Issue link: https://maltatoday.uberflip.com/i/460957
maltatoday, WEDNESDAY, 11 FEBRUARY 2015 12 Business Today Market commentary: US jobs report and the currency market The US job report released on Friday came in at 257,000, bring the total job creation number for the past 3 months above 1 million, which underscore the stronger 3-month increase since 1998. In addition to this better than expected number, data for December was also reviewed to the upside showing that the US labor market continues to make important improvements. This month's report was completed by an unexpected jump in wages that grew 0.5% in January, positively offsetting the concerning small decline recorded in December. The positive labor market data prompted investors to rise the odds of an interest rate hike by the FED in the first half of the current year or in September 2015. Sources from inside the FED have stated that, although the central bank recognized the consistently improving conditions of US labor market, wages growth and an acceleration in inflation will be the main key indicators to determine any interest rate increase. Once again the US Dollar posted daily gains against major currencies on the back of investors' speculation of a coming interest hike, which will contribute to a US's currency appreciation. On Friday the Euro lost about 1.5% against the dollar, retreating to 1.1316, although this morning has already returned to the 1.1350 level. Currencies has been a hot topic in the last few weeks with major Central Banks around the world taking steps towards measures aimed to depreciate their respective currency in a quest to productivity growth and exports' preservation. On January 21, the Bank of Canada unexpectedly cut its main interest rate by 0.25% to a record low of 0.75%, in its first monetary cut since 2009. The measure was deemed necessary by Canada's central bankers in order to provide some relief to the country's oil driven economy. The following day, on January 22, the European Central Bank announced its so much anticipated QE program, promising to inject as much as EUR 1.3 trillion in order to stimulate the European economy and put downwards pressure on the Euro that plunged to 1.11 against the US Dollar. On February 03, the Reserves Bank of Australia went head with a somewhat anticipated interest rate cut of 0.25%, bringing the country rate to an unprecedented 2.25% low. Such a move was deemed in line with the country's attempt to sure up its economy heavily dependent on commodities, whose prices have been falling throughout the entire 2014, and China, whose economy seems to be slowing down while it goes through a major shift from being investments driven, to become internal consumption based. Japan had already started a massive currency devaluation and liquidity injections almost 2 years ago resulting in the Yen breaching the 119.00 level against the US Dollar during Friday trading. This depreciating environment have been described by analysts as the new frontier of currency war among different economies all struggling, in one way or another, to cope with dropping inflation, plunging commodities exports' value and stagnating economic growth. The US has been the only major economy to move away from QE and monetary policy and has seen its currency substantially appreciating throughout the last 3 to 6 months. While this trend benefits US assets, especially the ones held by international investors, such a strong and rapidly appreciated dollar is actually doomed to negatively impact the country economy, which Standards & Poor estimates derives 46% of its revenues from overseas sales. The ongoing earnings season is already showing this negative currency impact, with major corporations from Microsoft to McDonalds, from General Motors to Pharmaceutical companies, reporting eroded margins and lower profits due to Forex exchange losses. At this point in time one interesting question would be: "will the FED prioritize its full employment mandate and