Forex News from InstaForex

Japan Economy Contracts More Than Expected In Q3

Japanese economy entered in to recession in the three months ended September, as the GDP contracted for the second straight quarter, preliminary figures from the Cabinet Office showed Monday. Gross domestic product fell an annualized 0.8 percent in the third quarter, following a revised 0.7 percent decrease in the previous three months. Economists had forecast a 0.2 percent drop for the September quarter. On a seasonally adjusted basis, GDP slid 0.2 percent quarter-on-quarter in the three-month period to September, the same rate of contraction as in the preceding quarter. The figure was also matched with consensus estimate. In the first quarter of this year, the economy expanded 1.1 percent. Nominal GDP remained flat in the third quarter, defying economists' expectations for 0.2 percent decline. In the second quarter, the economy grew 0.2 percent.

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US Treasury urges Japan to bolster economy

US Treasury Secretary Jack Lew has pressed Japan to proffer fiscal support to its economy to reignite growth in the country. Lew, in a statement, made the remarks during a bilateral meeting with Japanese Finance Minister Taro Aso on the sidelines of a G20 summit in Antalya, Turkey. He urged the country to fine-tune their fiscal policy to avert sluggish growth in the near future and ensure the return to domestic demand-driven growth can uphold consolidation efforts over the medium term. The Japanese economy slid 0.2% in the third quarter. The nation has faced recession four time since the global financial crisis.

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Singapore NODX Falls Unexpectedly In October

Singapore's non-oil domestic exports declined unexpectedly in October, data from the International Enterprise Singapore showed Tuesday. NODX dropped 0.5 percent year-over-year in October, confounding economists' expectations for a 3.6 percent growth. In September, non-oil domestic exports had risen 0.3 percent. The annual decrease in October was caused by a contraction in electronic NODX which outweighed the increase in non-electronic NODX, the agency said. Exports of electronic products fell 3.2 percent annually in October, in contrast to the 5.7 percent rise in the previous month. This was largely due to the fall in exports of ICs, parts of ICs and parts of PCs. Economists had expected a 2.2 percent fall for the month. At the same time, shipments of non-electronic products grew 0.7 percent in October, reversing a 1.9 percent drop in September. On a monthly basis, NODX rose a seasonally adjusted 1.1 percent in October, following a 2.8 percent decrease in the preceding month.

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Gender gap progress slows down - WEF

Women now earn what men did 10 years ago, highlighting the deceleration in global progress made in narrowing the gender division. The World Economic Forum's Global Gender Gap Report said the gap in education, economic opportunity, health, and politics worldwide has closed by 4% in the last decade, while the economic gap constricted by 3%. The WEF report implied it will take another 118 years to attain equality, and progress towards wage equality and labor force parity has stalled since 2009 or 2010. In 97 countries, more women than men are studying in university. Also, women comprise most of the skilled workers in only 68 nations and the majority of leaders in only four.

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Fitch: Oil India's Net Price more Stable After New Subsidy-Sharing Scheme

Fitch Ratings says India's new subsidy-sharing framework for kerosene and liquefied petroleum gas (LPG) provides the two state-controlled upstream producers, Oil India Limited (OIL, BBB-/Stable) and Oil and National Gas Corporation, with more stability in their realised oil prices net of discounts. The overall subsidy burden on the state and the state oil and gas companies have reduced substantially after diesel prices were deregulated in October 2014. The two state-controlled upstream companies were previously required to provide their oil to refiners at substantial discounts not directly related to oil prices - as high as USD56 per barrel - as part of India's state-directed energy subsidies for end-users. Following the deregulation of diesel prices, the government said that for the fiscal year ending March 2016 (FY16), the maximum state subsidy to oil marketing companies to sell fuel below market prices will be limited to INR18/kg for cooking gas (LPG) and INR12/litre for kerosene; any additional subsidy will have to be borne by the oil producers. The net realised prices that the upstream companies receive on the sale of oil produced (market price of crude less discounts to refiners) will vary less under this new mechanism because the discounts they provide increase and decrease with the movement in global crude oil prices. Assuming an average Brent oil price of USD55/bbl in FY16, OIL's net realised oil price after subsidy discounts would be around USD51/bbl. This would be about 8% higher than the USD47/bbl reported in FY15. However, if Brent averages USD40/bbl for the remainder of FY16 (average FY16 price of USD51/bbl), OIL's net realised oil price would be little changed at around USD48/bbl, as the discount also falls. Conversely, if Brent averages USD60/bbl for the rest of the financial year (USD59/bbl on average in FY16), the net realised price by OIL would be around USD53/bbl after adjusting for a higher discount. Our estimates assume that OIL's oil output would be 3% lower yoy in FY16, based on its 1HFY16 results. We have used a USD-INR exchange rate of 64.5, based on 1HFY16 average. As for the oil marketing companies, they would be compensated fully by the government for selling LPG and kerosene below market prices under this arrangement. The above arrangement is through March 2016; it is yet not clear if the government would make any significant adjustments to the mechanism or the thresholds for the next fiscal year.

