Gold remains close to three-week low

Gold fell for a second day and reached their lowest levels for the past three weeks. This followed after the Federal Reserve hinted about possible interest-rate hike in December.

As expected, at the meeting on Wednesday the US central bank decided to leave interest rates unchanged. According to the institution a possible increase in interest rates in December will depend on inflation and employment.

The weakness of the world economy and its impact on the United States give reason to believe that the Fed will delay increasing interest for the beginning of next year.

The published on Thursday data on US GDP show a slight slowdown. For the third quarter GDP increased by 1.5 %, as preliminary expectations were for growth of 1.6 %.

The spot price of gold fell 0.9 percent to 1,145.43 - its lowest level since October 9.

US futures for delivery in December fell 2.4% to $ 1147.30 per ounce.

Other precious metals also recorded declines on Thursday. 

Platinum fell 0.9 % to $ 989 per ounce.

Palladium fell 1.5 % to 667.50.

Silver depreciated by 2.1 % to $ 15.58 per ounce.

Euro area confidence unexpectedly rises

Consumer confidence in the euro area unexpectedly rose in October - for the fourth consecutive month. The ECB's comments on potential new incentives probably contributed to this.

The consumer confidence index rose to 105.9 points in October compared to 105.6 points a month earlier. This was the highest level of confidence from June 2011 onwards.

This result exceeded the average expectations of analysts who predicted a value of 105.1 points.

The level of inflation in the euro area has remained at levels of around zero in October. The index that is tracking the confidence in the construction sector rose to minus 20.7 points in October from minus 23.2 points in September. This was the highest level since September 2008 onwards, after the collapse of US investment bank Lehman Brothers Holdings Inc.

The confidence in the sector of retail sales reached a record high of 6.5 points compared to 4.2 points in September. The confidence in the industrial sector has improved. Contradicting signs come however from Europe's largest economy - Germany, where business confidence has fallen for the first time in four months.

US dollar close to 2.5-month high before Fed's statement

The released US economic data yesterday gave no reasons for raising interest rates in the country. Durable goods orders and consumer sentiment did not met the market's expectations.

Capital goods orders outside the defense sector marked a decrease of 0.3% last month, but the preliminary expectations were to remain unchanged. The data for August were even revised to 1.6%.

Also yesterday it became clear that the index of consumer attitudes fell to 97.6 points this month, compared with 102.6 points in September, despite expectations for an increase to 103.0. 

The euro, which received a serious blow from the speech of Mario Draghi after the ECB meeting last week, lost about 0.1% to 1.1034 dollars. But nevertheless the euro remained at the reached on Monday  2.5-year low of 1.0989.

The yen was at a level of 120.41 against the dollar after yesterday rose to a week’s peak of 120.16 upon the release of data on long-term contracts. On Friday will be hold the meeting of the of Japan's Central Bank and all are awaiting whether the bank will increase the incentives for the economy.

The Australian dollar fell more than 1% to a three-week low of $ 0.7109 after the surprisingly low inflation in the country raise expectations of rate cut by the central bank next week. Recently the Australian dollar was trading at a level of $ 0.7120, with a decline of nearly 1%. 

The British pound has stabilized after falling to a two-month low on Tuesday upon the released data on the growth of the UK economy that slowed more than expected in the third quarter. The pound fell to 1.5283 dollars on Tuesday, having retreated by 1.5 % from one-month peak of 1.5510 that was hit last Thursday.

USD slightly declined

The US dollar depreciated today, after having reached a 2.5-month low against a basket of several other major currencies. However, risk appetite was boosted after the easing of monetary policy in China and the dollar reduced some losses.

The stock markets recorded a growth on Friday after China cut interest rates for the fifth time this year - just days after the European Central Bank has indicated readiness to increase incentives for the economy.

Interest rates on US 10-year bonds rose by approximately 6 basis points on Friday to two-week high after stock prices rose and limited the assets demand, which in turn provided support for the dollar. 

The US dollar index fell 0.2 % to 96,953 points after reaching 97,201 points on Friday, which was its highest level since August 12.

The US dollar depreciated 0.2%  to 121.16 against the yen, having retreated from two-month high of 121.60 yen. The euro rose 0.2 % to 1.1035 dollars after earlier fell to 1.0989, which was the lowest level for the European currency since August 11.

 The US Federal Reserve will announce its decision regarding interest rates on Wednesday. Most expectations are that the US central bank will not raise interest rates at this meeting. 

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US job data indicate strong economy

The number of Americans who registered in the labor offices for the week ended Oct. 17 is amounted to 259 thousand. The result pleasantly surprised analysts who had predicted an increase to 266 thousand compared to 256 thousand for the previous seven days.