rise interest rates on the back of consistent labor market improvements, or will it prioritize its price stability mandate, remaining as dovish as possible to combat a slowing inflation?" This article was issued by Paolo Zonno, Trader/Analyst at Calamatta Cuschieri. For more information visit, www.cc.com.mt . The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this newspaper Regular market closed – 9/02/2015 Symbol Code Volume Traded Value Traded Trades High Price Low Price Open Price Close Price Change Twap l BOV 183054 381567.210 20 2.090 2.080 2.080 2.080 0.000 2.084 s GO 4100 10715.000 4 2.650 2.600 2.600 2.650 0.035 2.613 t HSB 1866 3757.320 3 2.020 2.010 2.020 2.010 -0.010 2.014 l IHI 4700 2914.000 2 0.620 0.620 0.620 0.620 0.000 0.620 t LOM 6700 12730.000 2 1.900 1.900 1.900 1.900 -0.020 1.900 s MIA 5000 12600.000 1 2.520 2.520 2.520 2.520 0.020 2.520 l MLT 7000 5040.000 2 0.720 0.720 0.720 0.720 0.000 0.720 s MTP 10823 14492.340 4 1.345 1.330 1.330 1.345 0.015 1.339 s PZC 62053 43997.630 2 0.710 0.702 0.702 0.710 0.024 0.709 t SFC 2828 8718.240 2 3.090 3.080 3.090 3.080 -0.010 3.083 s TML 59100 39401.500 4 0.670 0.665 0.665 0.670 0.005 0.667 t G15A 510250 520053.370 5 101.950 101.920 101.950 101.920 -0.040 101.920 t G15B 67742 70295.870 5 103.770 103.770 103.770 103.770 -0.020 103.770 t G16A 6058 6496.600 3 107.240 107.240 107.240 107.240 -0.020 107.240 t G16B 65223 70493.020 2 108.080 108.080 108.080 108.080 -0.010 108.080 t G17C 52500 58038.750 7 110.550 110.550 110.550 110.550 -0.020 110.550 t G17D 49800 54062.880 1 108.560 108.560 108.560 108.560 -0.050 108.560 t G18A 4659 5821.420 1 124.950 124.950 124.950 124.950 -0.060 124.950 t G19A 12812 16232.800 1 126.700 126.700 126.700 126.700 -0.080 126.700 t G19C 2000 2213.200 1 110.660 110.660 110.660 110.660 -0.070 110.660 t G20A 6989 8543.350 2 122.240 122.240 122.240 122.240 -0.090 122.240 t G20B 22000 26129.400 3 118.770 118.770 118.770 118.770 -0.080 118.770 t G21A 132039 164533.810 15 124.610 124.610 124.610 124.610 -0.130 124.610 t G22A 12954 16557.810 3 127.820 127.820 127.820 127.820 -0.180 127.820 t G22B 33100 40252.910 5 121.610 121.610 121.610 121.610 -0.150 121.610 t G23A 37970 50519.090 3 133.050 133.050 133.050 133.050 -0.400 133.050 t G24A 34000 39525.000 3 116.250 116.250 116.250 116.250 -0.170 116.250 t G28A 130800 173189.640 10 132.430 132.390 132.390 132.430 -0.160 132.410 l G28B 1183500 1526489.250 15 129.040 128.890 129.040 129.000 0.000 128.980 t G29A 48000 65351.400 5 136.160 136.140 136.140 136.160 -0.140 136.150 t G30A 258000 355627.200 9 137.840 137.840 137.840 137.840 -0.110 137.840 t G31A 245200 334550.440 13 136.470 136.420 136.420 136.470 -0.100 136.440 t G32A 161600 206977.280 14 128.080 128.080 128.080 128.080 -0.090 128.080 t G32B 140600 175932.780 15 125.130 125.130 125.130 125.130 -0.130 125.130 s G33A 450900 550999.800 25 122.200 122.200 122.200 122.200 0.040 122.200 t G34A 881800 1056612.300 25 119.900 119.750 119.750 119.770 -0.080 119.820 s BV20A 16000 16818.000 2 105.200 105.100 105.100 105.200 0.100 105.110 t CB21A 17000 17180.000 4 101.500 100.500 101.500 100.500 -1.000 101.060 l GC16A 1700 1649.000 1 97.000 97.000 97.000 97.000 0.000 97.000 l GF21A 7400 7776.360 2 105.100 105.020 105.020 105.100 0.090 105.090 l HB17A 5500 5748.050 1 104.510 104.510 104.510 104.510 0.000 104.510 l HB18A 17400 19192.200 2 110.300 110.300 110.300 110.300 0.000 110.300 l IG19A 3000 3030.000 1 101.000 101.000 101.000 101.000 0.000 101.000 l MF24A 10000 10900.000 1 109.000 109.000 109.000 109.000 0.000 109.000 l MI15A 10000 9400.000 1 94.000 94.000 94.000 94.000 0.000 94.000 l MS23A 1500 1650.000 2 110.000 110.000 110.000 110.000 0.000 110.000 s PG20A 12000 12971.000 2 108.100 108.050 108.050 108.100 0.060 108.090 s PT24A 8200 8720.700 1 106.350 106.350 106.350 106.350 0.050 106.350 l SF20A 13400 14214.480 4 106.200 105.520 105.520 105.520 0.000 106.080 t UF23A 2000 2090.400 1 104.520 104.520 104.520 104.520 -0.480 104.520 Market Summary as at February 9, 2015 Equity Official List Session State ................................................................... closed Number of trades ............................................................. 