Company News by ForexMart

U.S Economy Probably Expand by 3% in Two Years, Says Mnuchin

According to Steven Mnuchin, U.S Treasury Secretary, the economic growth of the United States could possibly grow by 3 percent in two years upon implementing the restoration of the regulatory reform and tax system and offering better trade agreements.

The job market of U.S revived gaining 12 percent increase in the prices of stock considering the fact that the election of Trump coupled with the consumer sentiment reached the highest peak in 16 years have painted a positive illustration of the economy.

In spite of that, the economy improved on its weakest pace within three years acquiring 0.7 percent in Q1 as it highlighted the dispute that the government dealt with as it aims to attain an annual growth higher than 3 percent.

Moreover, the administration of Trump had established the overhauling of the tax rate system labeled as the largest revision in history, since this is on the top list of their legislative program.

The plan was already published previously, it further contains the proposal for trimmed taxes intended for the citizen and businesses, creating comprehensive filer system and prohibiting the rich from loopholes. The package is expected to be signed and put into law within the current year.

On the other hand, the International Monetary Fund have given its forecast that the world's largest national economy will bolster hitting 2.3 percent in 2017 while 2.5 percent for next year.

Stronger Indian Rupee Provided Positive Impact to Masala Bonds

The Indian Rupee (INR) strengthened against the American dollar, while the masala bonds could take advantage with Indian firms who are looking to increase funds.

The masala bonds had a considerable growth even the latest fiscal together with the ICRA projected that the trend will persist particularly for firms without any natural hedge that could reduce risk from foreign currencies engaged in the external commercial borrowings (ECBs).

During the 2017 fiscal year, the rupee-linked bonds hold at t Rs 30,620 crore by which other country’s currency dropped to Rs 1,740 crore compared with the previous FY with Rs 2,440 crore.

According to Karthik Srinivasan, Senior VP of ICRA said: “With their cash flows denominated in Indian Rupees, many of the borrowers of ECBs don’t have a natural hedge against foreign currency risks inherent in that instrument."

Moreover, the national currency of India rose by more than 5% versus its U.S peer, this caused for theIR to be the top performer among its rivals.

The commercial banking company further anticipates an aggregate FII debt inflows worth $5-10 billion inclusive of RDBs amid FY18.

As Unemployment Rate Drops, US Economy on its Way to Recovery

The US Labor Department has released its US job report for April, wherein it indicated that business had topped up a total of 211,000 jobs last month, a far cry from March’s reading of only 79,000 jobs. This upward trend in hires has confirmed market projections that the country’s overall economic growth is well on its way towards a significant recovery. Economists are now saying that this evidently very strong economic data for the country signals that consumers might soon have the power to amplify their spending habits during the second quarter of 2017.

Oil Cut Production May Extend Beyond 2017, Says Minister of Saudi

Khalid Al-Falih, oil minister of Saudi Arabia showed confidence with regards to the deal to limit output for crude oil and the oversupply reduction is going to be extended within 6 months or more.

Al-Falih further discussed during the Asia Oil and Gas Conference held in Kuala Lumpur last Monday that the growth of U.S shale production together with the closure of refinery maintenance have lessened the effect of cutback led by the Organization of Petroleum Exporting Countries along its associates. Moreover, manufacturers are driven enough to achieve their target to drop in their bloated gasoline supplies. Nevertheless, he believes the world oil supply could still realign and revive its former healthy state.

The increasing U.S production place worries towards OPEC and its allies as it fails to minimize the market glut and expansion of prices.

The gains of oil were erased since the agreement made in the previous year to curb output. The OPEC meeting held in Vienna attended by various nations further supported the 6-month deal for the extension which will start in January. It would be the first time that the minister of Saudi to propose the extension beyond 2017.

Euro Fell Against the Dollar in the Post-French Election

The common European currency tumbled on Monday from its highs due to the triumph of centrist wing Emmanuel Macron. As investor received an estimate of 3% of profit after Macron won a couple of weeks ago.

The loss of the populist candidate, Marine Le Pen ended the worries of investors about the radical change subsequent to Brexit and Trump’s election last year in case that Le Pen won.
Based on opinion polls, Macron had a consistent point which is roughly 20 percent and his triumph on Sunday was a great surprise.

