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Forex Analysis by LiteForex

Discussion in 'Market Forecasts and Analysis' started by LiteForex Official, Nov 16, 2015.

  1. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-05 08:48 (GMT+2)
    EUR/USD

    The euro showed a slight increase against the US dollar on July 4, offsetting a decrease in the instrument the day before. The market activity on Thursday remained reduced, as the US exchanges were closed due to the celebration of Independence Day. Investors were focused on retail sales in the Eurozone. In May, sales fell again by 0.3% MoM after falling by 0.1% MoM last month. Analysts had expected growth of 0.3% MoM. YoY, sales slowed from 1.8% to 1.3%, while the forecast was 1.6%. Today, the pair is trading in both directions, and investors expect new drivers to appear on the market. Investors are focused on the June report on the US labor market. The number of new non-farm jobs is expected to increase from 75K to 160K, which should provide substantial support for the dollar.

    GBP/USD

    The pound slightly strengthened against the US dollar on Thursday, interrupting the development of the "bearish" trend since July 1. The growth of the British currency was facilitated by the closed US markets on the occasion of the national holiday, while the macroeconomic background remained ambiguous. In addition, investors are increasingly worried about the exacerbation of the situation around Brexit. Yesterday, Prime Minister Theresa May said that the current stalemate is a serious problem for the whole kingdom. The solution of the border issue with Northern Ireland was never found, and now, after May’s resignation, her successor will have to deal with its decision. There's little hope that this can be done within the allotted timeframe, therefore, markets are more often discussing the prospects of a "tough" Brexit.

    AUD/USD

    The Australian dollar showed ambiguous dynamics against the US dollar on July 4. Traders adjusted their positions on the instrument in anticipation of the publication of the US labor market report. In particular, if the report turns out to be weak, this could serve as another powerful signal for the Fed to lower the interest rate at the July meeting. Otherwise, there may be some relaxation from the regulator. Today, the Australian dollar is moderately supported by the published Construction PMI In June, the indicator rose from 40.4 to 43.0 points, which turned out to be better than the average forecast.

    USD/JPY

    The US dollar shows a flat trend against the Japanese yen, slightly correcting after a noticeable decline on July 2-3. Today, the dollar is trading in an uptrend, awaiting the publication of an important report on the labor market for June. More confident growth is hampered by good macroeconomic statistics from Japan. Household spending increased by 4.0% YoY in May, after rising by 1.3% YoY in April. Investors expected a slightly more modest acceleration of positive dynamics, up to 1.6% YoY. The index of coincident indicators, according to preliminary estimates for May, showed an increase from 102.1 to 103.2 points with a forecast of 95.5 points. However, the leading indicators index was worse than expected. In May, it dropped from 95.9 to 95.2 points, while investors expected a decline only to 95.7 points.

    Oil

    Oil prices showed a moderate decline on July 4, returning to the negative trend after growth on Wednesday. The "bearish" dynamics was supported by previously published data from the US Department of Energy, which did not meet market expectations about reducing the volume of stocks of petroleum products. In addition, the report reflected a moderate increase in production volumes. Today, in addition to the June report on the US labor market, investors are also awaiting the publication of the Baker Hughes report on active oil platforms.
     
  2. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-08 08:24 (GMT+2)
    EUR/USD

    On Friday, the euro fell significantly against the US dollar updating local lows of June 19. The reason for the emergence of a confident downward dynamics were strong data on the US labor market. The number of nonfarm payrolls in June increased by a record 224K after growth by 72K last month. Analysts had expected an acceleration of positive dynamics only by 160K, which seemed to be a very optimistic estimate. The unemployment rate in June rose from 3.6% to 3.7%, while the average hourly wage did not change from the previous 3.1% YoY. The euro was pressured by German data. The production orders in May decreased by 2.2% MoM and 8.6% YoY, which was significantly worse than the expected values of –0.1% MoM and −5.7% YoY. Today, investors are focused on a block of macroeconomic statistics from Germany on the industrial output and the trade balance for May.

    GBP/USD

    The British pound closed last week with a confident decline against the US dollar. The growth of "bearish" activity was connected to unexpectedly strong employment data in the June report on the US labor market. Instead of the planned 160K, the US economy added 224K of nonfarm payrolls, which heightened hopes of abandoning the interest rate cut during the July meeting of the Fed. However, in the monetary policy report, the regulator will point out a slowdown in GDP growth, despite rising consumption and some positive trends in the labor market. The wording remains the same and the Fed promises to act "according to the situation". Published on Friday, macroeconomic statistics from the United Kingdom was ambiguous. The Halifax home price index in June fell by 0.3% MoM after growth of 0.4% MoM in May. Analysts were expecting a decline of −0.2% MoM.

    AUD/USD

    The Australian dollar dropped significantly against the US one at the end of last week, interrupting another growth attempt and returning to the levels of the beginning of the month. This market reaction was caused by the publication of strong data on employment in the US, which strengthened the arguments in favor of maintaining the Fed's current monetary policy. The Australian dollar remains pressured amid the lack of progress in the US-China trade negotiations, but the macroeconomic statistics from Australia provides moderate support to the instrument. On Friday, investors were optimistic about the data on the AiG Construction PMI. In June, the index rose from 40.4 to 43.0 points, above market expectations. Today, the instrument is supported by data on the number of vacancies. In June, the ANZ index showed a steady growth of 4.6% MoM after a decrease of 8.2% MoM last month.

    USD/JPY

    The US dollar rose against the Japanese yen on Friday, updating local highs of June 18. At the end of the week, confident support for the US currency was provided by data on the US labor market for June, which reflected a sharp increase in nonfarm payrolls by 224K (with a forecast of 160K). At the same time, the report indicated an increase in unemployment and a slowdown in the average hourly wage MoM in June. Published on Friday, macroeconomic statistics from Japan was ambiguous. The index of coincident indicators in May rose from 102.1 to 103.2 points, while the index of leading indicators decreased from 95.9 to 95.2 points. Today, the pair is trading in both directions. The yen is pressured by mixed macroeconomic statistics from Japan. Bank lending slowed in June from 2.6% to 2.3% YoY, while the forecast was 2.8% YoY. The demand for machine-building products in May fell by 7.8% MoM after a growth of 5.2% MoM last month.

    Oil

    Oil prices rose moderately on July 5, despite the general strengthening of the dollar. Quotes are supported by growing tensions around Iran, as well as by the OPEC+ decision to extend the agreement on limiting oil supplies for another 9 months. In addition, investors are optimistic about the resumption of the US-China trade negotiations this week, counting on signals on the industrial activity increase in China.
     
