Market Analysis by Vistabrokers

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Vista Brokers: Greek Revised Reform Plan Failed to Impress Creditors Again

 

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On Tuesday the euro continued to decline against its main competitors, and European bond yields hit new lows. Vista Brokers analysts note that the pressure on the euro has strengthened after the launch of the ECB quantitative easing program on Monday. Moreover, the situation in Greece makes currency to reduce.

 

It should be noted that Greece has performed another updated list of reforms ahead of the Eurogroup meeting, but international lenders were not satisfied again. They especially did not like the idea to combat tax evasion and youth unemployment at the same time, represented by the Greek government. This idea is to hire students, housewives and even foreign tourists who do not have appropriate education, as tax collectors.

 

The Eurogroup head Jeroen Deysselblum summed up the new phase of talks on Greece, noting that the country urgently needs to carry out real reform, not just to discuss them, otherwise it will not get the money. The next stage of negotiations with the "troika" of creditors (EU, IMF and ECB) will be held today.

 

On Tuesday, European stock markets were basically flat. Stoxx Europe 600 Index rose by 0.2%, the German DAX was down by 0.3% and France's CAC 40 index lost 0.2%.

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Vista Brokers: AUD / USD Freshed its Lows

 

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On Wednesday, the Australian dollar has dropped amid weak statistics and general strengthening of the US dollar due to expectations of the Fed interest rates hike. Vista Brokers analysts note that during the Asian session on Wednesday AUD / USD pair has dropped below 0.7600, reaching its lowest level since 2009.

 

Today's statistics has helped the Australian dollar to fall. Thus, the Westpac consumer sentiment index in March fell by 1.2%, from 100.7 in February to 99.5. In February, the index rose sharply, after the Reserve Bank of Australia had unexpectedly lowered the rate, but after this, as a rule, should be a rebound, so the level of consumer sentiment falled in March.

 

Among other factors of the index reducing can be noted a sharp increase in gasoline price and weak GDP data. Latest statistics showed that the growth of the Australian economy in the 4th quarter of 2014 amounted to only 0.5%. Consumers are concerned about the economic outlook and the stability of the labor market, and lower interest rates had only a temporary effect, reducing their anxiety.

 

Also today, data on changes in the volume of mortgage lending came out in Australia and showed a 3.5% decrease in the number of loans, which is much higher than the predicted 1.9%.

 

A speech of the RBA deputy governor Christopher Kent did not add any positive. He reiterated that the acceleration of economic growth in the short term should not be expected, that unemployment may rise more than expected earlier, that the outlook remains uncertain. He also said that interest rates support the economy and, in particular, the real estate market, and that the low Australian dollar contributes to some sectors.

 

Analysts note that the statistics released today should not have such a strong influence on the Australian dollar. The main reason for the decline is a strong US dollar, which is risen on expectations of Fed tightening.

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Market Pulse 11.03

 

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On Wednesday, some interesting data will be released in the UK, and the Reserve Bank of New Zealand will announce a decision on interest rates. China has already published data on industrial production, as well as on fixed asset investment.

 

7:00 ** ECB President Mario Draghi Speaks - March (euro zone)

 

Moderate impact on the market (EUR). This Monday the ECB has officially launched a program of quantitative easing, so that Draghi's comments may be related to the expectations in regard to this program. In any case, in his speech, market participants will be looking for hints of further central bank's actions.

 

9:30 *** Industrial Production - January (UK)

9:30 ** Manufacturing Production - January (UK)

15:00 ** NIESR GDP Estimate - February (UK)

15:00 ** MPC Member Martin Weale Speaks - February (UK)

 

Strong impact on the market (GPB). Many analysts believe that the UK is the next applicant for the increase in interest rates after the United States. Investors are now looking for confirmation of this hypothesis, and positive data on industrial production, as well as on NIESR GDP estimate can be perceived this way.

 

20:00 *** Official Cash Rate - March (New Zealand)

20:00 *** RBNZ Rate Statement - March (New Zealand)

20:00 ** RBNZ Monetary Policy Statement - March (New Zealand)

20:05 *** RBNZ Press Conference - March (New Zealand)

 

Strong impact on the market (NZD). Analysts do not expect any surprises from the RBNZ and suggest that the bank will keep its key interest rate unchanged – at the level of 3.50%.

