Saudi Arabia’s Budget Deficit Increased to $98bn

Saudi Arabia’s budget deficit swelled to $98bn in 2015 as the kingdom, which is the world’s biggest oil exporter, counted the cost of falling crude oil prices.

In the first budget under King Salman, the kingdom said revenues reached 608bn riyals (£108.7bn; $162bn), down 15% on official expectations.

Spending for the year hit 975bn riyals, some 13% more than forecast.

Oil prices have plunged from a five-year high of $125 a barrel in March 2012 to just $37.18 now.

Saudi Arabia said that oil revenues, which make up 77% of the total figure for 2015, are down 23% compared to last year.

It is the largest member of the Opec oil-producing cartel and has refused to cut output, which has forced companies in other countries to halt projects and lay off staff.

Spending on military and security projects reached 20bn riyals in 2015, Saudi Arabia said, following its intervention in Yemen as well as action against militant group Islamic State.

The majority of the increase in overall spending was on salaries to civil and military Saudi employees.

Merry Christmas!

I want to wish you all a Merry Christmas! I hope you enjoyed reading my blog in the past year, I certainly know I enjoyed writing it!

GBP/USD Is Testing the Resistance at 1.4930

Those of you still interested in trading during the holidays might want to take a look at the GBP/USD chart. The pair formed a hammer candlestick above the support at 1.4800 and moved to the upside, eventually reaching the resistance at 1.4930. It’s still testing it, and I would say that a breakout above that level would mean that it will continue rising towards the next resistance at 1.4990 which coincides with the (MA)89 on the four-hour time-frame. On the other hand, if the pair bounces off the resistance at 1.4930, we can likely expect another move to the downside towards the support at 1.4870.

Forecasters Looking forward to 2016 after a Disappointing 2015

European economic forecasters are looking forward to 2016, hoping that their predictions for 2015 will come true next year.

The Stoxx Europe 600 Index will rally 16 percent from Tuesday’s close to surpass its April record, according to the average of 10 forecasts compiled by Bloomberg. Commerzbank AG, one of the most accurate at estimating the gauge’s trajectory the last two years, expects the equities to jump 18 percent in 2016, helped by the European Central Bank’s stimulus.

“It’s a liquidity-driven rally,” said Peter Dixon, Commerzbank’s global equities economist in London. “Looking back, quantitative easing did have a positive impact on equity markets, and next year the ECB may opt to extend the terms under which it is providing this liquidity. You want to continue to buy equities.”

That’s what all strategists are saying. Even the most bearish, JPMorgan Chase & Co., forecasts a 10 percent jump in the Stoxx 600 next year. Citigroup Inc., the most bullish, sees it surging 23 percent. The benchmark climbed 1.6 percent at 10:57 a.m. in London.

European equities climbed as much as 21 percent this year before concerns over global growth and a disappointing boost in ECB stimulus left the Stoxx 600 up just 4.2 percent through yesterday. With a valuation of 15.5 times estimated earnings, it’s almost 10 percent cheaper than the Standard & Poor’s 500 Index.

That, and diverging policies between the Federal Reserve and the ECB have sent investors flocking to Europe. The region’s equity funds got money in 29 of the past 31weeks, according to a Bank of America Corp. note dated Dec. 17 that cites EPFRGlobal data. Economists forecast euro-area growth of 1.7 percent next year --more than in 2015 and the most since 2010 -- and ECB President Mario Draghi has pledged to further boost stimulus if needed.