  3. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-09 08:22 (GMT+2)
    EUR/USD

    The euro showed a moderate decline against the US dollar on July 8, continuing the development of a strong "bearish" impulse formed at the end of last week. The euro reacted by sharp sales after the publication of the report on the US labor market, which indicated a much stronger increase in the number of new jobs than analysts had expected. The report also reflected the growth of the unemployment rate and a slight slowdown in wages growth. The market expects strong labor market data to help the Fed wait. Some analysts believe that the regulator will abandon the idea of lowering the interest rate during the July meeting. On Monday, investors were focused on German data on the industrial output and the trade balance for May. The industrial output showed an increase of 0.3% MoM after a decrease of 2.0% MoM last month. However, YoY, the dynamics deteriorated markedly: −3.7% vs previous −2.3%. Germany’s trade balance in May rose from 16.9 to 18.7 billion euros, which was slightly better than expected.

    GBP/USD

    The British pound fell against the US dollar on Monday, but it did not lead to an update in local lows. The instrument is still pressured by the publication of the June report on the US labor market. On Monday, the news background remained moderate, so investors continued to play on the same drivers. Today, the instrument is traded in both directions. Published statistics from the UK on retail sales does not allow the pound to show corrective growth, but investors are gradually fixing short positions. The volume of comparable sales from BRC in June fell again by 1.6% YoY after a decrease of 3.0% YoY a month earlier. Analysts were expecting the growth of 0.8% YoY. Market activity will begin to grow noticeably on July 10, when a large block of statistics on industrial output, trade balance, and adjusted GDP dynamics will be released in the UK.

    AUD/USD

    The Australian dollar tried to show corrective growth against the US one at the beginning of the week but returned to the downward trend and today resumed its active decline. Investors are still focused on the June report on the US labor market, which has noticeably confused the Fed’s plans to ease monetary policy. The instrument is also pressured by the newly launched process of the US-China trade negotiations, which may end with the signing of a final agreement. Today, investors are focused on business sentiment statistics from the National Australia Bank. The NAB index of business confidence in June fell sharply from 7 to 2 points, which, however, was not surprising. The index of business conditions for the same period increased from 1 to 3 points, which also coincided with market expectations.

    USD/JPY

    The US dollar continued to grow noticeably against the Japanese yen yesterday, updating local highs of May 31. Additional pressure on the yen came from Japanese macroeconomic statistics. Bank lending slowed in June from 2.6% to 2.3% YoY, while the forecast was 2.8% YoY. The demand for machine-building products in May fell by 7.8% MoM after a growth of 5.2% MoM last month. Analysts had expected the decline only by 4.7% MoM. In annual terms, orders decreased by 3.7% in May against an increase of 2.5% in April. The Eco Watchers current index in June fell from 44.1 to 44.0 points, against the forecasts of growth to 45.0 points.

    Oil

    Oil prices showed a moderate increase on July 8, but could not stay at the updated highs and returned to the red zone by the end of the day session. Quotes are supported by the growth of tension around Iran, as well as the lack of progress in the US-China trade negotiations. On Monday, Iran threatened to resume work on the enrichment of uranium, which was suspended under the 2015 agreement. Because of the US sanctions, Iran has actually lost all the benefits that it received as part of the agreement. It is likely that the resumption of nuclear activities will lead to a new deterioration of relations between Washington and Tehran. Today, investors will focus on the API report on oil reserves. The previous report reflected a sharp reduction in reserves by 5 million barrels, which was later not confirmed by the publication of an official report from the US Department of Energy.
     
  4. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-10 08:25 (GMT+2)
    EUR/USD

    The euro continued a decline against the US dollar on Tuesday, updating local lows of June 19. The single currency is pressured by uncertain macroeconomic statistics from Europe, as well as a fairly optimistic mood on the dollar. Yesterday, Fed Chairman Jerome Powell had a speech, which was devoted to the problem of banks reliability and stress tests program. His speech on July 10 will be much more important since it will be devoted to the problems of monetary policy. Some analysts believe that, given the latest report on the US labor market, the Fed will try to take a wait-and-see attitude and refuse to cut rates during the July meeting. In addition, on Wednesday the ECB meeting is expected and the publication of the FOMC minutes.

    GBP/USD

    The pound declined markedly against the US dollar on Tuesday, updating local lows of January 3. The "bearish" dynamics was facilitated by the uncertain macroeconomic statistics from the UK. In June, the BRC retail price index again showed a decline of 1.6% YoY after declining by 3.0% YoY last month. Analysts had expected positive dynamics of 0.8% YoY. On July 10, the market expects the publication of a large block of statistics from the UK. Among other things, investors are focused on the dynamics of industrial output in May, GDP growth rates in May (and the forecast for June), as well as the trade balance. In the USA, the focus of attention will be the speech of Fed Chairman Jerome Powell in Congress.

    AUD/USD

    The Australian dollar continues to develop a downward trend against the US one, updating local lows of June 21. "Bearish" sentiment is supported by the strengthening of USD amid a possible refusal of the Fed to reduce interest rates during the July meeting. The last report on the US labor market, which reflected a sharp increase in the level of employment, may be the reason for the regulator to do this, although it also showed an increase in the unemployment and a slowdown in wage growth. Today, the instrument continues to trade within a downtrend. AUD is pressured by weak macroeconomic statistics from Australia. Westpac consumer confidence index in July showed a decline of 4.1% MoM after declining by 0.6% MoM last month.

    USD/JPY

    The US dollar continues to grow moderately against the Japanese yen, as interest in risk remains on the market. Investors await possible signals from the Fed to maintain a waiting position amid the publication of a strong report on the US labor market. Published macroeconomic statistics from Japan exerts additional pressure on the yen. Yesterday, traders were disappointed with the preliminary data on the demand for machine-building products and equipment. In June, the indicator dropped sharply by 38.0% YoY after a decline of 27.3% YoY a month earlier. Today, the yen is pressured by an index of domestic prices for corporate goods. In June, the indicator decreased by 0.5% MoM and 0.1% YoY, whereas investors expected –0.3% MoM and +0.3% YoY.

    Oil

    Oil prices showed a moderate increase on July 9, as investors concentrated on growing tensions in the Middle East. Additional support for quotes is still provided by the decision of OPEC+ to extend the agreement to restrict production for another 9 months. A powerful "bullish" signal was the API report on oil reserves published yesterday. For the week of July 5, stocks fell sharply by 8.129 million barrels after declining by 5.000 million over the past period. However, the previous API report was significantly different from the data of the Department of Energy, so investors still prefer to wait for the publication of official data.
     
  5. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-11 08:36 (GMT+2)
    EUR/USD

    The euro showed strong growth against the US dollar on July 10, recovering the losses of the last three trading sessions. The reason for the emergence of a strong "bullish" dynamics was the correction of the dollar in response to the speech of Fed Chairman Jerome Powell. Powell pointed to the growing uncertainty in the prospects for the American economy, which is deteriorating under the influence of internal and external factors. Investment in the business, according to Powell, continues to decline, which poses a threat of a further slowdown in economic growth. The regulator's head did not name any exact dates for further stimulation, but the market believed in a rate cut of 25 basis points during the meeting on July 30-31. Moreover, a number of analysts believe that the Fed may decide on a stronger reduction in the rate, by 50 basis points at once. Today, the pair is also trading in an uptrend. Investors are focused on statistics on consumer inflation in Germany and France, as well as the publication of information about the latest ECB meeting on monetary policy.

