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India Forex Reserves Increase

FxOpen — Fri, 03 Sep 2010 07:55:28 GMT

India's foreign exchange reserves slightly increased as on August 27, a latest report from the Reserve Bank of India showed on Friday.

Foreign exchange reserves totaled US$282.842 billion as on August 27, up from US$282.549 billion as on August 20. Foreign currency assets reserves increased to US$256.648 billion from US$256.368 billion in the preceding week. At the same time, the gold reserves remained unchanged at US$19.278 billion.

Meanwhile, nation's reserve position with the International Monitory Fund amounted to US$1.935 billion, larger than the US$1.931 billion recorded in the preceding week.

India's foreign exchange reserves slightly increased as on August 27, a latest report from the Reserve Bank of India showed on Friday. (Market News Provided by RTTNews)

Latvia Q2 Current Account Surplus Narrows

FxOpen — Fri, 03 Sep 2010 07:18:32 GMT

Latvia's current account surplus narrowed in the second quarter from the previous three months period.

The current account surplus totaled LVL 183.85 million in the second quarter, down from LVL 246.34 million surplus seen in the previous quarter, the Bank of Latvia said on Friday. A year earlier, the current account surplus was LVL 458.29 million.

The current account surplus in the second quarter was 6% of the gross domestic product, smaller than 8.6% of GDP in the first quarter. The balance of trade of goods and services improved and was 1.2% of GDP in the second quarter.

Meanwhile, the capital account surplus decreased to LVL 44.52 million in the second quarter from LVL 96.78 million in the previous quarter. At the same time, the financial account deficit narrowed to LVL 182.5 million from LVL 362.09 million in the first quarter. Reserve assets totaled LVL 162.78 million.

Latvia's current account surplus narrowed in the second quarter from the previous three months period. (Market News Provided by RTTNews)

Russian Service Sector Hit By Heatwave

FxOpen — Fri, 03 Sep 2010 01:37:20 GMT

Russian service sector activity weakened sharply in August induced by record high temperatures, new survey data showed on Friday.

Markit Economics said the HSBC services purchasing managers' index fell to a seasonally adjusted 47.0. A reading above 50 indicates expansion while one below suggests contraction. This represents the fastest rate of contraction since May last year.

New work received by Russian service providers fell in August, with the heatwave blamed. Services employment declined, following a four-month sequence of mild growth.

Meanwhile, the composite PMI, which is a weighted average of the manufacturing and services PMIs, came in at 49.9 in August, down from 54.5 in July.

Russian service sector activity weakened sharply in August induced by record high temperatures, new survey data showed on Friday. (Market News Provided by RTTNews)

Japan Capital Spending Falls For 13th Quarter

FxOpen — Fri, 03 Sep 2010 00:58:03 GMT

Capital expenditure by Japanese companies continued to decline in the June quarter extending the current sequence of decline to 39 months, official figures showed on Friday. Separate data showed that Japan's service sector activity declined at a slower pace in August.

Capital spending fell 1.7% year-on-year between April and June, slower than the 11.5% fall in the preceding quarter, the Ministry of Finance said. This was markedly slower than analyst expectations for a 6.5% fall.

Excluding software, capital expenditure dropped 1.5% annually in the second quarter. This was less marked than the 12.9% decrease in the previous quarter.

Capital spending fell by 10.5% in the manufacturing sector but climbed 3.4% in the non-manufacturing sector. Excluding investment in software, investment in manufacturing dropped 10.8%, while that in non-manufacturing rose 4%.

In the manufacturing sector, investment plummeted 31.6% in business oriented machinery. Investment in petroleum & coal products and fabricated metal products fell 30.3% and 25.5% respectively.

In the non-manufacturing sector, investment surged 47.5% in the real estate sector. Spending in services rose 27.5% and that in construction was up 23.7%.

Sales made by firms were up 20.3% annually in the June quarter, accelerating from the 10.6% rise in the March quarter. Sales grew 25.9% in the manufacturing sector.

Meanwhile, total ordinary profits amassed by Japanese companies jumped 83.4% year-on-year, slower than the 163.8% increase in the preceding quarter. Profits had risen 102.2% in the December quarter of last year.

The better than expected investment data may lead to an upward revision of Japan's second quarter growth, due on September 10. Initial figures showed a timid 0.1% expansion in GDP between April and June.

However, analysts say the rising yen and deflation will deter companies' future investment plans, hurting economic growth in the long run.

