Japan’s Exports Rise as Weak Yen Helps Ahead of BOJ Meet

Economic

Summary:

Japan’s exports posted another gain in November as the yen’s weakness helped exporters, although the underlying trend in trade remained lackluster ahead of this week’s Bank of Japan meeting.

Exports measured in value rose 3.8% from a year ago led by chip-making machinery and non-ferrous metals while cars dragged on shipments, the Ministry of Finance reported Wednesday. That beat the consensus estimate of a 2.5% increase. Imports fell 3.8% led by crude oil, but still left a negative trade balance of ¥117.6 billion.

While the value of exports rose, trade is giving limited support overall to the Japanese economy. Demand in the US and Europe continued to wane while it rose in China, where the government is trying to support growth with aggressive stimulus measures. Measured in volume, exports were barely changed.

Shipments to the US declined 8% led by cars and medicine, and those to Europe sank 12.5% also led by autos, the report showed. Shipments to China rose 4.1%.

“A drop in auto exports is keeping a lid on overall exports because it’s such a major sector for Japan,” said Takeshi Minami, economist at Norinchukin Research Institute. “The global economy is not stalling or accelerating, making it hard for overall exports to increase.”

Overall, Wednesday’s data showed the trade balance stayed negative for a fifth consecutive month, suggesting that broader trade conditions are likely to keep weighing on the economy in the final quarter. Net trade was also a drag on the economy in the three months ended September.

The yen averaged 152.83 per dollar in November, 1.7% weaker than a year ago, the report said. A weaker yen tends to help exporters become more competitive as it inflates their overseas earnings when brought home.

The Bank of Japan said at the end of October that the impact of imported inflation is expected to wane while underlying inflation is set to rise moderately with a link between wages and prices intensifying. The central bank will be making its latest policy decision on Thursday.

Going forward, like other nations, Japan faces growing uncertainties over global trade with the return of Donald Trump to the White House in January. The US President-elect has pledged extra tariffs against China, Mexico and Canada after winning the election in November. During his campaign he also floated an idea of universal tariffs on all goods coming from abroad, including from Japan.

Japan’s Foreign Minister Takeshi Iwaya said earlier this month that Tokyo intends to pick up trade talks with Trump with an understanding that the elimination of tariffs on cars and auto parts will be on the agenda.

Sources: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Owen Li

Economic

The government on Wednesday unveiled a series of measures to stimulate corporate investment in key industries, aiming to address concerns that recent political turmoil could have long-term negative effects on the economy.

The plan was introduced during a meeting chaired by Finance Minister Choi Sang-mok and attended by other economy-related ministers, amid rising concerns following the recent declaration of martial law and the impeachment of President Yoon Suk Yeol.

"The breakthrough for overcoming internal and external challenges ultimately lies in corporate investment," Choi said.

Under the plan, the government will provide various forms of support and incentives to facilitate investment in seven large-scale projects worth a combined 9.3 trillion won ($6.5 billion).

The projects include an artificial intelligence cluster hub in Gwangju, just outside Seoul, and the construction of a cutting-edge secondary battery facility in Saemangeum, a 409-square-kilometer reclaimed area in North Jeolla Province.

To accelerate progress, the government plans to fast-track administrative procedures by more than six months, allowing construction to commence early next year, Choi said. Additionally, tax incentives will be expanded.

"We will revise regulations and improve institutional frameworks to create an investment-friendly environment, ensuring businesses can proceed with their plans smoothly," Choi said.

The government is also prioritizing the approval of a semiconductor cluster in Yongin, south of Seoul. Originally slated for approval in the first half of next year, the process will now be completed by the end of this year.

"Amid concerns that the current domestic political situation could weaken corporate investment plans, we will actively support businesses to maintain their momentum," he said.

Since the brief imposition of martial law on Dec. 3, Choi, who doubles as deputy prime minister for economic affairs, has been holding daily meetings with business leaders from both home and abroad to ensure the country's credibility. (Yonhap)

Source: Koreatimes

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Economic

Central Bank

Rate cut bets have been pared back

The US Federal Reserve meets this week for the last time in 2024 and it looks set to end the year with its third rate cut since September. However, it’s only in the past week or two that investors have become confident that the central bank will deliver a 25-basis-point reduction in the Fed funds rate when it announces its decision at 19:00 GMT on Wednesday.