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Market Pulse 12.03

 

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After yesterday's sharp fall of the Australian dollar against the US dollar, investors were waiting for data on the Australian labor market, which came early in the morning. Statistics was surprisingly positive. The unemployment rate in the country decreased by 0.1%, while the number of employees increased by 15.6 thousand. Analysts had expected the unemployment rate will remain at the same level, and employment will grow by 15.3 thousand. Some interesting data will be published today in the United States.

 

10:00 ** Industrial Production - January (euro zone)

 

Moderate impact on the market (EUR). Analysts expect a small growth of industry in January, after zero growth mom and decrease yoy a month earlier.

 

12:30 ** New Housing Price Index - January (Canada)

12:30 ** Capacity Utilization Rate - January (Canada)

 

Moderate impact on the market (CAD). Expectations regarding these data is moderately optimistic. After the Bank of Canada contrary to the predictions did not go to the next interest rate cut, the position of the Canadian dollar strengthened. Weak statistics can disturb this delicate balance.

 

12:30 *** Retail Sales - February (USA)

12:30 *** Core Retail Sales - February (USA)

12:30 ** Retail Sales Excluding Auto & Gas - February (USA)

12:30 *** Unemployment Claims - February (USA)

12:30 ** Continuing Claims - February (USA)

12:30 ** Import Prices - February (USA)

 

Strong impact on the market (USD). After a strong labor market data on Friday, the dollar has received considerable support and continues to grow. Perhaps the positive data today will help the greenback to strengthen its position. In general, forecasts are optimistic.

 

12:45 *** BOE Governor Mark Carney Speaks - March (UK)

 

Strong impact on the market (GPB). Carney's optimistic statements may boost the pound, but the head of the Bank of England may once again remind of retained risks for the British economy, the weak inflation and the troubled real estate market. In this case, the pound could come under pressure.

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Vista Brokers: EUR / USD Started to Fall more Quickly

 

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On Wednesday, the single currency continued to decline against the dollar on expectations associated with the Fed interest rates hike in June and the ECB quantitative easing program launching. Vista Brokers analysts note that a divergence of the United States and the euro zone monetary policies, on the one hand, stirs up investors' interest in the dollar, and on the other - puts pressure on the euro.

 

According to experts, the euro tends to parity in relation to the dollar. If on Tuesday EUR / USD has been closed at 1.0698, then on Wednesday it dropped down to 1.05562. Fall below 1.5000 would mean the lowest level since January 2003. Note also that the yield of European countries' bonds during the last week fell to record lows. The dollar index has already risen to almost 100.

 

Recall that on Monday the European Central Bank has launched the quantitative easing program, which involves the repurchase of bonds in the amount of 60 billion euros per month and 1 trillion euros for the whole program. Meanwhile, the Fed may raise interest rates as early as June of this year. Strong labor market data, published last Friday, have strengthened investors' hopes for rates hike.

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Vista Brokers: Gold Continues to Fall vs Dollar Strengthening

 

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On Wednesday, gold has fallen to 4-month low amid growing demand for the US dollar. Vista Brokers analysts note that the US currency continues to strengthen in the full currency market range: against the euro, franc, pound and other competitors, due to expectations that the Fed will raise interest rates in June. The growth of currency reduces the demand of foreign investors for gold and other precious metals.

 

By the end of trading on Wednesday on the COMEX April gold futures were down by 9.50 dollars, or 0.8%, to 1150.60 dollars per troy ounce. This is the lowest closing level since November 6, when contracts have ended the session at 1142.60 dollars per ounce.

 

Thus, the yellow metal was at the level just above $ 8 from the new low of nearly 5 years, and analysts believe that this reduction opens the way to even lower values. Gold does not bring investors income in the form of dividends or interest, so it will be difficult to compete with profitable assets such as treasury bonds and shares amid the Fed rate hike.

Waiting for the Fed interest rates hike in the middle of this year has an impact on all financial markets. On Tuesday the Wall Street Journal has reported that the Fed will probably remove words about "patience" in relation to the interest rate hike from the accompanying statement at the next meeting. This will be an additional signal to the fact that in June the central bank will decide to increase rates.

 

Note that the Fed will be the first of the largest global regulators who raise rates, as in the past few years we see only decline. Especially noticeable is the contrast between the Fed and the ECB monetary policies. That is why the decline in the euro against the dollar is currently very strong. Thus, on Wednesday, EUR/USD has fallen to 1.0547 level, which is not so far from a parity, continuing to lead from the start of the ECB quantitative easing program.

