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September 21. UK thinks about canceling Tax Free shopping system

The British authorities announced that they are considering the possibility of canceling the Tax Free system from December 31 of this year, explaining this decision by too large budget losses in case of a tax refund after purchases.

Such a plan by the authorities drew sharp criticism from the tourist industry. The fact is that canceling the Tax Free system for foreign visitors could cost the UK billions of pounds in lost profits. In addition, 70,000 jobs will be at risk.

Tourists from non-EU countries make purchases in the UK annually in the amount of £3.5 billion. In case of refusal to refund VAT, Britain will become the only country without Tax Free, which may lead to the fact that tourists prefer shopping in other cities and countries.

At the moment, a Tax Free deduction can be obtained for purchases worth 30 pounds, the amount of VAT is 20%. It is noted that items purchased in this manner should not be used in the UK.

September 30. Oil inventories in the United States unexpectedly decreased by 0.4% over the week

According to the Energy Information Administration of the US Department of Energy, commercial oil reserves in the country (excluding the strategic reserve) decreased by 2 million barrels, or 0.4%, and reached 492.4 million barrels. Analysts predicted an increase in reserves by 1.6 million, to 495.9 million barrels.

Oil production in the United States for the week averaged 10.7 million barrels per day, as in the previous week. On average, over the past four weeks, oil production in the United States amounted to 10.575 million barrels per day.

Recall that in early September, the US Department of Energy increased the forecast for the average oil production in the country for the current year by 120 thousand barrels per day, to 11.38 million (compared with the August estimate), and reduced for 2021 – by 60 thousand barrels, to 11.08 million barrels per day.

-- Edited by Charot FXMart on Wednesday 30th of September 2020 03:20:48 PM

October 5. US services PMI gains better than forecast

According to the American Institute for Supply Management (ISM), the index of business activity in the US services sector in September rose to 57.8%. The indicator for August was noted at 56.9%. Analysts had forecast a decline to 56.3%.

The employment index in the country's services sector in September rose to 51.8% from 47.9% in August.

The purchasing managers' index (PMI) for services, calculated by IHS Markit and also released today, dropped to 54.6 points in September, up from 55 points in August.

Business activity in the US services sector continues to climb for the fourth straight month amid a gradual recovery from the coronavirus crisis. The service sector accounts for almost 90% of US GDP and about 80% of the country's working citizens.

October 07. Futures on US indices are growing in anticipation of the Fed meeting minutes

Futures on major US stock indexes started to rise on Wednesday after a sharp drop a day earlier after President Donald Trump announced that he would stop negotiations on supporting the economy. Further trading dynamics will depend on the publication of the minutes of the last meeting of the US Federal reserve system this evening.

The Dow Jones industrial average rose 0.82% to 27928 points, the NASDAQ high-tech index rose 0.88% to 11373.88 points, and the S&P 500 broad-market index futures rose 0.83% to 3380.88 points.

Investors are awaiting the release of minutes from the Fed's September meeting, in which they think to find details of further prospects for the recovery of the American economy in the context of the coronavirus pandemic.

Yesterday's decline was caused by US President Donald Trump's announcement to end negotiations with Democrats in the house of representatives on stimulating the economy before the November presidential election. The reason was a disagreement over the amount of stimulus: house speaker Nancy Pelosi is demanding $2.4 trillion, and the White house administration is ready to give no more than $1.6 trillion.

October 12. Saudi Arabia will host the largest banking deal of the year

National Commercial Bank (NCB), the largest Bank in Saudi Arabia by assets, announced the purchase of rival Samba Financial Group for $15 billion. This deal will be the largest in the banking sector since the beginning of 2020. It is expected to be closed in the first half of 2021.

The combined Bank with assets of more than $220 billion will be the third in this indicator among financial institutions of the Gulf countries, its capitalization will exceed $46 billion.

NCB will pay 28.45 Saudi riyals ($7.58) per Samba share, which values the entire Bank at 55.7 billion riyals. The deal will be paid for with NCB shares. As a result, NCB shareholders will own 67.4% of the combined Bank, while Samba shareholders will own 32.6%. The national welfare Fund of Saudi Arabia Public Investment Fund (PIF), which is the largest shareholder of both banks, will own 37.2% of the combined financial institution.