    GBP/USD

    The pound showed the development of correctional dynamics against the US dollar on July 10. The growth of the instrument was facilitated by a decline in the dollar after the speech of Fed Chairman Jerome Powell, who focused on the negative aspects in the American economy, which prompted investors to return to the idea of the Fed lowering the interest rate during the July meeting. Published macroeconomic statistics from the UK was moderately optimistic. Industrial output in May showed an increase of 1.4% MoM after a decline of 2.9% MoM, which was slightly worse than forecasts of 1.5% MoM. YoY, production grew by 0.9% after declining by 1.1% in April. The experts were expecting 1.1% YoY. GDP in May rose by 0.3% MoM after a decrease of 0.4% MoM a month earlier. But the NIESR assessment of GDP in June was negative: −0.1% against 0.3%.

    AUD/USD

    The Australian dollar returned to a positive trend against the US one, having received support after the speech of Fed Chairman, which increased the risks of a rate cut during the meeting on July 30-31. AUD also ignored weak macroeconomic publications from Australia. Westpac consumer confidence index in July showed a decline of 4.1% MoM after declining by 0.6% MoM last month. Today, the instrument maintains upward dynamics. Moderate support for the "Australian" provides data on the dynamics of mortgage loans. In May, the indicator reached the zero level after a decline of 0.9% MoM in April. Analysts were expecting a decline of 0.6% MoM. Investment loans for the construction of new homes in May declined by 1.7% MoM after declining by 2.2% MoM last month.

    USD/JPY

    The US dollar fell markedly against the Japanese yen on Wednesday. The reason for the emergence of negative dynamics was a sharp increase in the likelihood of a reduction in the Fed's interest rate during the meeting of July 30-31 amid the "dovish" rhetoric of Fed Chairman Jerome Powell. More active growth of the instrument was hampered by the aggravation of the trade conflict between Japan and South Korea. Today, there is also a negative trend, despite the publication of ambiguous macroeconomic statistics from Japan. Services PMI in Japan fell by 0.2% MoM in June after rising by 0.8% MoM last month. Analysts were expecting a decline of only 0.1% MoM. In turn, the rate of foreign investment in Japanese bonds supported the yen. For the week of July 5, the volume of investment rose from 58.5 to 192.2 billion JPY.

    Oil

    Oil prices rose sharply on July 10, updating local highs since the beginning of June. The growth of the instrument was facilitated by the large-scale weakening of the dollar after the speech of Fed Chairman Jerome Powell. In addition, the quotes were strongly supported by a published EIA report. For the week of July 5, the oil stocks decreased by 9.5 million barrels, which turned out to be significantly more than the expected reduction of 3.567 million. Meanwhile, oil production in the USA increased again from 12.200 to 12.300 million barrels per day.
     
  6. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-12 08:45 (GMT+2)
    EUR/USD

    The euro showed ambiguous dynamics against the US dollar on Thursday, having managed to update the local maxima of July 5. The European currency was supported by published macroeconomic statistics from Germany. The harmonized consumer price index in June rose by 0.3% MoM after rising by 0.1% in May. The index showed an increase of 1.5% YoY, which also turned out to be better than market expectations of 1.3%. Information about the ECB meeting on monetary policy of 5-6 June, which was also published yesterday, put moderate pressure on the euro. The protocols reflected the revision of the Eurozone GDP for 2019 up to 1.2% YoY. However, for 2020 and 2021, GDP forecasts were revised down to 1.4% YoY. The regulator also expects current interest rates to remain unchanged at least until the first half of 2020. Today, investors are focused on the publication of May statistics on industrial output in the Eurozone.

    GBP/USD

    The pound ended Thursday with ambiguous dynamics. Despite the growth during the day, with the opening of the American session, the "bearish" sentiment recovered, which led to the correction and closing of the pair in the red zone. Traders were rather skeptical about the Bank of England financial stability report published on Thursday. However, the document reflected the readiness of the UK financial system to the negative consequences of the "tough" Brexit. But investors were much more interested in the published macroeconomic statistics on consumer inflation in the USA. In June, the consumer price index, excluding food and energy, rose by 0.3% MoM and 2.1% YoY, with a forecast of 0.2% MoM and 2.0% YoY.

    AUD/USD

    The Australian dollar is steadily strengthening against the US dollar, updating local highs since July 5. Published on Thursday, macroeconomic statistics from Australia turned out to be ambiguous, which, however, did not prevent the AUD from maintaining an uptrend. Moreover, investors partially ignored the strong US data on consumer inflation, which increased the likelihood of the Fed keeping the interest rates unchanged in July. Investment loans for the construction of new homes in May declined by 1.7% MoM after declining by 2.2% MoM last month. The volume of mortgage loans in May showed zero dynamics after a decline of 0.9% MoM in April.

    USD/JPY

    The US dollar showed a decline against the Japanese yen on July 11 but managed to recover by the closing of the day session, having received support from strong consumer inflation data. Moderate support was also provided by data on applications for unemployment benefits. For the week of July 5, the number of initial jobless claims decreased from 222K to 209K, significantly better than the forecast of 223K. Today the instrument is again trading in a downtrend, despite the publication of ambiguous statistics from Japan. Industrial output in May slowed from 2.3% to 2.2% MoM, which turned out to be worse than analysts' expectations. YoY, the decline deteriorated from −1.8% to −2.1%. However, the use of production capacity increased from 1.6% to 1.7% MoM.

    Oil

    Oil prices showed a slight increase on July 11 but corrected to the opening marks by the end of the day session. Quotes were supported by the closure of a number of oil rigs in the Gulf of Mexico in anticipation of the storm. In addition, investors are closely watching the development of tensions in the Middle East after the deterioration of US-Iranian relations. On Friday, investors are focused on Baker Hughes report on active oil platforms in the USA.
     
  7. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-15 08:22 (GMT+2)
    EUR/USD

    The euro maintains an upward trend against the US dollar. On July 12, the single currency managed to strengthen amid the publication of good macroeconomic statistics from the Eurozone. Industrial output in May rose by 0.9% MoM after declining by 0.4% MoM last month. Analysts expected growth of only 0.2% MoM. The indicator accelerated the decline from −0.4% YoY to −0.5% YoY, which, however, turned out to be significantly better than forecasts of −1.6% YoY. More confidently strengthening of the instrument was hampered by previously published data from Germany. The wholesale price index in June showed a decline of 0.5% MoM after rising by 0.3% MoM last month. Investors predicted the growth of 0.2% MoM. YoY, the index growth slowed down from 1.6% to 0.3%, which also turned out to be significantly worse than analysts' expectations of 1.3%.

    GBP/USD

    The pound showed quite an active growth against the US dollar on Friday, updating local highs of July 5. There were none interesting macroeconomic statistics from the USA and the UK, so the focus was on existing factors. However, investors followed the speech of the representative of the Bank of England Gertjan Vlieghe, who allowed the possibility of a sharp reduction in interest rates by the regulator, if the government fails to approve the agreement on Brexit. Today, the instrument is trading with moderate growth, preparing to update the previous local maxima. Strengthening of the pound is not hampered by weak data from the UK. The Rightmove house price index in June showed a decline of 0.2% MoM and 0.2% YoY after rising by 0.3% MoM and 0.0% YoY in May.

