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Daily Market Outlook by Solid Trust Markets
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[QUOTE="SolidTrustMarket, post: 106718, member: 36800"] [b]Daily Market Outlook 29 July [/b] [img]https://scontent-mrs1-1.xx.fbcdn.net/v/t1.0-9/12717510_174118869626335_4845820293159483711_n.jpg?oh=cfe2e64c784640ad95eb7cdbcd6ed352&oe=58089787[/img] Asian shares slipped after touching a near one-year peak on Friday, while Japanese stocks tumbled and the yen strengthened as the Bank of Japan's fresh stimulus measures disappointed markets. The BOJ modestly increased purchases of exchange-traded funds, but maintained its base money target at 80 trillion yen ($775 billion) and the pace of purchases of other assets, including Japanese government bonds. The central bank also held at 0.1 percent the interest it charges to a portion of excess reserves financial institutions leave with the central bank. Japanese Prime Minister Shinzo Abe's promised economic stimulus package will include 13.5 trillion yen ($130 billion) in "fiscal measures," both direct government spending and loans, according to a draft of the package seen by Reuters on Friday. The package, to be approved by Abe's cabinet on Tuesday, includes 7.5 trillion yen in spending by the national and regional governments and 6 trillion yen from the Fiscal Investment and Loan Programme, which is not included in the government's general budget, the draft shows. The headline figure for the package, which includes public-private partnerships and other amounts that are not direct government outlays, comes to 28.1 trillion yen. The dollar weakened 1.9 percent to 103.27 yen, its biggest one-day decline since June 24, after the UK's decision to leave the European Union. Before the BOJ's decision, many investors warned of a big chance of disappointment because markets have long expected more stimulus, making it difficult for BOJ Governor Haruhiko Kuroda to spring a surprise. Investors will await the U.S. government's initial reading on second quarter gross domestic product later on Friday. The economy was expected to expand at an annualized 1.8 percent, the Atlanta Federal Reserve's GDP Now forecast model showed on Thursday. The Bank of Japan expanded stimulus on Friday by doubling purchases of exchange-traded funds (ETF), yielding to pressure from the government and financial markets for bolder action, but disappointing investors who had set their hearts on more audacious measures. At the two-day rate review that ended on Friday, the BOJ decided to increase ETF purchases so its total holdings increase at an annual pace of 6 trillion yen ($58 billion), up from the current 3.3 trillion yen. The decision was made by a 7-2 vote. Worried about their dwindling policy options, some BOJ policymakers have expressed doubts over the feasibility of expanding an already massive stimulus program that has failed to boost inflation. Such concerns may be addressed when the BOJ conducts an assessment of the effect of its current policies at its next rate review on Sept. 20-21. Some analysts say the review may lead to more radical steps being proposed. The U.S. economy likely regained speed in the second quarter as robust consumer spending offset a sharp moderation in inventory investment and weak exports, pointing to underlying growth momentum that could be maintained for the rest of the year. Gross domestic product probably increased at a 2.6 percent annual rate, which would be the fastest in a year, according to a Reuters survey of economists. The economy grew at a 1.1 percent pace in the first quarter. The Commerce Department will publish its advance second-quarter GDP growth estimate on Friday at 08:30 a.m. (1230 GMT). With the Federal Reserve watching the labor market and persistently low inflation, a pick-up in growth in the second quarter, which officials at the central bank are also anticipating, is not expected to have an impact on the outlook for interest rates in the short term. Oil prices fell to fresh April lows on Friday as slowing economic growth threatened to worsen ongoing oversupply of crude and refined products. Because refiners produced too much fuel from cheap crude, margins in the Americas, Europe and Asia have fallen sharply this year, eroding revenues for oil producers and refiners like Royal Dutch Shell (RDSa.L), which this week reported poor results. On the supply side, Iranian exports to Asia's main buyers - China, India, Japan and South Korea - jumped 47.1 percent in June from a year ago to 1.72 million barrels per day, the highest levels in over four years. The sales jump is the latest sign that Tehran's aggressive moves to recoup market share, lost under international sanctions, are paying off. Because of ongoing oversupply, U.S. bank Goldman Sachs (GS.N) said this week that it did not expect a big recovery in prices any time soon. Despite this, some analysts said recent price falls in oil had been overdone, especially as demand remains strong despite concerns over future economic growth. [/QUOTE]
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