Separately, new data showed that Japan's service sector activity continued to decline in August but at a slower pace compared to July. Markit Economics said the Nomura services purchasing managers' index rose to a seasonally adjusted 48.7 from 46.3 in July. A reading above 50 indicates expansion while one below suggests contraction.

New work received by Japanese service providers declined in August, although the rate of decline was the slowest in the current four-month period of reduction. Those respondents that reported a decline in new orders widely attributed this to lacklustre client demand.

Meanwhile, the composite PMI, which is a weighted average of the manufacturing and services PMIs, came in at 49.5 in August, up from 48.6 in July.

South Korean Final GDP +1.4% On Quarter

FxOpen — Thu, 02 Sep 2010 21:43:59 GMT

South Korea's gross domestic product expanded 1.4 percent in the second quarter of 2010 compared to the previous quarter, the Bank of Korea said on Friday. That was slightly lower than the 1.5 percent quarterly expansion indicated in the preliminary reading on July 26.

"The GDP estimates released today are based on more complete source data, from the industrial production index, the service industry activity index, etc., than were available for the advance estimates," the Bank of Korea said in a statement accompanying the data.

On the production side, the manufacturing sector added 5.2 percent, mainly due to the growth in machinery equipment, fabricated metal products and automobile manufacturing. The construction sector eased 0.9 percent on sluggishness in residential building construction. Services added 0.1 percent, reflecting increases in the transport and storage and health and social work sectors.

On the expenditure side, private consumption rose by 0.8 percent, while facilities investment surged 9.1 percent, construction investment shed 3.6 percent and exports of goods jumped by 7.0 percent.

The annual headline figure was unchanged, with GDP expanding 7.2 percent on year.

On the production side, manufacturing increased 18.0 percent and services 3.6 percent, while construction declined by 0.5 percent.

On the expenditure side, facilities investment surged 30.2 percent and exports of goods jumped 14.9 percent, although construction investment declined 2.9 percent. Domestic demand excluding inventories increased 4.5 percent.

Nominal gross national income increased 2.2 percent on quarter, while real gross national income increased by just 0.5 percent. In terms of year-on-year growth, real GNI increased by 5.4 percent.

The GDP deflator fell 2.6 percent on year.

The gross saving ratio climbed from 30.8 percent in the first quarter to 31.7 percent in the second, while the gross domestic investment ratio increased from 28.4 to 29.4 percent over the same period.

(Market News Provided by RTTNews)

Dollar Held In Check Ahead Of Key Jobs Report

FxOpen — Thu, 02 Sep 2010 15:27:31 GMT

The dollar was stuck in place versus other majors on Thursday as traders sifted through a pile of economic news ahead of tomorrow's pivotal monthly jobs report.

Stocks pushed slightly higher in afternoon action on Wall Street, fueling a bit risk appetite and preventing much upside for the safe haven dollar.

A key prelude to the jobs report provided some hope that the US employment situation is improving, albeit slowly.

First time claims for jobless benefits fell more than expected last week, but remain stubbornly high. Jobless claims fell by 6,000 to 472,000 for the week ended August 28, better than the 475,000 forecast by economists polled by Reuters.

Pending home sales posted a surprising increase of 5.2 percent to 79.4 in July from June, according to The National Association of Realtors.

And the government reported nonfarm productivity fell 1.8 percent, the largest drop in almost four years.

The dollar was steady versus the euro after seeing significant weakness on Wednesday. The buck held near $1.2800, near yesterday's two-week low of $1.2855.

Against the yen, the buck was little changed at 84.25, having tested its 15-year low of 83.58 before finding its footing.

There was little movement in the dollar/sterling pair, which stayed near 1.5400 throughout the day. The buck has gained about 6 cents versus the sterling over the past month.

The European Central Bank kept its key interest rate at one percent for a sixteenth month.

Jean-Claude Trichet, the region's top policy maker, said the euro zone's economy remains on track for a moderate but uneven recovery. Still, the ECB decided to extend emergency lending measures through the end of year to support the banking system.

(Market News Provided by RTTNews)

Weekly Jobless Claims Edge Down To 472,000

FxOpen — Thu, 02 Sep 2010 08:40:08 GMT

First-time claims for unemployment benefits showed a modest decrease in the week ended August 28th, according to a report released by the Labor Department on Thursday, with the decrease offsetting an upward revision to the previous week's data.

The Labor Department said that initial jobless claims edged down to 472,000 from the previous week's revised figure of 478,000. Economists had expected jobless claims to inch up to 475,000 from the 473,000 originally reported for the previous week.

