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Bundesbank Warns Of Noticeable Setback If Covid-19 Does Not Subside, Lockdown Extended

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The German economic recovery will face significant setback if the rate of coronavirus infections fails to ease and the lockdown restrictions are subsequently extended, the Bundesbank said in its latest monthly report released on Monday.

The economic recovery in the biggest euro area economy slowed down in the final three months of 2020 amid a resurgence in the Covid-19 infections. The government restored lockdown restrictions to battle the pandemic.

Bundesbank assessed that there was no major setback as economic activity continued to recover. Industry, construction and retail sales continued to recover until November.

“This would have counterbalanced the losses that are likely to have arisen as a result of the closings of the stationary retail trade ordered in December,” the bank said.

Business confidence continued to improve in December, suggesting that the restrictions that were extended and tightened at the beginning of the new year will not set the economic recovery too far back.

“However, if the infection rate does not subside significantly and the current restrictions on economic activity last longer or are further tightened, a noticeable setback could nonetheless occur,” the Bundesbank warned.

Official data showed that Germany’s GDP decreased 5 percent in 2020, almost reaching the level of 2009, when economic output fell by 5.7 percent as a result of the global financial and economic crisis.

The bank expects the rate of inflation to be clearly positive again in January due to the introduction of CO2 emission certificates for the consumption of petroleum products and gas as well as the expiry of the reduction in VAT rates.

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Bulgaria's Inflation At 4-Year Low

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Bulgaria’s consumer price inflation slowed to a four-year low in December, the National Statistical Institute reported Monday.

Consumer prices edged up 0.1 percent annually, following a 0.4 percent rise in November. A similar slower rate was last seen in December 2016.

On a monthly basis, consumer prices advanced 0.5 percent, but faster than the 0.1 percent gain posted in November.

The harmonized index of consumer prices climbed 0.5 percent on month but remained flat on a yearly basis in December.

In the whole year of 2020, consumer price inflation was 1.7 percent.

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

U.S. Dollar Advances Amid Risk Aversion

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The U.S. dollar firmed against its major counterparts in European trading on Monday, as a rapid surge in coronavirus cases triggered worries about the pace of global economic recovery.

Friday’s weak U.S. retail sales data suggested that a flare-up in coronavirus infection has curbed the consumer spending in the world’s largest economy.

Janet Yellen will appear before the Senate Finance Committee on Tuesday for her confirmation hearing as Treasury Secretary.

Yellen is expected to affirm that the value of the U.S. currency should be determined by markets.

The Wall Street Journal reported that Yellen is unlikely to affirm the stance of a weaker exchange rate, unlike her predecessor Steven Mnuchin.

U.S.-China tension prevailed as the Trump administration notified several Huawei suppliers that it’s revoking their licenses to work with the Chinese firm.

U.S. markets remained closed on account of the Martin Luther King Jr. holiday.

The greenback jumped to 0.8926 against the franc, its biggest level since December 7. The dollar is poised to find resistance around the 0.92 level.

The greenback appreciated to a 6-day high of 1.3520 against the pound and a 1-1/2-month high of 1.2056 against the euro, from Friday’s closing values of 1.3576 and 1.2075, respectively. The greenback is likely to challenge resistance around 1.34 against the pound and 1.18 against the euro.

The greenback spiked up to near a 2-week high of 0.7659 against the aussie, near 3-week high of 0.7096 against the kiwi and a 1-week high of 1.2799 against the loonie, compared to last week’s closing values of 0.7702, 0.7125 and 1.2737, respectively. On the upside, 0.75, 0.68 and 1.299 are likely seen as its next resistance levels against the aussie, the kiwi and the loonie, respectively.

The greenback recovered slightly to 103.84 against the yen, from an Asian session’s low of 103.69. This may be compared a 4-day high of 103.93 set at 7:00 pm ET. If the greenback rises further, it may find resistance around the 106.00 level.

Looking ahead, at 8:15 am ET, Canada housing starts for December are scheduled for release.

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*Bulgaria Dec HICP Flat On Year

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Stock market chart. Photography of monitor screen.

Bulgaria Dec HICP Flat On Year

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*Bulgaria Dec HICP Rises 0.5% On Month

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Bulgaria Dec HICP Rises 0.5% On Month

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*Bulgaria Dec Inflation 0.1% Vs. 0.4% In November

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Bulgaria Dec Inflation 0.1% Vs. 0.4% In November

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*Bulgaria Dec CPI Up 0.5% On Month Vs. +0.1% In November

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Bulgaria Dec CPI Up 0.5% On Month Vs. +0.1% In November

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*German Economic Recovery Slowed Down In Q4 2020, No Significant Setback – Bundesbank

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Stock Exchange Data Investment Workplace Concept

German Economic Recovery Slowed Down In Q4 2020, No Significant Setback – Bundesbank

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UK House Prices Fall At Faster Pace In January: Rightmove

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UK house prices declined at a faster pace in January before the stamp duty holiday ends, the property website Rightmove said Monday.

As new sellers still hope to tempt buyers and squeeze in a sale before the stamp duty holiday ends, house prices dropped 0.9 percent on month in January, after easing 0.6 percent in December.

On a yearly basis, growth in house prices halved to 3.3 percent from 6.6 percent in December.

According to Rightmove, it takes 126 days from the time an offer is accepted until legal completion. This suggests that new buyers in the market should not be factoring in any stamp duty savings, unless they are first-time buyers.

“While the tax savings were an added incentive, movers’ desire for more inside and outside space seems to be continuing, and this new lockdown could be a spur to act in 2021 for those who can and who did not do so in 2020,” Tim Bannister, Rightmove’s Director of Property Data.

Data showed that visits to Rightmove were up by 33 percent, the number of buyers contacting agents was up by 12 percent and the number of sales agreed grew 9 percent for January so far compared to the prior year.

Despite temporary market closures in 2020, people’s housing needs meant the number of sales agreed was up by 10 percent for the whole year versus 2019, the agency added.

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

Gold Edges Up Amid Risk-off Mood

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Gold edged up slightly in thin trading on Monday, with U.S. equity and bond markets shut Monday for the Martin Luther King Jr. holiday.
Risk-off sentiment prevailed as weak U.S. retail sales data as well as growing coronavirus infections around the world sparked worries about a slow recovery from the pandemic.
Spot gold edged up 0.2 percent to $1,832.60 an ounce, while U.S. gold futures were marginally higher at $1,830.70.
The total number of global coronavirus cases topped 95 million, while the death toll surpassed 2 million.
China reported more than 100 new Covid-19 cases for the sixth consecutive day, while the number of hospitalized Covid-19 patients with serious symptoms in Japan topped 970, marking a record high since the onset of the pandemic in the country.
Portugal imposed a new nationwide lockdown while the U.K. government announced that it will close all travel corridors from today in order to restrict the spread of new coronavirus variant cases.
New coronavirus infections have been decreasing in Germany but the country’s health minister said that more needed to be done to bring it permanently under control.
Chancellor Angela Merkel and Germany’s 16 state premiers will discuss what to do next on Tuesday.
According to a report from the Wall Street Journal, U.S. President-elect Joe Biden’s pick for Treasury Secretary, Janet Yellen, is expected to rule out seeking a weaker dollar when she testifies on Capitol Hill Tuesday.
Yellen’s confirmation hearing as Treasury Secretary is scheduled for Jan. 19 in front of the Senate Finance Committee, the day before President-elect Joe Biden is sworn into office.

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

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