Market Analysis by Vistabrokers

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Vista Brokers: Dollar was Supported by Statistics and Fed Remarks

 

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On Friday morning, the dollar slowed the rally that it had began yesterday after strong US data and remarks of Fed representatives. Vista Brokers analysts say that amid publication of inflation data and orders for durable goods, which were better than expected, the dollar index rose to a basket of currencies by 1.1%.

 

Today DXY fell by 0.2% to around 95.130 against 95.357 month high reached on Thursday. The euro rebounded by 0.1% to $ 1.1213, while remaining near-month low at $ 1.1184 reached during yesterday's dollar rally. Against the yen, the dollar fell by 0.2% to 119.15.

 

Strengthening of the US dollar on the one hand was caused by the statistics. Thus, the consumer price index, excluding the prices of food and energy prices in the US rose by 0.2% against 0.1%, which had been expected. The overall consumer price index fell slightly more than forecast, but this is due mainly decline in oil prices. Furthermore, the core CPI which does not include products with the most volatile prices, is the benchmark for the Fed. Orders for durable goods in January rose by 2.8% against the expected 1.7%.

 

The market reaction to these two indices was so stormy that investors even ignored the fact that the data on the number of initial and counting unemployment claims came out worse than expected.

 

A positive factor for the dollar on Thursday also were several Fed comments. We note the key moments of FOMC members' speeches.

 

The Dallas Fed President Richard Fisher said that the US economy is clearly showing a strong growth and absence of inflation and suggested that the Fed could raise short-term rates at first and watch the reaction of the market.

 

The head of the Federal Reserve Bank of Cleveland Loretta Mester believes that the US GDP growth this year will be 3%. It supports the consideration of a rate increase in June. In her opinion, it is better to start the slow process earlier rather than sharply raise interest rates later, causing shock in the markets.

 

San Francisco Fed President John Williams expects that the level of "full employment" will be reached this year, and inflation will come to the 2% target by the end of next year. He noted that the Fed could start raising rates in the summer or fall.

 

Thus, statements of FOMC members were consonant with Janet Yellen remarks and sounded quite optimistic.

[Vistabrokers]

Market Pulse 27.02

 

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On Friday a trading day is again filled with fundamental data. The most important will be inflation data in Germany and the GDP changing in the United States. In the USA will also be published osome other statistics that may have an impact on the market.

 

7:45 ** Consumer Spending - January (France)

7:45 ** Producer Prices - January (France)

 

Moderate impact on the market (EUR). Forecasts for both indices are not too optimistic. Analysts expect that consumer spending in France has fallen, and the producer price index has declined again.

 

8:00 ** Flash Consumer Price Index - February (Spain)

 

Moderate impact on the market (EUR). It is expected that in February the slowdown in inflation in Spain was 1.5%, after the January index also fell by 1.3%. Decline in consumer prices in one of the largest economies of the euro area indicates its moderation.

 

13:00 *** Prelim Consumer Price Index - February (Germany)

13:00 *** Prelim Consumer Price Index - EU Harmonised - February (Germany)

 

Strong impact on the market (EUR). Forecasts for both indices are not too optimistic, although when compared to other euro zone economies, the situation in Germany with inflation is not critical. It is expected that in February figures have risen slightly mom and have fallen yoy.

 

13:30 *** GDP Second Release - Q4 (USA)

13:30 ** Prelim GDP Price Index - Q4 (USA)

13:30 ** Personal Consumption (Second Release) - Q4 (USA)

13:30 ** Core Personal Consumption Expenditure (Second Release) - Q4 (USA)

 

Strong impact on the market (USD). Preliminary data on changes in US GDP in the 4th quarter of 2014 showed an increase of 2.6%, while analysts were expecting 3%, so that in early February, the market has been disappointed by the data. Now it is expected that GDP will be revised down - from 2.6% to 2.1%.

 

14:45 ** Chicago PMI - February (USA)

 

Moderate impact on the market (USD). It is expected that the index of business activity in the Chicago area fell slightly in February, but it does not cancel the fact that the index is at a high enough level.

 

15:00 ** Pending Home Sales - February (USA)

15:00 ** Revised UoM Consumer Sentiment - February (USA)

 

Moderate impact on the market (USD). Forecasts for both indices are positive enough. Recall that in recent weeks the US housing market has surprised investors, showing disappointing data or far exceeding forecasts.

[Vistabrokers]

Vista Brokers: US GDP in 4th Quarter Rose More than Expected

 

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On Friday morning the euro rose slightly against the dollar. However, it will be very difficult for the single currency to return to its earlier levels. Vista Brokers analysts reminde that on Thursday the US dollar has risen sharply against its major competitors, when the inflation data and durable goods in the USA came out better than expected. The current fundamental picture is not supportive for the euro, which is suffering because of the uncertainty in Greece and numerous signals of slowing economy of the euro zone.