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Fed minutes indicate December liftoff

Federal Reserve policymakers, who are looking at deferring an interest rate hike, are now contemplating a rate liftoff at its December meeting. At the October 27-28 meeting of the Federal Open Market Committee, policymakers cleared a rate increase would consider the move at their meeting on December 15 and 16. The doves lost the battle, and it emerged before the release of a better than projected “October jobs report that provided more evidence of an economy on solid ground,” said Diane Swonk, Chief Economist at Mesirow Financial Holdings Inc. The Fed minutes also revealed majority of participants agreed the conditions that would ignite a rate hike could be met by next month.

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Asian shares to notch largest weekly gain in six weeks

Asian shares are slated to score their biggest weekly advance in six weeks, with Japanese stocks pulled lower by a firmer yen. The MSCI Asia Pacific Index ended at 133.71, down 0.2%, snipping this week's gain to 1.2%. On Thursday, the gauge recorded the biggest daily leap in a month despite optimism the Federal Reserve's tightening pace will be gradual. Japan's Topix index lost 0.4%. Hong Kong's Hang Seng Index added 0.1%. Hang Seng China Enterprises Index accrued 0.2%. South Korea's Kospi index gained 0.1%.

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Pound Edges Up Against Most Majors

The British pound strengthened against most major currencies in the Asian session on Friday. The pound rose to 1.5299 against the U.S. dollar and 188.00 against the yen, from yesterday's closing quotes of 1.5289 and 187.84, respectively. Against the euro, the pound edged up to 0.7005 from yesterday's closing value of 0.7018. If the pound extends its uptrend, it is likely to find resistance around 1.54 against the greenback, 189.00 against the yen and 0.69 against the euro.

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Treasuries Close Modestly Lower After Seeing Early Strength

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After moving modestly higher in early trading, treasuries turned lower over the course of the trading session on Friday. Bond prices pulled back in early afternoon trading and remained in the red going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 2.262 percent. The downturn by treasuries may partly have reflected profit taking on the heels of the upward trend seen over the past several sessions. Amid a relatively quiet day on the U.S. economic front, traders also kept an eye on speeches by a pair of Fed officials. In remarks at an event in Fort Smith, Arkansas, St. Louis Fed President James Bullard repeated a speech he delivered at a separate event earlier this month. Bullard noted the market-based probabilities of a near-term end to the zero interest rate policy have increased but stressed any decision will be data dependent. Additionally, New York Fed President William Dudley spoke at Hofstra University on Long Island, telling students the U.S. economy is in pretty good shape. Dudley said the Fed hopes to soon become reasonably confident that inflation will return to the 2 percent inflation target. The New York Fed also stressed that the decision on interest rates would be data dependent, noting that there will be four weeks of data before the next monetary policy meeting. While the markets will be closed next Thursday for Thanksgiving, traders will be presented with a slew of U.S. economic data in the days leading up to the holiday. Traders are likely to pay close attention to reports on new and existing home sales, durable goods orders, and personal income and spending. Bond trading could also be impacted by reaction to the results of the Treasury Department's auctions of two-year, five-year, and seven-year notes. The Treasury is due to sell $26 billion worth of two-year notes next Monday, $35 billion worth of five-year notes next Tuesday, and $29 billion worth of seven-year notes next Wednesday.