    AUD/USD

    The Australian dollar showed strong growth against the US one on Friday, rising to the highs of July 5. The reason for the strengthening of the instrument was the correctional dynamics of the US currency. Ambiguous macroeconomic statistics from China and the United States hampered a more confident growth of the “Australian”. Today, the instrument is supported by strong data from China. Retail sales in June rose by 9.8% YoY after rising by 8.6% YoY last month. Analysts were expecting a slowdown to 8.3% YoY. The industrial output for the same period increased by 6.3% YoY after rising by 5.0% YoY in May. In Q2, China's GDP accelerated from 1.4% QoQ to 1.6% QoQ (with a forecast of 1.5% QoQ).

    USD/JPY

    The US dollar showed a steady decline against the Japanese yen on Friday, updating local lows of July 5. It is curious that this happened amid the publication of weak macroeconomic statistics from Japan. In May, industrial output in Japan slowed down from 2.3% MoM to 2.0% MoM. YoY, the decline in production increased from −1.8% to −2.1%, which turned out to be worse than market expectations. Today, the pair is trading in an uptrend. Japan's markets are closed on Monday to celebrate the Marine Day, so statistics from China and the United States remain in the spotlight. Chinese data on GDP, retail sales, and industrial output were stronger than forecasts, which contributed to the growth of investor interest in risk. With the opening of the American session, investors are awaiting the publication of the index of the July Manufacturing PMI from the New York FRB.

    Oil

    Oil prices are consolidating near local highs, updated at the end of the week. Quotes are supported by a reduction in the production of some US manufacturers in the Gulf of Mexico due to a tropical storm. On the other hand, investors were disappointed with the published report of the International Energy Agency. According to it, further growth in production in the USA will contribute to the growing imbalance of supply and demand in the market. The IEA expects a decline in oil demand by 2020 to a record level since 2003. Additional support for quotes was provided by Baker Hughes report on active oil platforms in the USA published on Friday. During the week, the number of drilling rigs decreased from 788 to 784 units.
     
  8. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-16 08:31 (GMT+2)
    EUR/USD

    The euro showed a negative trend against the US dollar on July 15, departing from local highs, updated on Thursday. On Monday, there were no interesting macroeconomic statistics from the Eurozone, so investors concentrated on existing data and releases from China. In the US, only the New York Fed Manufacturing PMI has been published. In July, the figure rose by 4.3 points after falling by 8.6 points in June and with the forecast of growth by only 2.0 points. Today the pair is trading ambiguously, waiting for the appearance of new drivers. Investors are focused on a block of statistics on business sentiment in Germany and the Eurozone from the ZEW Institute. Also, investors are awaiting the publication of data on consumer prices in Italy for June and the Eurozone trade balance for May. The USA will respond by releases on retail sales and industrial output for June. By the end of the daily session, the market expects the speech of Fed Chairman Jerome Powell.

    GBP/USD

    The pound fell markedly against the US dollar on Monday. A certain pressure on the British currency was caused by weak statistics on the dynamics of housing prices. The Rightmove house price index in June showed a decline of 0.2% MoM and 0.2% YoY after rising by 0.3% MoM and 0.0% YoY in May. An additional negative factor is growing uncertainty around Brexit. In the near future, elections will be held for the new prime minister, who will have to resolve issues of coordinating a deal with the EU. The current deadline implies the Brexit by October 31, and some candidates, for example, Boris Johnson, insist on a "tough" Brexit, if parliament re-blocks the agreement. Today, investors are focused on statistics on the labor market. Also, the speech of the Bank of England's head Mark Carney is expected.

    AUD/USD

    The Australian dollar continues to grow steadily against the US one, updating local highs since July 4. Monday's macroeconomic statistics from China provided strong support to AUD. The data indicated a sharp increase in industrial output in June from 5.0% to 6.3% YoY, with a forecast of 5.2% YoY. China's quarterly GDP accelerated from 1.4% to 1.6% (forecast 1.5% QoQ). YoY, as analysts had expected, GDP slowed down from 6.4% to 6.2%. Today, the pair is trading in both directions, waiting for the appearance of new drivers on the market. Investors are focused on the protocol of the RBA meeting of July 2, at which the regulator decided to reduce the interest rate by 25 basis points to 1.00%.

    USD/JPY

    The US dollar showed a flat dynamics against the Japanese yen on Monday and today shows a slight growth. There were no data from Japan, as the markets were closed on the occasion of the Marine Day. On Tuesday, there would be also no publications from Japan, so investors will focus on releases from the USA. The focus is on statistics on retail sales and industrial output for June. Fed Chairman Jerome Powell is expected to speak, as well as a number of other Fed representatives, among whom are Raphael Bostic, Michelle Bowman, and Charles Evans.

    Oil

    Oil prices declined slightly on July 15, responding to the publication of controversial macroeconomic statistics from China. Quotes are still supported by a high degree of tension in the Middle East, as well as the lack of progress in the US-China trade negotiations. Chinese data pointed to weak economic growth in annual terms, but also reflected a sharp increase in industrial output, which correlates well with the increase in crude oil imports. Import volumes rose to a record high of 13.07 million barrels per day (by 7.7% YoY). Growth was promoted by the launch of new refineries in China. On Tuesday, investors are focused on the publication of the API report on oil reserves for the week of July 12.
     
  9. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-18 08:45 (GMT+2)
    EUR/USD

    The euro rose against the US dollar on July 17, recovering from a steady decline the day before, when investors were inspired by strong data on US retail sales. On Wednesday, the macroeconomic background changed noticeably. Traders are optimistic about the data on consumer inflation in the Eurozone. In June, the consumer price index rose by 0.2% MoM and 1.3% YoY, accelerating from the previous values of 0.1% MoM and 1.2% YoY. In June, the base CPI rose from 0.3% to 0.4% MoM, which turned out to be better than market expectations 0.3% MoM. YoY, the index accelerated from 0.8% to 1.1%, which coincided with analysts' forecasts. The pressure on the dollar is provided by a weak statistics on the US housing market. The change in the number of new living buildings in June fell by 0.9% MoM after a decrease of 0.4% MoM last month. The number of building permits in June decreased by 6.1% MoM after rising by 0.7% MoM in May.

    GBP/USD

    The pound showed a slight increase against the US dollar on July 17, interrupting the development of a strong "bearish" impulse formed the day before. The growth of the instrument was largely technical, while the macroeconomic background from the UK remained moderately negative. On Wednesday, investors were focused on a report on consumer and industrial inflation. In June, the consumer price index showed zero dynamics, slowing down from the previous growth of 0.3% MoM. YoY, the inflation continues to remain at the target level of 2%. The producer price index for the same period decreased by 0.1% MoM and grew by 1.6% YoY, which was worse than analysts' expectations of growth by 0.1% MoM and 1.7% YoY. Today, statistics on retail sales, as well as the Bank of England report on the terms of lending for Q2 2019 will be published.