The Saudi authorities continue to act in accordance with the plan to diversify the country's economy and reduce its dependence on the oil sector.

October 19. US exchanges are growing on expectations of economic stimulus

Major US stock indexes rallied on Monday in anticipation of news on a new US fiscal aid package and the upcoming November 3 presidential election.

Thus, the Dow Jones Industrial Average grew by 0.3%, to 28690.91 points, the NASDAQ high-tech companies index – by 0.72%, to 11755.51 points, the S&P 500 broad market index – by 0.49%, to 3501.02 points.

Markets remain focused on expectations for a new stimulus package for the US economy. The Republican administration of D. Trump supports a package of measures worth $1.8 trillion, but Democrats, led by Joe Biden, insist on $2.2 trillion.

Over the weekend, it became known that the Speaker of the House of Representatives Nancy Pelosi made it clear that the agreement on US fiscal stimulus could be concluded from day to day, until the presidential election.

October 23. US exchanges are trading in positive territory on forecasts for state aid

According to the trading data, the main US stock indexes on Friday are mainly growing against the background of how investors assess the prospects for a new package of support for the US economy.

The Dow Jones Industrial Average (DJIA) rose 0.13% to 28399.19 points, the NASDAQ high tech index fell 0.13% to 11,490.58 points, the broad market S&P 500 index rose 0.27%. up to 3462.8 points.

Investors also continue to monitor the situation around the presidential elections in the United States, which will be held on November 3. The final debate between Republican candidate Joe Biden and incumbent President Donald Trump ended yesterday. According to the poll, Biden won the final debate.

Internal statistics had an additional impact on the US stock market. Composite index of business activity (PMI) in October, according to preliminary estimates, rose to 55.5 points from 54.3 points in September. The PMI index in the services sector increased over the reporting month to 56 points against the September estimate of 54.6 points. Analysts expected the indicator to remain at the same level. At the same time, the PMI in the industry rose to 53.3 points from 53.2 points, growth was expected to 53.4 points.

October 28. Bank of Canada has kept the rate at the same level of 0.25%

The Bank of Canada on Wednesday kept its key interest rate at a record low of 0.25%. Earlier, the head of the Canadian Central Bank, Tiff Maclem, said that the rate would remain unchanged for at least two years amid a slow economic recovery after the coronavirus pandemic.

Representatives of the regulator also noted that in the next two years, the country's economy will experience excess supply, which will lead to keeping inflation below the target level (2%) until 2022. Also, the central bank stressed that the recovery process of the Canadian economy will be long and uneven.

The Bank also raised its growth forecast for the third quarter to 47.5% on an annualized basis. He also predicts stronger annual growth in 2020, although he lowered his forecast for 2021.

November 2. Oil prices fall amid new quarantine measures in Europe

World oil prices fell to $36 a barrel Monday morning on concerns over demand following the announcement of new quarantine restrictions in Europe. However, during the day the asset managed to recover, the current Brent quotation is $37.50.

Experts note that the deterioration of the situation with the coronavirus is forcing the authorities of European countries to take additional quarantine measures, which negatively affects expectations for economic recovery and oil demand.

British Prime Minister Boris Johnson announced on October 31 stricter quarantine measures from November 5 to December 2. In the region, measures are being introduced that are actually similar to the spring lockdown. Austrian Chancellor Sebastian Kurz on Saturday also announced the start of the second lockdown from November 3. Germany from Monday to the end of November switches to the «soft» lockdown for the second time since the beginning of the pandemic.

At the end of October, another government decree came into force in Italy, providing for new measures to combat coronavirus. In France, President Emmanuel Macron announced the introduction of a nationwide quarantine from October 30.

Analysts note that the quarantine measures announced in the UK and Italy only exacerbate the negative situation in Europe.

November 9. OPEC+ deal parameters may be changed more than expected

The head of the Ministry of Energy of Saudi Arabia, Prince Abdel Aziz bin Salman, at the oil industry conference ADIPEC-2020, said that OPEC+ could adjust the parameters of the deal to reduce oil production even more significantly than analysts believe.

The politician stressed that in conditions of weak demand for oil, the organization can not only keep the production cut at 7.7 million barrels per day (or more), but also extend the deal until the end of 2022.