 

While on Friday there were some positive for the single currency data, but at the general background investors did not pay much attention to it. Thus, in Germany, the preliminary index of consumer prices in February has risen by 0.9% against the expected 0.6% on a monthly basis and by 0.1% against 0.3% in annual terms. This is good news for the euro zone's largest economy, where a month earlier slowdown in inflation was 1.1% and 0.4%, respectively. But successes of Germany do not allow to forget problems of the euro zone.

 

In the afternoon, the dollar began to grow against the euro again - investors awaited revised data on the US GDP, and these data came out stronger than forecast. Thus, the US GDP growth in Q4 2014 was 2.2% quarterly and 2.4% year on year against the expected 2.1%. This strengthened the already strong enough faith of market participants that the Fed will raise interest rates this year.

 

At the end of trading the EUR / USD peaked 119.80 and traded at 119.56, up 0.13% during the day. Note that the dollar index finished February with growth, and this is the eighth consecutive month when the index is increasing, which was not observed since 2004.

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Vista Brokers: China's Central Bank Unexpectedly Cut its Rates

 

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On Saturday, it was reported that the Chinese central bank has decided to support the economic growth and inflation, lowering interest rates: a key rate by 0.25 to 5.35% and the deposit one – by 0.25 to 2.5%. Vista Brokers analysts say that markets were expecting monetary policy easing from the Central Bank of China, but a little later, and remind us that Chinese controller has already become the 21st bank to adopt new measures easing in January and February 2015.

 

In the accompanying statement, the central bank said that the rate cut was a necessary measure, given the fall in global commodity prices. The bank's decision on Monday support commodity markets, in particular copper. At the time of writing, the metal is traded on the New York Stock Exchange, Comex for 2,701 dollars per pound (May delivery), up from the opening of trading by 0.35%. Recall that China is the world's largest consumer of copper.

 

Also, the central bank noted problems in the property market, the growth in consumer prices which is minimum for the last 5 years, and a high debt levels. Markets expect the government can reduce the forecast for economic growth in 2015 to 7% after 7.4% growth in 2014 at a party meeting on March 5.

 

Analysts also note that at the weekend the data on Manufacturing PMI index was released in China, and it has grown up in February a little more than it was expected, but still remained in the negative zone. Thus, the index is at around 49.9 points, while only values above 50 are considered to be growth.

 

Recall that the last time the People's Bank of China cut interest rates not so long ago - in November 2014, but this decline have had little impact on the economy, and even then experts said that easing of monetary policy will continue. Now we can also assume that the Central Bank will go along this path in the future. The next step will likely be declining in banks' reserve requirements.

[Vistabrokers]

Market Pulse 02.03

 

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Monday's economic calendar is quite full. In many European countries, China and Canada the manufacturing PMI index will be published and in the US - the same ISM manufacturing PMI index. There will be some interest data in consumer price index flash estimate and the unemployment rate in the euro zone.

 

8:15 ** Manufacturing PMI - February (Spain)

8:45 ** Manufacturing PMI - February (Italy)

8:50 ** Manufacturing PMI - February (France)

8:55 ** Manufacturing PMI - February (Germany)

9:00 ** Manufacturing PMI - February (euro zone)

 

Moderate impact on the market (EUR). Analysts expect that the index of purchasing managers in the manufacturing sector, will mainly remain at the level of the previous month (in France, Germany, the euro zone) or slightly increase (in Spain, Italy).

 

9:30 *** Manufacturing PMI - February (UK)

9:30 ** Net Lending to Individuals - January (UK)

9:30 *** Mortgage Approvals - January (UK)

 

Strong impact on the market (GPB). In addition to data on the PMI index the statistics in lending, including mortgage approvals will be interesting. Growth in lending reflects a possible increase in consumer spending in the future, and the growth of mortgage lending shows the health of the housing market. Strong data on the PMI index and the growth of credit activity can support the pound.

 

10:00 *** Consumer Price Index Flash Estimate - February (euro zone)

10:00 ** Flash Core CPI - February (euro zone)

10:00 ** Unemployment Rate - February (euro zone)

 

Strong impact on the market (EUR). The greatest attention will draw the consumer price index flash estimate. It is expected that in February this index will show a decline of 0.5% after falling 0.6% in January, but there may be surprises. The unemployment rate is still at a very high level, and it is expected that this level in January will remain unchanged.

 

10:00 ** Annual Gross Domestic Product - 2014 (Italy)

 

Moderate impact on the market (EUR). It is expected that Italy's economy during the last year has fallen by 0.4%. This is less than the rate of 2013 - 1.9%, but it will hardly increase the optimism in common currency.