    AUD/USD

    The Australian dollar closed Wednesday trading with ambiguous dynamics against the US currency. The growth of the instrument was due to the publication of weak data on the US housing market, but the generated momentum was not enough for AUD to enter the green zone. In addition, investors were in no hurry to open new positions awaiting the publication of the Australian labor market report for June. Today, the pair shows moderate growth, despite the fact that the report data were ambiguous. The employment rate in June rose by only 0.5K after rising by 45.3K last month. Analysts had expected growth of 10.0K. Full employment rose by 21.1K after rising by 2.4K last month. Part-time employment fell by 20.6K after rising by 39.8K in May. Unemployment, as expected, remained unchanged at 5.2%.

    USD/JPY

    The US dollar returned to decline against the Japanese yen on July 17, leveling off the results of Tuesday's correctional growth. The development of negative dynamics was supported by the publication of weak statistics on the housing market. In addition, investors are concerned about the possible exacerbation of the US-China trade relations since the ongoing negotiations have not yet led to positive results. The rate of houses construction started in the US in June decreased by 0.9% MoM after a decrease of 0.4% MoM last month. Analysts had expected growth of 1.9% MoM. The changes in the number of building permits issued was also negative. In June, it collapsed by 6.1% MoM after rising by 0.7% MoM last month. Today, the pair is developing a downward trend. The import and export statistics published in Japan exert certain pressure on the yen. Exports in June fell by 6.7% YoY after falling by 7.8% YoY last month. Analysts had expected a decline of 5.6% YoY. Import volumes collapsed by 5.2% YoY after falling by 1.5% YoY in May.

    Oil

    Oil prices showed a moderate decline on July 17, pressured by an ambiguous EIA report. The report reflected a decline in oil reserves for the week of July 12 by 3.11 million barrels, which turned out to be better than the expected decline by 2.69 million barrels. At the same time, the data indicated an increase in the stock of gasoline and distillates, which offset the positive effect of the decrease in crude oil reserves. US production fell from 12,300 to 12,000 million barrels, which, however, was due to the closure of some of the oil rigs in the Gulf of Mexico because of the storm.
     
  10. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-19 08:24 (GMT+2)
    EUR/USD

    The euro rose significantly against the US dollar on Thursday, returning to the local highs of July 15. The single currency was still supported by moderately optimistic data on consumer inflation in the Eurozone in June. In addition, investors were noticeably disappointed with the US statistics on the housing market, which turned out to be below market expectations. There was no new data from the Eurozone on Thursday, so the euro developed a correctional dynamics amid the lack of progress in the US-China negotiations. Today, the instrument again trades in both directions with a noticeable predominance of "bearish" sentiment. Investors expect the publication of data on industrial inflation in Germany for June and the statistics on the balance of the current account in the Eurozone in May.

    GBP/USD

    The British pound strengthened against the US dollar on July 18, returning to the levels of the week's beginning. The pound was strongly supported by data on retail sales in the UK, which lowered concerns about a further slowdown in the British economy (especially in view of a possible "tough" Brexit). In June, retail sales increased by 1.0% MoM after a decline of 0.6% MoM in May. YoY, sales accelerated from 2.2% to 3.8%, which was significantly better than the forecast of 2.6%. Today, investors are noticeably cautious, fearing to develop an upward trend in the instrument. The focus is on data on the dynamics of public sector borrowing in June, as well as the publication of statistics on the University of Michigan consumer confidence index for July.

    AUD/USD

    The Australian dollar rose substantially against the US one on Thursday, updating local highs of April 24. It is curious that AUD has managed to show quite active growth, despite the ambiguous report on the Australian labor market for June. It reflected employment growth for mere 0.5K jobs, while in May the growth was 45.3K. Analysts were expecting growth of 10.0K jobs. Macroeconomic statistics from the USA published on Thursday was moderately optimistic. The secondary jobless for the week on July 5 decreased from 1.728 to 1.686 million, with an expected decrease only to 1.700 million. Initial jobless claims expectedly increased from 208K to 216K. Most of the support for USD currency was provided by the Philadelphia Fed Manufacturing PMI, which rose from 0.3 to 21.8 points in July against the forecast of growth to 5 points.

    USD/JPY

    The US dollar showed a steady decline against the Japanese yen on Thursday, updating local lows of June 26. Today, the pair is trading with quite active growth, being influenced by technical factors. Investors are focused on a block of macroeconomic statistics from Japan on consumer inflation, which, however, does not have a noticeable effect on the instrument. The national consumer price index in June showed an increase of 0.7% YoY, which coincided with the previous data and forecasts of experts. In turn, the activity index in all industries in May rose by 0.3% MoM after rising by 0.9% MoM last month, while investors expected negative dynamics of −0.2% MoM.

    Oil

    Oil prices showed ambiguous trend on July 18, updating monthly local minima. Quotes began to fall amid a sharp decline in US stock exchanges, as well as due to expectations of a quick recovery in production in the Gulf of Mexico after the hurricane last week. The instrument is also pressured by a previously published report from the EIA, which indicated a decrease in crude oil reserves, but also reflected a sharp increase in gasoline and distillate stocks. Investors are also reacting negatively to deadlocked US-China trade negotiations. Apparently, the situation will not change as long as the US authorities do not ease the sanctions on the Chinese company Huawei. On Friday, a Baker Hughes report on active oil rigs in the US is expected.
     
  11. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-22 08:23 (GMT+2)
    EUR/USD

    The euro fell markedly against the US dollar on July 19, leveling off growth the day before. Technical factors contributed to the weakening of the instrument, while the macroeconomic background remained controversial. On Friday, the euro was pressured by a weak data on production inflation in Germany. In June, the producer price index fell by 0.4% MoM after falling by 0.1% MoM last month. YoY, the index slowed down from 1.9% to 1.2%, below market expectations of 1.4%. In turn, the dollar reacted negatively to the speech of Fed representative James Bullard, who spoke in favor of a strategy of rapidly lowering interest rates, which would allow avoiding the development of another economic crisis. Investors saw in these words hints of a possible reduction in the interest rate at the end of July. Today, the instrument shows ambiguous dynamic, awaiting the appearance of new drivers in the market. Investors are focused on the Bundesbank monthly report, as well as the publication of the Chicago Fed National Activity Index for June.

    GBP/USD

    The pound showed a corrective decline against the US dollar on Friday, departing from the local highs updated on July 15. On Friday, the British currency was pressured by disappointing data on the dynamics of public sector borrowing. In June, net borrowing increased from 3.822 to 6.500 billion pounds, which was significantly worse than market expectations of 3.200 billion. The June budget deficit was the most significant in the last 4 years, which is very alarming, considering that the country is on the threshold of Brexit. Investors continue to follow the election of the Prime Minister. According to available data, Boris Johnson is still the leader of the race. The results of the election of the new leader of the Conservative Party and the Prime Minister of Great Britain will be known this week.