At the same time, the average monthly number of submitted applications for unemployment benefits last month decreased from 265.250 to 263.250. So the indicator, which is considered more reliable than the markets because  temporary is smoothing fluctuations in the data, reached its lowest level since December 1973 onwards.

After a disappointing government employment statistics in September, the US labor market submitted mainly positive signals, preserving hopes that the Federal Reserve may proceed to raise rates before the end of the year.

"With August and September being notorious for initially under-reportingjob gains, today's data add to the case that employment growth will pick up inOctober and the unemployment rate will continue to grind lower," said John Ryding, chief economist at RDQ Economics in New York. 

Yahoo Q3 results within forecasted expectations

Yahoo! Inc. (NASDAQ:YHOO) reported yesterday the results for the quarter ended September 30, 2015. The US Internet giant again disappointed investors by presenting a weaker than expected financial results.

The company reported revenue of 1.23 billion dollars against 1.15 billion dollars a year earlier. The net profit is 76 million dollars, or 8 cents per share, compared to 6.8 billion dollars a year earlier. Analysts expected higher revenue and profit, and this sent shares 1.5 % down in the post-trading.

The main reason for the weak financial results is due to the special effects following the market debut of online retailer Alibaba, in which Yahoo holds a large share.

Despite the poor results, the current president and CEO of Yahoo! Marissa Mayer, who held this position since July 2012, showed satisfaction and pointed out that the result meets the expectations.

Q3 2014

Q3 2015

GAAP revenue

$1,148 million

$1,226 million

Cost of revenue – TAC

$54 million

$223 million

Income (loss) from operations

$42 million

$(86) million

Non-GAAP income from operations

$156 million

$92 million

Adjusted EBITDA

$306 million

$244 million

Net earnings

$6,774 million

$76 million

GAAP net earnings per diluted share

$6.70

$0.08

Non-GAAP net earnings per diluted share

$0.52

$0.15

“Our Q3 results were largely within our forecastedexpectations -- our GAAP revenue grew 7% year-over-year and our Mavens revenuegrew 43%.  As we move into 2016, we will work to narrow our strategy,focusing on fewer products with higher quality to achieve improved growth andprofitability,” said Marissa Mayer. “In addition to sharpeningfocus within core business growth, our top priority is the planned spinoff ofAabaco Holdings. This is an important moment for the Company, and we continueto strive to complete the spin as quickly as we can."

Gold falls for third consecutive day

The price of gold fell for a third day after the dollar continued its strong performance. Thus the precious metal continues to move away from the 3 and a half month high, which was reached last week.

US dollar appreciated against the background of uncertainty about rising US interest rates. The euro fell against the dollar and reached a 10 days minimum ahead of the ECB meeting, which could pave the way for the introduction of additional incentives.

The biggest threat to the precious metal currently is the largest increase in speculative long positions for the past few weeks.

The spot price of the precious metal fell 0.6% to $ 1170.26 per troy ounce. Silver fell 1.6 % to 15.79. Platinum fell 0.3 % to $ 1008 per troy ounce. Palladium lost 1.6% of its value, reaching 682 dollars, which is above the bottom from 1 October of 664.10.

Chinese economy grew at its slowest pace since 2009

Chinese economy falls for first time since the global financial crisis in 2009. 

This is the conclusion from the published today reports of the National Bureau of Statistics of China.

Gross domestic product increased by 6.9% yoy in the third quarter, compared to % from April to June.  Analysts had expected even lower result of 6.8%, but even so, the data were considered disappointing against the background of continuing decline in investments.

Investments in fixed assets increased by 10.3 % below the forecasted 10.8%, while industrial production in September recorded annual growth of just 5.7%, while the expected slowdown of 6.1% to 6%. Total retail sales of consumer goods are up by 10.9% compared with 10.8 % from the previous month.

Over the past seven years, China contributed to about one-third of global economic growth. Based on the poor performance of the country this month, the International Monetary Fund lowered its forecast for expansion of the world economy from 3.3% to 3.1%.

The government has set its annual economicgrowth target at "around 7 percent" for 2015, but at the weekendChinese Premier Li Keqiang admitted that with the global economic recoverylosing steam, hitting such a target was "not easy."

Negative inflation in the Euro area

Eurostat confirmed its initial estimates for annual inflation in the euro area, the indicator is weakened by 0.1% in August to -0.1% in September. A year earlier, the increase in consumer prices amounted to 0.3 %.