 

Other precious metals show the same trend as gold does. Platinum yesterday has dropped in price by 1.3% to 1115.40 dollars per ounce (the lowest closing level since 2009). Palladium fell below $ 800 per ounce for the first time since February 24. Silver lost 26.8 cents to $ 15,365 per ounce.

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Vista Brokers: US Retail Sales Disappointed the Market

 

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After Friday's strong data on the US labor market, investors for several days were in euphoria in relation to the dollar. This has led to a significant increase of the currency against some of its competitors. Vista Brokers analysts note that on Thursday retail sales data in the United States suspended the rising dollar and forced currency to fall against the euro and the yen.

 

Thus, the volume of retail trade in February showed a decline of 0.6% against the expected growth of 0.3%. The volume of trade excluding car sales fell by 0.1% against the projected growth of 0.6%. This is the third consecutive monthly decline. In January, sales fell by 0.8% after falling by 0.9% in December.

 

Thus, despite the apparent improvement in the labor market and the decline in oil prices, consumption is not restored - households remain cautious. This may temper the enthusiasm of investors in the Fed interest rates hike. Recall that at the moment market expectations subtends a rate hike in June this year. After the publication of weak statistics, the euro rose from 1.0622 dollars to 1.0633 dollars. The dollar fell against the yen to 120.88 yen from 121.03 yen.

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Vista Brokers: Investors Fixed Profits on EUR / USD and USD / JPY

 

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Dollar has stopped to grow against the euro and the yen after weak data on retail sales in the United States, published on Thursday. Vista Brokers analysts say that weak statistics has become a signal for the end of the week-long dollar rally. It is a long overdue pullback, and after the data release, investors began to take profits on EUR / USD and USD / JPY.

 

EUR / USD has risen from 1.0548 to 1.0635, but currently is still near 12-year highs. USD / JPY on Thursday has dropped from 121.45 to 121.28, but on the Friday morning, returned to the starting position. The pair is at the highest level since July, 2007.

 

Recall that the strengthening of the dollar against major competitors began when on Friday, March 6 the strong data on the US labor market was published and led to increased expectations of the Fed interest rates hike in June. Then, on Monday, March 9 ECB launched its quantitative easing program and began to purchase bonds, which further undermined the position of the euro. European bank seeks to increase liquidity in the euro and lowering bond yields to help economic growth in the euro zone and push inflation. The Bank of Japan has also significantly softened its monetary policy.

 

Analysts believe that profit-taking after the week-long rally does not mean that investors have lost confidence in the dollar. In medium and long term, the US currency tends to the uptrend. Today, some accents can be arranged by statistics on the producer price index and consumer sentiment index from the University of Michigan in the United States. But the focus of investors will now be sent to the next week FOMC meeting. Perhaps the Fed will make some sort of clarity about when rates begin to rise. Or vice versa they will disappoint the market with the lack of specificity or doubts.

[Vistabrokers]

Market Pulse 13.03

 

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On Friday, an important statistic is expected mainly in the US and Canada. Data on producer price index and the index of consumer sentiment in the United States may have a significant impact on the US dollar.

 

12:30 *** Unemployment Rate - February (Canada)

12:30 *** Employment Change - February (Canada)

12:30 ** Full Time Employment Change - February (Canada)

12:30 ** Part Time Employment Change - February (Canada)

 

Strong impact on the market (CAD). Expectations about Canadian labor market data are optimistic: experts predict a decrease in the unemployment rate from 6.6% to 6.5%. This may support the Canadian dollar, which is already felt confident after the Bank of Canada did not cut interest rates once again, contrary to expectations.

 

12:30 *** Producer Price Index - February (USA)

12:30 ** Producer Price Index ex Food & Energy - February (USA)

 

Strong impact on the market (USD). After falling by 0.8% in January, analysts expect growth of the producer price index by 0.2% in February. Strong data could support the dollar.

 

14:00 *** Michigan Consumer Sentiment Index - March (USA)

 

Strong impact on the market (USD). In March analytics expect the index growth to 95.6. The US consumer sentiment is improving, so that the actual data can be even stronger than forecast, which could support the dollar.

 

15:15 ** MPC Member Andy Haldane Speaks - March (UK)

 

Moderate impact on the market (GPB). Comments of the Monetary Committee member will attract the attention of investors because they can shed light on sentiment in this BoE body, which takes decisions on interest rates.

