Thread: Company News by ForexMart

New Fintech Rules will be Imposed by Brazilian Central Bank

Brazil’s central bank is interested in implementing regulations to the FinTech sector to provide support for the industry startups and other firms in engaging and improving the Brazilian nation that is currently suffering from a recession.

As published in the recent report of Reuters, the monetary authority of the country, Banco Central do Brasil (BCB) is planning to put into effect such rules for this year to sustain growth to FinTech companies and further services available in the Federative Republic of Brazil

According to Otavio Damaso, the BCB’s Chief of Staff, the advancement of FinTechs and innovative products seems positive for improving the financial system of the country since the economy is experiencing a worst depression.

The economy of Brazil got an 8 percent rate in March 2017 which is lower during December 2014. In the past, the country is known to be one of the fastest growing economies around the globe, then political controversies and mismanagement of funds arise creating jobless 13 million individuals.

During the former years, the traditional financing options caused banks to charge borrowers higher interest rates, this open doors for many fintechs to influence the Latin America’s biggest economy to offer loans at a cheaper price.


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Congress Rift Might Dampen Trump’s NAFTA Dream

The Trump administration has already started the first part of its renegotiations with regards to the North American Free Trade Agreement with Canada. But this first step towards NAFTA adjustments has created a rift between some Republican and Democrat senators, with the backers of the said agreement clashing with dissenters. These negotiations are expected to corner Trump especially now that his political policies are being put at stake by a political crisis within the US economy.


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U.S Labour Market Declined Despite Positive Economic Outlook

Applications for U.S unemployment benefits had fallen circumstantially during the previous week, while the total of jobless Americans declined to a 28-1/2-year low which could lead to a sudden failure on the labor market slack.

The economic development was supported by the data released on Thursday that showed an abrupt expansion towards the manufacturing activity within the Mid-Atlantic states this month. The report says that the shipments for goods accelerated and more working hours for laborers. Further measure for the economic activities increase again in the month of April.

The positive data favors the expected hike in interest rates for the following month, even if the decision of the Fed Reserve depends on the condition of the financial markets, which recently been shaken by the scandals of US President Donald Trump.

Jobless claims benefits were lessened by 4,000 with a seasonal adjustment of 232,000 within the week that finished on May 13 as it experienced a three-weeks consecutive decline, as mentioned by the Labor Department.

Economists penciled last week that claims will reach 240,000 but it currently obtained less than 300,000 by which the threshold is linked with a stabilized job market for 115 successive weeks. This is the longest period recorded since the year 1970 which historically appeared that the market was smaller.

The employment sector reached full employment with the jobless rate gained a 10-year low to 4.4 percent. The U.S economy was able to produced 211,000 number of jobs in April.


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Extended OPEC Output Cuts Raise Oil Prices

The extension of production output cut from big oil producing countries caused the oil prices to rise. Oil future climbed to the highest in almost a month and key benchmarks reaching gains for two weeks. Brent crude LCOc1 increased by 0.5 percent adding 28 cents at $52.79 while the U.S. crude oil CLc1 rose by 0.6 percent equivalent to 29 cents at $49.64 a barrel which is the highest since 26th of April. Investors are optimistic that production will reach an estimated 1.8 million barrels per day by the end of March 2018.

OPEC leaders and other oil producing countries will have a policy meeting on May 25 in Vienna. Although, there are signals indicating sufficient supplies from the Saudi Arabia being the biggest oil producer. Investors have mixed sentiment with conflicting concern from the drop in U.S. oil stocks and OPEC oil cuts.


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Japan Exports Rallied for 5 Months

Exports from Japan notably increased for five consecutive months indicating a strong offshore demand and increased shipments of semiconductors and steels that boost economic growth. In April, exports climbed up to 7.5 percent compared with the previous year and lower than the median estimate of 7.8 percent yearly growth.

On the other hand, its trade surplus with the U.S. also decreased by 4.2 percent from a year ago while the exports jumped by 2.6 percent and continuously grows in the past three months because of high volume of car and auto parts shipments. An economist predicts that this upsurge will continue including domestic imports but the protectionist trade policies of Donald Trump raises concerns with Japan being an export-reliant country.


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The current Money Fall contest has already started on May 22, 2017 and will end on May 26, 2017.

You can register for the next competition which will take place from May 29, 2017 to June 2, 2017

Note:
Registration for the next competition finishes 1 hour before the contest starts.

Food Stamp Program in Peril from Trump’s Tax Cuts

The Supplemental Nutritional Assistance Program or SNAP is currently in peril as Trump’s budget plan could possibly slash over $190 billion from the said food stamp program. These cuts on SNAP will be representing a funding cut of over 29%, since the US government spent over $70 billion on the food stamp program last year. Prior to this particular cut, the Trump administration had recently proclaimed that it will be able to strike a budget balance within a decade without altering the US government’s biggest spending drivers, namely social security and medical assistance. Trump had previously stated that there will be no changes made to these factors during his campaign period.


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Debt Relief for Greece Still in Progress, No Deal Yet

Intercontinental lenders in Greece has a comprehensive meeting discussing debt sustainability on Monday. The meeting ended failing to reach an agreement about additional debt relief for Greece. Ministers disagreed to grant new loans to Athens but the head of Eurogroup, Jeroen Dijsselbloem says otherwise. He said that they are deliberating and making progress on the next disbursement targeting before summer to be able to pay due debts in July.


In their next meeting, they are optimistic that they will settle a deal in doling out bailout funds to the country on June 15. They are aiming for a more sustainable agreement which the International Monetary Fund commended and hoping that E.U. governments will support this deal. Although, the deal is not yet ready and will most likely be implemented once the current bailout program has ended next year.


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FOMC Minutes Signal Interest Rate Hike Next Month

Fed officials are now more than ready to raise its short-term interest rates after stating in their meeting last month that increasing its rates are now “more than appropriate”. The central bank also moved to begin cutting back on its Treasury and mortgage securities holdings, which is currently worth $4.5 trillion. The Fed also stated in its minutes that they will be allowing an accumulation of these said securities in the long run without having to reinvest its proceeds to other assets. The Fed’s next policy meeting is scheduled this coming June 13-14 and will be immediately followed by a press conference from Fed Chair Janet Yellen.


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China’s Debt-rating Downgraded by Moody’s to A1 from Aa3

The credit rating of China was downgraded by Moody’s Investors Service on Wednesday, the previous Aa3 (Double A-3) were down to A1 which means that the Chinese economy is going to grind lower for the next years as the country showed slow growth and its debt continuously increase. The downgrade is done due to the financial pressure that the government faces after years of credit-driven stimulus.

Craig Erlam, a Senior Market Analyst of Oanda, said in an interview, “Because talk of Chinese debt and concerns about the size of Chinese debt has been going on for the last few years. They seem to be very reliant on these high levels of growth, which has been slowing.” He further added that the credit downgrade does not surprise him at all.

The second largest economy in the world gained 6.7 percent last year and 6.9 in 2015, this pace is the slowest based on the records since 1990 by which Erlam believes that the following years appears to be challenging.

The bond credit rating company has expectations that the direct debt burden of China’s government will climb higher reaching 40 percent of 2018’s Gross Domestic Product which is close to the 45 percent as the decade ends. However, it remains lower to the 60 percent for the European Union.

The Finance Ministry of the republic claims that the downgrade is based on an improper approach that overestimated the risks on the increasing debt.


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