    AUD/USD

    The Australian dollar retreated from local highs against the US dollar on July 19. The decline of the instrument was technical in nature, while the macroeconomic and news background remained ambiguous. Further growth of the Australian currency is hampered by the lack of progress in the US-China trade negotiations. Despite the optimistic start, at present, the parties have not been able to achieve any progress, and the market does not seem to really believe in a favorable outcome of the event. Today, the pair is trading in both directions, and AUD expects new drivers to appear on the market.

    USD/JPY

    The US dollar showed growth against the Japanese yen on July 19, departing from local minima updated the day before. The development of upward dynamics in the instrument was facilitated by relatively weak macroeconomic publications from Japan. Investors were disappointed with data that indicated a slowdown in consumer inflation. The Tokyo consumer price index excluding the price of fresh food in June expectedly slowed down from 0.8% YoY to 0.6% YoY. The indicator excluding energy prices, increased by 0.5% YoY, which turned out to be weaker than the forecast of 0.6% YoY. The activity index in all industries in May slowed down from 0.8% MoM to 0.3% MoM, which, however, turned out to be better than expectations of −0.2% MoM. Today, the pair continues to develop upward dynamics. At the beginning of the week, investors are focused on the speech of the head of the Bank of Japan Haruhiko Kuroda.

    Oil

    Oil prices rose slightly on July 19, corrected from local minima, updated the day before. Moderate support for quotes was provided by the US reports on the destruction of the Iranian drone in the Gulf of Mexico, which again heightened tensions in the Middle East. Additional support for the prices was provided by speeches of Fed representatives who favored a rapid reduction in interest rates. Finally, the published Baker Hughes report on active oil platforms in the United States reflected a reduction in the number of drilling rigs from 784 to 779 units.
     
  12. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-23 08:26 (GMT+2)
    EUR/USD

    The euro showed a moderate decline against the US dollar on July 22, continuing the development of a strong "bearish" impulse formed on Friday. Monday's macroeconomic background remained insignificant; therefore, investors were still focused on the upcoming meetings of the world central banks. On Thursday, the ECB will publish the minutes of its meeting. Given the negative macroeconomic statistics and rather gloomy prospects for the world economy, it is likely that the European regulator is announcing a new interest rate cut. However, the likelihood of such an outcome just exceeded 50%, so the intrigue remains. On Tuesday, the market expects the publication of data on bank lending in the Eurozone and preliminary statistics on the level of consumer confidence.

    GBP/USD

    The British pound is trading in a downward trend against the US dollar, developing a correction formed at the end of last week. The pound remains pressured amid uncertain prospects around Brexit. Today we will know the name of the new prime minister, who, following Theresa May, will have to deal with the issue of concluding an agreement with the EU. Chances are high that the new prime minister will be former foreign minister, Boris Johnson, who has previously actively advocated a "tough" Brexit if the EU does not make concessions on the Irish border. On Tuesday, investors are also awaiting the publication of the minutes of the Financial Policy Committee meeting and the CBI report on changes in the volume of industrial orders in July.

    AUD/USD

    The Australian dollar showed ambiguous dynamics against the US dollar on Monday, retaining the "bearish" impulse formed at the end of last week. AUD is pressured by a tense situation around the US-China trade negotiations, which again come to a standstill. Investors are also awaiting a Fed meeting at the end of July, which could result in interest rates lowering. The speeches of the official representatives of the regulator at the end of the week provoked a fairly strong correction in favor of USD, and now conversations are about the scale of the upcoming easing, rather than about the fact of the rate cut.

    USD/JPY

    The US dollar has been rising against the Japanese yen since the end of last week, recovering from local lows of June 26, updated last Thursday. On Monday, investors were focused on the speech of the head of the Bank of Japan, Haruhiko Kuroda, who reaffirmed his readiness to resume economic stimulation in the event of further growth in global uncertainty. In addition, Kuroda is ready for additional monetary easing to achieve a target inflation rate of 2%. Today, the pair is trading in an uptrend. Market participants are waiting for the publication of US macroeconomic statistics. The focus will be on Redbook statistics on retail sales, as well as the dynamics of sales in the secondary housing market.

    Oil

    Oil prices showed ambiguous dynamics on July 22, closing with almost zero results. Quotes are still supported by growing tensions in the Persian Gulf. Last week, investors reacted violently to the seizure of a British tanker by Iran in response to similar actions by Britain in early July. In turn, the pressure on prices is exerted by a further decline in demand for petroleum products amid a slowdown in global economic growth. Today, in addition to the publication of macroeconomic statistics from the United States, the API report on oil reserves for the week of July 19 is expected. The previous report reflected a decline in stocks by 1.401 million barrels.
     
  13. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-24 08:24 (GMT+2)
    EUR/USD

    The euro showed a noticeable decline against the US dollar on Tuesday, updating local lows of May 31. The pressure on EUR was exerted by the negative prospects of Brexit, as well as the statements of US President Donald Trump, who noted that "in trade matters, the EU is worse than China." Investors fear the escalation of the US-EU trade conflict since it is not the first time when Trump is trying to impose additional duties on European goods. Published macroeconomic statistics was ambiguous. Sales in the US secondary housing market in June fell by 1.7% after rising by 2.9% MoM last month. Analysts were expecting a decline of only 0.2% MoM. Richmond Fed Manufacturing Index in July dropped sharply from 3 to −12 points, with the forecast for growth to 5 points. European statistics reflected a slight increase in consumer confidence from −7.2 to −6.6 points, with a constant forecast.

    GBP/USD

    The pound showed a decline against the US dollar on July 23. The focus was on voting on the candidacy of the leader of the Conservative Party. As expected, former Foreign Minister Boris Johnson won a landslide victory and is now to take the post of prime minister. Markets reacted rather pessimistically since Johnson is known for his tough position on Brexit, which increases the risk of a country leaving the EU without an agreement. Today the pair is trading ambiguously, waiting for the appearance of new drivers. On Wednesday, data on business activity in the US in July, as well as statistics on the dynamics of approved mortgage loans in the UK in June will be published.

    AUD/USD

    The Australian dollar showed a steady decline against the US dollar on Tuesday and today maintains an active negative trend. Yesterday, AUD was pressured despite the publication of weak macroeconomic statistics on the US secondary housing market sales. Investors are frightened by the prospects for the development of a new trade conflict involving the USA, this time with the EU. This can negatively affect the world economy, given that the US-China negotiations have not yet led to a positive result. Donald Trump’s statements that he was able to hold a series of successful negotiations with congressmen on the sovereign debt ceiling also provided moderate support to the US dollar. If the decision is approved in Congress, it will allow the US government to work until 2021.

    USD/JPY

    The US dollar showed a moderate increase against the Japanese yen on Tuesday, updating local highs of July 17. It is curious that the growth of USD proceeded against the background of the publication of rather weak statistics on the housing market. The yen is still pressured by the uncertain situation around the prospects of monetary policy easing by the Bank of Japan. Today, the pair is trading in both directions. Minor support for the yen provides Japanese data on Manufacturing PMI. In July, according to preliminary estimates, the figure rose from 49.3 to 49.6 points, which was only 0.1 points worse than expected.