 

13:30 ** Core PCE Price Index - January (USA)

13:30 ** Personal Spending - January (USA)

13:30 ** Personal Consumption Expenditure Deflator - January (USA)

 

Moderate impact on the market (USD). The growth of private consumption expenditure tells us about the health of the economy, but we do not see a persistent increase in these direction yet, as well as in the growth of wages.

 

14:30 ** RBC Manufacturing PMI (s.a.) - February (Canada)

 

Moderate impact on the market (CAD). Manufacturing PMI index shows an improvement or deterioration in comparison with the previous month. Growth or exceeded forecast is favorable for the currency.

 

15:00 *** ISM Manufacturing PMI - February (USA)

 

Strong impact on the market (USD). Analysts expect a slight reduction of the index in February compared with the previous month, but the rate is still at a high level.

[Vistabrokers]

Vista Borkers: Euro Tested Fresh Lows

 

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On Monday, the single currency has rebounded slightly against the dollar amid quite positive statistics. Thus, in Italy and Germany manufacturing PMI index rose more than analysts had expected. Consumer price index flash estimate in the euro zone showed a decline of 0.3% against a more pessimistic forecast of 0.5%. The unemployment rate in the region in January unexpectedly fell by 0.1% instead of expected growth by the same amount.

 

However, as Vista Borkers analysts say, positive statistics did not make much impression on investors, and a recovery has stopped at about 1.1250. Market participants were waiting for strong data on the ISM manufacturing index in the US, and although these expectations were not met (index came out worse than forecast), it must be admitted that the rate is still at a high level. In January, the index was at 53.5, and in February fell to 52.9 vs. 53.4. A value above 50 is considered to be the growth of the industry.

 

It is worth noting that after the release of ISM data two world's largest bank have announced a reduction of forecasts for the US GDP growth in the first quarter of 2015. Goldman Sachs cut its forecast from 2.7% to 2.5%, arguing it with an unexpected decline in the cost of construction index and ISM data. Barclays also lowered the forecast for the 1st quarter from 2.1% to 1.9%.

[Vistabrokers]

Vista Brokers: RBA Kept Rates Unchanged

 

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On Tuesday, it was reported that the Reserve Bank of Australiaon on its meeting has decided to keep the interest rate at the same level - 2.25%, while the market has been expecting another decrease of it. Vista Brokers analysts point out that the absence of new stimulation measures led to a rise of the Australian dollar in the foreign exchange market. Immediately after the publication of the RBA decision, AUD / USD pair rose by 0.6%, exceeding the 0.78 level.

 

Why did the Reserve Bank of Australia postponed the lowering of the rates which was expected by many of analysts? In anticipation of the publication of the meeting's decision their forecasts about the rate decline by 0.25% voiced Goldman Sachs, Morgan Stanley, Bank of America, Westpac.

They named such reasons as decline in world commodity prices, the highest since 2002 unemployment rate, a low level of confidence in the economy of consumers and businesses, the economic slowdown in China, which is the main buyer of Australian raw materials.

 

The arguments are sufficient, but nonetheless, the RBA decided to keep the rate. In the accompanying statement, the regulator noted the following: it is expected that economic growth will be weak, as a domestic demand; further depreciation of the national currency is necessary for balanced growth in the future; prospects for a rate cut will be discussed at further meetings. Thus, the RBA did not lower the rate, but showed that probably do so in the near future in order to stimulate the economy.

 

The head of the Reserve Bank Governor Glenn Stevens said that after the last meeting rate has already been reduced, at the moment it is advisable to leave it at that level. "Further easing of policy may be appropriate over the period ahead. The Board will further assess the case for such action at forthcoming meetings"- he said.

[Vistabrokers]

Vista Brokers: Oil is above $60 per barrel

 

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On Tuesday morning, April futures for Brent crude rose by 1.37% to $ 61 per barrel during London trading. Meanwhile, in New York April futures for WTI grew by 0.75% to $ 51.91 per barrel.

 

Vista Brokers analysts note that the growth factor for oil was the information from Baker Hughes that the number of active rigs in the US last week fell to its lowest level since 2011 - 986. However, there are still so many factors of pressures on oil. Thus, the US Department of Energy expects that in 2015 the growth of oil production in the country will be 7.8%. It will be produced 9.3 million barrels per day. In 2016, daily production could grow to 9.52 million barrels.

 

Note also that in February the volume of oil production in Saudi Arabia increased by 130 thousand barrels per day to 9.85 million barrels - a maximum since 2013.

[Vistabrokers]

Market Pulse 03.03

 

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Today Australia has already published data on building approvals, and the Reserve Bank has released its decision on interest rates, together with the accompanying statement. The RBA decided to leave the rate unchanged. Today interesting statistics will be also released in Canada and the UK.

