Italy Services Growth Eases More Than Expected In December

Italy’s service sector growth eased at a faster-than-expected pace in December, survey figures from IHS Markit showed Wednesday.

The services Purchasing Managers’ Index, or PMI, fell to 52.3 in December from November’s 9-month high of 53.3. Economists had expected the index to drop to 52.6.

However, any reading above 50 indicates expansion in the sector.

Output grew at a weaker rate in December amid solid rise in the level of new orders. Firms raised their staffing numbers for the third straight month, but the rate of job creation was only marginal.

On the price front, input price inflation accelerated to a five-month high in December, driven by higher fuel prices and salary pressures. Despite this, companies lowered output charges on strong competitive pressures.

“Italy looks to be in for a bumpy ride during 2017, and IHS Markit forecasts GDP growth to ease back from a predicted 0.9 percent in 2016 to just 0.4 percent,” Phil Smith, Economist at IHS Markit, said.

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Canadian Dollar Climbs Against Majors

The Canadian dollar drifted higher against its major opponents in the European session on Wednesday.

The loonie climbed to more than a 2-week high of 1.3343 against the greenback, off its early low of 1.3457.

The loonie advanced to 1.3922 versus the euro and 88.16 against the yen, reversing from its previous lows of 1.4005 and 87.58, respectively.

The loonie that came off from an early 5-day low of 0.9757 against the aussie rose back to 0.9693.

The loonie is likely to find support around 90.00 against the yen, 1.30 against the greenback, 0.96 against the aussie and 1.41 against the euro.

The material has been provided by InstaForex Company – www.instaforex.com

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Worrisome Signs Series: Real Wages in Decline Thanks to Inflation

The US Federal reserve is right to worry on looming inflation, as higher inflation without compensatory growth would eat away the purchasing powers of the consumers. In addition to that, a higher inflation uptick means that the FED would have to unwind its asset portfolio fairly quickly.

Since the great recession of 2008/09 the growth in the nominal wages in the economy remained fairly stagnant, despite a steady decline in the unemployment rate from 10 percent to 4.8 percent. Only since 2015, it has shown some upward pace. Several times, throughout the past year, several times the FOMC has mentioned in their statement that the household earnings remained solid and indicated in 2015 that the drop in the oil price would benefit the consumers by increasing their spending powers or real wages.

However, the same Federal Reserve failed to mention, what we can see from that graph that since November 2015 there has been a steady decline in real wages as inflation rose at a faster pace compared to the real wages. While the nominal wage growth (2.5 percent) has hit the highest level since the crisis, real wage growth (0.8 percent) has touched the lowest level in more than 2 years.

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Uk Gilts Trade Narrowly mixed Despite Upbeat December Construction Pmi

The UK gilts traded narrowly mixed Wednesday despite upbeat December construction PMI, which accounts for around 5.9 percent of the country’s gross domestic product (GDP).

The yield on the benchmark 10-year gilts, which moves inversely to its price, fell 1/2 basis point to 1.32 percent, the super-long 40-year bond yield climbed 1/2 basis point to 1.80 percent and the yield on short-term 2-year bounced 1-1/2 basis points to 0.14 percent by 10:50 GMT.

Activity in Britain's construction sector expanded at the fastest rate in nine months in December, boosted by more house building, but sterling's weakness drove the biggest rise in costs in over five years, an industry survey showed on Wednesday, Reuters reported.

The Markit/CIPS purchasing managers' index (PMI) rose to 54.2 in December, its strongest since March and well ahead of expectations in a Reuters poll for it to hold steady at November's reading of 52.8.

Moreover, the UK manufacturing PMI for December jumped to 56.1 from 53.6 (upwardly-revised from 53.4), which comes higher than the market expectations of 53.3. This is actually the best reading since June 2014, and will confound expectations for a Brexit-related slowdown in the economy.

According to the latest Citi/YouGov survey, UK’s inflation expectations for the short term are broadly steady at 2.4 percent whilst expectations for the longer term have risen to 3.0 percent up from 2.8 percent in November.

Meanwhile, the FTSE 100 traded 0.07 percent lower at 7,173.5 by 10:50 GMT. While at 10:00 GMT, the FxWirePro's Hourly GBP Strength Index stood neutral at +35.67 (higher than +75 represents purely a bullish trend).

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مصاعب الين ترفع الأسهم اليابانية

يستمر الدولار الأمريكي بصعوده يوم الأربعاء، ووصل إلى أعلى مستوى له خلال 14 عام مقابل الين الياباني، ما أدى إلى رفع الأسهم الآسيوية بشكل واسع، مع تمتع الأسهم اليابانية بأقوى المكاسب حتى الآن.

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Eurozone Inflation Accelerates In December

Eurozone inflation rose at the fastest pace in more than three years in December, flash data from Eurostat showed Wednesday.

Inflation increased more-than-expected to 1.1 percent in December from 0.6 percent in November. A similar higher rate was last seen in September 2013. Inflation was expected to rise to 1 percent.

Nonetheless, headline inflation has been below the European Central Bank’s target of ‘below, but close to 2 percent’ since early 2013.

Core inflation that excludes energy, food, alcohol and tobacco, rose slightly to 0.9 percent from 0.8 percent. Final data is due on January 18.

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