How China’s Banks Support the Yuan Against Moody’s Outlook

The yuan stays the same even though Moody’s lowers China’s credit outlook. The USDCNH did not change much at around 7.15 per dollar, because big state-owned banks in China sold dollars, balancing out Moody’s move to lower China’s credit outlook.

Chinese banks swapped yuan for US dollars in the onshore market and then sold those dollars in the spot market. This action helped keep the yuan steady and reduce the worries caused by Moody’s about slower economic growth and possible risks in China’s property sector. Also, a survey showed that China’s services activity increased the most in three months in November.

October 2023: A Challenging Month for German Factory Orders

In October 2023, Germany witnessed a noticeable decrease in factory orders, marking the first decline in three months. This drop was unexpected, especially since orders had slightly increased by 0.7% in September, and there were predictions of a modest 0.2% growth. However, the actual figures showed a significant 3.7% fall. This sudden decline points to ongoing instability in Germany's industrial sector.

A closer look at the data reveals that the most significant reduction was in the machinery and equipment sector, which plummeted by 13.5%. This was a major setback, as this sector is usually a strong contributor to industrial growth. Other areas like fabricated metal products, basic metals, electrical equipment, and the automotive industry also experienced downturns. These sectors are crucial for Germany's economy, and their decline can have broader implications.

Interestingly, not every sector faced a downfall. The transport equipment sector, for instance, saw a substantial increase of 20.2%. This surge was largely due to some large-scale orders, highlighting the variability in different industrial segments.

When examining the source of the orders, foreign demand showed a significant decrease of 7.6%. This drop was consistent across the board, with orders from the Euro Area and the rest of the world declining by 7.6% and 7.4%, respectively. However, domestic orders within Germany painted a different picture, registering a 2.4% increase. This suggests that the domestic market still has some resilience, even as international demand weakens.

Another interesting observation is that when excluding large-scale orders, there was actually a 0.7% increase in new orders in October. This indicates that the overall decline might be somewhat influenced by fluctuations in big-ticket orders.

To provide a broader perspective, it's useful to look at the three-month trend. Comparing the August to October 2023 period with the previous three months, there was a 4.6% decrease in new orders. This longer-term view offers a clearer picture of the industrial sector's health, beyond the monthly ups and downs.

Boost Your Trading with Solid ECN's 15% Deposit Bonus

At Solid ECN, we understand the crucial role of adequate margin in forex trading and other leveraged markets. Novice traders often face challenges in high-volatility environments like cryptocurrency markets, particularly when operating with limited funds.

To support our clients, Solid ECN offers a valuable opportunity: a 15% deposit bonus. This bonus can reach up to $1,000 for each account, providing a significant boost to your trading capacity. What's more, any profits earned are yours to withdraw without restrictions. Unlike many other firms that retract bonuses during stop-outs or margin calls, our bonus is fully tradable – meaning you can use it to its full extent, even in the face of losses.

We're taking on 15% more risk to ensure you trade with greater confidence. Give Solid ECN a try and share your trading experiences with us. We're committed to enhancing your trading journey.

%15 Bonus | Swap Free | Raw Spread | Regulated

Japanese Yen Climbs as US Fed Rate Cuts Anticipated

The Japanese yen has strengthened to about 147 per dollar, reaching its highest point in 12 weeks. This rise comes amid increasing expectations that the US Federal Reserve may end its current phase of monetary tightening and possibly start reducing interest rates next year. Concurrently, Bank of Japan (BOJ) board member Asahi Noguchi expressed over the weekend that Japan has not yet achieved inflation driven by wage increases. Instead, recent inflation rises have been cost-push driven. Noguchi believes it's too early to move away from the BOJ's highly accommodative monetary policy, echoing sentiments from other BOJ officials.

In economic news, recent data indicated that Tokyo’s core inflation rate in November rose less than anticipated. However, it exceeded the BOJ’s 2% target for the 18th month in a row, signaling sustained inflationary pressure. Additionally, there's positive news from the manufacturing sector, where sentiment has improved significantly in December, especially in the auto industry, suggesting a robust recovery.

Canadian Dollar Climbs as Bank of Canada Holds Firm on Rates

The Canadian dollar has seen further appreciation, crossing the 1.35 mark against the USD. This uptick follows the Bank of Canada's decision to keep interest rates at their 22-year peak, along with a somewhat hawkish outlook. The bank held its key overnight rate at 5%, and even suggested the possibility of another rate hike. This comes amidst ongoing worries about inflation, even though there's been a recognition of both economic slowdown and a general easing of prices.

Recently, Canada reported a decline in its inflation rate to 3.1% in October, the lowest in four months, while the core rate fell to a 28-month low of 2.7%. At the same time, the economy saw an unexpected contraction at an annualized rate of 1.1% in the third quarter. This situation has led investors to speculate on the possibility of a rate cut as soon as March. However, Governor Tiff Macklem has clarified that the Bank of Canada is not currently considering any easing measures, as inflation still significantly exceeds the target.