 

7:00 ** Retail Sales - January (Germany)

 

Moderate impact on the market (EUR). Analysts expect that retail sales in January have risen. Growth of this index reflects higher consumer activity that strengthens the currency.

 

8:00 ** Unemployment Change - February (Spain)

 

Moderate impact on the market (EUR). One of the most important indicators showing the change in the number of unemployed people during the past month. The rate growth reflects negative processes, although in February it is expected a much smaller increase of the index than in the previous month.

 

9:30 *** Construction PMI - February (UK)

 

Strong impact on the market (GPB). The index of purchasing managers in the construction industry. Shows the improvement or deterioration compared with the previous month. The situation in the construction industry in Britain is always closely watched by the market.

 

10:00 ** Treasury Select Committee Hearings - March (UK)

10:00 *** BOE Governor Mark Carney Speaks - March (UK)

 

Strong impact on the market (GPB). Market participants will closely monitor statements of Mark Carney looking for some hints at the future Bank of England strategy in respect of monetary policy. Optimistic signals can enhance investors' hopes that the British regulator will raise rates after the Fed.

 

13:30 *** Gross Domestic Product - December (Canada)

13:30 *** Quarterly Gross Domestic Product Annualized - Q4 (Canada)

13:30 ** Raw Materials Price Index - January (Canada)

 

Strong impact on the market (CAD). Analysts expect that in December, Canada's economy has grown by 0.1%. It's quite a bit, but compared with the value of November, when GDP has fallen by 0.2%, it is a better result. During the 4th quarter of 2014, experts expect growth of 2%.

[Vistabrokers]

Vista Brokers: Aussie Drops after Weak GDP Data

 

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On Wednesday, the Australian dollar dropped after the release of Australia's GDP statistics for Q4 2104. Vista Brokers analysts note that the weak data made aussie fall to 0.7813 dollars compared with 0.7824 dollars late Tuesday.

 

Thus, it became known that the Australian economy in the 4th quarter increased by 0.5% qoq and 2.5% yoy against forecasts of 0.7% and 2.5%, respectively. As you can see, the data did not meet investors' expectations, and it is natural that they began to sell the currency of the Green continent.

 

Recall that the Australian dollar on Tuesday has received support after the announcement of the RBA decision, and has grown against the US dollar. The thing is that analysts expected the Reserve Bank to announce reduction of interest rates from the level of 2.25% to 2%, but this has not happened. The RBA accompanying statement also was rather neutral, without much pessimism, so aussie rose.

 

But, as it often happens in Forex, optimism was short term, and today, having received a reminder of the Australian economic problems (the GDP data) the Aussie fell again. Weak statistics has reminded the market that the Reserve Bank of Australia is set to easing of monetary policy, and if this has not happen yesterday, it is likely would happen at the next meeting. Westpac analysts expect a rate cut by 0.25% in April or May. ANZ economists are inclined to believe that it will happen at the May meeting.

 

The belief that the RBA will go with further rate cuts was strengthened by its member John Edwards comments. Today, he said that the GDP growth rate is significantly lower than those needed to effectively strike unemployment and to restore the labor market, they need the GDP growth of at least 3%. Therefore, Edwards considers further rate cuts necessary.

[Vistabrokers]

Market Pulse 04.03

 

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Wednesday is saturated, as the whole week is. Today Australia has already release data on changes in GDP for the 4th quarter, the Fed Chairman Janet Yellen has spoken in the USA. In many countries today PMI index will be published, this time for the services sector, as well as the PMI composite. The Bank of Canada today will announce its decision on interest rates, and in the US ADP non-farm employment change data will be released.

 

8:15 ** Services PMI - February (Spain)

8:15 ** PMI Composite - February (Spain)

 

8:45 ** Services PMI - February (Italy)

8:45 ** PMI Composite - February (Italy)

 

8:50 ** Services PMI - February (France)

8:50 ** PMI Composite - February (France)

 

8:55 ** Services PMI - February (Germany)

8:55 ** PMI Composite - February (Germany)

 

9:00 ** Services PMI - February (euro zone)

9:00 ** PMI Composite - February (euro zone)

 

Moderate impact on the market (EUR). Typically, the PMI composite index and Services PMI have less impact than the corresponding manufacturing index. Analysts expect that in the majority of countries of the euro zone indices will remain at levels of January, and only in Spain is expected a slight increase.

 

9:30 *** Services PMI - February (UK)

9:30 *** PMI Composite - February (UK)

 

Strong impact on the market (GPB). The UK purchasing managers' index in the service sector is considered important.Currently, the index is at a high level, and in February, experts also predict a rise.

 

13:15 *** ADP Non-Farm Employment Change - February (USA)

 

Strong impact on the market (USD). The indicator of employment in the private sector is the main reference to official statistics (non-farm payrolls) and often causes significant fluctuations in the market. Expectations regarding the index are optimistic, so that the US dollar could gain significant support.