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Euro Falls Against Majors

The euro weakened against the other major currencies in the Asian session on Monday. The euro fell to nearly a 7-1/2-month low of 1.0600 against the U.S. dollar, nearly a 7-month low of 130.57 against the yen and a 5-day low of 1.0825 against the Swiss franc, from last week's closing quotes of 1.0643, 130.70 and 1.0842, respectively. Against the pound, the euro dropped to 0.6992 from Friday's closing value of 0.7007. If the euro extends its downtrend, it is likely to find support around 1.05 against the greenback, 129.00 against the yen, 1.07 against the franc and 0.695 against the pound.

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Japan government plans to raise minimum wage to boost economy: draft

Japanese government is planning to raise the minimum wage paid to other workers to strengthen its economy, and to meet its target nominal GDP to 600 trillion yen in 5 years, a draft of economic stimulus measures showed on Monday. A Reuters-obtained draft showed that the government is also offering some financial support to people living off their pensions to boost consumer spending. Prime Minister Shinzo Abe's government will also provide a time frame for lowering the corporate tax rate below 30% to improve competitiveness, the draft showed.

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US politicians condemn Pfizer-Allergan deal

US politicians slammed Pfizer Inc.'s decision to acquire Allergan Plc for $160 billion, considering the move as tax evasion. Democrats heavily criticized Pfizer, with Hillary Clinton accusing the drugmaker of utilizing legal loopholes to dodge its fair share of taxes and leaving the burden on American taxpayers. Senator Bernie Sanders said the agreement would enable major US companies to conceal its profits abroad. Republican presidential candidate Donald Trump, who pressed for overhauling corporate tax, described the deal as disgusting. Under the deal, the merged company will be called Pfizer and will be operated by Pfizer Chief Executive Ian Read. Also, the executive management will remain in New York, as well as its extensive operations throughout the country.

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U.S. Dollar Falls Against Majors

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The U.S. dollar weakened against the other major currencies in the Asian session on Tuesday. The U.S. dollar fell to a 5-day low of 122.67 against the yen and a 4-day low of 1.0169 against the Swiss franc, from yesterday's closing quotes of 122.84 and 1.0179, respectively. Against the euro and the pound, the greenback dropped to 1.0645 and 1.5139 from yesterday's closing quotes of 1.0635 and 1.5122, respectively. The greenback edged down to 1.3341 against the Canadian dollar, from yesterday's closing value of 1.3364. If the greenback extends its downtrend, it is likely to find support around 121.00 against the yen, 1.00 against the franc, 1.08 against the euro, 1.53 against the pound and 1.31 against the loonie.

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Japan Manufacturing Growth At 20-Month High

Japan's manufacturing activity expanded at the fastest pace in twenty months in November, as output growth quickened, the latest flash survey from Markit Economics showed Tuesday. The Markit/ Nikkei Manufacturing Purchasing Managers' Index, or PMI, rose to 52.8 in November from 52.4 in October. A score above 50 indicates expansion in the sector. Manufacturing output cotniuned to grow sharply in November and the latest rate of increase was the fastest since March 2014. At the same time, new orders rose at a slower rate in November, while growth in exports orders accelerated to a five-month high. On the price fornt, input prices climbed at the fastest rate in four months, although inflation remained historically muted. The final manufacturing PMI figures will be published on 1st December


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Australia Construction Work Drops 3.6% In Q3

The total value of construction work done in Australia slipped a seasonally adjusted 3.6 percent on quarter in the third quarter of 2015, the Australian Bureau of Statistics said on Wednesday - standing at A$49.040 billion. That missed forecasts for a decline of 2.0 percent following the 1.6 percent increase in the second quarter. On a yearly basis, construction work was down 3.7 percent. The value of building work added 0.6 percent on quarter and 6.4 percent on year to A$24.156 billion. Residential work gained 2.0 percent on quarter and 12.4 percent on year to A$15.523 billion, while non-residential work fell 1.9 percent on quarter and 3.0 percent on year to A$8.633 billion. The seasonally adjusted estimate for engineering work completed slipped 7.3 percent on quarter and 11.7 percent on year to A$24.884 billion in Q3. Also on Wednesday, the government noted that skilled vacancies were up 0.6 percent on month in October after rising a downwardly revised 1.1 percent in September (originally 1.8 percent).