The largest upward pressure on the index have restaurants and cafés (+0.12 percentage points), vegetables (+0.11 pp) and tobacco (+0.08 pp). The biggest downward impacts had  the prices of fuels for transport (-0.71 pp), heating oil (-0.25 pp) and milk, cheese and eggs (-0.06 pp).

A separate report published yesterday reveals that exports of the countries of the European union with the rest of the world increased by 6% yoy in August to 148.3 billion euros. At the same time, imports increased by 3% to a seasonally uncorrected 137.1 billion. As a result, the surplus in trade in goods reached 11.2 billion euros from 7.4 billion for August 2014.

For the first eight months of the year, exports are up by 6% to 1346.0 bln, while import - by 3% to 1189.0 billion. Thus the surplus is amounted to 156.9 billion against 104.5 billion for the period  January - August 2014.

Оptimistic end of the week in USA

The end of the week marked a growth on US markets. Investors are betting on risk supported by data on US consumer confidence, which rose in October for the first time since the last 3 months.

The indicator increased to 92.1 points compared to 87.2 points in September, according to the survey of the University of Michigan.

Another report, however, shows a decline of 0.2% in industrial production in the US in September. This is the biggest monthly decline since May. But the Fed data for August wаs revised upward from a decrease of 0.4% to 0.1% and the expectations were for a greater drop in the indicator in September.

The pressure on risk appetite was proved by the words of the President of the Federal Reserve Bank in Cleveland, Loretta J. Mesterr. She said the US economy can handle an increase in the fed fundsrate and that it is appropriate for monetary policy to take a step back fromthe emergency measure of zero interest rates.The effect of this statement, however, is limited by the fact that Mester will be entitled to vote in the Federal Open Market Committee in 2016.

Thus, the Dow rose 0.20% to 17,176 points. Technological Nasdaq stock index increased by 0.16% to 4878 points.  S & P 500 rose by 0.20 percent to 2028 points.

The US dollar increased by 0.23% to 1.1358 EUR/USD, after 0,1% deflation in the euro zone for September was reported today, as expected. The dollar index DXY is up by 0.36% to 94.71.

Futures US light crude for November delivery rose 0.01% to 46.38 dollars per barrel. The price of gold fell by 0.19 percent to $ 1 180.89 per troy ounce.

Gold close to 3 and a half month high

Gold rose to a 3 and a half month high on Wednesday as weak economic data from USA and China supported the speculations that Fed will not raise rates this year.The probability the Fed proceed to interest rate hike after the sluggish data on the US economy is very small.

The spot price of gold reached $ 1,188.20 per troy ounce - the highest level since June 23. Futures on precious metal for delivery in December recorded an increase of 1.2 percent to 1179.80. Among other precious metals, silver increased by 1.7 percent to $ 16.16 per troy ounce. Platinum climbed 0.8 percent to $ 994.75. Palladium rose 2.8 percent to $ 698.50 per troy ounce.

Amid the general rise of precious metals, the dollar fell, reaching 3 and a half week low against a basket of major currencies. The published report yesterday showed U.S. retail sales barely increased in September and the producer prices recorded their biggest decline in eight months. Consumer inflation in China slowed in September, while producer prices continue to fall - 5.9 percent on an annual basis, which is the 43rd consecutive month of deflation. 

EUR/USD reached a three-week high

On Monday the single currency rose, reaching its highest level in three weeks. Forex traders continue to monitor whether the Fed will wait until 2016 before raising short-term interest rates.The pair was trading in a wide range between 1.1355 and 1.1396, before settling at a level of 1.1358.

On Monday morning the Atlanta Fed President Dennis Lockhart noted that FOMC will have more economic data to consider before rising the interest rates.

Naturally, we will have more information inpreparation for the December FOMC meeting. By early December, we will have theOctober and November employment numbers, along with revisions for prior months.We will also have the September and October PCE inflation data and both thefirst and second estimates of third-quarter GDP, said Lockhart in his speach.

According to Chicago Fed President Charles Evans the weak inflation data should be taken into consideration before rising the interest rates. In his speach on Monday, he said: 

Accordingly, when thinking about the initial stages of normalization, I find ituseful to focus on where I think the federal funds rate ought to be at the endof next year given my economic outlook and assessment of the risks. And rightnow, regardless of the exact date for lift-off, I think it could well beappropriate for the funds rate to still be under 1 percent at the end of 2016.

The dollar fell against the yen and USD/JPY fell about 0.20 percent to 120.03.

The dollar also fell against the pound, as the pair GBP/USD closed at 1.5346, while USD/CHF remained unchanged at 0.9606.

