21 / 08 / 2018 | Notizie sul mercato

US and China resume trade talks

The tension between the United States (US) and China regarding their trade relations rages on, but, in the last few days, there seems to be an effort from both sides to reduce it. The trade talks between representatives of both sides scheduled for the end of August 2018 could be a starting point, according to global market analysts. 

Mid-level trade talks are expected to focus on the value of the Chinese Yuan (Renminbi) compared to the US Dollar. According to a CNBC report, published on Monday August 20th 2018, the US Dollar has gained a bit more than 6% against the Chinese Yuan in the first eight months of 2018. The CNBC report noted that much of the US Dollar’s appreciation occurred during July and August 2018. The last time that the US Dollar traded around 7.0 against the Chinese currency was in May 2008, more than 10 years ago. 

The Chinese Yuan began to lose value when the US President Donald Trump spoke against the Chinese government’s trade policies, stressing that it’s unfair towards the US and pledged to do whatever he could to reverse the situation. Listening to US threats of sanctions against China made global investors worried and sent the world’s major stock markets down as there was no guarantee that there won’t be an escalation. The US Federal Reserve’s (Fed) move to raise its benchmark interest rates to 2% drove the US Dollar’s value up, affecting its exchange rate with the Chinese currency. 

Some analysts suggest that the Chinese government allowed the country’s currency to depreciate as a countermeasure to the imposed US sanctions on Chinese products. However, they are not sure whether this policy helped the Chinese economy withstand the sanctions’ pressure or made the situation worse. The weakness of the Chinese Yuan makes imports of materials more expensive from the rest of Asia which raises the cost of Chinese produced goods, and the surging government debt denominated in  US Dollars increases the doubts of analysts about the Chinese policies. 

The CNBC report notes that, during the upcoming meeting between US and Chinese officials, it is likely that the US side will express its discomfort regarding the Chinese Yuan’s depreciation. A report by the political risk consultancy Eurasia Group, released on Friday August 17th 2018, noted that the Chinese side will likely respond by saying that “China is not seeking to weaken the currency but allowing the exchange rate to respond to the pressures of the trade war, a slowing domestic economy, and monetary easing.”

A Wall Street Journal (WSJ) article on Saturday August 18th 2018 said that “the US and Chinese negotiators are outlining a roadmap to end their trade impasse ahead of the meetings scheduled between the US President Trump and his Chinese counterpart Xi Jinping in November 2018.” The article mentioned that the two sides want to keep a deepening trade dispute from torpedoing the US-China relationship and further shaking the global financial markets. 

Nomura, which is one of the largest financial services groups with headquarters in Asia, published a report on Sunday August 19th 2018 in which its market analysts suggested that additional protectionist measures from the US administration should be anticipated. “We expect the Trump administration to move ahead with the 25% tariff on an additional $200bn in Chinese imports, whether in full or by installments, with an announcement sometime after the USTR finishes the review process on September 6th 2018. There is still a significant amount of uncertainty around trade as developments could fare better or worse than we expect,” was noted in the Nomura report.

STO and trading the US Dollar

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17 / 08 / 2018 | Notizie sul mercato

Turkish economy hurt by US sanctions

The economic and political uncertainty in Turkey have shaken the Asian country’s economy and seemed to affect the global markets during this week. The country’s currency, the Turkish Lira lost much ground in the last few days against its competitors. However, the decision of the Turkish central bank to support the Lira and other moves made by the Turkish government made the currency regain some of the lost value. 

Turkish Finance Minister speaks about the economy

On Thursday August 16th 2018, the Turkish Finance Minister Berat Albayrak told major investors who are interested in the updates that “Turkey fully recognizes the economic challenges. Turkey will emerge from the current period of volatility stronger. Berat Albayrak noted that the government has no intention to impose capital controls which could restrict the movement of capital in and out of the country. 