 

15:00 *** BOC Overnight Rate - March (Canada)

15:00 *** BOC Rate Statement - March (Canada)

 

Strong impact on the market (CAD). Analysts do not expect the Bank of Canada will cut interest rates once again, but as the results of yesterday's meeting of the Reserve Bank of Australia have shown, the regulators are full of surprises. In any case, investors will pay much attention to the accompanying statement.

 

15:00 *** ISM Non-Manufacturing PMI - February (USA)

 

Strong impact on the market (USD). Analysts expect a slight decrease in the index for non-manufacturing sector, although the rate is still at a high level, so the market reaction may be ambiguous.

 

19:00 ** Beige Book - March (USA)

 

Moderate impact on the market (USD). The Overview of 12 US Federal Reserve banks on the state of the local economies may be interesting from the point of the current situation. Better-than-expected statements are able to support the dollar.

[Vistabrokers]

Vista Brokers: EUR/USD Continues to “Swing”

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On Tuesday, EUR / USD at first rose slightly amid the positive statistics from the euro zone, but then fell again. Vista Brokers analysts note that the pair is actively moving up and down in anticipation of the ECB meeting on Thursday.

 

The data on retail sales in Germany were much better than expected and the euro grew to the maximum of 1.1210. Thus, the retail trade in the euro zone's largest economy grew by 2.9% mom and 5.3% yoy (up to June 2010), against forecasts of 0.5% and 2.6% respectively. The sale of food, beverages and tobacco rose by 3.8%, while sales of non-food products increased by 6.3%.

 

As you can see, the difference between expected and actual data is significant, and it gave an upward impetus to the single currency. Much stronger than the forecast was also statistics on the unemployment change in Spain. The indicator has shown a 13.5 thousand decline of unemployed versus expected 10 thousand.

 

However, the euro could not held the growth too long, even with such a positive background. Pressure on the currency was put with expectations about the ECB meeting and comments that may sound at the traditional press conference. It is unlikely that they will be bullish for the euro, so that investors act out beforehand.

[Vistabrokers]

Vista Brokers: Euro Dropped Lower Prior to ECB Meeting

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On Wednesday, the single currency continued to move in a downtrend, reaching new lows against the US dollar and other major currencies. Vista Brokers analysts say that it was mainly due to releases of Services PMI in some countries of the euro zone. In another situation, the response to such data would not be so stormy, but not before the ECB meeting, which, according to market expectations, will disclose some details of the ambitious program of quantitative easing realization.

 

Thus, in Spain the PMI index for the services sector in February went down from 56.7 to 56.2 against the expected growth to 56.9. In Italy, analysts had expected growth from 51.2 to 51.8, but the index dropped to 50. In France, the index remained at the level of January meeting with expectations. In Germany, analysts expect that the rate will remain unchanged, but it fell from 55.5 to 54.7. And finally, in the euro zone the index fell from 53.9 to 53.7.

 

While statistics was published in different countries, the EUR / USD continued to fall. Even retail sales data for the euro zone, which came much better than expected (1.1% vs. 0.2%) could not stop its decline as well as ADP non-farm employment change index, which came weaker than expected. Thus, ADP data showed that in February, the private sector added 212,000 new jobs, and the forecast was 220,000.

[Vistabrokers]

Vista Brokers: Euro Freshes Lows against other Currencies

 

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During early Thursday trading the single currency was declining against all major competitors in anticipation of today's ECB meeting and the official start of the quantitative easing program in the euro zone. Vista Brokers analysts note that the euro has fallen against the dollar to the minimu, since September 2003.

 

Also the euro is losing ground against the British pound, Swiss franc, Japanese yen. EUR / JPY today is trading at 132.31 yen against 132.58 yen late Wednesday.

 

Recall that the European Central Bank is preparing to launch a large-scale program of quantitative easing, which involves the purchase of government bonds in the amount of 60 billion euros per month. Analysts expect that after today's meeting rates will remain the same: 0.05% for the key rate and 0.2% for the deposit rate. Such large-scale measures to stimulate the economy have a strong pressure on the euro.

[Vistabrokers]

Market Pulse 05.03

 

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On Thursday will be published a lot of important data that can significantly affect the dynamics of currency pairs. Australia has already released statistics on retail sales and the trade balance. Today, two major world central banks at once will announce their decisions on interest rates and comment on the economic situation in accompanying statements. The market will be waiting for this information.

 

12:00 *** Bank of England Interest Rate Decision - March (UK)

12:00 *** Asset Purchase Facility - March (UK)

12:00 *** MPC Rate Statement - March (UK)

 

Strong impact on the market (GPB). Although investors do not expect any surprises from the Bank of England, they will listen to its comments carefully. If the nature of statements is optimistic, investors will consider this as a signal that the bank could start to raise rates in the foreseeable future. If the comments seem too neutral or even pessimistic, the reaction can be quite the opposite.