    Oil

    Oil prices showed a moderate increase on July 23, despite the fact that "bearish" sentiment prevailed during the day. Quotes were strongly supported by the API report on oil reserves published on Tuesday. For the week of July 19, stocks fell sharply by 10.961 million barrels after declining by 1.401 million over the past period. On Wednesday, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.
     
  14. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-25 08:23 (GMT+2)
    EUR/USD

    The euro maintains negative dynamics against the US dollar, updating local minima of May 31. EUR is pressured by weak macroeconomic statistics, as well as the strengthening of the dollar amid progress in the US-China trade negotiations. Published yesterday, the European statistics on the business activity was below market expectations. The Markit Manufacturing PMI in Germany in July fell from 45.0 to 43.1 points, with the forecast of growth to 45.2 points. The composite Manufacturing PMI in the Eurozone for the same period decreased from 52.2 to 51.5 point, with a forecast of 52.1 points. The Markit Services PMI fell from 53.6 to 53.3 points, which coincided with the preliminary estimates of experts. Today the pair is trading ambiguously, waiting for the appearance of new drivers. Investors are focused on the ECB meeting, which is expected to clarify the prospects for a possible easing of monetary policy.

    GBP/USD

    The pound showed quite active growth against the US dollar on July 24, recovering from a three-day decline. The reason for the emergence of positive dynamics were hopes for changes in the situation around Brexit after the new British Prime Minister Boris Johnson took office. The British currency received additional support from the euro, which is weakening amid disappointing macroeconomic statistics on the business activity ahead of the ECB meeting. The US data also proved ambiguous. The Markit Manufacturing PMI in July showed a decline from 50.6 to 50.0 points, while the forecast was 51.0 points. The composite PMI in July showed a slight increase from 51.5 to 51.6 points, not reaching forecasts of 52.1 points.

    AUD/USD

    The Australian dollar is steadily falling against the US currency, updating local minima since July 11. The instrument is pressured by relatively weak macroeconomic statistics from Australia, while consumer sentiment on USD is supported by insignificant progress in the US-China trade negotiations. Published yesterday, the data on Australian business activity from Commonwealth Bank reflected the preservation of negative dynamics. The Services PMI in July fell from 52.6 to 51.9 points. The Manufacturing PMI fell from 52.0 to 51.4 points. The composite index, according to preliminary estimates, fell from 52.5 to 51.8 points.

    USD/JPY

    The US dollar, having updated local maxima against the Japanese yen of July 17, tends to horizontal movement. The dollar is pressured by uncertain US macroeconomic statistics, which is to some extent true for the Japanese currency. Published yesterday, statistics from Japan was worse than expected. The Manufacturing PMI in July rose from 49.3 to 49.6 points, with a forecast of 49.7 points. The index of leading indicators in May fell from 95.9 to 94.9 points, contrary to expectations of a decline only to 95.2 points. The exception was the index of coincident indicators, which in May rose from 102.1 to 103.4 points, above the forecast of 103.2 points.

    Oil

    Oil prices showed a decline July 24, despite the fact that during the day the instrument showed a moderate increase. Confident support for the quotes was provided by the EIA oil reserves report. For the week of July 19, oil and petroleum products in the United States fell sharply by 10.835 million barrels after a decrease of 3.116 million over the previous period. Analysts expected a decrease of −4.011 million. The EIA report almost completely coincided with the API data that appeared the day before. The report also reflected the decline in oil production in the USA from 12.000 million to 11.300 million barrels per day. Additional price support is provided by the continuing tension in the Middle East.
     
  15. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-29 08:38 (GMT+2)
    EUR/USD

    EUR showed a moderate decline against USD on July 26, approaching the record lows of May 2017, updated the day before. The development of the "bearish" dynamics of the instrument was facilitated by not the strongest macroeconomic data from Europe. The German Import Price Index in June fell by 1.4% MoM and 2.0% YoY, which was significantly worse than market expectations (–0.8% MoM and –1.5% YoY). In turn, the data published in the US was able to provide moderate support to USD. Preliminary estimates reflected a slowdown in the US economy in Q2 2019 from +3.1% to +2.1% YoY, which turned out to be somewhat better than market expectations of +1.8% YoY. Pressure on EUR is also exerted by the prospect of another monetary policy easing by the ECB, which is not straightforward yet. It is likely that the regulator will decide on new interest rate reductions only in the first half of 2020.

    GBP/USD

    GBP declined significantly against USD on Friday, updating local lows of April 2017. British investors are still focused on Boris Johnson's victory in the elections. The new head of the Conservative Party is still engaged in the selection of the government and has not yet noted any concrete steps in the Brexit issue, but the market is very negative. In particular, investors draw attention to the criticism of Johnson by the Minister for Foreign Affairs of Ireland. During the Asian session on July 29, the instrument is trading ambiguously, waiting for new drivers to appear at the market. A large block of macroeconomic statistics from the UK is planned to be published today. The first in line will be the data on Nationwide House price index. The statistics on BoE Consumer Credit and Mortgage Approvals in June are also expected to be released.

    AUD/USD

    AUD closed on Friday with a steady decline against USD, updating local lows of June 21. At the end of last week, there were no interesting macroeconomic statistics from Australia; therefore, the movement of the instrument was largely technical. In turn, the data on the dynamics of US GDP for Q2 2019 contributed to the preservation of the "bearish" dynamics. Contrary to forecasts of a slowdown in the US economy to +1.8% YoY, real data indicated an increase of +2.1% YoY, which may be a signal in favor of maintaining the current monetary policy at the Fed meeting at the end of the month. On Wednesday, July 31, investors are also awaiting the publication of important statistics on the dynamics of consumer inflation in Australia for Q2 2019.

    USD/JPY

    USD showed insignificant growth against JPY on Friday, having updated local highs of July 10. The development of ambiguous trading dynamics was promoted by macroeconomic publications from Japan and the USA, as well as the fact of fixing long profits after the rally of the dollar last week. During the Asian session on July 29, the pair is trading in both directions. The focus of investors is on the retail sales data in Japan. In June, sales volumes showed zero dynamics on a monthly basis, after rising by 0.4% MoM last month. Analysts expected the increase of +0.8% MoM. In annual terms, the increase has slowed from +1.3% YoY to +0.5% YoY, with the forecast of +0.2% YoY.

    Oil

    Oil prices showed ambiguous trading dynamics at the end of last week, as the growth of tensions in the Middle East was held back by signals of a slowdown in US economic growth. Despite the fact that Friday's data on US GDP for Q2 2019 turned out to be better than expected (+2.1% YoY against the forecast of +1.8% YoY), the slowdown rate is quite noticeable, therefore one can still expect steps aimed at stimulating the national economy by the Fed. Baker Hughes report on active oil platforms in the US published last Friday showed moderate support for quotations, indicating a further reduction in the number of drilling rigs from 779 to 776 units.
     