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Vista Brokers: Dollar Continued to Fortify its Positions

 

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On Friday, the US currency was strengthening against its major counterparts in Forex, amid expectations associated with the Fed interest rates hike in June. Vista Brokers analysts say that the euro against the dollar has tested the level of a 12-year low below 1.05, closing the last trading week trading at around 1.05. The growth of the US dollar has also influenced stock and commodity markets.

 

Over the past week, the dollar index has risen by more than 2%, due to expectations that the US Federal Reserve will tighten its monetary policy in a few months. Due to the greenback's strengthening, stocks and resources are reducing in price. MSCI All-Country World equity index has fallen on Friday by 0.8%, the index of developing countries - by 1%. European stock markets have gotten a support from the ECB quantitative easing program launching, so that the FTS Eurofirst 300 index was down only by 0.1%. Yields of bonds in the euro zone has dropped to record lows, due to the asset repurchase program.

 

It is also worth noting that the US stock indexes went down due to low oil prices, which, in turn, puts pressure on energy stocks. Thus, S & P 500, decreases the third consecutive week. Currently it is about 3% below the record level having set in March. Meanwhile, the yield of American treasuries is growing - on Friday it has increased to 2.0998% from 2.096% on Thursday.

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Vista Brokers: Euro Fell below $1.0500

 

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On Monday, the single currency has dropped again after a weak attempt to grow on Friday evening. Vista Brokers analysts point out that the euro has experienced a short period of growth above $ 1.0600, but sentiment on the currency remains bearish, and today during the Asian session, the euro fell to $ 1.0457 (a minimum since January 2003).

 

Last week, the euro fell by 3.2%, which is the largest weekly drop since September 2011. The single currency is pressured by the ECB quantitative easing program, which implies the purchase of assets for an overall amount of 1.1 trillion euros to stimulate the economy in the euro zone.

 

Also, the difference between monetary policies of the ECB and the Fed is growing, because the US controller has closed its QE program and is now preparing for a gradual interest rates hike. Investors expect that this process will begin in June, as the latest statistics give quite clearly signals of the US economic recovery. Because of this, the dollar index was growing last week. On Monday, the DXY is at 12-year high of 100,420.

 

Note that the pressure on the euro still has the situation in Greece with its economic problems and possible exit from the euro zone. Yes, in late February, Athens has negotiated with creditors (ECB, EU and IMF) to extend financial bailout program for 4 months, but the reform plan has not been approved yet - all Greek offers of debt restructuring are rejected.

 

Analysts believe that both Athens and Brussels are ready to compromise - the only question is how long negotiations will take. As a result, it is likely that Greece's debt burden will decrease, and by reducing payments on loans, the Greeks will be able to spend more on the economy development and preventing a humanitarian catastrophe, which now hangs over the country. It is clear that Athens will not refuse from reforms, but a radical party Syriza will try to reduce them to a minimum and to slow down the implementation of reforms, because otherwise it will lose its popularity among Greek people.

[Vistabrokers]

Market Pulse 16.03

 

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Monday is not full of important information. Statistics, which can have a moderate impact on the market, will be released in the US and Switzerland. In Europe Mario Draghi will speak, and it, perhaps, will be the most interesting event of the day.

 

9:15 ** Producer & Import Prices - February (Switzerland)

9:15 ** Retail Sales - January (Switzerland)

 

Moderate impact on the market (CHF). Predictions for these two indicators are rather optimistic. It is expected that after a January's decline, the producer & import prices index in Switzerland will increase by 0.4%.

 

12:30 ** Empire State Manufacturing Index - March (USA)

 

Moderate impact on the market (USD). The indicator is based on a survey of New York FRB district manufacturers. It is now at a high level, and in March, analysts expect the growth, which could support the dollar.

 

13:15 ** Capacity Utilization - February (USA)

13:15 ** Industrial Production - February (USA)

 

Moderate impact on the market (USD). Capacity utilization allows us to estimate how much free capacity the economy has. The indicator is very close to the level of 80%, which is considered dangerous for the development of the inflationary pressure. With regard to the volume of industrial production, experts expect a small growth of the rate.

 

14:00 ** NAHB Housing Market Index - March (USA)

 

Moderate impact on the market (USD). It is the indicator of developers' confidence, measuring by NAHB, based on a survey of 900 developers in respect of current and future sales of private homes.

 

18:45 *** ECB President Mario Draghi Speaks - March (euro zone)

 

Strong impact on the market (EUR). Draghi comments can significantly affect the single currency as market participants are looking for signals for further action of the European Central Bank in the speech.

