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UK Inflation falls to 1.6%

Dr Search- Principal Consultant at the Search Clinic — Tue, 15 Sep 2009 02:08:00 +0000

Inflation fell less than expected in August to 1.6 per cent after rising fuel off set a decline in utility and food bills.

The Consumer Prices Index (CPI) measure of inflation – the labour Government’s preferred measure – fell from 1.8 per cent in July and below the 1.4 per cent expected by analysts.

Retail Prices Index (RPI) deflation which includes mortgage interest payments and is used as a measure for workers’ pay deals, rose to minus 1.3 per cent in August from minus 1.4 per cent in July.

Steep rises in food and fuel prices pushed CPI to a peak of 5.2 per cent last September. Price falls since then have seen the figure fall steeply.

Loans Calculators Blog- loans rates blog for news about interest rates- unsecured and secured loans, mortgages, remortgages and refinancing including home loans, equity release and consolidate debt loans.

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Wall Street lifted by jobs data

Dr Search- Principal Consultant at the Search Clinic — Thu, 11 Jun 2009 00:25:00 +0000

Wall Street ticked higher in early trades as the latest report on jobless claims turned out to be better than expected and retail sales improved.

The Dow Jones was up 62.13 points at 8,801.15 at midday in New York, the S&P; 500 was up 8.57 at 947.72, and the Nasdaq was up 11.48 at 1,864.56.

A Labor Department report showed first time jobless benefits claimants fell to 601,000, better than expectations. The Commerce Department said retail sales increased 0.5 per cent in May after two months of declines.

In the UK, RBS was the top riser among a buoyant banking sector on the back of news that it plans to hive off unprofitable business customers to a separate division. The sector in general enjoyed a rally on a note from JPMorgan that it remains overweight on investment and credit banks.

RBS was up 1.8p, or 5.75 per cent, to 39.7p. Barclays wasn’t far behind, up 16p or 5.55 per cent to 304.50p.

The FTSE 100 index closed up just 25.12 points higher at 4,461.87 as banking sector gains were offset by falls in commodities.

Oil companies retreated after recent gains, despite oil prices rising for a third day, above $72 a barrel and hitting an eight-month high in New York on the back of a larger-than-expected drop in US crude inventories.

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UK buoyed with positive house price data

Dr Search- Principal Consultant at the Search Clinic — Fri, 29 May 2009 06:46:00 +0000

Lots of positives in the global markets this morning.

Firstly we have seen the Nationwide House price index survey show a surprise bounce as the average house price rose 1.2% in May- this is the strongest monthly gain for 19 months.

Although this is a good indicator that the severe downturn in the property market may be bottoming out- Nationwide noted that it is still too early to call as unemployment is still rising and credit conditions remain tight.

In the wider markets we have seen more leveraging into Oil and Gold which both rose sharply- Gold is closing in on $1,000/oz again and Oil has hit a new 6 month high above $65 a barrel.

This morning we also saw German retail sales rise unexpectedly in April by 0.5%- a hopeful sign for the German economy to curb the sharp contraction in recent GDP data witnessed in the Q1.

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Asian shares founder after North Korean nuclear test

Dr Search- Principal Consultant at the Search Clinic — Tue, 26 May 2009 06:43:00 +0000

Markets foundered today as the United Nations condemned North Korea’s nuclear test and investors awaited more clues about the health of the world economy.

Tensions on the Korean Peninsula showed no signs of easing after the UN Security Council criticized North Korea’s test of a nuclear bomb as a “clear violation” of international bans. But the country’s defiance continued with reports saying it would likely step up its weapons testing by firing short-range missiles this week.

While hurting sentiment in the short term, the standoff was more an excuse to take a breather from the recent rally, analyst said.

Caution ahead of upcoming economic reports in the US, as well as Wall Street and British market holidays Monday, also left investors with few reasons to set a course one way or the other.

Japan’s Nikkei 225 stock average fell 19 points, or 0.2pc, to 9,327.82, while Hong Kong’s Hang Seng rose 19.91 points, or 0.1pc, to 17,141.73 in an erratic session.

In South Korea, the Kospi was off 2.4pc at 1,367.02. The benchmark dived over 6pc on Monday on news of North Korea’s nuclear test before recovering nearly all its losses.

Elsewhere, Shanghai’s index lost 0.1pc, Australia’s benchmark was up 1.1pc and Taiwan’s market dropped 0.8pc.

Both US and British financial markets were closed Monday for holidays. European markets finished little changed on Monday.

With investors eyeing key US economic reports this week, including home sales, big-ticket manufactured goods and consumer confidence, Wall Street futures pointed to a slightly lower open on Tuesday. Dow futures were down 11, or 0.1pc, at 8,249 and S&P; futures fell 0.4, or 0.1pc, to 884.50.

Oil prices fell Asia trade ahead of OPEC’s meeting this week, with benchmark crude for July delivery trading at $60.93 a barrel, down 74 cents from overnight trade.