Berat Albayrak’s call to investors was deemed important as the condition of the Turkish economy significantly deteriorated in the last weeks. The Turkish Finance Minister denied the rumour that his country is ready to ask for the assistance of the International Monetary Fund (IMF) which has helped in the past with economic aid and advice the Asian country. He stressed that Turkey remains committed to the free market, “despite the fact that we are experiencing unfavourable conditions which we will overcome.” 

Investors listened to Berat Albayrak saying that reducing inflation is one of the top priorities for the economic cabinet. Currently, the Turkish Consumer Price Index (CPI) inflation is running at 15% which is rather high for an economy that wants to be competitive by global standards. The economic cabinet has set as target the reduction of inflation in single digits as soon as possible. The Finance Minister of Turkey said that his country wants to boost its primary budget surplus, adding that he has asked from all ministries to contribute to an ambitious savings programme. He also stressed that “fiscal discipline is one of the anchors of the economy”, in an effort to convince investors that the cabinet will put a strain on spending. 

Regarding the banking sectors, Berat Albayrak repeated that it is strong and healthy and that the recent stress tests ran by the central bank of Turkey confirmed that. He also mentioned that volatility experienced in the economy is not triggered by fundamentals. Albayrak assured investors that the banking sector is capable of managing the situation and that there haven't been major deposit flows, stressing that support from the government will be provided if needed.

Turkish Lira volatility

The diplomatic spat with the United States (US) earlier in the week had sent the Turkish Lira to a downward spiral which made it hit a record low of 7.2 to the US Dollar. The Turkish currency has lost almost 20% of its value during the last month. Berat Albayrak’s call seemed to calm investors making the Turkish Lira gain 2.5% in value early morning on Thursday August 16th 2018. 

On Monday August 13th 2018, the Turkish central bank announced that it would help the country’s banks by reducing the Turkish Lira and the foreign currency reserve requirements. However, the central bank of Turkey didn’t proceed in hiking its benchmark interest rate in order to help curb the high CPI inflation as some analysts were anticipating. 

On Thursday August 16th 2018, the US Treasury Secretary Steven Mnuchin assured the US President Donald Trump at a cabinet meeting that sanctions were ready to be put in place if the US pastor Andrew Brunson is not released by the Turkish authorities. President Donald Trump wrote on Twitter that “Turkey has taken advantage of the United States for many years. They are now holding our wonderful Christian Pastor, who I must now ask to represent our Country as a great patriot hostage. We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!”

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15 / 08 / 2018 | Notizie sul mercato

UK CPI inflation and US retail sales in the spotlight

On Wednesday August 15th 2018 the Office for National Statistics (ONS) will publish a report regarding the United Kingdom’s Consumer Price Index (CPI) inflation in July 2018. Another ONS report will show how much UK retail prices changed during July 2018. In the United States (US), the US Census Bureau is expected to release data associated with the retail sales in July 2018. 

UK CPI inflation

The most important of the releases is the UK’s CPI inflation data. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation. Analysts are anticipating that the CPI inflation picked up coming in at 2.5%, on an annualised basis. In June 2018, the UK’s CPI inflation came in at 2.4% on annualised basis, unchanged from May 2018 and below the analysts’ expectations for a 2.6% figure. The 2.4% CPI inflation figure is the lowest reading since March 2017.

 The ONS will also release data regarding the UK’s core CPI inflation in July 2018. Core CPI inflation is inflation excluding the prices of seasonally volatile products such as food and energy. According to analysts’ forecasts, the UK’s core CPI inflation is expected to have increased from 1.9% recorded in June 2018 to 2.2% in July 2018 on a year-to-year basis.

 Market experts are expected to scrutinize another ONS report regarding the Retail Price Index in July 2018. The Retail Price Index (RPI) measures changes in the prices of goods and services bought for household consumption in the UK. The RPI takes a large sample of retail goods including food, tobacco, household goods and services, transport fares, motoring costs, clothing, and leisure goods and services. An increase in the index means that prices have increased on average (inflation) while a decrease means that prices on the whole have fallen (deflation). Economists forecast that the RPI increased by 3.6% on a yearly basis during July 2018 and by 0.4% on a month to month basis. 