The Australian and New Zealand dollar were stronger in the first day of the week. AUD/USD is rising by 0.22% to 0.7361 while NZD/USD closed at 0.6716.

Gold futures climbed to a near three-month highs on Monday amid the weaker dollar.

The precious metal was trading in a wide range between 1,153.83 and 1,168.97 dollars per troy ounce, before settling at 1,163.59, up by 0.67% for the session.

Sharp decline in exports and imports in Bulgaria

In August 2015 the total export of Bulgaria amounts to 3.8 billion BGN which means decline by 1.0% compared to the same month of the previous year. Imports fell more strongly - by 11.6% yoy, to 3.8 billion BGN. Thus, the foreign trade deficit for the month declined by 46 million BGN or 23.5 EUR. 

The decline of exports and imports is mostly due to seasonal factors. However National Statistical Institute’s  data on foreign trade is an alarming signal as it comes to a decline in key indicators on an annual basis. The reported shrinkage in exports is the first from November 2014 onwards.

Against this background most important  will be the report for September, which will show whether the economy can still rely on exports as an engine of economy growth.

Otherwise the first eight months of the year Bulgaria exported goods worth a total 30.3 billion BGN, which is a growth by 8.0% yoy. Meanwhile, the country imported goods for 34.0 bln, or by 3.1% more compared to the same period of the previous year.

Except the European market other major trade partners of Bulgaria are Turkey, China, Serbia, Russian Federation, Singapore, USA and Macedonia.

Canada’s Unemployment rate is increasing

Canada unemployment rate unexpectedly rose to its highest level in a year and a half in September, although employment increased by 12 thousand above analysts' forecasts for an increase of 10.5 thousand.

The unemployment rate reached 7.1% instead of the expected decline from 7% to 6.9%, because more people have joined the labor market, states the Statistics Canada's report that was published yesterday.

The number of unemployed went up by 1.4 percent while employment rose only by 0.1 percent. Unemployment Rate in Canada averaged 7.72 percent from 1966 until 2015, reaching an all time high of 13.10 percent in December of 1982 and a record low of 2.90 percent in June of 1966. Although the newly opened positions exceeded the forecasts of economists, the improvement was mostly due to temporary employment.By sectors, the strongest results showed "Culture, information and recreation" with 32,500 new jobs. In education services employment declined by 51.300.
The number of self-employed workers increased, while public sector employment declined.  There was little change in the number of private sector employees. 

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Fed remains extremely cautious

USD  was trading cautiously during the Asian session after yesterday’s pressure upon publication of the report from the last Fed’s meeting in September that increased the doubts that the central bank will raise rates this year.
Yesterday it became clear that Fed is extremely cautious and postponed the long awaited interest rate hikes to make sure that global economic downturn would not affect the US recovery. EUR /USD hit a three-week peak of 1.1328, and today is at 1.1285. USD/JPY  is at 119.90 and remains within the well known from the last weeks range between 119 and 121. The most profitable currencies are on track to hit new highs. The Australian dollar approached the peak from September at 0.7280. A breakthrough this level would lead to the highest levels since the end of August. The New Zealand dollar approached the peak from August at 0.6708. NZD’s rally after the bottom on 23 September at 0.6235 so far is amounted to 7%.

Fed caution led to gains on Wall Street and generally in risky assets. The data from Europe is not good and it became clear German exports collapsed in August, with the greatest pace since the global financial crisis. Today there are no major macroeconomic news that could move the market.

Reserve Bank of Australia left the cash rate unchanged at 2%

It happened what was expected. Reserve Bank of Australia left the cash rate unchanged at 2% on the meeting today.

The institution pointed the weakening of some economies, and in particular - China, which is a major trading partner, but adding that although the increase in the gross domestic product of Australia is below long-term averages, it is accompanied by stronger employment growth and stable levels of unemployment.

Overall, the economy is likely to be operatingwith a degree of spare capacity for some time yet, with domestic inflationarypressures contained. Inflation is thus forecast to remain consistent with thetarget over the next one to two years, even with a lower exchange rate.
The purpose of the regulator is facilitated by the depreciation of the local currency, the Australian dollar fell by nearly 9% in the third quarter. This movement is balancing the lower prices of key export commodities.Markets, however, still believe there is a 30% chance for a new reduction of interest rates in November, the decision will most likely be affected by the slowdown of the Chinese expansion.

The data on the trade balance, published today, is highlighting the problems of the export sector. The deficit increased to 3.10 billion AUD in August compared to the revised to 2.79 billion previous month. Exports registered zero change, while imports increased by 1%.