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Vista Brokers: RBA Meeting Minutes Publication Put Pressure on Aussie

 

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On Tuesday, the Australian dollar has dropped after the RBA monetary policy meeting minutes publication. Currency is trading at 0.7631, compared with 0.7645 shortly before the release.

 

Vista Brokers analysts note that the minutes made clear that the central bank is likely to continue to cut interest rates this year, but cautiously. While the RBA takes a pause, wishing to see fresh statistics after rate cuts in February. But the way to further easing of monetary policy is open, and the Reserve Bank believes these measures are appropriate for achieving the sustainable growth.

 

Recall that the RBA has cut its key interest rate to a record low of 2.25% in February. Then, in March, the rate value was retained, although investors have expected further cuts. Analysts remain confident that in 2015 the Reserve Bank of Australia will continue to stimulate the economy, as GDP growth slows and unemployment increases.

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Market Pulse 17.03

 

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Today the Bank of Japan, which never tells the time of its publications in advance, publishes a decision on interest rates, data on the annual rise in monetary base and comment on monetary policy. The Japanese controller will also hold a traditional press conference. The Reserve Bank of Australia has already published its monetary policy meting minutes.

 

10:00 *** ZEW Economic Sentiment - March (Germany)

10:00 ** ZEW Survey (Current Situation) - March (Germany)

 

Strong impact on the market (EUR). The economic sentiment indicator shows the difference between the number of optimists and pessimists among financial experts. This indicator is closely monitored by markets, and can have a significant impact. Forecasts are optimistic regards this index as well as regards the index of the current situation.

 

10:00 ** ZEW Economic Sentiment - March (euro zone)

10:00 ** Final Consumer Price Index - March (euro zone)

10:00 ** Final Consumer Price Index - Core - March (euro zone)

 

Moderate impact on the market (EUR). It is expected that the slowdown in inflation in February was 0.3%, while the core consumer price index has risen slightly. Forecasts for the ZEW economic sentiment index are also optimistic.

 

12:30 *** Manufacturing Sales - January (Canada)

 

Strong impact on the market (CAD). Volumes of manufacturing sales may be an early indicator of acceleration or deceleration of economic activity. Growth is favorable for the currency, but in January, analysts expect a fairly strong slowdown, so that the effect of the indicator may be negative.

 

12:30 *** Building Permits - February (USA)

12:30 ** Housing Starts - February (USA)

 

Strong impact on the market (USD). The US real estate market has not pleased investors yet, as the labor market has, and expectations on the number of issued permits, and laid foundations are not too optimistic. However, the data can still surprise us.

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Vista Brokers: EUR/USD is Waiting for a Guide for Directional Movement

 

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On Monday, EUR / USD was fluctuating in a fairly narrow range, trading above the 1.0500 mark. Vista Brokers analysts say that at the moment the pair is waiting for a guide to continue directional movement. It may get such a guide today from data on ZEW indexes in Germany and the euro zone, as well as the February inflation report in the currency union. However, much more likely that a new starting point will be a FOMC meeting on Wednesday, which is called the event number 1, not only for this week, but for the whole March.

 

On the one hand, investors feel a disturbance before the meeting, because their hopes for a rate hike in June may not materialize. Amid such sentiments dollar, which in the past couple of weeks has strengthened with confidence against its competitors, is now losing its ground. The weakness of the dollar has led to the fact that on Monday major currencies rose versus greenback. Stock and commodity markets were also able to recover.

 

However, on the other hand, the growth of the euro against the dollar is still limited, even with the disturbance about the upcoming FOMC meeting and positive outlook for ZEW indexes. An important role is played by the ECB's quantitative easing program, which has started last week. The European Central Bank said that in the first week of the program it was purchased assets in the amount of 9.751 billion euros of public sector bonds and 3.754 billion euros of asset-backed securities.

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Vista Brokers: Markets Fade prior to Fed Meeting

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Today at 18.00 GMT in the US following data will be published: FOMC economic projections, FOMC rate decision and FOMC statement, and at 18.30 will begin a traditional press conference with the Federal Reserve head Janet Yellen. Vista Brokers analysts note that markets are waiting for these data, since they will likely affect the dynamics of many financial instruments: currency pairs, securities, commodities.

 

Investors expect that the Fed today will specify a lead time for interest rates hike for the first time in nearly nine years. Since 2008, the US central bank is keeping interest rate unchanged at 0.25%, and it did not increas the rate since 2006. Most analysts predict that the rate will be raised in the middle of the year, possibly in June. Recall that positive data on the US labor market, which has recently been showing clear signs of recovery, is adding confidence.