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EU flags potential economic troubles on imbalances

The European Commission warned of potential economic troubles in 12 of the 19 eurozone countries, including Germany, and findings will be released in February. Through its monitoring policy, the commission said it will closely look at imbalances in the following countries: Austria, Belgium, Estonia, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, and Slovenia. The policy was unveiled at the peak of the euro debt crisis. High trade surplus was attributed to Germany, leaving it susceptible to an economic slowdown elsewhere. The commission added the six nations, Bulgaria, Croatia, Hungary, Romania, Sweden, and the United Kingdom, that do not use the euro will face renewed monitoring as well.

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Singapore Dollar Falls To 2-day Low Against U.S. Dollar

The Singapore dollar weakened against the U.S. dollar in the Asian session on Friday. Against the greenback, the Singapore dollar fell to a 2-day low of 1.4097 from an early high of 1.4070. At yesterday's close, the Singapore dollar was trading at 1.4081 against the greenback. If the Singapore dollar extends its downtrend, it is likely to find support around the 1.42 area.

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Gold Ends Week At 5-year Year Lows

Gold prices fell for a sixth consecutive week, with Friday's losses pushing the preious metal to its lowest in more than five years. A stronger dollar contributed to the decline. Gold futures for December delivery settled down $13.80, or 1.3% at $1,056.20 an ounce on Comex. Expectations that the Federal Reserve will raise interest rates next month are weighing on prices.


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Japan Industrial Production Climbs 1.4% In October

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Industrial output in Japan gained a seasonally adjusted 1.4 percent on month in October, the Ministry of Economy, Trade and Industry said in Monday's preliminary reading - rising for the second straight month. That missed forecasts for an increase of 1.8 percent, although it was up from 1.1 percent in September. On a yearly basis, industrial production slipped 1.4 percent - also missing expectations for a decline of 0.9 percent following the 0.8 percent drop in the previous month. Upon the release of the data, the METI maintained its assessment of industrial production, saying that it has been fluctuating indecisively. Industries that mainly contributed to the monthly increase included business oriented machinery, transport equipment and electronic parts and devices. According to the survey of production forecast in manufacturing, production is expected to rise 0.2 percent in November and fall 0.9 percent in December. Industries that mainly contributed to the increase in November included communication electronics equipment, electrical machinery, and electronic parts and devices. Industries that mainly contributed to the decline in December included business-oriented machinery, transport equipment and electronic parts and devices. Shipments in October were up 2.1 percent on month, rising for the second straight month. They were also down 0.8 percent on year. Industries that mainly contributed to the increase included transport equipment, business oriented machinery and electronic parts and devices. Inventories in October dipped 1.9 percent on month, falling for the second straight month. They were also up 0.2 percent on year. The inventory ratio in October fell 3.0 percent on month, falling for the second consecutive month. It also fell 0.5 percent on year. Also on Monday, the METI said that the total value of retail sales in Japan was up 1.8 percent on year in October - topping forecasts for an increase of 0.9 percent following the 0.1 percent decline in September. Sales from large retailers were up 2.9 percent on year, just missing forecasts for an increase of 3.0 percent but still up from 1.7 percent in the previous month. On a seasonally adjusted monthly basis, retail sales advanced 1.1 percent - beating forecasts for a gain of 0.3 percent and up from 0.8 percent in the three months prior.

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Treasuries Rise as China Stock Decline Drives Demand for Safety

Treasuries soared as it heads for their biggest gain in 2 weeks, as a fall in Chinese shares drove demand for the relative safety of U.S. government securities. The U.S. 10-year yield declined three basis points to 2.21% as of 7:01 a.m. in London, according to Bloomberg Bond Trader data. The benchmark 2.25% note due in November 2025 advanced 1/4, or $2.50 per $1,000 face amount, to 100 3/8. Treasuries fell1.1% over the past month, the worst performer of 26 bond markets around the world tracked by Bloomberg and the European Federation of Financial Analysts Societies.

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Malaysia Manufacturing Sector Weakens Further In November - Nikkei

The manufacturing sector in Malaysia continued to contract in November and at an accelerated pace, the latest survey from Nikkei revealed on Tuesday with a PMI score of 47.0. That's down from 48.1 in October, and it slides further beneath the boom-or-bust line of 50 that separates expansion from contraction. Among the individual components, production contracted at the sharpest rate in more than three years. New orders declined at a record pace, as did buying activity.