Recall that the new OPEC+ agreements started in May with a reduction in oil production by 9.7 million barrels per day for three months. Since August, the alliance has continued to reduce production, but to a lesser extent – by 7.7 million barrels per day for the period until the end of the year. Further, it is expected to decrease by 5.8 million barrels per day until the end of April 2022.

November 12. The number of applications for unemployment benefits in the United States fell

According to the US Department of Labor, the number of Americans who filed initial applications for state unemployment benefits last week fell more than expected to 709 thousand. At the same time, the figure remains at a level that raises concerns about a slowdown in the labor market recovery by background of the resumption of coronavirus diseases.

Analysts had expected the number of applications to drop to 735,000. The previous figures were revised to 757 thousand. The number of secondary applications fell to 6.786 million, which is also slightly below the forecast.

Experts note that the number of initial filings is still close to the lowest level since late March, when the first wave of layoffs related to the epidemic hit the US economy. At the same time, the indicator still exceeds the level of applications before the start of the pandemic by more than three times.

The total number of Americans receiving unemployment benefits in the United States for the week ended October 31 fell by 436 thousand from the revised figure of the previous week to 6.786 million.

November 18. Gold prices drop on news of coronavirus vaccine

Gold price is recovering weakly after a daily decline to $1,866.10 per troy ounce. The current gold quote is $1.883.05.

The pressure on the precious metal is exerted by the news around the coronavirus vaccine. Investors give preference to the acquisition of risky assets, which has a negative impact on the value of gold as a «safe haven asset». Market participants look forward to a return to normal life in the near future and expect further easing of monetary policy in many countries.

It was announced today that the Pfizer and BioNTech vaccine has achieved a final 95% efficacy, and Pfizer will submit it for regulatory approval in the United States in the coming days.

At the same time, the American company Moderna said that the results of the third phase of trials of the coronavirus vaccine showed its effectiveness at 94.5%.

November 25. US jobless claims unexpectedly rose over the week

According to the US Department of Labor, the number of initial applications for unemployment benefits for the week ended November 21, increased by 30 thousand compared with the revised figure of the previous week to 778 thousand applications.

Analysts had expected a decline of 12 thousand applications from the initial figure last week – to 730 thousand. The initial figure of the previous week was revised to 748 thousand from 742 thousand.

The total number of Americans receiving unemployment benefits in the United States fell by 299 thousand from the revised figure of the previous week to 6.071 million.

December 02. Visa will issue the world's first cashback credit card in bitcoins

Visa is partnering with cryptocurrency startup BlockFi to release the world's first cashback credit card in bitcoins. The card will be issued by Evolve Bank with the assistance of credit card startup Deserve.

1.5% will be returned from each card transaction. Cashback will be accumulated, then automatically converted into bitcoins and credited to your BlockFi account.

In addition to the credit limit with a specific interest-free period, BlockFi will give customers a welcome bonus of $250 in bitcoins if the amount spent on the card exceeds $3000 in the first three months.

The card will be metallic, similar to the Apple card that the company has jointly released with Goldman Sachs. Annual maintenance for a new VISA credit card will cost $200. The card will initially only be available in the US.

December 08. UK starts vaccination, US buys vaccines

December 8 could be a historic day in the fight against the coronavirus pandemic as the United Kingdom officially began vaccination today. The UK uses a vaccine developed by Pfizer and BioNTech and has reportedly purchased 40 million doses. Pfizer said it could produce 50 million doses this month; production volume in 2021 is not yet clear.

Donald Trump's government purchased 100 million doses of Pfizer's vaccine in advance (enough to vaccinate 50 million people, since each person needs two doses every few weeks). Pfizer then offered a contract for the supply of more vaccines, which Trump refused.

The current agreement between the US government and Pfizer allows for the purchase of up to 500 million doses in the second half of 2021. However, this number is optional. As other countries place their own vaccine orders and Pfizer has a production logistics scheme, the US may not be able to purchase another 500 million doses, even if it wants to.

The question of when and how Americans will be vaccinated is critical, as the country has reached a record 102,000 hospitalizations and the highest weekly death rate. The United States has recorded over 15.3 million cases (200,000 new just yesterday) and over 290,000 Covid-19-related deaths.