 

12:45 *** ECB Interest Rate Decision - March (euro zone)

12:45 ** Deposit Facility Rate - (euro zone)

12:45 ** Marginal lending facility - March (euro zone)

13:30 *** ECB Press Conference - March (euro zone)

 

Strong impact on the market (EUR). At the ECB meeting some interesting details can be sounded regarding to the start of the asset repurchase program which is the part of the program of quantitative easing later this month. So that its results can significantly affect dynamics of the pair.

 

13:30 *** Unemployment Claims - February (USA)

13:30 ** Continuing Claims - February (USA)

13:30 ** Revised Nonfarm Productivity - Q4 (USA)

 

Strong impact on the market (USD). Analysts expect that the number of unemployment claims during the reporting week has grown a little more than a week earlier, and the level of labor productivity in the 4th quarter has increased.

 

15:00 *** Ivey PMI - February (Canada)

 

Strong impact on the market (CAD). The index is based on a survey of purchasing managers. It shows an improvement or deterioration in comparison with the previous month. Growth rate or exceeded the forecast is favorable for the currency.

[Vistabrokers]

Vista Brokers: Euro Moves Closer to Parity with Dollar

 

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On Thursday, the single currency has decreased during the trading day first on expectations of the ECB meeting and Mario Draghi press conference, and then on the information that the European Central Bank has given to the market. Vista Brokers analysts say that the euro against the dollar has freshed the 11-year low, reaching the level of 1.100. Thus, the euro zone currency is getting closer to parity with the US dollar, which many experts predict.

 

So, yesterday the ECB held its first meeting since the launch of quantitative easing program was announced. Rates remained unchanged as it was expected, and the central bank revealed some details about asset purchases. The program starts on March 9. In the accompanying statement, the regulator noted that the purchase will be carried out gradually and on a wide range of assets.

 

At the press conference Draghi reiterated that the ECB plans to buy assets in the form of private and public sector liabilities in the amount of 60 billion euros per month during the period from March to September 2016. The total volume of quantitative easing will be 1.1 trillion euros. The plans also include the ECB's purchase of assets with a negative yield if it is above the deposit rate (-0.2%). Analysts say that this fact has led to a sharp drop in European bond yields.

 

Meanwhile, the euro is at a minimum in September 2003 against the dollar. In tandem with the Japanese yen and other major competitors, the single currency also fell.

[Vistabrokers]

Vista Brokers: Markets Wait for US Labor Market Data

 

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Today during the American session will be released statistics that can influence the dynamics of major currency pairs, as well as affect stock markets. These are data on unemployment rate and non-farm payrolls in the US. Vista Brokers analysts note that the strong data would strengthen confidence regarding the Fed rates hike in June or even earlier.

 

It is expected that in February, the US non-farm payrolls rose by 240,000 after rising 257,000 in January. Thus, February may be the 12th consecutive month, when the number of jobs is increasing by more than 200,000 monthly, and it will be the longest period of growth since 1994.

 

In addition, experts expect a decline in the unemployment rate from 5.7% to 5.6%, as well as a small increase in the average wage: 0.2% after rising 0.5% in January. Recall that recently the largest US companies said that this year they will increase wages of their employees. So, the biggest retailer Wall-Mart will provide more than one billion dollars to raise wages of 40% employees. Other companies, like TJX Cos Inc and health insurer Aetna, have also announced wage increases.

 

Given all these facts, the US labor market looks really healthy, and it increases the likelihood of rising interest rates by the Fed. Analysts say that if today's data will be even more than expected, market participants can move their expectations of growth rates on May. The dollar may be able to gain versus all counterparts.

 

Expectations of strong data today have supported Asian stock indexes. The MSCI's broadest index of Asia-Pacific shares outside Japan grew up during the Asian session 0.4%. Japan's Nikkei gained 1% amid the yen falling against the dollar.

[Vistabrokers]

Market Pulse 06.03

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7:00 ** Industrial Production - January (Germany)

 

Moderate impact on the market (EUR). Industrial production gives a small contribution to GDP, but it allows to predict the dynamics of interest rates. Therefore, the growth or exceeding the forecast may be favorable for the currency. Analysts expect a small growth of the indicator on a monthly basis.

 

8:15 ** Consumer Price Index - February (Switzerland)

 

Moderate impact on the market (CHF). Experts expect that the growth of the consumer price index on a monthly basis in February was 0.1% after falling 0.4% in January. Although it is unlikely to give support to the Swiss franc - the inflation is expected to fall by 0.6%.