US retail sales in July 2018

In the US, the most significant financial updates of the day will be linked with the retail sales. The retail sales data is awaited as they will give a first glance at the strength of consumer spending as the third financial quarter of the year starts. Economists forecast that the US retail sales surged by 0.1% on a monthly basis, a reduced pace of growth when comparing with the 0.5% figure recorded in June 2018. 

However, market analysts will take into consideration the so called “retail control” alternative measure of sales which is used by the US financial authorities to calculate the country’s GDP growth. They expect that this measure will show the retail sales rebounding by 0.4% on a month-to-month basis after being flat in June 2018. 

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13 / 08 / 2018 | Notizie sul mercato

Economists focus on Eurozone GDP and UK salaries data

On Tuesday August 14th 2018 the financial news updates will be dominated by reports coming from the Eurozone and the United Kingdom (UK). On that day, Eurostat which is the official statistical office of the European Union (EU) will publish preliminary data regarding the growth of the Eurozone’s Gross Domestic Product (GDP) during the second quarter (Q2) of 2018. 

In the UK financial analysts will be expecting the release of data associated with the average earnings, including and excluding bonuses, in June 2018 and the unemployment rate during the same month. The reports published by the Office for National Statistics (ONS) are considered important as they give a detailed view of the employment market to the economists. A less significant ONS data release in the UK will be linked with the number of people who claimed unemployment benefits during July 2018. 

Eurozone GDP Q2 2018

Eurostat will publish its 2nd estimate GDP growth data in a report that will be anticipated by the financial market experts. According to the economists’ forecasts, the Eurozone’s GDP growth during the second quarter of 2018 is expected to come in at 2.1% on a year to year basis. On a quarterly basis, the Euro-bloc’s GDP growth is expected by market analysts to hit 0.3%. 

On July 31st 2018, Eurostat published its first estimate for the Eurozone’s GDP which matches the expectations for the second estimate. A report released by Internationale Nederlanden Groep (ING) on July 31st said that “perhaps still temporary, but factors with a longer shelf life seem to have brought Eurozone GDP growth down to a lower cruising speed for the moment. The confidence impact of a trade row and weaker real household income growth seem to be spoiling the European market conditions for the moment. Trade uncertainty seems to have already had a significant effect on the Eurozone economy in the second quarter of 2018.”

UK average earnings and unemployment rate

Economists will be also expecting to scrutinize the ONS reports regarding the average earnings in the UK and the country’s unemployment rate during July 2018. The average weekly earnings excluding bonuses released by the ONS is a key short-term indicator of how levels of pay are changing within the UK economy. The unemployment rate released by the ONS represents the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the UK economy.

According to the economists' forecast, the average weekly earnings excluding bonuses in the UK will have likely risen by 2.6% in June 2018, a bit less than the reading recorded in May 2018. The average weekly earnings including bonuses are expected to have risen by 2.5% as it had been measured in May 2018. 

Economists suggest that during June 2018 the unemployment rate in the UK remained stable at 4.2%. According to the ONS, the 4.2% figure is the lowest recorded in the last 42 years. In May 2018, the unemployment rate 4.2% figure had come in line with market expectations.

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The Euro against the US Dollar, the US Dollar against the British Pound and the Euro against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

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19 / 07 / 2018 | Notizie sul mercato

Canadian CPI inflation likely to have risen in June 2018

The financial news on Friday July 20th 2018 is going to be marked by the economic data releases in Canada. The economy of Canada is a highly developed mixed economy with the 10th largest Gross Domestic Product (GDP) by nominal and the 17th largest GDP by Purchasing Power Parity (PPP) in the world, according to the International Monetary Fund’s (IMF) quarterly World Economic Outlook, published on December 10th 2017.