World markets lost $ 11 trillion in the third quarter

Most of the stock markets in the world ended the third quarter of this year in the red. The aggregate capitalization fell by $11 trillion due to many factors - from the economic slowdown in China to the expectation of US interest rates rise.

Raw materials quarter proved to be the worst since 2008 and this naturally affected the commodity currencies. Will there be new shocks when finally the US central bank increase the interest rates?

Yet there are exceptions. Leader in growth became Latvian stock index OMX Nasdaq Riga which in September jumped by 30% after weak variations in the previous two months.

In USA the decline in the stock market reached the maximum for the last four years.

From July to September Standard & Poor's 500 has dropped by 6.9% and the Dow Jones Industrial Average - by 7,6%.

For the same period the Western European stock markets lost 8.8% (Stoxx Europe 600 index), which was also the largest shares decline from 2011 onwards.

In Asia as a whole was noted even bigger decrease this quarter - MSCI Asia Pacific fell by 15%. And in Shanghai, Singapore and Jakarta the collapse was greater than the peak of the crisis in 2008. The worst result among 90 indexes showed China's Shanghai Composite has collapsed by 29%.

Inflation in Russia in 2015 will reach 12.2%

The inflation in Russia in 2015 will be 12.2% and in 2016 - 6.8 percent. This was announced yesterday  by Minister of Economic Development Alexei Ulyukayev during the International Investment Forum in Sochi.

"We are ready with the new socio-economic forecasts and on Monday will present them to the government," announced Ulyukayev. 

According to the evaluation of the Ministry of Economic Development in August inflation was 0.4%, which exceeds twice last year's indicator. The 12-month inflation in August reached 15.8% (in July - 15.6%) and continues to increase.

The  Finance Minister Anton Siluanov  expects inflation in Russia in 2016 to be in the range of 6-7% .

According to Merkel, the crisis can not be solved without Russia

The end of the crisis in Syria can only come with the help of Russia, said German Chancellor Angela Merkel, days after Russia launched air strikes against terrorists in the Arab country.

Speaking of the refugee crisis, Merkel said that the problem must be solved, and the people must return to their homes.

 "That's particularly true of Syria, where we have all known for years that there can only be a solution with Russian and not without Russia," Merkel said at speech in eastern Germany to mark the upcoming 25th anniversary of German reunification.

The United States  have a different opinion, the White House has already stated that Russia's military actions in Syria risked prolonging the conflict in Syria.

Turkey, USA, Germany, Britain, France, Qatar and Saudi Arabia urged Russia to cease the military air operation in Syria.

Will these actions lead to further escalation and strengthen the extremism and radicalization in the region???

The dollar rose after the data on private sector employment

On Wednesday the US dollar marked an increase following the report on US Private-sector employment data. Meanwhile  the euro fell as a result of negative data on consumer prices in the Eurozone. 

In September the US private sector created 200,000 new jobs. Analysts predicted number to be around 192,000. This data suggest that the Federal Reserve may raise interest rates until the end of the year. 

Following the publication of information on employment, the dollar index rose 0.45 %. The US currency rose 0.10% against the Japanese yen to almost 120. The dollar marked an increase and against the Swiss franc and British pound.

Data released for consumer prices in the euro area showed a decrease of 0.1% yoy, which is far from the ECB target inflation of 2%. As a result, the euro fell 0.6 % to $ 1.1180 and 0.5% to 0.7380 against the British pound. This fueled speculation that the ECB may extend quantitative easing program at a time when the Fed is preparing to raise interest rates.

According investors report on employment in non-agricultural sector, which will be released on Friday will determine whether the Fed will raise interest rates and give direction to the dollar.

Gold suffered the worst quarter in a year

Gold reached its lowest level in two weeks and recorded  worst quarter of the last year.
The report on US Private-sector employment that was released yesterday  turned out to be better than the market expectations. This additionally sparked further speculation that Fed is ready to act to end the year.

From July to now the gold lost almost 5% of its value and the last quarter was the fifth consecutive ending with a loss. This is the longest series of decline since 1997. The spot price of the precious metal fell by 1% to $ 1115 per troy ounce, while futures for delivery in December fell $ 11 to $ 1115.20.

The platinum continue with the depreciation and is heading to the biggest quarterly decline since 2008. This was prompted by concerns about decline in demand for diesel cars after the scandal with Volkswagen. The metal fell by 1% to $904.75 per troy ounce and has lost almost 16% in the  last quarter.

Palladium fell 0.5%t  to $650.75 and ended the quarter with almost 3% loss. This is the third consecutive quarter of decline for the metal.

Silver fell 0.6% to 14.52 per troy ounce and ended the quarter with almost 8% loss.