A string of upbeat economic indicators as well as inflation edging higher over the last couple of months, not to mention of course Trump’s election victory, have all led to a drastic repricing of the expected number of rate cuts next year. Donald Trump’s re-election and the implications his policies could have on growth and inflation have complicated the Fed’s interest rate path at a time when the US economy continues to defy fears of a slowdown and underlying price pressures remain sticky.

All eyes on new dot plot

If the Fed does trim rates as expected in December, markets currently foresee just two more 25-bps cuts in 2025. That would be about 50 bps less than what FOMC members predicted in the September dot plot. So, what’s the likelihood that the December dot plot will be revised accordingly?

Most Fed officials backed the case for further rate cuts heading into the blackout period but were split on the size of easing that would be warranted with the inflation picture as it is now. With markets having already done the heavy lifting, policymakers will probably pencil in a similar path as implied by traders.

Will the Fed signal several rate cuts or a pause?

In fact, the risk for the dot plot is tilted toward a dovish surprise as some FOMC members may still be optimistic about inflation coming down substantially in 2025 and therefore being able to cut rates by at least three times. Although, if it’s evident that policymakers based their projections on not making too many assumptions about how inflationary Trump’s policies will be, investors might not be very convinced about a more dovish path.

Hence, Jay Powell’s press conference will be as closely watched as ever for gauging the Fed chief’s and his colleagues’ views on inflation and the economy. Earlier in December, Powell said that the Fed can “afford to be a little more cautious”. He is likely to reiterate that there is no rush to take rates closer to the neutral level.

The question is how strongly he will signal a pause in January and is he going to open the door to a longer pause? The odds that the Fed will stand pat in January currently stand at around 87%.

Dollar could climb to a new 2024 high

Should Powell remain worried about the prospect of inflation staying above the Fed’s 2% goal and the dot plot is predicting barely two rate cuts in 2025, the US dollar could stretch its recent bounce back. The greenback’s index against a basket of currencies could easily surpass the November 22 high of 108.07 if both Powell and the dot plot are more hawkish than anticipated.

Moreover, if any hawkish rhetoric is followed up with an uptick in the core PCE price index on Friday when the November readings are due, the dollar’s bullish streak could extend even still.

Such a move, though, would have to be backed by a similar rally in Treasury yields and this poses a downside risk for Wall Street.

If, however, Powell adopts a more balanced tone and is hopeful that there will be further progress in reducing inflation in 2025, the dollar index could pull back towards its 50-day moving average near 105.30 before attempting to breach the 105.00 level.

Clouded Outlook

On the whole, the Fed meeting may not change much about the monetary policy outlook, and this may stay the case until some of the cloud for 2025 has been lifted. Specifically, the Fed is unlikely to let its guard down on inflation until it sees that the incoming Trump administration’s policies on taxes and tariffs won’t pose a huge risk to re-igniting inflationary pressures. This means that the dollar’s downside is limited for now.

This could change, however, if the labour market starts to deteriorate unexpectedly over the coming months, in which case, the Fed won’t hesitate to lower borrowing costs even if inflation remains problematic.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

Understanding the Relationship Between Inflation and Interest Rates

Inflation is a term that frequently appears in economic discussions, often eliciting concern among consumers, investors, and policymakers alike. It refers to the general increase in prices of goods and services over time, which can erode purchasing power. However, one of the most significant effects of inflation is its impact on interest rates. Understanding this relationship is crucial for making informed financial decisions.

The Basics of Inflation

Inflation occurs when the demand for goods and services exceeds their supply, leading to higher prices. It can be measured using various indices, the most common being the Consumer Price Index (CPI). Central banks, like the Federal Reserve in the United States, monitor inflation closely to implement monetary policies aimed at stabilizing the economy.

Interest Rates: What Are They?

Interest rates are the cost of borrowing money, expressed as a percentage of the loan amount. They can be affected by various factors, including economic growth, fiscal policies, and, notably, inflation. When inflation rises, it typically leads to higher interest rates, as lenders seek to maintain their profit margins and purchasing power.

The Relationship Between Inflation and Interest Rates

Central Bank Policies: Central banks play a pivotal role in controlling inflation and, consequently, interest rates. When inflation is high, central banks may increase interest rates to cool down the economy. This action makes borrowing more expensive, which in turn can reduce consumer spending and business investment, helping to lower inflation.