On Friday July 20th 2018, Statistics Canada, which is the official statistical office of the country, will publish data regarding the Consumer Price Index (CPI) inflation during June 2018. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation.  The economists’ consensus is that the Canadian CPI inflation edged up, during June 2018, coming in at 2.5% on an annualised basis. If confirmed, it will constitute a 0.3% increase when compared with the May 2018 inflation figure. The annual CPI inflation rate in Canada stood at 2.2% in May 2018, the same as in April 2018, missing market expectations of 2.5%. Higher prices for shelter and transportation were offset by the slowing cost of food, household equipment, clothing & footwear.

 The Bank of Canada (BoC) aims at an inflation range of 1%-3%. In general, a high inflation reading is seen as anticipatory of an interest rate hike and is positive (or bullish) for the Canadian Dollar. On the contrary, a lower inflation figure than the one anticipated may have a negative effect on the Canadian Dollar’s exchange rates against its major competitors. 

The BoC is also expected to release data regarding the core CPI inflation during June 2018. According to a poll by Bloomberg published on Monday 16th July 2018, the majority of economists suggest that the Canadian core CPI inflation picked up reaching 1.4% in June 2018 on a year-to-year basis. In May 2018, the core CPI inflation, which excludes volatile items, had eased to 1.3% from 1.5% in April 2018, missing market expectations of 1.4%.

CPI inflation and interest rate hikes

On July 11th 2018 the BoC’s governing board hiked the Bank’s benchmark interest rate by 0.25%, bringing the overnight lending rate to 1.5%. This was the fourth time that the BoC has raised borrowing costs in the last 12 months. Market analysts had predicted the interest rate hike given firming CPI inflation and other signs of an economy close to capacity. 

A Wells Fargo report, published on July 11th 2018, noted that ‘core measures of inflation are near the middle of the BoC’s target range and headed higher. A weaker Canadian dollar, which has fallen in the wake of trade concerns, and new tariffs on U.S. imports will add upward pressure to inflation, along with growing capacity constraints.’ The analysts of the US bank commented on the Canadian GDP growth saying that ‘we expect Q1 to be the weakest quarter of the year, due to higher oil prices, stronger export growth and a stabilization in residential investment. Stronger monthly growth puts GDP on track to expand above 2.0 percent in Q2, at the upper end of Canada’s potential GDP growth range of 1.5-2.1 percent as calculated by the BoC. Growth faster than the long-term sustainable rate should further reduce space capacity in the economy.’

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The Canadian Dollar against the Euro and the US Dollar are just two of the currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

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17 / 07 / 2018 | Notizie sul mercato

Economists focus on UK and Eurozone CPI inflation data

Economists are waiting for the release of important economic data coming from the United Kingdom (UK) and the Eurozone this week. On Wednesday July 18th 2018, the Office for National Statistics (ONS) will publish data regarding the UK’s Consumer Price Index (CPI) inflation and the Producer Price Index for June 2018. On the same day, Eurostat will publish the Eurozone’s CPI inflation report for June 2018. 

UK CPI inflation likely to have picked up in June 2018

The most important of the releases is the UK’s CPI inflation data. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation. Analysts are anticipating that the CPI inflation picked up coming in at 2.6%, on an annualised basis. The ONS will also release data regarding the UK’s core CPI inflation in June 2018. Core CPI inflation is inflation excluding the prices of seasonally volatile products such as food and energy. According to analysts’ forecasts, the UK’s core CPI inflation is expected to have increased from 2.1% recorded in May 2018 to 2.2% on a year-to-year basis. 

In May 2018, the UK’s CPI inflation had surprised economists by remaining unchanged at 2.4%, on a year-to-year basis, which constitutes a one-year low. The consensus among market experts was that the CPI inflation would increase to 2.5%. Core CPI inflation had also remained flat at 2.1%. The ONS report accompanying the data said that Transport inflation jumped on higher fuels and lubricants costs, while prices rose at a softer pace for recreation & culture, housing & utilities, restaurants & hotels, and food & non-alcoholic beverages.