 

If the Fed shows a clear direction today, it would give a significant support to the dollar against major competitors. Monetary policy of the US central bank, in this case, would be contrary to most countries. Within a few months of this year 24 central banks lowered their rates, while the Fed is taking a course on monetary policy tightening. Especially large-scale stimulus measures are used by the European Central Bank and the Bank of Japan.

[Vistabrokers]

Market Pulse 18.03

 

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On Wednesday, there will be a lot of interesting publications, including the results of the Fed meeting, which is the event of primary importance. These results will be known only in the evening, and prior to the publication market participants will unlikely act actively. However, we should note other interesting publications of the day. Quite a lot of important statistics will be released today in the UK.

 

9:30 *** Claimant Count Change - February (UK)

9:30 ** Claimant Count Rate - February (UK)

9:30 ** Unemployment Rate - February (UK)

9:30 ** Average Earnings Index - February (UK)

9:30 ** Employment Change - February (UK)

 

Strong impact on the market (GPB). Data on the British labor market can be quite interesting. It is expected that the claimant count rate has declined in February, and the unemployment rate has fallen to 5.6%. Such positive data can give a significant support to the pound.

 

9:30 *** MPC Meeting Minutes - March (UK)

9:30 *** MPC Official Bank Rate Votes - March (UK)

09.30 *** MPC Asset Purchase Facility Votes - March (UK)

 

Strong impact on the market (GPB). Simultaneously with a portion of labor market data will be released MPC meeting minutes, which can also be a determining factor for the future dynamics of the pound. It will be interesting to see an MPC voting pattern, as well as to know any details of the last meeting.

 

10:00 ** Trade Balance - January (euro zone)

10:00 ** ECB President Mario Draghi Speaks - March (euro zone)

 

Moderate impact on the market (EUR). Prior to the Fed meeting, these data are unlikely to affect the dynamics of the euro. Note that Draghi's speech on Monday was quite optimistic. He has noted a stable economic recovery, a necessity of reforms and an importance of the euro zone unity.

 

12:30 *** Annual Budget Release - 2015 (UK)

 

Strong impact on the market (GPB). The UK Treasury publishes a budget plan for a next fiscal year, which begins in April. Investors will anatomize this release, analyzing plans of the Treasury for a year. This publication usually has an effect on the market, but not at once, because it takes time for market participants to conduct in-depth analysis.

 

18:00 *** FOMC Economic Projections - March (USA)

18:00 *** FOMC Rate Decision - March (USA)

18:00 *** FOMC Statement - March (USA)

18:00 *** FOMC Press Conference - March (USA)

 

Strong impact on the market (USD). These data may have a long-term impact on all financial markets. Investors do not expect the Fed to take any actions right now, but they wait for clearer guidelines about, when rates will be raised. If the market will not receive these guidelines, there is the risk of a significant dollar reduction.

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Vista Brokers: New Zealand Dollar Reacted to Global Dairy Trade Price Index Decline

 

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On Wednesday, the kiwi fell slightly against the US dollar, having taken a lead from yesterday's weak data on the global dairy trade price index. Vista Brokers analysts note that diary prices dynamics have a strong impact on the New Zealand dollar, as these products are the main export items for the country.

 

However, the fall of the currency was limited prior to the FOMC meeting, which will be held tonight. Thus, NZD/USD has fallen to 0.7305 from 0.7377 on Tuesday.

 

Note that the global price index for dairy products, which is calculated on the results of GlobalDairyTrade auctions, has decreased by 8.8% compared with the previous auction on March 3.

[fxapex]

USDJPY has been trading flat but until any new hit it might remain so, after that there might be some positive movement.

[Vistabrokers]

Vista Brokers: Dollar fell after the Fed meeting

 

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On Wednesday, the market was waiting for an accompanying statement of the US Federal Reserve Federal Open Market Committee, as well as for a press conference of Janet Yellen. Vista Brokers analysts note that as it was expected by many market participants, statement did not become less dovish, and thus interest rates hike in June is questionable. Perhaps markets will move their expectations to September.

 

After the FOMC statement publication, the dollar began to fall against its major competitors. EUR / USD briefly touched the level of 1.10, but could not stay on it and began to fall again after reaching this level. GBP / USD overcome the 1.51 level. Against the yen the dollar fell to 120 yen.