Expectations of Future Inflation: If consumers and investors expect inflation to rise in the future, they may demand higher interest rates to compensate for the expected decrease in purchasing power. This is known as the "Fisher Effect," which posits that real interest rates (the nominal rate minus inflation) remain constant over time, leading to an increase in nominal rates when inflation expectations rise.

Market Reactions: Financial markets react to inflation data and central bank policies. If inflation is reported to be higher than expected, bond yields often rise, reflecting an increase in interest rates. Investors demand higher yields to offset the anticipated erosion of their returns due to inflation.

Impact on Different Types of Interest Rates: Not all interest rates react the same way to inflation. Short-term rates, which are influenced by central banks, may rise quickly in response to inflationary pressures. In contrast, long-term rates, which are determined by market forces, can also be influenced by factors like economic growth and fiscal policies.

The Broader Economic Implications

The interplay between inflation and interest rates has broader implications for the economy. Higher interest rates can slow down economic growth, as consumers may reduce spending and businesses may cut back on investment. Conversely, low-interest rates can stimulate growth but may lead to higher inflation if demand outstrips supply.

Conclusion

Understanding how inflation affects interest rates is essential for navigating the financial landscape. As inflation rises, interest rates typically follow suit, impacting everything from mortgage rates to savings account yields. For consumers and investors alike, being aware of this relationship can inform better financial decisions and strategies.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

CFD (Contracts for Difference) day trading has become increasingly popular among retail traders due to its flexibility and the potential for high returns. This trading style allows individuals to speculate on price movements of various financial instruments without actually owning the underlying assets. In this article, we will explore what CFD day trading is, its benefits, the risks involved, and essential strategies to succeed.

What is CFD Day Trading?

CFD day trading involves buying and selling CFDs within the same trading day, aiming to profit from short-term price fluctuations. Unlike traditional trading, where you own the asset, a CFD is a contract that reflects the price movement of an asset. This means you can trade various types of assets, including stocks, indices, commodities, and currencies, without the need to own them.

Benefits of CFD Day Trading

Leverage: One of the most significant advantages of CFD trading is the ability to use leverage. Traders can control a larger position with a smaller capital outlay. For example, with a leverage ratio of 10:1, a trader can open a position worth $10,000 using only $1,000 of their own money. While this can amplify profits, it also increases the potential for losses.

Access to Global Markets: CFD trading provides access to a wide range of markets and assets. Traders can diversify their portfolios by trading different instruments, which can help mitigate risks.

Flexibility: CFD day trading is highly flexible, allowing traders to react quickly to market movements. Positions can be opened and closed at any time during market hours, providing opportunities for profit in volatile markets.

No Ownership of Underlying Assets: Since CFDs are contracts, traders do not need to worry about the costs associated with owning physical assets, such as storage or maintenance.

Risks of CFD Day Trading

While CFD day trading offers numerous benefits, it also carries significant risks. Understanding these risks is crucial for anyone looking to enter this market.

High Volatility: The financial markets can be highly volatile, leading to rapid price changes. While this can create trading opportunities, it also increases the risk of substantial losses.

Leverage Risk: While leverage can amplify profits, it can also magnify losses. Traders can lose more than their initial investment if the market moves against them.

Market Sentiment: CFDs are heavily influenced by market sentiment and news events. Unexpected news can lead to sudden price movements, making it essential for traders to stay informed.

Lack of Regulation: The CFD market is less regulated than traditional markets, which can expose traders to unscrupulous brokers and practices. It’s essential to choose a reputable and regulated broker.

Strategies for Successful CFD Day Trading

Technical Analysis: Successful CFD day traders often rely on technical analysis to make informed decisions. This involves studying price charts, identifying trends, and using indicators to predict future price movements.

Risk Management: Implementing a solid risk management strategy is crucial. Traders should always use stop-loss orders to limit potential losses and never risk more than they can afford to lose.

Stay Informed: Keeping abreast of market news and economic indicators can provide valuable insights into potential price movements. Economic calendars and news feeds are essential tools for day traders.

Develop a Trading Plan: A well-defined trading plan outlines entry and exit points, risk tolerance, and profit targets. Sticking to this plan can help traders avoid emotional decision-making.