 

10:00 ** Revised GDP - Q4 (euro zone)

10:00 ** Gross Fixed Capital - Q4 (euro zone)

10:00 ** Household Consumption - Q4 (euro zone)

 

Moderate impact on the market (EUR). According to forecasts, the GDP growth in the 4th quarter amounted to 0.3% mom and 0.9% yoy. The gross fixed capital is also the important business climate indicator.

 

13:30 *** Building Permits - January (Canada)

13:30 *** Trade Balance - January (Canada)

13:30 ** Labor Productivity - Q4 (Canada)

 

Strong impact on the market (CAD). These are sufficiently important indicators for Canada, which could affect the national currency. In January, analysts expect the growth of building permits by 5.5% after a significant increase in the previous month.

 

13:30 *** Trade Balance - January (USA)

13:30 *** Unemployment Rate - February (USA)

13:30 *** Non-Farm Employment Change - February (USA)

13:30 ** Change in Private Payrolls - February (USA)

13:30 ** Change in Manufacturing Payrolls - February (USA)

13:30 ** Average Hourly Earnings - February (USA)

13:30 ** Participation Rate - February (USA)

13:30 ** Two-Month Payroll Net Revision - February (USA)

 

Strong impact on the market (USD). The most anticipated data of the day, which can significantly affect the greenback dynamics against all major competitors. It is expected that the unemployment rate in February fell by 0.1%, while the number of non-farm payrolls rose by 241,000.

[vic84]

NZDUSD has been trading low and still the selling continues which indicates that the pair is going to fall further down.

[Vistabrokers]

Vista Brokers: Non-farms and Unemployment did not Disappoint the Market

 

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On Friday, the dollar updated 11-year high against the euro and rose against the other competitors after strong data on the US labor market. Vista Brokers analysts note that the statistics was oppositely directed, but main landmarks of the Fed - employment in the non-agricultural sector (non-pharms), and the unemployment rate came out better than expected. This reinforces expectations of market participants that the Fed will raise rates in the middle of the year.

 

Thus, the euro fell to 1.0886 dollars from 1.0986 dollars loosing during the day 1.4% and breaking level of 1.09 for the first time since September 5, 2003. Against the Japanese currency, the dollar rose by 0.4% to 120.70 yen from 119.91 yen earlier.

 

Note that the number of people employed in the non-agricultural sector of the US in February rose by 295,000 against the expected 240 000. The unemployment rate fell to 5.5% compared to 5.7% last month, less than expected 5.6%. In addition, hourly wages - another important indicator for the Fed, rose in February, though slightly less than the market expected (0.1% vs. 0.2%).

 

Earlier, the Fed said that it would consider raising interest rates when the economic data, particularly data on inflation and the labor market will be strong.

[Vistabrokers]

Vista Brokers: Oil Fell due to Strong Dollar

 

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On Monday during morning trading Brent crude oil has lost 43 cents, falling down to $59.30. WTI fell by 27 cents to $49.34. Vista Brokers analysts point out that during the previous week both brands of oil have finished with a decline. The main reason is strong data on the US labor market, which provided significant support to the dollar. This factor has forced investors to forget about geopolitical tensions and the threat of a possible decline in production in Libya and Iraq.

 

On Friday, the dollar hit a 11-year high against a basket of currencies after data on the US labor market. Statistics showed that the unemployment rate in the US fell to a minimum of May, 2008 - 5.5%. Non-farm payrolls rose by 295,000, exceeding the forecast for 55,000.

 

Analysts expect that this week Brent will be traded in the range of $ 55.36- $ 63.04 and WTI - in the range of $ 48.45- $ 55.02.

[Vistabrokers]

Market Pulse 09.03

 

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A new busy week has started in Forex, though on Monday there is not so many important releases. Australia today has already published an ANZ job advertisements index. Japan has released Eco Watchers Surveys. The most important event of the day is a Eurogroup meetings.

 

7:00 ** Trade Balance - January (Germany)

 

Moderate impact on the market (EUR). The trade balance is the difference between exports and imports for the period. Positive values are favorable for the currency as it reflects flow of funds to the country's economy.

 

14:45 ** ECB Announces Covered Bond Purchase - March (euro zone)

 

Moderate impact on the market (EUR). ECB announces its weekly balance sheet, from which investors and market observers conclude about scale of the ECB bond purchase. Expansion of purchase is a signal for greater activity of the central bank, which puts pressure on the euro.

 

*** Eurogroup Meetings - March (euro zone)

** ECB President Mario Draghi Speaks - March (euro zone)

 

Strong impact on the market (EUR). Today's meeting of the Eurogroup, as well as the previous one will be held under the Greece sign. Over the weekend, Athens sent the Eurogroup chairman Jeroen Deysselblum a letter in which they urged to initiate discussions between representatives of Greece, the ECB, the European Commission and the IMF, as well as introduced a series of reforms that the country agrees to hold. The list consists of seven major reforms, including the establishment of an independent Economic Council, the introduction of an upper limit for government spending and Internet gambling taxation, measures to combat bureaucracy and financial support to the poorest people of Greece.