The situation with coronaviruses in Europe is starting to stabilize thanks to November lockdowns. France, Spain, Italy, the United Kingdom and Germany are seeing significant declines in the number of Covid-19 cases. Russia is currently the largest coronavirus hotspot outside the US, outperforming even India in its daily statistics.

-- Edited by Charot FXMart on Wednesday 9th of December 2020 12:11:56 AM

December 10.2020 - USA, coronavirus and latest economic reports

In the US, the November inflation report was published, which beat the forecast at 0.2%, as well as weekly data on jobless claims, which disappointed investors. The labor market situation in the United States is deteriorating due to the ongoing Covid-19 outbreak.

By the end of the week, 70 million people infected with coronavirus will be registered in the world. In the United States, there are more than 15.8 million patients, of whom more than 296,000 have died. The number of hospitalizations in the country has reached the highest ever.

In the EU, the number of new cases is gradually decreasing. A notable exception is Germany, which despite the lockdown, where more than 20,000 new cases of Covid-19 are detected daily. Brazil, India and Russia also continue to be hit hard by the virus.

December 15. Industrial production in the US in November grew better than forecast

According to the report of the US Federal Reserve System, industrial production in November increased by 0.4% versus the previous month, when the indicator was noted at the level of 0.9%.

At the same time, the volume of production is still 5% below the pre-crisis level. Analysts polled by Reuters were expecting an increase of 0.3%.

In annual terms, industrial production in November fell by 5.5%, and in October – by 5%.

Manufacturing production in November increased for the seventh month in a row – by 0.8% versus October. The forecasts assumed an increase in the indicator by 0.3%. In the mining industry, production increased by 2.3%, electricity generation decreased by 4.3%.

Capacity utilization in the US increased to 73.3% in November from 73% a month earlier. Analysts on average predicted a decline to 72.9%.

December 17. Bank of England has kept the rate unchanged

The Bank of England at its meeting on Thursday kept its base interest rate at 0.1%, in line with analysts' expectations.

Moreover, the regulator has kept the volume of asset repurchases from the market at 895 billion pounds. The redemption of government bonds at the same time is 875 billion pounds, and the volume of redemption of corporate bonds remained at 20 billion pounds.

The Bank of England continues to monitor the situation around Brexit. London and Brussels are still trying to avoid a shock scenario with the introduction of import duties on January 1. Therefore, keeping the program for buying up government debt securities at the same level should provide the regulator with sufficient «firepower» until the end of 2021.

December 23. Great Britain is on the verge of a trade blockade

UK industrialists fear that the country could face the threat of a food crisis. In particular, the country is facing an impending shortage of fruits and vegetables, and shoppers are lining up at supermarkets in London.

The fact is that due to the mutating coronavirus, a number of European countries have suspended transport links with Great Britain. And now, with food supply chains disrupted, London is on the verge of a trade blockade. Analysts note that the volume of supplies from the European Union amounted to a quarter of the total volume of the previous year.

In addition, port disruptions mean that British meat and fish exporters are unable to ship their goods to Europe. As it is known, the European Union is highly dependent on supplies from Britain. For example, in France there may not be enough fish for Christmas due to blocking of cargo.

December 25. What awaits the oil market in 2021?

The outgoing year will be remembered for numerous anti-records: a fall in demand by 25%, overcrowding of oil storage facilities and a drop in prices for the first time in history. The reason for such events was the coronavirus pandemic in the world, which led to an unprecedented drop in oil prices: Brent collapsed to the level of $15 per barrel, and for the first time in history, WTI completely went into negative territory, reaching minus $40 (suppliers paid extra to buyers for oil export).

However, experts believe that next year will be more successful for «black gold», and the price of a Brent barrel will remain in the region of $45-55 per barrel. By the end of 2020, OPEC's coordinated efforts to balance the oil market, as well as news of the successful testing of vaccines against COVID-19, helped the oil rise to $50 per barrel.

The demand for oil products in the outgoing year is gradually approaching 97-99% of 2019, but air traffic has not yet been restored. Moreover, the new mutation Covid casts doubt on the imminent opening of borders. At the same time, the world economy continues to grow, which was facilitated by the stimulating programs of central banks. In such conditions, an optimistic scenario for further dynamics of the oil market is still more likely, experts say.

