce my exposure.”

In Dublin, the ISEQ  is down 0.41%

CRH is of 0.80%.

European Benchmarks

Irish Share Prices

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.3725 and at £0.8225.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time high of 11,771 on May 21, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 3.11%, to 1,619 points, Bloomberg report.

On Monday in London the BDI closed up 24 points or 2.17% to 1,130.

The index rose by 220% in 2013 to 2,237.

Global rebalancing — the tanker scrapyard index?

Crude oil for March 2014 delivery is trading on the Chicago York Mercantile Exchange (CME/Nymex) at $101.16 up 86 cents from Friday's close (markets were closed Monday). In London, Brent for April 2014 delivery is trading on the International Commodities Exchange at $109.42. The North Sea benchmark accounts for two-thirds of the global market.

Finfacts, July, 15, 2013: US West Texas Intermediate oil benchmark jumps in July - - margin between WTI and Brent falls.

Gold spot price

The spot price of an oz of gold is trading on the CME in Chicago at $1,315.00 down $4.0 from Friday's closing (markets were closed Monday) - - the gold price fell 28% in 2013, the biggest annual plunge since 1981.

Gold had hit a record high of $1,921.15 a troy ounce on Sept 06, 2011.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

International
Latest Headlines
Wednesday newspaper review: December 17, 2014
Tuesday newspaper review: December 16, 2014
Monday Newspaper Review - Irish Business News and International Stories - - December 08, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 25, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 21, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 20, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 19, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 18, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 17, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 14, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 13, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 12, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 11, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 06, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 04, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 03, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 31, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 30, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 29, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 22, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 21, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 16, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 13, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 09, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 08, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 06, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 02, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 01, 2014
Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014