The Bank of England’s (BoE) board and its Governor Mark Carney would like to see the UK’s CPI inflation rate hovering around 2%. Average earnings, including bonuses, are expected to have increased by 2.5% during May 2018 and, if the inflation forecast is confirmed, the recent pattern of wages rising faster than prices will be reversed. 

Eurozone CPI inflation

On July 18th 2018, Eurostat, which is the official statistical office of the European Union (EU), is expected to publish data regarding the Eurozone’s Consumer Price Index (CPI) inflation in June 2018. Economists polled by Bloomberg on July 11th 2018 suggest that the Euro-bloc’s headline inflation rose to 2.0%, on an annualised basis, during June 2018. If the figure is confirmed, it will be the highest since February 2017.

The inflation rate is expected to rise due to increased prices of fuel and food. A flash estimate report released by Eurostat on June 29th 2018 said that “looking at the main components of euro area inflation, energy is expected to have the highest annual rate in June 2018 (8.0%, compared with 6.1% in May 2018), followed by food, alcohol & tobacco (2.8%, compared with 2.5% in May), services (1.3%, compared with 1.6% in May) and non-energy industrial goods (0.4%, compared with 0.3% in May).”

Trade the British Pound and the Euro on the STO platform

The British Pound against the Euro, the Euro against the US Dollar and the British Pound against the US Dollar are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

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16 / 07 / 2018 | Notizie sul mercato

Online social trading is a new trend

Social media according to the Merriam-Webster online dictionary are “forms of electronic communication (such as websites for social networking and microblogging) through which users create online communities to share information, ideas, personal messages, and other content (such as videos).” During the last decade, thanks to the evolution of technology and mobile devices, social media networks such as Facebook, Twitter and others have become trends and changed our way of life. 

The influence of the social media has been transmitted to the world of trading and investing. The leaders of the investment and trading sectors saw the potential of using the new technologies to improve their skills and benefit as much as possible. The result of these efforts is the commonly known online as social trading which aims to transform trading in ways that couldn’t be done until now. 

What is online social trading?

According to a KPMG report, published on September 2016, "the idea of using social platforms for trading was introduced to the market shortly after the 2008 crisis, offering the possibility for everyone (nearly) to join and to trade in the same way as the trader(s) you were following. The easy registration and low (nearly free) service fees have positioned these offerings as strong alternatives to traditional fund managers who are fighting against decreasing industry returns themselves."

Social trading works by giving people with limited financial knowledge insight into the stock exchange by allowing a real-time analysis of individual trader performance. Seen as one of the most significant shifts in trading, social trading has the potential to open up opportunities for those interested in stock markets. 

Users, as it happens on all known social media such as Facebook, Twitter, LinkedIn and others, can create social trading profiles and as they trade, their interactions are broadcast in real-time to their followers. If followers of a particular investor/trader like the way he trades, they can even choose to “copy” his trades with the click of a button. Copying specific ways of trading can be risky as markets are volatile and there is no guarantee that a successful, in the past, strategy will continue to be successful in the future. 

However, social trading helps traders who don’t have the sufficient amount of time or knowledge to devise an advanced strategy on their own by reducing the need for conducting research and by first identifying the best-performing currencies and commodities before deciding whether to buy or sell them. According to the KPMG report, “social trading carries the very nature of the democratisation of technology, offering access to better financial services and financial education to the masses. This is along the lines of what we’ve seen from robo advisors, blockchain, and mobile payments.” Economists also suggest that in the future fund managers will be able to better understand their clients’ needs based on data generated from the online social trading platforms, precisely as retail giants such as Amazon and eBay suggest new purchases to their customers. 

Trading with STO

STO has set as a goal to offer an optimal trading experience to its clients. STO pays special attention to its clients’ education by arranging educational courses such as webinars and providing its clients with the latest market news reports. STO account owners are able to trade on the most active shares in the US, German and Italian stock markets.