During the early trades of Asia, the euro surge reaching $1.1024 which is its highest rate since November 9. It further increased on its one-year high touching 124.58 yen versus its Japanese peer while hitting a five-month high jumping to 1.0886 against the Swiss franc.
However, amid morning session of Europe, it declined by 0.4 percent to $1.0953 vs the greens and 0.6 percent to 123.26 against the yen.

The political risk linked with Le Pen were already removed, the risk involves the pledge that France will be taken out from the European region. As the risk was eliminated, the focus turned to the economic fundamentals along with the monetary policy normalization of EU and U.S.

Demonetisation Slowed Down Indian Economy

The International Monetary Fund issued a regional forecast for India this month and predicted that the South Asian country will slow down because of the cash crunch bring about by the demonetization despite the fact that its economic growth would likely remain strong within the Asia Pacific region compared with the previous outlook in October.

According to the report of National Accounts Statistics, the economic impact of the cash insufficiency may be downplayed in the least short term.

In addition to it, an analysis made by the staff of IMF states that the projections in October 2016, the negative cash flow seems slow amid the financial year 2016-17 nearly four to five percentage points. While the growth in FY 2017-18 was almost half of its percent point.

High Demand for Bitcoin Hit a Record High $1,760

The Bitcoin attained a record high on Tuesday because of an upsurge demand for crypto-assets and the production of new tokens to increase stake for new establishment through blockchain technology which implies the dispensability of a central regulator.

The digital currency rose on the day by 6 percent reaching $1,760.40 from $1,747.89 on the BTC=BTSP BitStamp platform. Currently, it surged to almost 80% percent for the year and a significant expansion of market capitalization up to $52.5 billion, reported by coinmarketcap.com.

However, Federal Reserve of Minneapolis Bank President Neel Kashkari is not convinced of a positive bitcoin probable future, saying that the blockchain technology will progress more in the future compared to the digital currency. Also, considering the shift in the market interest where majority of the bitcoin rallied was influenced because of high demand for the initial coin offerings (ICOs).

FBI Chief Comey Sacked by Trump

President Trump has fired FBI Director James Comey yesterday in a sudden turn of events in the White House, causing a sudden onslaught of calls for a special prosecutor to take control of the ongoing investigation of the body into Trump’s possible relationships with Russia, particularly during his campaign. This sudden development would most likely lead to a long-term falling out and could cause uncertainties with regards to the fate of the Russian investigations. Prior to Comey’s relieving of his position, the FBI has been involved in the investigation of Trump’s ties with Russia, particularly on whether the Russian government had influenced the presidential elections last year. The Russian government has denied any connections with the current administration.

India’s Consumer Price Inflation Abates this April

Inflation rate of India narrowed down because of lower food cost for the month of April. However, this would make it tough to ease rates in the near future. Consumer price inflation is anticipated to persist lower than the 4.0 percent medium target of the Reserve bank of India for the past six months.

It is forecasted from a survey of economist that inflation in April will decline to a three-month low of 3.40 percent this month compared to the 3.81 in March. Yet, the central bank raised its inflation rate for the fiscal 2017 to 2018 to attain 4.5 percent for the first half and 5.0 the second half of the year. An economist described the situation that even if the interest rate cut exceeded the 4 percent level in the next few months, the RBI will be cautious and would not cut rates since the current situation is stable already.

Ireland’s Household Debt Has Fallen but Remains Fourth in the Most Indebted Nation in EU

The household debt of Ireland had collapsed for more than 20 times which appeared to be much apace than Europe in 2016, underlining the amount of Ireland’s recovery from the debt-induced financial crisis.

Based on the statistics showed by the Irish Central Bank, Sweden ousts the Irish island on the ranking of the most indebted nation in EU as the Swedish region have low-interest rates which gave rise to concerns about the overheating in the housing market of the country.

The household credit serves as the disposable income percentage further weakened by 10.2 percent point in the previous year, reaching 140.9 percent versus the 0.5 pp overall downturn in the European Union.

The bank also mentioned that the contraction has weighed on the reduction in debt and improvement in the household incomes. The indebtedness has declined by 52.9 percentage point as the year 2012 ends versus with the decreased in the broader EU by 3.3 percent.

Moreover, the Irish government was compelled to agree with the Europe and IMF program for economic stabilization in 2010 as the property bubble suddenly broke causing the string of banks to fall down. Despite the strong rebound, the economy remains to become one of the rapid-growing states in EU.