Dollar Stays Strong as Job Market Data Looms

On Thursday, the dollar index maintained its position above 104, with investors taking a cautious approach. They are waiting for the upcoming monthly jobs report, which is anticipated to offer new insights into the current state of the US labor market. The report, due on Friday, is expected to reveal an increase in employment by 170,000 in November. Additionally, it's predicted that the unemployment rate will stay at a 22-month peak of 3.9%, and wage growth might slow down to 4%, marking the lowest since June 2021.

Recent data presents a mixed picture. Wednesday's figures suggested a slowdown in the US labor market, with the ADP report showing fewer job additions in November than anticipated, and labor costs in the third quarter being lower than expected. Despite these indications of a cooling labor market, the dollar has stayed near its highest levels in almost three weeks. This resilience is partly due to traders increasing their bets on rate cuts by other central banks. Currently, the market is pricing in about an 85% likelihood of the European Central Bank cutting rates in March 2024.

Cotton Futures Reach New Heights Amid Supply Concerns

Cotton futures recently hit a high not seen in over a month, climbing above 82 cents per pound. This surge, the most significant since late October, comes as traders face concerns over the short-term availability of cotton. Recent data from ICE reveals a sharp decline in certified cotton stocks. On December 5th, stocks available for delivery against futures contracts were at just 6,325 bales, a significant drop from the two-year high of 87,770 bales recorded on December 1st.

Adding to these supply worries, the Cotton Association of India (CAI) has lowered its forecast for the 2023/2024 cotton season's production to 29.4 million bales. This downward revision is due to the impact of the pink bollworm infestation in Haryana and the fact that many farmers have been forced to uproot their plants.

In other developments, Brazil reported its cotton export figures for November. The country shipped 253.71 thousand tons of cotton, indicating a 12% increase from October 2023. However, this figure represents a 5.5% decrease when compared to the exports in November 2022.

EURUSD Dips Slightly, Future Projections Indicate Decrease

On Friday, December 8, the EURUSD pair saw a slight decline, dropping by 0.0008 or 0.07%, to close at 1.0784. This was a marginal decrease from its previous trading session's level of 1.0792.

Analysts and global macro models from Solid ECN Security are projecting that the Euro to US Dollar exchange rate, commonly referred to as EUR/USD, will hover around 1.07 by the end of the current quarter. As we look ahead, our forecasts extend to 12 months, where we anticipate the exchange rate might further decrease to around 1.04.

Solid ECN: Your Solution to Inflation with Diverse Currency Wallets

At Solid ECN Securities, we recognize the challenges posed by inflation and have developed an innovative solution to help our customers safeguard their assets. Understanding the need for diversification and stability, we now offer a range of wallets that allow our clients to store their assets, investments, and profits in various widely sought-after currencies and cryptocurrencies.

Our offerings include:

- A Euro wallet
- A US dollar wallet
- A Pound sterling wallet

This variety ensures that our customers have the flexibility to manage their finances in the currencies and cryptocurrencies they trust and prefer.

Furthermore, Solid ECN is proud to offer trading in over 250 products within a true ECN (Electronic Communication Network) environment, with accounts based in Bitcoin. This feature provides our clients with a distinct edge in trading Forex, Commodities, Indices, and cryptocurrencies.

We invite you to open an account with Solid ECN, your premier destination for trading in a diverse and secure financial environment.

%15 Bonus | Swap Free | Raw Spread | Regulated

GBPUSD Sees Slight Decline, Predicted to Lower Further

On Friday, December 8, the GBPUSD experienced a modest decrease, dropping 0.0046 or 0.37% to close at 1.2544, down from 1.2590 in the previous trading session. This shift reflects a slight downward trend in the currency pair.

It is anticipated that the British Pound will trade around the 1.25 mark by the end of the current quarter. Extending the outlook further, over the next 12 months, the Pound is estimated to potentially trade at around 1.20.

China Experiences Steepest Food Price Fall Since 2021

In November 2023, the cost of food in China experienced a notable decrease, dropping by 4.2% compared to the same time last year. This decrease in food prices was more significant than the 4.0% drop observed in the previous month. In fact, this trend of falling food prices has been ongoing for five consecutive months, marking the most rapid decline since September 2021.

A key factor in this decline was the dramatic fall in pork prices, which went down by 31.8%, surpassing the 30.1% decrease seen in October. This larger drop in pork prices was unexpected and is thought to be due to a combination of unusually warm winter weather and a continued adequate supply following the Golden Week holiday in early October. In addition to pork, other food items also saw price reductions, including cooking oils (down by 4.1%), eggs (decreasing by 8.8%), and milk (a slight decrease of 0.3%).

However, not all food categories followed this downward trend. Fresh vegetables, for example, saw a slight increase in price (0.6%), reversing the previous month's decline of 3.8%. Similarly, the cost of fresh fruit accelerated, with prices rising by 2.7% compared to a 2.2% increase in the previous month.

In terms of the economic impact, this trend of falling food prices can have mixed effects. On one hand, lower food prices can benefit consumers by reducing their living expenses, potentially increasing their disposable income and encouraging spending in other sectors. On the other hand, for producers and farmers, falling prices can reduce income and profitability, possibly leading to challenges in the agricultural sector. Overall, the impact on the economy would depend on the balance between these consumer and producer effects.