Japan’s manufacturing index rises to 11-year high
Fundamental outlook JAPAN’S large manufacturers’ sentiment rose to an 11-year high for the fourth quarter (4Q). US Federal Reserve increased its benchmark rates by 25 basis points, as widely expected. European Central Bank ( ECB) and Bank of England ( BoE) retained its monetary policy.
US producer prices rose per cent in November retaining its good growing pace. Excluding food and energy, core prices grew 0.3 per cent, beating forecast. Consumer prices rose 0.4 per cent in November while core prices grew 0.1 per cent.
US retai l sales rose 0.8 per cent in November while core retail sales, excluding automobiles, grew one per cent. Unemployment claims dropped to 225,000 for the week ended December 9, the lowest in eight weeks.
Federal Reserve increased its benchmark rate by 25 basis points to the range of 1.25 per cent to 1.5 per cent. Policymakers lift the forecast for GDP estimated growth to 2.5 per cent in 2018 from the current 2.1 per cent.
China’s industrial production rose 6.1 per cent on a yearly basis in November. Fixed asset investment also maintained a steady pace of 7.1 per cent on a year-to- date basis.
Japan’s producer prices grew 3.5 per cent on year, above forecast and beating last month’s data. Japan’s core machinery orders jumped five per cent, exceeding forecast and its previous month’s minus 8.1 per cent.
Japan’s Ta n k a n manufacturing index that measures huge manufacturers’ sentiment rose to an 11-year high in December at 25 index in the quarter ending December. Tankan services index was unchanged for the third month at 23 reading.
German ZEW economic sentiment that measures institutional and investors’ confidence dropped to 17.4 index in November, the lowest in three months.
ECB retained its monetary policy. Analysts expect to hear from President Mario Draghi on the tapering plan mentioned in October although he gave no hints on it after that.
British consumer prices rose 3.1 per cent in November on a yearly basis, the highest in over five years. Retail price index expanded 3.9 per cent and slid from four per cent gains in October. Retail sales gained 1.1 per cent in November, the best recorded in three months.
UK average earnings of threemonth period ended October rose 2.5 per cent, the best recorded in 10 months. Unemployment rate was at 4.3 per cent for October. Claimant for jobless benefits expanded 5,900 in November, exceeding expectations.
BoE retained its monetary policy and policymakers vow to hold on to the asset purchase programme to support UK’s recovery. Prime Minister Theresa May assured that she will deliver the Brexit procedures on time despite the bumpy road ahead and after losing the Brexit vote in Parliament recently. Technical forecast
US dollar/Japanese yen traded in our expected range last week.
This week, we reckon the movement wi l l be almost unchanged and trapped within the 111 to 113.50 region. Breaking beyond the aforementioned range could entail the need to reinforce risk control.
Euro/ US dollar traded in narrow range and hovered around the 1.18 region last week. Technically, the trend is still uncertain as the dollar’s direction is unclear. This week, we forecast the initial range will move from 1.17 to 1.1850 region but prone to drive down towards the weekend. Breaking below 1.17 might test the 1.1550 support.
British pound/ US dollar has been behaving in whipsaw movements as the Brexit has triggered a lot of uncertainties. This week, the trend may break below 1.33 and lower to 1.3050 area. Reversing upward will meet selling resistance at 1.3450 region.
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DAR Wong is a registered fund manager in Singapore with 28 years of global trading experiences. You may reach him at dar@ pwforex.com
The subsidies should be better used for the benefit of the rakyat, Jen (Rtd) Tan Sri Abdullah Ahmad, executive chairman of the Malaysian Aviation Commission (MAVCOM), said in an interview.
He said passengers using the airport should rightly take up the higher charges and not the rakyat, some of whom have not even entered an aircraft or taken a flight.
“Our PSC are among the lowest in the world,” he said in a statement which contained excerpts of the interview on PSC.
From January 1 next year, the PSC rate for all international destinations from any Malaysian airport will be RM73. Currently, the PSC rate applicable at non-Asean international destinations from klia2 is RM50.
He also said MAVCOM does not agree with AirAsia’s move to charge passengers a RM3 fee and calling it a KLIA fee with each
Tan Sri Abdullah Ahmad, executive chairman of the Malaysian Aviation Commission
ticket booked since they moved to klia2 from LCCT since 2014.
He said it was unethical for the airline to collect the fee for itself but use another party’s name.
To claims that PSC affects passenger travel, he said, from the experience of other countries, raising or lowering PSC does not affect passenger traffic but rather it was the security situation and safety in the destinations passengers are flying to that directly affect air travel.
As such, he said, it was puzzling for certain airlines in the country to claim their profits were affected by higher PSC, when November MAHB passenger traffic numbers showed their traffic had actually increased.
On complaints by these airlines that PSC would affect passenger interests, he said, it was just a pretext because they were more interested in their own business when it was MAVCOM which protects consumer rights of air passengers. Turn to Page B2, Col 6