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Copper Drops With Metals After Chinese Factory Activity Slows

Copper fell with other markets after activity in Chinese factory slowed, underscoring a weak outlook for demand in the country. The official manufacturing purchasing managers index fell to 49.6 last month. The official PMI figure has been in contraction territory for four months. Copper for 3-month delivery on the London Metal Exchange slipped 0.5% to $4,561.50 a ton by 9:29 a.m. in Shanghai.

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Australia GDP Expands 2.5% On Year In Q3

Australia's gross domestic product gained 2.5 percent on year in the third quarter of 2015, the Australian Bureau of Statistics said on Wednesday. That beat forecasts for an increase of 2.4 percent and accelerated from the 2.0 percent gain in the second quarter. On an annualized quarterly basis, GDP gained 0.9 percent - also topping expectations for an increase of 0.8 percent and up from the 0.2 percent gain in the three months prior. The terms of trade slipped a seasonally adjusted 2.4 percent on quarter in Q3. The major contributions to economic growth this quarter came from exports, with net exports contributing 1.5 percentage points to GDP growth. The growth in exports is reflected by strong growth in mining activity (5.2 percent), bouncing back after the decline in the June quarter. Strength in the broader economy was also seen in household final consumption expenditure (up 0.7 percent) and new and used dwelling construction (up 2.0 percent). These positive contributions were offset by a fall in total gross fixed capital formation of 4.0 percent, driven by falls in private (-2.9 percent) and public (-9.2 percent) investment. The September quarter continues to see the decline in mining related construction, with engineering construction decreasing 7.1 percent.

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Treasury yields dive as weak US data renewed woes on Fed liftoff

Treasury yields plunged as soft manufacturing data revived questions about the possible timing of Federal Reserve's interest rate hike over the following year. According to the Institute for Supply Management, manufacturing activity slumped to 48.6 in November, from 50.1 in October. The likelihood of a Fed rate increase this month has lowered. Futures markets pointed to 75% probability of a rate hike in December. The yield premium investors get for purchasing longer-term debt slimmed at 1.25 percentage points, its narrowest in nine months. The yield on the benchmark 10-year US government note slipped to its one-month low of 2.155%, while the two-year yield fell to 0.907%, its weakest in nearly two weeks.


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Fitch: Strong Capitalisation Backs Malaysian Insurers' Profile Amid Changes

Malaysia's insurance and takaful sector will remain stable in 2016, underpinned by the industry's solid capitalisation, Fitch Ratings says in a new report. The sound capitalisation will also support the sector's premium growth and potential underwriting volatility as economic growth decelerates. The sector's solid capitalisation is built on the robust regulatory framework and capital practices required by the Malaysian regulator. The series of regulatory reforms implemented in recent years aimed to raise the sector's competitiveness ahead of full liberalisation and economic integration with other south-east Asian economies. The industry's consolidated risk-based capital ratio was strong at 239% in 1H15, well beyond the regulatory minimum of 130%. Fitch believes stable domestic demand and low insurance penetration will continue to support the general insurance and takaful sector. This is despite the slower premium growth in 1H15 associated with lower automobile sales and private consumption, as consumers adjust to the Goods and Services Tax implemented in April 2015. The growth in investment-linked policies is likely to stay strong given the low interest rates, but we expect life insurers to increasingly tap on health-related and retirement products as the population ages and medical costs rise. High claims from the compulsory motor class will continue to pressure general insurers' profitability but this will be partly offset by healthy underwriting margins from fire and non-motor classes. We believe the deregulation of tariff rates in 2016 to have a mixed impact: motor insurers are likely to benefit from greater flexibility in pricing their risks adequately, but it could trigger competitive pricing among fire insurers and erode bottom-line profitability. Fitch expects M&A activity in the sector to pick up following a quiet 2015. This will be driven by the regulatory requirement for composites to split their life and non-life operations within five years from 2013. There are currently eight takaful and four insurance composites that have yet to split their operations. The report, "2016 Outlook: Malaysian Insurance Sector", is available on www.fitchratings.com or by clicking on the link in this media release.