Trading Forex and CFDs (Contracts for Difference), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
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13 / 07 / 2018 | Notizie sul mercato

Meet Ethereum

Bitcoin, Ethereum, Litecoin, Ripple are words that have been added to our vocabulary in the last two years. The names of the most famous cryptocurrencies in the world are making the headlines of the financial news media, sometimes for the profit that their owners make and other times for their price drops. Bitcoin is leading the rest of the cryptocurrencies in terms of gains and fame, but some of the newer cryptocurrencies have started covering the distance with the pioneer.

What is Ethereum?
Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality.  Ether is a cryptocurrency whose blockchain is generated by the Ethereum platform. Ether can be transferred between accounts and used to compensate participant mining nodes for computations performed.

There are two accounts available through Ethereum: externally owned accounts and contract accounts. Ethereum allows developers to deploy all kinds of decentralized apps. Even though Bitcoin remains the most popular cryptocurrency, some economists speculate that the Ethereum’s growth has the potential to overtake Bitcoin in terms of usage in the future.

The story behind Ethereum
Vitalik Buterin is the programmer that designed Ethereum. Buterin had argued that Bitcoin needed a scripting language for application development. Failing to gain agreement, he proposed the development of a new platform with a more general scripting language. The Ethereum’s founder said in an interview that “I thought the people of the Bitcoin community weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each case in a sort of Swiss Army knife protocol.”

In 2014, the crowdsourcing campaign that Vitalik Buterin and other co-founders launched raised more than $18mn and since then Ethereum has grown rapidly with hundreds of developers working on the project. However, a theft of over $50mn in Ether by anonymous hackers in 2016 raised questions over the security of funds and caused a split in the Ethereum community resulting into two separate blockchains, the Ethereum Classic (ETC) and the Ethereum (ETH).

Differences between Ethereum and Bitcoin
  • The number of Bitcoin is capped at 21 million ever to be produced but Ethereum is not capped to any specific quantity. Researchers have estimated that more than 90 million tokens will be mined by 2021 while the majority of Bitcoins already have been mined.
  • They use different security protocols. Ethereum uses a “proof of stake” system. The Bitcoin uses a “proof of work” system.
  • Ethereum offers several methods of exchange including Ether (cryptocurrency), smart contracts and the Ethereum Virtual Machine (EVM).
  • The computers that run the Bitcoin platform are called miners and receive a reward for facilitating and verifying transactions. On the contrary, the Ethereum platform doesn’t offer rewards but allows miners to receive a transaction fee.
Trading Cryptocurrency CFDs on STO
Using the STO Crypto Account, our clients are able to trade Cryptocurrency Contracts for Difference (CFDs) with competitive trading conditions. STO clients can trade CFDs on three of most important cryptocurrencies such as Bitcoin, Litecoin and Ethereum.
 
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12 / 07 / 2018 | Notizie sul mercato

US-China trade war escalates

Global financial markets were rattled on Wednesday July 11th 2018 after the United States (US) administration decided to escalate the trade war with China. The two largest economies in the world have become tangled in a trade conflict in the last few months since the US President Donald Trump declared his intention to reverse the situation regarding the trade deficit with the US trade partners. 

On Tuesday July 10th the US administration delivered another blow to the country’s trade relationship with China when it issued a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium. The US Trade Representative Robert Lighthizer, answering reporters’ questions, said that his country was acting because China hadn’t acknowledged all previous warning. 

More specifically, Robert Lighthizer noted that “for more than a year, Donald Trump’s administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior- behaviour that puts the future of the US economy at risk.” 

The news shocked the global financial markets that saw the US President Donald Trump taking the trade dispute to the point of no return as Bloomberg’s reporters wrote in their report on July 11th 2018. The famous financial media outlet noted that the new tariffs could force the Chinese administration to retaliate with dangerous consequences. The report focused on the problematic position of the Chinese President Xi Jinping towards his political comrades who ask for immediate action. 

