Wednesday, December 17, 2014
Tuesday, December 16, 2014
Monday, December 15, 2014
(bad effects of low oil) Russia raises key rate to 17%, effective Tuesday 12-16-2015
Russia raises key rate to 17%, effective Tuesday
Russia on Monday announced that it would hike its
key interest rate to 17 percent, effective Tuesday, citing rising
devaluation and inflation risks.
The bank had raised the rate to 10.5 percent last week in an effort to stem a run on its currency.
"This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks,'' the central bank said in a statement. The decision is effective starting Dec 16.
Earlier on Monday, the Russian ruble saw its biggest drop against the dollar since 1998. It strengthened after the rate decision and was last trading at 62.50 rubles per dollar, compared to 65.50 before the announcement.
The announcement comes on the back of a plunge in the price of oil—Russia's main export and revenue source. The country also faces headwinds from Western sanctions over its conflicts with Ukraine.
The bank had raised the rate to 10.5 percent last week in an effort to stem a run on its currency.
"This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks,'' the central bank said in a statement. The decision is effective starting Dec 16.
Earlier on Monday, the Russian ruble saw its biggest drop against the dollar since 1998. It strengthened after the rate decision and was last trading at 62.50 rubles per dollar, compared to 65.50 before the announcement.
The announcement comes on the back of a plunge in the price of oil—Russia's main export and revenue source. The country also faces headwinds from Western sanctions over its conflicts with Ukraine.
Pedro SalaverrAa
Dennis Gartman, editor and publisher of "The Gartman
Letter," said that while the move could perk up the currency in the
short term, the country may regret the decision later.
"All it is is a temporary stem in the decline of the ruble," Gartman told CNBC Monday. "The problems that it's going to create for the Russian economy, for the Russian people and for Mr. Putin, [will be] very severe."
Gartman sees the ruble trading at 100 against the dollar soon. The currency has tumbled some 50 percent year-to-date.
"This is really extraordinary to watch," Gartman said. "I wouldn't be surprised at all if the Russians we selling gold, they have no choice. What else can they sell? They can't sell any crude oil anymore."
The Kremlin recently trimmed its growth forecast for 2015, predicting that the economy will sink into recession.
In September, the United States and the European Union imposed a new round of sanctions for Moscow's actions in Ukraine, which included blocking Western financial markets to key Russian companies and limiting imports of some technologies.
The additional sanctions were expected to cause enough pain to put Russia into recession for one or two years, predicted economist Alexei Kudrin, who served as finance minister under President Vladimir Putin for 11 years until 2011.
The potential for a prolonged downturn caused investors to pull their money from the capital, causing the ruble to further lose value.
The Associated Press contributed to this report.
"All it is is a temporary stem in the decline of the ruble," Gartman told CNBC Monday. "The problems that it's going to create for the Russian economy, for the Russian people and for Mr. Putin, [will be] very severe."
Gartman sees the ruble trading at 100 against the dollar soon. The currency has tumbled some 50 percent year-to-date.
"This is really extraordinary to watch," Gartman said. "I wouldn't be surprised at all if the Russians we selling gold, they have no choice. What else can they sell? They can't sell any crude oil anymore."
The Kremlin recently trimmed its growth forecast for 2015, predicting that the economy will sink into recession.
In September, the United States and the European Union imposed a new round of sanctions for Moscow's actions in Ukraine, which included blocking Western financial markets to key Russian companies and limiting imports of some technologies.
The additional sanctions were expected to cause enough pain to put Russia into recession for one or two years, predicted economist Alexei Kudrin, who served as finance minister under President Vladimir Putin for 11 years until 2011.
The potential for a prolonged downturn caused investors to pull their money from the capital, causing the ruble to further lose value.
The Associated Press contributed to this report.
Karma AllenNews Associate
https://www.blogger.com/blogger.g?blogID=5548660505688581623#editor/target=post;postID=2995300463938075967
Sunday, December 14, 2014
Oil nose dives. 26pesos per liter of Diesel price, highly probable 12-15-2015
WTIC did another nasty dive and broke below important supports. Although this could be already in the bottoming process, long candles which typically could reverse anytime. We should also discuss what other problems it could encounter if WTIC stays below these levels.
Saudi and Russia are widely known to have a lot of oil deposits and oil exports is one of their income generating for GDP. Now that WTIC has fallen almost 50% of the price since 2011 or 2013. It could really make a big effect, especially for Russia,who had a bad record last 1998 when it's country's debt defaulted, Oil slump that time was also one of the reasons they were not able to pay off their debt,then coincided with 2000 tech bubble.
I believe 50s level is an important support, and a breakeven cost to oil explorers. U.S. got a lot of production which lessened their Oil imports. It could be an oversupply, but it could also be a political strategy by the US and Oil traders.
Consumers will GREATLY benefit from this, but thinking on a bigger picture, when we revisit 33USD (2009 lows), a lot of Countries and Corporate debt will default. Which could spark the next recession. Just saying....
Diesel price estimates for the Philippines
58USD x 44.50 USD/peso = 2581 / 119.24= 21.64pesos/liter X additional 20-30% profit/margin = 26-28 pesos per liter of Diesel, highly probable.
Thursday, December 4, 2014
Wednesday, December 3, 2014
China confirmed bull market, and HK targets 12-4-2014
Since Q3 of 2014. We are closely monitoring China market. We indicated that a sudden movement to the upside was encountered last August 2014,and a break above 2200 level could trigger a possible start of bull market for China. Helped by cheap oil, lessening their oil imports expenses.
We did notice that after going above 2200 level, China became very strong since 2009 recession.
We still continue to expect this market to go on uptrend.
Targets and resistances:
2850 (61.8% retracement of 2010 peak, uptrend resistance of Nov 2011)
3150 (76.2% retracement of 2010 peak, uptrend resistance of July 2011)
3450 (2010 peak and 31.8% retracement of 2009 peak)
All targets and resistances has 2 or more technical reasons. I believe it will just be the start of China's Bull market.
One market that will benefit China Bull market in case it starts to go strong is Hong Kong.
HK is one of the weakest since 2009 recession and once of the markets that was not able to revisit 2009 in Asia.
Uptrend since 2009 is still intact, and always get bumped and was a great BUY opportunity, now that China is getting strong, we may see HK go strong as well.
First target is around 25300-26000 where 2014 high is and medium term resistance of Nov 2013.
27500 is also an uptrend resistance where medium term uptrend since Nov 2011 is located.
I may not be thinking correct, but in case it is a full blown bull market like the US, HK can reach as high as 33,000. Though let us not think of it as of this moment. :)
*** this China Bull market thing is against our expectation of an ending Primary III in the US, where Primary IV coming next(hoping Q4 2014 to Q1 2015). It could still be a China Bull market, but dont expect a straight line up. Just pointing out next target resistances. China and HK is one of the weakest primary markets in the world, let us give them a chance to shine at least getting back 50% or 61.8% from their 2007 highs.
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