It should be added that the negative effect on demand from the pandemic will come to naught by the end of the first half of 2021, and the OPEC+ deal will remain in one form or another. However, in the unlikely scenario of canceling the agreement to cut oil production, the price of «black gold» may fall to the range of $35-45 per barrel. But, again, this is extremely unlikely.

December 31. Senate Republicans blocked bill to increase payments to Americans

Republicans in the Senate have blocked a bill passed by the House of Representatives to increase the amount of incentive payments during the coronavirus pandemic from $600 to $2 thousand.

The head of the Republican majority in the US Senate, Mitch McConnell, said that he did not welcome the intention «to throw more borrowed money into the hands of rich Democratic friends who do not need help anyway.» Other demands of Donald Trump, in the form of an investigation of alleged violations in the presidential elections and establishing the responsibility of social networks for publishing content, the Democrats refused to discuss at all.

We recall that on Monday, the House of Representatives of the US Congress approved an increase in stimulus payments requested by President Donald Trump from $600 to $2 thousand. A day earlier, Trump signed the country's budget for the 2021st fiscal year in the amount of $2.3 trillion. The budget includes a $900 billion package of measures to support the economy in a pandemic.

January 05. Experts named the key risks of 2021

Analysts of the consulting company Eurasia Group named the main risks for the economy, international politics and states in general, which they may face in 2021.

The first line in the ranking of the top 10 risks is occupied by the «divided America». Experts suggest that a huge part of the US population will consider the head of state illegitimate. For example, incumbent President Donald Trump's refusal to acknowledge presidential election results is a unique case in US history that signals a strong internal division in America.

The second risk is, of course, the coronavirus pandemic. Its further development threatens not only the lives and health of people, but also political stability and the world economy. Moreover, the distribution of vaccines can lead to the division of populations and states into haves and have-nots.

The third place in the ranking is taken by the fight against climate change. According to experts, global cooperation in this area can be replaced by competition.

In addition to these three points, the list of risks for 2021 includes growing tensions between China and the United States, difficulties with the international transfer of information and the likelihood of a conflict in cyberspace. Analysts also note the problems in the economies of Turkey and the Middle East, potential political risks in Germany associated with the resignation of Chancellor Angela Merkel, as well as the political crisis in Latin America.

January 11. Oil has renewed its February 2020 high

On Monday, March Brent oil futures surpassed $56 per barrel for the first time since February 25, 2020. During the day, quotations decreased slightly, but still remained above the $55 per barrel level. March futures for the Texas WTI reached $51.56 a barrel.

The oil market began its growth last week, after Saudi Arabia announced its intention to reduce oil production by 1 million barrels per day in February and March. Earlier at a meeting, the OPEC+ countries decided to keep the current production restrictions. At the same time, Russia and Kazakhstan were allowed to increase oil production in aggregate by 75 thousand barrels per day.

Today, pressure on quotes continues to be exerted by investors' fears about the prospects for global economic growth and demand for raw materials amid the further spread of coronavirus in many regions of the world. Traders are confident that a worsening epidemiological situation will inevitably lead to a slowdown in economic activity.

Additional pressure on the oil market was provided by the Baker Hughes report, according to which the number of operating oil rigs increased by 8 units to 275, which corresponds to an 8-month high.

January 13. Bitcoin shows worst dynamics since March 2020

On Wednesday, the most popular cryptocurrency drops in price, showing the worst trading dynamics since March 2020. Since the beginning of the new year, bitcoin has been showing increased volatility: until recently, the currency was updating its historical highs in the area of ​​$42 thousand, and today it is already trading near $34 thousand.

At the same time, JPMorgan bank experts previously said that the cost of bitcoin could jump up to $146 thousand if the cryptocurrency acts as a competitor to gold as a «safe haven».

The jump in the price of bitcoin at the end of 2020 came as a surprise to the markets. The previous sharp rise in the digital currency was recorded at the end of 2017, when quotes rose to the level of $20 thousand. After that, there was a certain lull in the cryptocurrency market, and bitcoin entered a period of a protracted depression that lasted until the spring of 2020.

In the spring, with the onset of the coronavirus pandemic, the demand for bitcoin grew along with the appetite for risky assets amid massive injections from the US Federal Reserve and central banks of other countries.