“He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon. Yet, matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like cancelling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance,” is a quote from the Bloomberg report. 

Analysts at Nomura, which is one of the largest financial services provider headquartered in Asia, believe that China may move against the US to counterbalance the heavy tariffs imposed on its products. “We expected some response in the wake of China’s reaction to the first round of US tariff increases. However, the release of this list, only four days after the first round of tariffs took effect, indicates that trade protectionism may escalate beyond the initial round of tariffs imposed last week. The new list, targeting $200bn with a 10% tariff, is almost equally split between capital and consumer goods. Thus, if these tariffs do indeed take effect, there would likely be a larger impact on consumers than in the initial round,” Nomura’s economists noted. 

Rabobank’s research team published its report on the US tariffs on July 10th 2018 commenting that the US-China trade war is escalating adding that China probably won’t be able to impose equal tariffs because it doesn’t import an equal volume of products from the US. “Covered are low-tech goods as well as high-tech items squarely aimed at slowing China’s march to ‘2025’ industrial supremacy. If we see these duties kick in, nearly half of all Chinese exports will be under tariffs. China has immediately responded that it will “fight fire with fire” – and yet it can’t put USD200bn of tariffs in place as it doesn’t buy USD200bn more of US goods!”

STO and trading the US Dollar

The US Dollar against the Euro, the US Dollar against the British Pound and the US Dollar against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing the suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
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11 / 07 / 2018 | Notizie sul mercato

US CPI inflation likely to have risen in June 2018

On Thursday July 12th  2018 the United States Department of Labour Statistics is going to publish data regarding the US Consumer Price Index (CPI) and the core CPI inflation during June 2018. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation. The CPI inflation figure is taken into consideration by the US Federal Reserve (Fed) board when it evaluates its monetary policy.

Economists polled by the Wall Street Journal (WSJ) on July 3rd 2018 said they expect the data to show that the US CPI inflation rose to 2.9% in June 2018, on an annualised basis. The CPI inflation stood at 2.8% in May 2018. On a month-to-month basis, they anticipate that CPI inflation increased by 0.2% matching May’s 2018 reading. The US Bureau of Labour Statistics is also going to release data regarding the core CPI inflation. According to the majority of economists polled by the WSJ, core CPI inflation will likely tick higher, coming in at 2.3% on an annualised basis. The reading is expected to be slightly higher than the 2.2% figure recorded in May 2018. The core CPI inflation measures the price movements by the comparison between the retail prices of a representative shopping basket of goods and services. In order to measure the core CPI inflation, analysts are excluding the prices of volatile products such as food and energy to capture an accurate calculation. 

The 2.8% CPI inflation figure recorded by the US Department of Labour Statistics in May 2018 was the highest reading since February 2012. The report that accompanied the data said that rising prices for gasoline and shelter led the inflation rate upwards. More specific analysts noted that “the indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, as they were in April 2018. The gasoline index increased 1.7%, more than offsetting declines in some of the other energy component indexes and led to a 0.9% rise in the energy index.” 

Nomura, which is one of the largest financial services group headquartered in Asia, released a report on July 9th 2018 regarding the US CPI inflation. Economists at Nomura suggested that core CPI inflation increased by 0.2% on a month-to-month basis in June 2018, slightly above the 0.17% pace in May 2018, but essentially the same as its six-month average. Regarding the US headline inflation rate in June 2018, Nomura’s analysts noted that “the US June headline CPI to rise by 0.2% (0.212%) m-o-m, pushing up its 12-month change to 2.9% (2.94%) from 2.80% previously. Some of the negative payback from unusually large increases of certain components in May, such as prescription drug and lodging-away-from-home prices, will likely be offset by higher airline fares and a smaller decline in used vehicle prices.”

STO and the US Dollar

The US Dollar against the Euro, the US Dollar against the British Pound and the US Dollar against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
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