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Australia Retail Sales Jump 0.5% In October

The total value of retail sales in Australia climbed a seasonally adjusted 0.5 percent on month in October, the Australian Bureau of Statistics said on Friday - standing at A$24.655 billion. The headline figure beat expectations for an increase of 0.4 percent, which would have been unchanged from both the September and August readings. There were rises in food retailing (0.6 percent), department stores (3.5 percent) and household goods retailing (1.1 percent). There were falls in cafes, restaurants and takeaway food services (-0.6 percent) and clothing, footwear and personal accessory retailing (-0.1 percent). Other retailing (0.0 percent) was relatively unchanged. By region, there were rises in New South Wales (0.8 percent), Victoria (0.5 percent), Queensland (0.5 percent), South Australia (0.3 percent), Tasmania (0.8 percent), the Australian Capital Territory (0.6 percent) and the Northern Territory (0.2 percent). Western Australia (0.0 percent) was relatively unchanged. Online retail turnover contributed 3.0 percent to total retail turnover in original terms.

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VW's suspended top engineer quits after 30 years, Audi says

Ulrich Hackenberg, Volkswagen's suspended top engineer has quit the company after 30 years, luxury-car division Audi said, as VW pushes ahead with the search for culprits in its diesel emissions scandal. The supervisory board of VW suspended Hackenberg two months ago. He will be replaced by Stefan Knirsch, head of engine development, Audi said.

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Treasuries Regain Ground Following Upbeat Jobs Data

Following the sell-off seen in the previous session, treasuries regained some ground over the course of the trading day on Friday. Bond prices moved to the upside in morning trading before moving roughly sideways in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to 2.275 percent. The ten-year yield partly offset the 15.2 basis point jump seen on Thursday but remains well above the one-month closing low it set on Tuesday. The rebound by treasuries came as traders went bargain hunting even amid the release of a Labor Department report showing stronger than expected job growth in the month of November. The report said non-farm payroll employment jumped by 211,000 jobs in November compared to economist estimates for an increase of about 190,000 jobs. Job growth in September and October was also upwardly revised to 145,000 jobs and 298,000 jobs, respectively, reflecting 35,000 more jobs than previously reported. The Labor Department also said the unemployment rate held at the more than seven-year low of 5.0 percent set in the previous month, matching expectations. The stronger than expected job growth further cemented expectations the Federal Reserve will raise interest rates later this month, although the pace of monetary policy normalization is expected to be gradual. Joel L. Naroff, President and Chief Economist at Naroff Economic Advisors, said, "There really is nothing except a major crisis that will stop the Fed from its appointed first round of rate hikes." "All it would have taken is a mediocre employment report to provide the necessary cover to raise rates and the November data were more than that," he added. A separate report from the Commerce Department showed that the U.S. trade deficit unexpectedly widened in October, as exports fell at a faster rate than imports. The Commerce Department said the trade deficit climbed to $43.9 billion in October from a revised $42.5 billion in September. Economists had expected the trade deficit to narrow to $40.6 billion in October from the $40.8 billion originally reported for the previous month. The economic calendar for next week starts off relatively quiet, although reports on producer prices and retail sales are likely to attract attention later in the week. Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds. The Treasury is due to sell $24 billion worth of three-year notes next Tuesday, $21 billion worth of ten-year notes next Wednesday, and $13 billion worth of thirty-year bonds next Thursday.

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NZ Dollar Falls Against Majors

The New Zealand dollar weakened against the other major currencies in the Asian session on Monday. The NZ dollar fell to 0.6699 against the U.S. dollar and 82.57 against the yen, from Friday's closing quotes of 0.6743 and 83.01, respectively. Against the euro and the Australian dollar, the kiwi dropped to 1.6208 and 1.0939 from last week's closing quotes of 1.6101 and 1.0865, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.65 against the greenback, 80.00 against the yen, 1.66 against the euro and 1.11 against the aussie.