Conclusion

CFD day trading can be an exciting and potentially lucrative way to engage in the financial markets. However, it is essential to approach it with a well-informed strategy and a clear understanding of the risks involved. By leveraging technical analysis, maintaining strong risk management practices, and staying informed, aspiring traders can navigate this dynamic market effectively. Whether you're a seasoned trader or just starting, CFD day trading offers opportunities for those willing to put in the time and effort to learn.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

In the fast-paced world of finance, algorithmic trading has emerged as a revolutionary force, transforming the way traders and investors execute their strategies. Utilizing complex mathematical models and automated systems, algorithmic trading allows for the rapid execution of trades, making it an indispensable tool for many market participants. This article delves into the intricacies of algorithmic trading, exploring its strategies, benefits, risks, and the technology that powers it.

What is Algorithmic Trading?

Algorithmic trading refers to the use of computer algorithms to automate trading decisions in financial markets. These algorithms analyze vast amounts of market data, identify trading opportunities, and execute orders at speeds that far exceed human capabilities. Traders can leverage algorithms to implement various strategies, including arbitrage, market making, and trend following.

Key Components of Algorithmic Trading

Data Analysis: Algorithms are designed to analyze historical and real-time market data, identifying patterns and trends that inform trading decisions.

Execution: Once a trading opportunity is identified, algorithms execute trades automatically, often through direct market access (DMA) to ensure minimal latency.

Risk Management: Many algorithmic trading systems incorporate risk management features, allowing traders to set parameters that limit potential losses and optimize their risk-reward ratio.

Popular Algorithmic Trading Strategies

Trend Following: This strategy seeks to capitalize on established market trends. Algorithms analyze price movements and execute trades in the direction of the prevailing trend.

Mean Reversion: Mean reversion strategies operate on the premise that prices will revert to their historical average. Algorithms identify overbought or oversold conditions and execute trades accordingly.

Statistical Arbitrage: This strategy exploits price inefficiencies between correlated assets. Algorithms continuously monitor price relationships and execute trades when discrepancies arise.

Market Making: Market-making algorithms provide liquidity to the market by placing buy and sell orders. They profit from the bid-ask spread while managing inventory risk.

Benefits of Algorithmic Trading

Speed: Algorithms can process vast amounts of data and execute trades in milliseconds, allowing traders to capitalize on fleeting market opportunities.

Consistency: Automated trading removes emotional biases, ensuring that trading strategies are executed consistently according to predefined rules.

Reduced Transaction Costs: Algorithmic trading can minimize transaction costs by optimizing order execution, allowing traders to achieve better prices.

Backtesting: Traders can test their strategies using historical data to evaluate performance and make necessary adjustments before deploying them in live markets.

Risks and Challenges

Despite its advantages, algorithmic trading is not without risks:

Technical Failures: Algorithms rely on technology, and technical glitches can lead to significant losses if not monitored closely.Market Impact: Large orders executed by algorithms can impact market prices, especially in less liquid markets.

Overfitting: Traders may inadvertently design algorithms that perform well on historical data but fail in real-market conditions.

Regulatory Scrutiny: As algorithmic trading becomes more prevalent, regulatory bodies are closely monitoring its impact on market stability, leading to potential compliance challenges.

The Technology Behind Algorithmic Trading

Algorithmic trading relies on various technologies, including:

Programming Languages: Languages such as Python, C++, and R are commonly used to develop trading algorithms.

Data Feeds: Real-time data feeds provide the necessary market information for algorithms to make informed trading decisions.

Trading Platforms: Many brokers offer algorithmic trading platforms that allow traders to implement their strategies seamlessly.

Cloud Computing: The use of cloud computing enables traders to access powerful computational resources, enhancing the capabilities of their algorithms.

Conclusion

Algorithmic trading represents a significant shift in the financial landscape, offering traders and investors the ability to execute strategies with unparalleled speed and precision. While the benefits are substantial, it is crucial to understand the associated risks and challenges. As technology continues to evolve, algorithmic trading will likely play an even more prominent role in shaping the future of financial markets. Whether you are a seasoned trader or a newcomer, understanding algorithmic trading can provide valuable insights into modern trading practices and strategies.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Cryptocurrency

XRP stalls after an amazing six-week rally as profit-booking slows down the altcoin’s rally toward $3.00.

The XRP/USD pair is down 2% to its intraday low of $2.3 on Dec. 16 in a corrective trend that began after it topped out at $2.90 on Dec. 3. As a result, XRP’s price is down by almost 18% after tripling its value in the past six weeks.

RLUSD stablecoin hype boosts XRP price

XRP has been receiving growing attention, not only because of its outperformance over the last few weeks but also due to major developments within the XRP Ledger (XRPL) ecosystem, including the upcoming RLUSD stablecoin.