 

Many experts believe that the Fed's statement was no accident so dovish. In particular, Steve Enlander from Citigroup says that the dovish statement was a conscious action to reduce too rapidly rising dollar, and it do not reflect a real attitude of the Fed to interest rates hike. As it was expected the Fed dropped the word "patient" from its statement in terms of raising interest rates, and pointed out that everything depends on economic data.

[Vistabrokers]

Market Pulse 19.03

 

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On Thursday, the market continues to take a lead from yesterday's Fed decisions. Although today investors are also expecting for some interesting publications. In the US data on the labor market and the Philly Fed manufacturing index will be published, Swiss National Bank will hold a meeting and the ECB will announce allotment in 4-years TLTROs. In addition, today opens the EU economic summit.

 

8:30 *** Libor Rate - March (Switzerland)

8:30 *** 3-Month Libor Lower Target Range - March (Switzerland)

8:30 *** 3-Month Libor Upper Target Range - March (Switzerland)

8:30 *** SNB Monetary Policy Assessment - March (Switzerland)

8:30 *** SNB Press Conference - March (Switzerland)

 

Strong impact on the market (CHF). Libor rate decisions consider to be one of the most important indicators for the Swiss franc. Analysts do not expect any changes in monetary policy of the Swiss National Bank, but the policy assessment, as well as the following press conference can be interesting.

 

10:15 *** ECB Announces Allotment in 4-years TLTROs - March (euro zone)

 

Strong impact on the market (EUR). The indicator shows the amount of the ECB loans to commercial banks. Large volume demonstrate increased demand for central bank's liquidity and may put pressure on the euro.

 

12:30 *** Unemployment Claims - March (USA)

12:30 ** Continuing Claims - March (USA)

12:30 ** Current Account - March (USA)

 

Strong impact on the market (USD). Data on the US labor market which shows weekly change in the number of applications for unemployment benefits traditionally have a significant impact on exchange rates. Analysts expect growth to 297,000 applications.

 

13:50 ** MPC Member Andy Haldane Speaks - March (UK)

 

Moderate impact on the market (GPB). Andy Haldane is a voting MPC member and the monetary analysis and statistics executive director. His speech can give markets direction in relation to BOE next steps.

 

14:00 *** Philly Fed Manufacturing Index - March (USA)

 

Strong impact on the market (USD). Philadelphia Fed index is based on a survey of manufacturing companies in the region. March forecast is quite optimistic: analysts expect index to increase from 5.2 to 7.3.

[Vistabrokers]

Vista Brokers: Dollar Quickly Recovers vs Euro

 

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After having risen to 1.05 after the FOMC statement on Wednesday, today EUR / USD has returned to a downward trend. Vista Brokers analysts note that the dollar is quickly recovering against the single currency, and the pair has almost returned to the levels reached prior to yesterday's statement publication. Although the statement' sentiment was not as hawkish as we market had expected, but it does not change the global situation. The US economy is recovering, and sooner or later the Fed will raise interest rates, while the economy of the euro zone is not in the best condition, which causes the ECB to soften its monetary policy.

 

As the Fed had promised, the word "patience" was dropped from the statement, which considers to be a signal that the rate hike is imminent. However, the Fed is not going to speed up this process, since the risk of the early rate hike is too high. This probably indicates that rates will be risen not in June, but likely in September.

 

In contrast to the currency market, which has reacted to the dovish statement with dollar sales, the US stock market rose on Wednesday. Standard & Poor's 500 index rose to two-week high, the index of companies with a small cap Russell 2000 rose to a record level, and the Nasdaq Composite overcome the level of 5000. Shares of all sectors except banking one has risen. The price of Brent crude oil rose by 4%, while the price of gold - by 1.6% (maximum daily increase since January 30).

 

Meanwhile, the euro is losing strength not only against the dollar but also against other competitors in the market. Thus, today, the single currency is declining against the Swiss franc after the Swiss National Bank has lowered its forecasts for GDP growth and inflation, which could mean new measures of economy stimulation in the near future. GDP growth forecast for 2015 was revised from 2% to 1%, the inflation for 2015 - from -0.1% to -1.1% and for 2016 - from 0.3% to -0.5%.

 

Some accents in the dynamics of the single currency can be arranged by today's ECB Economic Bulletin, as well as allotment in 4-years TLTROs announcement.