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Fitch: Japanese Life Insurers Seek Overseas Growth Opportunities

Japanese life insurers are likely to strengthen their insurance business outside Japan in 2016 while accumulating foreign bond holdings to improve their investment yield, Fitch Ratings says in a new report. The Rating Outlook for Japanese life insurers has been revised to Stable from Negative, to be consistent with the Outlook for the Japan sovereign (Long-Term Local-Currency Issuer Default Rating at A). This reflects the insurers' high concentration of Japanese government bonds (JGBs) in their investment portfolios. The Sector Outlook remains Stable due to the overall improvement in earnings and sufficient capitalisation. Several Japanese major life insurers have started to acquire sizable life insurance companies (for around JPY1.4trn in total) in developed markets such as the United States and Australia, following the overseas expansion plans of The Dai-ichi Life Insurance Company, Limited (Insurance Financial Strength (IFS) Rating A/Stable). Fitch believes this trend will continue, given the ageing and contracting population in Japan, and will monitor any integration and governance risks from international M&A. Japan's life insurers are likely to continue moderately accumulating foreign bonds to seek higher yield, if the very low bond yields in Japan (at around 1% for 20-year JGBs) persist. Fitch expects currency risks (especially versus US dollar) may increase further, if insurers raise unhedged portions. Although the increasing allocation to foreign bonds will provide broader diversification from the concentration on JGB, currency risks need to be managed effectively given the majority of the life insurance liabilities are still yen-denominated. Fitch expects the life insurers to maintain their strong earnings level and solid capital adequacy in 2016. The nine major traditional life insurers' core profit was JPY1,194bn in the first half of the financial year ending March 2016, up from JPY1,117bn a year earlier. The nine insurers' average statutory solvency margin ratio was 923.5% at end-September 2015, compared with 897.7% a year earlier. The view is supported by an improving investment spread owing to accumulated foreign bond investments and the moderately expanding profitable "third sector" (health) insurance product businesses. The report titled "2016 Outlook: Japanese Life Insurance" is available at www.fitchratings.com or by clicking on the link in this media release.

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Japan averts recession with revised Q3 GDP data

Japan avoided a technical recession in the third quarter with the initial estimate of a contraction revised to an annualized growth of 1.0% from a preliminary reading of 0.8%. The revision, larger than an average market forecast for a revision to a 0.1% gain, implied the Japanese economy was in better shape than initially predicted. Cabinet Office reported capital expenditure was the main factor to the upgrade, revised up to a 0.6% increase from an initial decline of 1.3%. Despite the evasion of inflation, policymakers will remain under pressure to beef up growth by injecting additional stimulus measures.

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Australia Unemployment Rate Falls To 5.8%

The jobless rate in Australia slipped to a seasonally adjusted 5.8 percent in November, the Australian Bureau of Statistics said on Thursday. That handily beat forecasts for 6.0 percent and was down from 5.9 percent in October. The Australian economy added 71,400 jobs in November to 11,900,600 - blowing away forecasts for a decline of 10,400 jobs following the downwardly revised increase of 58,300 (originally 58,600). Full-time employment increased 41,600 to 8,205,800 and part-time employment increased 29,700 to 3,694,800. The participation rate came in at 65.3 percent - also beating forecasts for 65.0 percent, which would have been unchanged. Unemployment decreased 2,800 to 739,100. The number of unemployed persons looking for full-time work decreased 9,400 to 517,400 and the number of unemployed persons only looking for part-time work increased 6,600 to 221,700. Monthly hours worked in all jobs decreased 12.7 million hours (0.8 percent) to 1,645.9 million hours. The labor force underutilization rate decreased 0.2 points to 14.3 percent, based on unrounded estimates. The male labor force underutilization rate fell 0.2 points to 12.3 percent. The female labor force underutilization rate decreased 0.2 points to 16.6 percent.

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Ford to allocate $4.5 billion in developing electric car

Ford Motor Co. announced a $4.5 billion investment aimed at creating more capable electric version of the Focus small car in 2016, the first of 13 new electric vehicles it pledged to develop in the next four years. The move came as carmakers, including General Motors Co., have committed to offering a wider array of long-range electric cars even as low gasoline prices decreases demand for more efficient automobiles. The upgraded Focus, which can travel 100 miles on a charge, will be produced late next year. It will also be equipped with new technology enabling drivers to charge the battery 80% in 30 minutes.