Pegged 1:1 to the US dollar, RLUSD is set to launch on the XRPL and Ethereum blockchains and will be backed by cash reserves and US treasury bills. RLUSD will require XRP for transaction fees.

After receiving approval from the New York Department of Financial Services, the stablecoin could be widely used for transactions and savings, particularly in emerging economies, according to Georgios Vlachos, co-founder of the Axelar.

Vlachos notes that this will significantly boost the adoption of XRP as a payment token in 2025. Axelar’s interoperability platform also links XRPL to 69 other blockchains, enabling seamless integration.

Meanwhile, Ripple’s chief technology officer, David Schwartz, warned investors about possible supply constraints and price fluctuations for RLUSD upon launch.

Schwartz also responded to worries about pre-launch offers that seem to be boosting the value of the RLUSD, explaining that rather than reflecting actual market worth, such high bids probably reflect people looking for the novelty of holding the first RLUSD tokens.

The Ripple executive confirmed that once supply and demand return to normal, the stablecoin price would settle close to its planned $1 parity, notwithstanding these anticipated swings.

XRP’s open interest remains high

Expectations of a crypto-friendly regulatory environment under Trump’s presidency and the pending launch of RLUSD have sparked growth in XRP-tracked futures, with the open interest (IO) zooming to record highs on Dec. 3.

Open interest is a key metric that traders and analysts use to assess market sentiment and anticipate future price movements. XRP Price Chart 'Bull Flag' Targets $15 Despite Consolidation Phase_1

XRP Price Chart 'Bull Flag' Targets $15 Despite Consolidation Phase_1

XRP open interest. Source: CoinGlass

Higher open interest simply indicates that more money is entering the market, raising the chances that the trend will continue.

XRP’s giant bull flag targets $15

The XRP/USD pair is expected to resume its prevailing bullish momentum despite the price correction as it paints a classic technical structure with an upside outlook.

Dubbed a "bull flag,” the pattern forms when the price consolidates lower in a descending channel (flag) following a strong move upward (flagpole). Ultimately, the price breaks above the channel’s upper trendline, typically rising by as much as the flagpole’s height. XRP Price Chart 'Bull Flag' Targets $15 Despite Consolidation Phase_2

XRP Price Chart 'Bull Flag' Targets $15 Despite Consolidation Phase_2

XRP/USD daily chart featuring bull flag pattern. Source: Cointelegraph/TradingView

XRP’s recent price action has led it to form a similar bull flag pattern, as shown in the chart above. Thus, the next bullish target is the flagpole’s height, which comes to be around $15, a 520% uptick from the current price.

Source: Cointelegraph

Risk Warnings and Disclaimers

Add to Favorites

Daily News

Remarks of Officials

Central Bank

Forex

FastBull Events

FastBull Featured

Devin

Mohammad Omar

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data

Japan’s Exports Rise as Weak Yen Helps Ahead of BOJ Meet

Sources: Bloomberg

Gov't Unveils Measures To Boost Corporate Investment Amid Martial Law Debacle

Source: Koreatimes

Fed To Likely Cut Rates, But A Pause May Be Around The Corner

Rate cut bets have been pared back

All eyes on new dot plot

Will the Fed signal several rate cuts or a pause?

Dollar could climb to a new 2024 high

Clouded Outlook

How Does Inflation Affect The Interest Rates

Understanding the Relationship Between Inflation and Interest Rates

The Basics of Inflation

Mastering CFD Day Trading

What is CFD Day Trading?

Benefits of CFD Day Trading

Risks of CFD Day Trading

Strategies for Successful CFD Day Trading

Conclusion

Understanding Algorithmic Trading: A Comprehensive Guide

What is Algorithmic Trading?

Key Components of Algorithmic Trading

Popular Algorithmic Trading Strategies

Benefits of Algorithmic Trading

Risks and Challenges

The Technology Behind Algorithmic Trading

Conclusion

XRP Price Chart 'Bull Flag' Targets $15 Despite Consolidation Phase

RLUSD stablecoin hype boosts XRP price

XRP’s open interest remains high

XRP open interest. Source: CoinGlass

XRP’s giant bull flag targets $15

XRP/USD daily chart featuring bull flag pattern. Source: Cointelegraph/TradingView

Source: Cointelegraph

Risk Disclosure