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Sunday, August 16, 2015

China Yuan may move Go up or down According to central bank Chief economist

economy, business, finance

China's move to bring down the Yuan last week could lead to similar adjustments, and China's currency is likely to move in both directions as the economy stabilizes, Ma Jun, chief economist at the central bank said on Sunday.

The People's Bank of China (PBOC) surprised the global markets by bringing down the yuan CNY=CFXS by nearly 2% last August 11. The PBOC called it a free-market reform but some saw it as the start of a long-term yuan depreciation to spur exports.

A more market-oriented pricing mechanism for the Yuan will help to avoid excessive deviation from the equilibrium level and significantly reduce the possibility of sudden fluctuations, Mr Ma said in an e-mailed statement on Sunday. The economy will probably grow about 7% this year, he said.

The yuan halted a three-day slide on Aug 14 following its first major devaluation since 1994 after the central bank said it will intervene to prevent excessive swings. Policy makers are trying to balance the need for financial stability with a desire for stronger exports and the yuan's inclusion in the International Monetary Fund's basket of reserve currencies.

"If we want to evaluate the yuan's mid-term trend, it's more important to analyze the fundamentals of the economy, which has shown signs of stabilization and recovery," Mr Ma said in the statement. "Even if the central bank needs to intervene in the market in the future, it could be either way." China's decision on Aug 11 to allow markets greater sway in setting the currency's level triggered the biggest selloff in 21 years and roiled global markets.

The current exchange rate is now more consistent with economic fundamentals, and there is no need to adjust it to boost exports, PBOC Deputy Governor Yi Gang said at a press conference on Aug 13. The central bank has exited regular intervention, and will will act when the market's volatility is excessive, Mr Yi said.

Friday, August 7, 2015

U.S. dollar and Stocks fall flat before U.S. jobs data

Investors on Friday head for safety as the U.S. dollar and world stocks markets fall flat before U.S. jobs data. It is said that the Federal Reserve will use that data to raise interest rates for the first time in nearly a decade.

In Europe, Germany's export industrial output dropped in June that caused Europe stocks inched down by 0.5%. Top-rated German bond yields were flat at 0.72%

The prospect of higher U.S. rates has sucked funds out of emerging markets. A slump by Chinese stocks and a rout in commodities has also hurt investor demand.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4% and set for its third straight weekly loss. Japan's Nikkei stock index was up 0.3%. The MSCI world index.

In currencies, the dollar index was unchanged at 97.81. The euro was also flat $1.0927 EUR= early in Europe.

Sunday, July 19, 2015

Google Stocks Surges, help Nasdaq to close on record high

 Google stocks, finance, investment Schedule

Last Friday Google stocks surges by 16% that helps Nasdaq setting a new record high. The 16% sudden increase in Google's publicly traded stock resulted to additional $65.1 billion in shareholder wealth, on paper.

Google's surge came after the search engine company reported quarterly earnings that exceeded analyst estimates for the first time since late 2013. The company's inability to hit the targets that steer investors had raised doubts about Google that had caused its stock to lag the rest of the market since the end of 2013.

Other players, Honeywell global Inc (HON) were up by 1.9% or $2.04 to $105.61. Yahoo, which holds a large stake in Alibaba, increased by 2%. Consumers remained upbeat about employment and wages. The railroad’s gain helped boost the Dow Jones Transportation Average by 0.7 percent.

Tuesday, July 7, 2015

Greek financial crisis

Greek financial crisis, Greece, economy, finance, Euro, EU


German Finance Minister Wolfgang Schaeuble said that Berlin refuse to give Greece an actual debt cut when he arrived at a meeting with his counterparts in the 19-country Eurozone.

He said that without an aid program it is not possible to help Greece within the framework of the Eurozone. Berlin is reluctant to consider a debt cut for Greece. The Greece is asking for a debt relief to be near the top of bailout discussions. It doesn't necessarily mean an actual reduction in the amount owed but an extension to the country's repayment schedule.

Schaeuble said actual debt cuts are banned under European rules.

Lithuania just began using the euro currency this 2015 and doesn't want the 19-country single currency club to start losing members now. Lithuanian Finance Minister Rimantas Sadzius said a Greek exit "is not an option for us," as arrived for the meeting of Eurozonefinance ministers in Brussels to discuss a possible new bailout deal for Athens.

Sadzius said he believes common ground can be found. Greece's new finance, Euclid Tsakalotos is set to unveil new proposals to his peers in the Eurozone.

"In politics, there is always room for compromise," said Sadzius. "We believe that the Eurozone should expand rather than contract."

Wednesday, June 24, 2015

Greek Crisis Weigh Upon German Business Morale

German business, economy, business, finance

German business morale is down again for a 2nd straight month in June according to a survey. Concerns about the Greek debt crisis has been affecting them negatively. The survey which is called the Ifo business climate index was conducted by Ifo Institute for Economic Research. It is based on a monthly survey of some 7,000 firms, it dropped to 107.4 in June from 108.5 in May.

Greece needs cash to save them from defaulting their loan from the IMF next week. Fears about the risk of a default have prompted savers to withdraw billions from Greek banks, forcing the European Central Bank to increase emergency liquidity assistance to keep them afloat.

German economic growth slowed to 0.3% in the first quarter, with no improvement is sight.

source: https://www.cesifo-group.de/ifoHome/facts/Survey-Results/Business-Climate.html

Wednesday, June 17, 2015

China's stock market Keeps on rising worth over $10 trillion

China stock market, finance, market, economy

Right now China's stock market is worth over $10 trillion with the Shanghai Stock Exchange had a total market cap of $5.9 trillion while the Shenzhen Stock Exchange is at $4.4 trillion (World Federation of Exchanges), meaning there is $10.3 trillion in China's stock market since both the Shanghai and Shenzhen has been surging this year. The benchmark Shanghai Composite is up nearly 60% since January 1, and the Shenzhen Composite has skyrocketed by 120%, easily making it the world's best-performing market.

The crazy rise has pushed the Shanghai Stock Exchange up the ranks to become the world's third-biggest by market cap, behind the New York Stock Exchange at nearly $20 trillion and Nasdaq at $7 trillion.

81% of retail investors in China trade at least once a month, according to a State Street survey published earlier this year. American investors traded just 53% while French investors traded 32% monthly.

Top stock exchanges by market cap:
  1.     New York Stock Exchange - $19.7 trillion
  2.     NASDAQ OMX - $7.4 trillion
  3.     Shanghai Stock Exchange - $5.9 trillion
  4.     Japan Stock Exchange - Tokyo - $5 trillion
  5.     Shenzhen Stock Exchange - $4.4 trillion
  6.     Hong Kong Stock Exchange - $3.96 trillion
  7.     Euronext - $3.5 trillion

Saturday, June 6, 2015

Job Growth is Up by 5.5% in the US

Job Growth, employment, US data

There are concern about US economy is slowing, but this has not affected the job market as the government announce last Friday that businesses 280,000 jobs in May. The unemployment rate is up by 5.5% from 5.4%.

However, wages is barely rising above inflation, because of a limited the economy’s growth. Education and health has contributed an additional 592,000 jobs (2.8% gain). Healthcare has been boosted by the medical demands of aging population and the expansion of health insurance under the Affordable Care Act.

People who were surveyed said they had to skip some medical care for lack of money, and could not cover an unexpected emergency that cost $400.