262 Volume Traded ................................................................. 5,022,820 Value of € denominated securities .................................... 6,262,772.8 Value of US$ denominated securities ................................ 0.00 Value of GBP£ denominated securities .............................. 0.00 Current Index ................................................................... 3417.065 Previous Index ................................................................. 3414.497 Change in Index (%) ......................................................... 0.075% 7.50% MIH 2012/14 ..............................................0.00 0.00% 7.00% MIDI 2016/18 - £ .........................................105.00 0.00% 6.00% Sim Farsons Cisk 2017/20 ...........................105.52 0.00% 5.35% Izola Bank 2015 .........................................100.60 0.00% 4.25% BOV 2019 ..................................................104.50 0.00% 6.60% Eden Fin 2017/20 ......................................105.50 0.00% 7.50% MIH 2015 ...................................................94.00 0.00% 5.35% BOV 2019...................................................114.00 0.00% 6.20% Tumas Inv 2017/20 .....................................105.01 0.00% 6.25% Med Bank 2015 ..........................................102.00 0.00% 6.50% Island HGH 2017/19 ...................................101.00 0.00% 4.90% Gasan Fin 2019/21 .....................................105.10 0.09% 5.60% GlobalCapital 2014/16 ................................97.00 0.00% 6.25% IHI 2015/19 ................................................100.00 0.00% 5.80% IHI 2021 ....................................................100.00 0.00% 6.75% United Fin 2014/16.....................................0.00 0.00% 6.25% Corinthia Fin 2016/19 .................................103.00 0.00% 6.00% Corinthia Fin 2019/22 ................................103.50 0.00% 6.25% Tumas Inv 2014/16 .....................................0.00 0.00% 6.20% Mizzi Org Fin 2016/19 .................................107.00 0.00% 6.00% Pendergardens 2022 .................................105.01 0.00% 6.70% AX Inv 2014/16 ...........................................100.00 0.00% 7.50% Med Bank 2019 ..........................................106.50 0.00% 6.00% Medserv 2020/23 ......................................110.00 0.00% 4.60% HSBC Bank Mt 2017 ....................................104.51 0.00% 7.50% Med Bank 2019 - £ .....................................102.50 0.00% 5.80% IHI 2023 ....................................................103.00 0.00% 7.15% MIH 2015/17 ...............................................90.00 0.00% 7.00% Grd Harbour Mna 2017/20 ..........................110.50 0.00% 6.00% AX Inv 2024 ...............................................109.60 0.00% 7.15% MIH 2015/17 - £ ..........................................100.00 0.00% 4.80% BOV 2020 ..................................................105.20 0.10% 6.00% Island HGH 2024 .......................................102.90 0.00% 7.15% MIH 2015/17 - $ ..........................................80.00 0.00% 6.80% Premier Cap 2017/20 .................................109.60 0.00% 6.00% MIH 2021 ...................................................94.99 0.00% 4.80% BOV 2018 ..................................................106.00 0.00% 6.25% IHI 2017/20 ...............................................103.00 0.00% 5.30% Mariner Fin 2024 .......................................109.00 0.00% 5.90% HSBC Bank Mt 2018 ...................................110.30 0.00% 5.50% Pendergardens 2020 .................................108.10 0.06% 5.00% Tumas Inv 2024 .........................................107.99 0.00% 7.00% MIDI 2016/18 .............................................107.50 0.00%