[Vistabrokers]

Vista Brokers: Fed Rate Hike Probability Pressures on Metals

 

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On Tuesday, the yellow metal has updated three-month low on expectations that the US Federal Reserve will raise rates in the middle of the year. Vista Brokers analysts note that the probability of the Fed rates hike for the first time since December 2008 from a historical low of 0-0.25%, is putting pressure on precious metals. Raising rates could lead to a significant strengthening of the dollar and the decline in demand for protective assets.

 

Today during morning trading, April gold futures on Comex fell by 0.49% to 1160.8 dollars per troy ounce, updating the three-month low at 1163.45 dollars per troy ounce. May futures for silver on the same stock exchange decreased by 0.42% to 15.71 dollars per troy ounce.

 

On Monday metals received a short-term support before the Eurogroup meeting, where the situation in Greece was discussed. Economic problems of the country mean increased demand for safe-haven assets, so that each new round of negotiations, as a rule, support the price of gold. Yesterday the Eurogroup led by Jeroen Deysselblum rejected a revised list of reforms proposed by Athens, which means a happy ending is far away.

 

Amid the failure of Greece at the Eurogroup meeting on Tuesday markets returned to the subject of interest rates of the Fed. Impact on the precious metals still have data on the labor market, which came in the United States on Friday. It was reported that the unemployment rate in January fell from 5.7% to 5.5%, while the number of jobs in the non-agricultural sector grew by 295 000. Analysts have predicted a decline in unemployment to 5.6% and growth in the number of jobs by 235 000.

 

Thus, real values have exceeded forecasts, causing large fluctuations in the financial markets.

Analysts suggest that the labor market data, released on Friday, will have an impact on the gold in the medium term.

[Vistabrokers]

Market Pulse 10.03

 

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On Tuesday the economic and financial affairs council (ECOFIN) meetings is held. In Australia, has already been published the NAB business confidence index, in China – the consumer price index and the producer price index. The most interesting event of the day promises to be the BOE governor Mark Carney's speech.

 

6:45 ** Unemployment Rate - February (Switzerland)

 

Moderate impact on the market (CHF). Analysts expect that in February, the unemployment rate in Switzerland rose from 3.1% to 3.2%. The growth of the rate may adversely affect the dynamics of the Swiss franc.

 

7:45 ** Industrial Production - January (France)

 

Moderate impact on the market (EUR). It is expected that industrial production in France in January has shown a decline of 0.2% since the previous month it had risen by 1.5%.

 

14:00 ** JOLTs Job Openings - January (USA)

 

Moderate impact on the market (USD). Job openings is considered to be a not too important indicator when compared with statistics on the US labor market, which was published last Friday. However, currently the US labor market receives much attention because of the expectations regarding to the Fed rates hike, so this indicator can also affect the greenback's dynamics.

 

14:35 ** House of Lords Economic Affairs Committee hearing - March (UK)

14:35 *** BOE Governor Mark Carney Speaks - March (UK)

 

Strong impact on the market (GPB). Market will look in the statements of Mark Carney for hints that the Bank of England will go on the path of monetary policy tightening after the US Federal Reserve. Positive comments about the economy, inflation, the real estate market investors may understand as a signal for a possible rate hike in the foreseeable future.

[Vistabrokers]

Vista Brokers: Trend for EUR / USD is Still Downward

 

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Despite weak attempts to rise, which the euro has made on Monday, the trend for EUR / USD is still downward, and the bears will be able to hold their positions for a long time. Vista Brokers analysts say that the single currency tends to parity with the US dollar, but perhaps even 1 mark will not be able to provide sustainable support to the euro.

 

There are many reasons for it, and in the first place is the difference in the monetary policy of the ECB and the Fed. If the first CB is just beginning a program of quantitative easing amid low rates to support the economy, the second one plans to raise rates amid its recovery. Also, the pressure on the euro puts the situation in Greece. Country where radical political forces have come to power, can not negotiate with creditors to restructure debt and the list of necessary reforms. And it begins to blackmail the eurozone with a referendum on Greece's exit from the monetary union.

 

According to the results of yesterday's Eurogroup meetings, a revised reform plan, submitted by Greece, has not been approved by ministers of finance, so probably this month, the country will not receive financial bailout. According to the Eurogroup chairman Jeroen Deysselblum, a list that Athens gave at the meeting was different from the first list of proposals which has been performed two weeks ago, and in such a "raw" form it can not be accepted. Deysselblum previously stated that the EU is willing to give Greece the first tranche of 7.2 billion euros in March, but only with the consent of all reforms.