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Loan Calculator sees feel good factor returns

Dr Search- Principal Consultant at the Search Clinic — Wed, 20 May 2009 01:41:00 +0000

Overnight the UK government has hinted it may look to sell a portion of the debt it has taken on in the nationalised UK banking sector.

Over in the US the feel good factor continues as the Treasury Secretary Geithner adds to the Growing Belief that we have turned the corner.

This, added to bullish global economic data and further comments from the US gave the Stock Markets a real boost, pushed the oil price up above $60 per barrel again.

Positive data included a rise in Japanese consumer confidence and better than expected export figures from the EU. We then got ‘reasonable’ numbers from the US including strong trading performance from Lowes, a major company whose business is directly related to the house building industry.

Financial stocks added to the positive sentiment following news that Goldman Sachs, Morgan Stanley and JP Morgan had applied to the Treasury for permission to repay their TARP borrowings.

So all round the feel good factor has returned- but will this translate into a solid global recovery?

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How low can interest rates go?

Dr Search- Principal Consultant at the Search Clinic — Thu, 18 Dec 2008 00:52:00 +0000

Another day and more record lows for GBP/euro are currently at all time lows.

This cross is trading in uncharted territory and is struggling to find support with many expecting to see parity before the year is out. However, UK retail sales just out at better than expected levels (0.3% versus -0.6%) should lend support to GBP over today’s session.

UK Unemployment out yesterday would not have helped GBP as the headline figure rose to 1.07m for November; a jump of 75,700 from October. This is the largest rise since 1991 and does little to quell fears of continued redundancies in London in 2009.

Japanese yen has also been in the headlines hitting record highs of 87.15 last night. JPY is currently trading at 87.68 and may well test yesterday’s high again.

Japan’s Central Bank meet tomorrow and there is speculation that they may well cut rates close to zero in an effort to stimulate their economy. Falling global demand has hit Japan’s economy hard as they have such a export focus. Japan’s rate is currently 0.3%.

Economists are also speculating about the ECB cutting deposit rates as soon as today in an effort to stimulate interbank lending. Cutting deposit rates (from current 2% on overnight cash) would make holding cash with the ECB less attractive and hopefully free up capital for consumers and companies and help the interbank market.

Ever since Lehmans collapsed banks have been very cautious about lending to one another. The Euribor (the euro interbank offered rate) set yesterday at 3.16 which is 66 basis points above the ECB rate.

In commodity markets, yesterday Opec agreed to cut production by a record 2.2m barrels per day but the price of crude oil has continued to fall. Oil has fallen by more than $100 from a record of $147 in mid July to current levels of $43.21 (Brent Crude in London). Opec has cut production three times since September and Opec accounts for 40% of the World’s oil production.

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Lots of data and comment out yesterday- and it was all bad

Dr Search- Principal Consultant at the Search Clinic — Tue, 02 Dec 2008 14:25:00 +0000

Where does Loans Calculators start? Well, following the recent positive trend in consumer confidence (which, as pointed out in previous posts, is seemingly just on the back of lower oil and petrol prices) the market was jolted back to the dreadful reality of the manufacturing and retail sectors with very weak data and further job losses.

Concern over the immediately outlook for UK plc was reignited following the release of the CIPS/Markit manufacturing survey yesterday morning. The number was expected to be bad but the reality was worse with the headline number reported at its lowest level since 1992 and indicating that industry’s output and orders are falling at their fastest rate since January of that year. This in turn, triggering widespread job losses.

The exchange market took the news badly and proceeded to dump Sterling back through the previous hard won support levels of 1.5020 and 1.2000, with the moves lower accelerating through the day so that by the close, cable had fallen by its largest margin since that day in 1992 when Sterling left the ERM.

The PMI survey from the Eurozone showing that manufacturing in the region was at its weakest for a decade gave no respite and the release, later in the day, from the Institute of Supply Management in the US suggesting that the economy in the States is in its worst position since the recession was also ignored by the exchange market.

Stock Markets caved in and Sovereign Debt yields plunged as investors rushed out of vulnerable equities and headed for the relative of security of US Treasuries and Gilts.

Money Markets were comparatively less volatile ahead of the perceived rate cutting extravaganza this week. Estimates for the sizes of cut by the BoE and the ECB grew during the day however and increased further overnight following the decision by the Reserve Bank of Australia to cut their own rates by a further massive 100 basis points to 4.25%.

Calls this morning are for the MPC to cut by a full 1.50% and the ECB to go by at least 0.75%. It is going to make for a nervous couple of days for holders of Sterling or Sterling based investments.

The Fed Chairman, yesterday evening, also aired his views on the current condition of the US economy and his prognosis was not good. Not terminal but not good. He basically said that things would get worse from here before any sort of improvement by the end of 2009.