Dollar Sputters Ahead Of Jobless Claims

FxOpen — Thu, 02 Sep 2010 07:40:02 GMT

The dollar held its ground versus other major currencies Thursday morning ahead of another prelude to tomorrow's closely-watched monthly jobs report.

Its been a rough week for the dollar, which has hovered near a recent 15-year low against the yen and turned lower against the euro on rising stocks.

The Department of Labor's weekly jobless claims report is due out today at 8:30 am ET.

Economists expect weekly jobless claims to rise to 475,000 from 473,000 reported for the previous week. Weakness in the jobs market has bled into the greater economy, fueling talk of a double-dip recession.

At the same time, the Labor Department will release its revised report on second quarter non-farm productivity and unit labor costs. Economists project the productivity growth be revised down by 1.6%.

At 10.00 a.m. ET, the Commerce Department will release its report on factory goods orders for July. Economists project that factory goods orders rose by a modest 0.3% during the month following a 1.2% decline in the previous month.

The dollar was little-changed versus the yen, within a whisker of August's 15-year low of Y83.63. The markets have ignored comments from Japanese officials intended to talk down the yen, which has been boosted by the unwinding of carry trades.

The dollar also paused versus the euro after falling sharply in the previous session. The buck hit a 2-week low of 1.2855 yesterday, and was edging back toward that mark this morning.

Eurozone logged its biggest growth in four years as estimated in the second quarter, lifted by investment and exports.

Economic growth in the second quarter was 1% on a sequential basis, preliminary data released by the European Union statistical office Eurostat showed Thursday. The agency confirmed the flash estimate issued on August 13.

Against the sterling, the dollar was slightly improved at 1.5400.

UK house prices fell 0.9% compared to July, faster than the 0.5% decrease in the previous month. Economists had forecast a 0.3% drop.

(Market News Provided by RTTNews)

U.K. House Prices Continue To Drop

FxOpen — Thu, 02 Sep 2010 05:26:43 GMT

U.K. house prices dropped more than expected in August as the imbalance between supply and demand in the housing market increased, according to Nationwide. However, the lender said the current fall in house prices was "not an unhealthy development."

House prices fell 0.9% compared to July, faster than the 0.5% decrease in the previous month. Economists had forecast a 0.3% drop.

The average price of a U.K. home is now just over GBP 166,500. This marks the first time house prices have dropped for two straight months since February last year.

"Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of last year," said Nationwide chief economist Martin Gahbauer. "As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices."

But he added there was little evidence of distressed selling, with the number of mortgage arrears and repossessions falling in the June quarter. "As such, the current period of price declines is likely to remain relatively modest. Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development," said Gahbauer.

On a year-over-year basis, house prices were still up 3.9%, sharply lesser than the 6.6% increase in July and the 8.7% rise in June. Economists had forecast a 4.9% rise.

The quarter-on-quarter rate of change, which is seen as a more smoother indicator of recent price changes, was flat in August, compared to a 1.2% increase in July.

Nationwide's data follows figures released earlier this week by the Bank of England, which showed mortgage demand retreated sharply in July. Mortgage lending increased GBP 0.1 billion, well below the June increase of GBP 0.5 billion.

"Housing market activity is currently low, the economic fundamentals are far from ideal for the housing market, a major fiscal squeeze is getting underway, and house price to earnings ratios have moved up," said IHS Global Insight chief economist Howard Archer. "On top of this, credit conditions remain tight with mortgages still hard to get for many people."

Exacerbating falling demand, Archer added, was rising supply, tipping the supply-demand balance firmly in favor of buyers. The economist forecast house prices to fall back by 3-5% over the second half of the year, although he said a sharp correction was unlikely.

"It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector," Archer said. He predicted house prices to be at least 10% lower at the end of next year, compared to current levels.

Italy Non-E.U. Trade Falls To Deficit In July

FxOpen — Thu, 02 Sep 2010 05:21:34 GMT

Italy's trade balance with countries outside the European Union fell into a deficit in July compared to a large surplus in the same month a year ago, data showed on Thursday.

Statistical office Istat said a trade deficit of EUR 125 million was recorded, in sharp contrast to the EUR 1.4 billion surplus in July 2009.

Exports to non-E.U. countries increased 16.7% from a year ago, while imports jumped 32.1%. On a month-over-month basis, exports were broadly stable, while imports climbed 0.9%.

In the January to July period, exports rose 13.8%, while imports climbed 23.2% compared to the same period a year ago.

Italy's trade balance with countries outside the European Union fell into a deficit in July compared to a large surplus in the same month a year ago, data showed on Thursday. (Market News Provided by RTTNews)