[Vistabrokers]

Vista Brokers: After Temporary Decline Dollar Returned to Growth

 

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On Thursday, the dollar regained positions after having decline against its major counterparts on Wednesday after the Fed meeting. Vista Brokers analysts remind that the FOMC accompanying statement was more dovish than market participants have expected, and this led to a maximum daily decline of the dollar for the last 6 years. The Fed has removed the word "patience" in respect of the rate hike, but has lowered the outlook for economic growth and inflation. This has pushed growth rates expectations from June closer to September.

 

However, the dollar has recovered its positions quickly enough and it argues that "bullish" trend for the US currency is based not only on speculation regarding the Fed's actions. Many experts still believe that against the dollar the euro, which has seriously weakened amid the ECB quantitative easing program launching and problems of Greece, will soon reach parity.

 

It is worth noting that on Thursday came out weekly data on unemployment claims in the US, which showed an increase in the number of applications by 1000 compared to the previous reporting week (291 0000 vs 290 000). Analysts expected that the number of new applications will be 295 000, so that the data was better than expected once again. The labor market is still one of the main benchmarks for the Fed, and on Wednesday the head of the Fed once again confirmed this, so that the market recovery will continue to provide support for the dollar. Note that at the moment the US unemployment rate is the lowest since May 2008 – 5.5%.

[Vistabrokers]

Vista Brokers: Oil Rises while Dollar Weakens

 

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On Friday, oil prices in the world market rise after one of the lowest close of the year on Thursday. Vista Brokers analysts point out that yesterday traders have feared regarding record volumes of oil inventories in the United States, but today the situation changed due to the weakening of the dollar against other major currencies.

 

By the end of trading on Thursday on the New York Stock Exchange WTI crude oil for April delivery closed at $ 43.96 a barrel, losing 1.6% during the day. May Brent crude oil on London's ICE Futures Exchange fell by 2.7%, to $ 54.43 a barrel.

 

Recall that on Thursday the dollar was mainly declining against most major currencies after the US Federal Reserve meeting on the previous day, which has given no clear signals regarding the rates increasing. However, oil prices remained under pressure due to inventories increase in the United States. According to the Energy Information Administration, last week oil inventories in the country increased by 9.6 million barrels to 458.5 million barrels, exceeding forecasts. In Cushing, Oklahoma, oil reserves rose by 2.9 million barrels, and it is almost full occupancy of the hub.

 

The additional pressure on oil prices put Kuwaiti Oil Minister Ali al-Omaira, who has said on Thursday that although the country is concerned about the influence of cheap oil on a budget, Kuwait will not reduce production because they afraid to loose market share.

 

Considering all these factors, analysts believe that the growth of oil will be short-lived. On Friday morning, May futures for Brent rose by 0.46% - up to 54.68 dollars per barrel. April futures for WTI fell by 0.11 percent - to 43.91 dollars per barrel.

 

Some experts believe that the main reason for the oil growth is the weakening of the US dollar after the Fed meeting. Market participants expected from the US central bank more hawkish clear signals to make clarity to the situation with the rates increase, but such signals have not been received. However, there are a lot of signals of the US economic, and in particular the labor market, recovery, so the dollar retains its potential for growth.

[Vistabrokers]

Market Pulse 20.03

 

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On Friday, a lot of important data will be published in Canada. Meanwhile, the RBA Governor Glenn Stevens has already spoken, and in Brussels the EU summit is continued. Here will be discussed military conflict in Ukraine, extension of sanctions for Russia and the bailout for Greece.

 

9:30 ** Public Sector Net Borrowing - February (UK)

 

Moderate impact on the market (GPB). Public sector net borrowing is the difference between revenue and expenditure of the central and local governments and government agencies. Growth is negative for the currency.

 

12:30 *** Consumer Price Index - February (Canada)

12:30 *** Core CPI - February (Canada)

12:30 *** Retail Sales - February (Canada)

12:30 *** Core Retail Sales - February (Canada)

 

Strong impact on the market (CAD). Forecasts for all indicators are relatively optimistic. Analysts expect that the consumer price index rose after a small decline in January, as well as core retail sales did. Retail sales are expected to fell, but not as much as in January. This statistics is important and can have a significant impact on the Canadian dollar.

 

14:20 ** FOMC members Dennis Lockhart Speaks - March (USA)

 

Moderate impact on the market (USD). Dennis Lockhart is the head of the Federal Reserve Bank of Atlanta and a voting member of the FOMC, so his opinion affects the monetary policy committee, and Lockhart comments may affect the dollar.