He as near as possible promised that US rates would be cut to an unprecedented low of under 1% at their meeting on the 16th Dec and also looked to appease concerns that the Fed were running out of ideas to help the ailing patient. As stated above, Wall Street took fright, the Dollar strengthened.

This sort of outlook caused consternation in the commodity markets as renewed demand was deemed a long way off. Gold plummeted back to the $760 level and oil also fell, below the technically important support $50 per barrel. The price of WTI this morning is a little below $48.

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Typical Thanksgiving Day Holiday

Dr Search- Principal Consultant at the Search Clinic — Fri, 28 Nov 2008 02:45:00 +0000

In terms of volumes and liquidity left us trading very tight ranges yesterday and with tradition dictating an early close today in the US equity markets and with a lot of the rest of the workforce extending the holiday into the weekend, we are destined for another quiet one.

There is also very little data on today’s agenda and nothing market sensitive scheduled for the weekend.

This morning so far we have already seen a slightly better than forecast result for UK Consumer Confidence, much in the same vein as the rest of Europe and are left awaiting the CBI Distributive Trade Survey.

This is anticipated to be a weak number once again and with all the High Street bad news in the press, is likely to remain soft going forward. The FT, in an article this morning, ârubber stamp’ a 50 basis point cut by the ECB next week, which the market still feels will be the first of a few cuts in the coming months.

The UK still also expected to reduce rates by the same magnitude but the weekend press will be important for the health of Sterling going into December.

Other than that, we have the EU flash estimate for inflation and unemployment later this morning but that should be too little and too late to influence today’s end of month trading. This weekend sees an OPEC consultative meeting taking place in Cairo which should pave the way for discussions on a production cut at their official meeting later in December.

There are mutterings that OPEC want to reduce the current OECD oil stocks fall by about 100 million barrels to around 52 days of forward cover from its present 55 days.

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Iran worries continue to push up Oil Prices

Dr Search- Principal Consultant at the Search Clinic — Fri, 30 Mar 2007 06:42:00 +0000

Oil hit 6 month highs yesterday as the developing news story of the week, the capture of 15 British Sailors by Iran, continues to threaten supply. The price of Light Sweet Crude rose to $66 per barrel and Brent Crude to $67 per barrel.

Iran is the world’s 4th largest exporter of oil and although there has not been any disruption to supply as yet, prices are being pushed up as the failure to develop a swift diplomatic conclusion to the situation increases the chances of military conflict.

The issue of oil in relation to the US economy was touched on earlier this week. Loan Calculator Blog mentioned that rising prices, especially as we approach the heaviest period for oil consumption, could have a serious impact on the disposable income of the US consumer. This could be expected to lead to an easing of inflationary pressures which has been a major concern to Ben Bernanke in recent months.

The FOMC is suffering from mixed signals at the moment but if the above scenario occurs at least it can be decisive and act by initiating another phase of interest rate cuts. However, rising oil prices may force US industry to push up the price of their goods and services which could exacerbate the mixed signals and economic imbalances which has been such a factor of Fed indecision recently.

In the Eurozone, French unemployment data is expected to show that the country’s high unemployment rate is being addressed. The European Central Bank, hardly mentioned this week, will be looking for continued signs of improvement so that it can continue to tighten monetary policy.

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Loan calculators consider UK growth

Dr Search- Principal Consultant at the Search Clinic — Tue, 13 Feb 2007 03:09:00 +0000

Interest rates in the UK strengthened on expectations that an inflation report released today will show consumer price in the U.K. held near the highest in 10 years last month.

The U.K. currency cancelled out a three-day losing run against the euro following strong data released in the UK yesterday morning, most notable of all was the fact that house price inflation touched a 21-month high in December.

German economic growth was much stronger than expected in the second half of last year, prompting the nation’s federal statistic to revise up its growth estimates. Real gross domestic product grew by a quarterly rate of 0.9% in the last three months of the year, data published early this morning showed.

Finance ministers and central bankers from the group of seven nations urged investors to recognize Japan’s economic recovery could possibly be stronger than they think, warning not to make “one way bets” against the currency. Japan’s currency slumped to a record low against the euro, increasing concerns among Europe that their exports would become less competitive.

Oil hovered below $58 a barrel early this morning, following yesterdays $2 slide on signs the OPEC will keep output stable when it meets next month. Several OPEC ministers have said there will be no need for output cuts to add to pledged reductions of 1.7 million barrels per day, with Saudi Arabia’s oil minister Ali al-Naimi saying the marker was in better balance.

Gold steadied early this morning following sharp declines yesterday as the dollar lost some of its clout against other currencies. Gold held just above the widely marked technical support level of $660 an ounce, countering some expectations that geopolitical issues may drive the bullion closer to $700.

Investors this week have initially been seen putting more money into gold as tensions were seen increasing in the middle east after European Union foreign ministers agreed on sanctions on Iran to raise pressures over its nuclear programme.

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