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U.S. Dollar Rises Against Majors

The U.S. dollar strengthened against the other major currencies in the Asian session on Friday. The U.S. dollar rose to 1.3658 against the Canadian dollar for the first time since June 2004, from yesterday's closing value of 1.3624. The greenback advanced to a 2-day high of 122.15 against the yen, from yesterday's closing value of 121.53. Against the euro, the pound and the Swiss franc, the greenback edged up to 1.0927, 1.5135 and 0.9890 from yesterday's closing quotes of 1.0940, 1.5159 and 0.9873, respectively. The greenback edged up to 0.6735 against the NZ dollar, from yesterday's closing value of 0.6753. If the greenback extends its uptrend, it is likely to find resistance around 1.41 against the loonie, 124.00 against the yen, 1.07 against the euro, 1.49 against the pound, 1.02 against the franc and 0.66 against the kiwi.

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UK regulator to humiliate inefficient asset managers

UK regulators are slated to name and shame asset management groups that fail to properly coordinate with entities over pay, succession, and other corporate governance matters. For the first time in July, the Financial Reporting Council will unveil the investment groups that are not pressuring firms enough in their roles as custodian of other people's money. Companies that fail to adhere to stewardship standards will be placed on six months' notice to step up their game. FRC Chair Sir Winfried Bischoff said the stewardship code has helped bolster the profile of stewardship and resulted in improvements in the engagement between investors and corporations.

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Mexico Leading Index Rises For Second Month

The leading index for Mexico, which measures the future economic activity, increased for the second straight month in October, figures from the Conference Board showed Monday. The Conference Board leading economic index climbed 0.7 percent in October, following a revised 0.5 percent rise in the prior month. In August, the index had fallen 1.6 percent. Out of the six components, five c‪#‎forex_demotivator‬ontributed positively to the index in October. The coincident index that reflects the current economic activity rose 0.3 percent in October, the same rate of increase as in September. All three components gained during the month. Despite the small improvements in both the LEI and CEI, the persistent weaknesses among the leading indicators over the last six months continue to suggest that Mexico's rate of economic expansion is unlikely to pick up in coming months, the Conference Board said.

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EU officials agree on new digital privacy law

European Union officials sealed a deal on a pan-European digital privacy law, forming a new legal framework which will have ripple effects around the world on how firms can utilize people's personal details. EU officials said negotiators agreed on a final text of the union-wide bill following almost four years of haggling and lobbying, replacing a patchwork of 28 different sets of national privacy laws and bolstering their privacy penalties to perhaps billions of euros. Under the agreement, fines would be increased to a maximum of 4% of a company's overall global revenue. The new text needs to be approved by the European Parliament and EU governments before enacting it in two years' time.

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Argentina to ease currency control

Argentina announced it would alleviate its foreign exchange control, with President Mauricio Macri hoping the move will bolster exports and fuel economic growth. Farmers in the country have been waiting for the Argentinian peso to decline before selling stockpiles of soybeans. The official exchange rate of 10 pesos per US dollar is not matched by a firmer black market rate. Analysts noted the official rate to decline between 13.5 and 15.00 to the dollar. Also, Finance Minister Alfonso Prat-Gay expected the rate to weaken near 14.2 per greenback.

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Japan Nov Trade Deficit Narrows More Than Forecast

Japan's merchandise trade deficit narrowed more-than-expected in November from a year ago, as imports fell faster than exports, the Ministry of Finance said on Thursday. The trade deficit decreased notably to JPY 379.7 billion in November from JPY 898.8 billion in the corresponding month last year. Economists had expected the deficit to narrow to JPY 449.7 billion. Exports dropped 3.3 percent year-over-year in November, exceeding economists' expectations for a 1.6 percent decline. Similarly, imports plunged 10.2 percent in November from a year ago. The expected rate of fall was 7.3 percent.

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Canadian Dollar Falls Against Majors

Japan's merchandise trade deficit narrowed more-than-expected in November from a year ago, as imports fell faster than exports, the Ministry of Finance said on Thursday. The trade deficit decreased notably to JPY 379.7 billion in November from JPY 898.8 billion in the corresponding month last year. Economists had expected the deficit to narrow to JPY 449.7 billion. Exports dropped 3.3 percent year-over-year in November, exceeding economists' expectations for a 1.6 percent decline. Similarly, imports plunged 10.2 percent in November from a year ago. The expected rate of fall was 7.3 percent.

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