  16. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-07-31 08:39 (GMT+2)
    EUR/USD

    The European currency showed ambiguous trading against the US dollar on Tuesday. The controversial macroeconomic releases from Europe contributed to the decline of EUR, while further growth of USD was hampered by the expectation of lowering the interest rate by the Fed at its meeting on Wednesday, July 31. Industrial Sentiment in the euro area in July showed a decrease to –7.4 points from –5.6 points last month. Analysts expected a decrease to –7.0 points. Business Climate in the euro area in July fell from 0.17 to –0.12 points, which also turned out to be worse than market forecasts of 0.08 points. The data from France were also disappointing. According to preliminary estimates, French GDP in Q2 2019 slowed down from +0.3% QoQ to +0.2% QoQ. French Consumer Spending in June showed a decline of 0.1% MoM after rising by 0.3% MoM last month. On Wednesday, in addition to the minutes of the Fed meeting, the data on euro area's GDP for Q2 2019 and Consumer Price Index for July are expected.

    GBP/USD

    GBP showed a decrease against USD on Tuesday, having updated the record lows of March 14, 2017. Closer to the end of the afternoon session, the instrument was still able to slightly correct, which was caused by the profit taking before the Fed meeting, at which the interest rate can be reduced by 0.25 or 0.50 points. Minor support for the pound on Wednesday is provided by data on Consumer Confidence in the UK. In July, according to the data from Gfk, the index rose from –13 to –11 points, while the forecast did not suggest changes in the indicator. During the day, investors expect the release of Nationwide Housing Price Index for July.

    AUD/USD

    AUD showed a moderate decline against USD on Tuesday, having updated local lows of June 19. During today's Asian session, the pair shows active growth, caused by the expectation of lowering the interest rate by the Fed and the publication of a number of good macroeconomic data from Australia. Australia's Consumer Price Index in Q2 2019 showed an increase of 0.6% QoQ and 1.6% YoY, which was slightly better than market expectations (+0.5% QoQ and +1.5% YoY). In the past quarter the index showed an even more modest growth of +0.0% QoQ and +1.3% YoY.

    USD/JPY

    USD ended the session on Tuesday with a moderate decline against JPY, departing from its local highs of July 10. The correction of the instrument proceeded against the background of disappointing macroeconomic data from Japan on industrial production and the release of the minutes of the Bank of Japan meeting on the interest rate. As expected, the regulator did not change interest rates, confirming its previous intentions. The Bank of Japan has not announced any new stimulation measures for the national economy. During the Asian session on July 31, the pair is trading in both directions. Minor support to the yen is provided by the Housing Starts indicator in Japan. In June, it showed an increase of 0.3% YoY after a decline of 8.7% YoY last month. Analysts expected a decline of –3.4% YoY.

    Oil

    Oil prices showed a moderate increase on Tuesday, supported by the expectation of lowering the interest rate by the Fed for the first time in 10 years. Moreover, some experts believe that the Fed may decide to cut the rate by 0.50 points, since the economic situation is noticeably worsening, and earlier Donald Trump stated that “a small reduction in the rate will not be enough”. Additional support to prices on Tuesday was provided by the API Weekly Crude Oil Stock report. For the week as of July 26, the report reflected a decrease in stocks by 6.024 million barrels after a record decline of 10.961 million barrels for the previous period. On Wednesday, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.
     
  17. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-08-01 08:57 (GMT+2)
    EUR/USD

    EUR showed a steady decline against USD on Wednesday updating record lows of May 2017. The instrument was under pressure from weak macroeconomic statistics from the euro area. According to preliminary estimates, euro area's GDP in Q2 2019 slowed down from +0.4% QoQ to +0.2% QoQ, which coincided with market expectations. In annual terms, the indicator decreased from +1.2% YoY to +1.1% YoY, which turned out to be better than the forecast. Preliminary data on consumer inflation were also disappointed. In July, the Core Consumer Price Index slowed down from +1.1% YoY to +0.9% YoY against the forecast of +1.0% YoY. With the opening of the US session and the publication of the Fed’s decision to lower the interest rate by 0.25 points, the instrument managed to partially recoup; however, during the Asian session on August 1, the market again has strong "bearish" sentiment.

    GBP/USD

    GBP showed ambiguous dynamics against USD on Wednesday, interrupting the development of a confident downward rally, which brought the instrument to record lows of March 2017. GBP was supported by the expectation of a decrease in the interest rate by the Fed, which was fully justified. The US regulator lowered the rate by 0.25 points, as expected by most experts, while already halting the balance reduction (previously this process was supposed to be completed in September). During the Asian session on August 1, the instrument is trading downwards, waiting for new drivers to appear at the market. On Thursday, investors are focused on the Bank of England decision on interest rates and comments by the head of the British regulator Mark Carney. No changes in the monetary policy are expected from the Bank of England, since it is obvious that the regulator will take a wait and see attitude in anticipation of the next Brexit deadline.

    AUD/USD

    AUD fell significantly against USD on Wednesday, continuing to develop a confident downtrend since July 19. However, during yesterday's Asian session, the instrument showed moderate growth caused by the publication of strong statistics on consumer inflation. The Consumer Price Index in Q2 2019 rose by 0.6% QoQ after zero dynamics in the previous quarter. Analysts had expected growth rate at 0.5% QoQ. YoY, the growth of the index accelerated from +1.3% to +1.6%. Today, the pair is trading in both directions. Moderate support for the instrument is provided by Australia's Manufacturing PMI. In July, according to data from Commonwealth Bank, the index exceeded expectations of 51.4 points and amounted to 51.6 points. Additional support was provided by Chinese statistics. Caixin Manufacturing PMI in July rose from 49.4 to 49.9 points, exceeding the forecast of 49.6 points.

    USD/JPY

    USD showed moderate growth against JPY on Wednesday, updating other local highs. The growth of the instrument was not impeded by the fact that the Fed cut interest rates, or by the publication of controversial macroeconomic statistics from the US. As expected, the regulator lowered the interest rate by 0.25 points and announced the suspension of the balance reduction program from the beginning of August. Published data indicated a sharp decline in Chicago's PMI in July from 49.7 to 44.4 points with a forecast of 50.6 points. At the same time, ADP Nonfarm Employment Change report in July reflected a steady increase of 156K jobs with an increase of 112K last month. Analysts expected a growth of 150K. On Friday, investors are awaiting the publication of the July report on the US labor market.

    Oil

    Oil prices showed a decline on Wednesday, retreating from updated local highs of July 17. The decrease in the interest rate by the Fed by 0.25 points did not provide significant support to the instrument, since the market had already taken a similar outcome into account. At the same time, during the day, oil was supported by the API report published the day before and the EIA report released on Wednesday. A report from the Department of Energy indicated a decrease in US oil inventories by 8.496 million barrels after a decrease of 10.835 million barrels over the past period. Analysts expected a much more modest reduction of 2.588 million barrels. At the same time, the report also reflected an increase in oil production in the United States from 11.300 to 12.200 million barrels per day.
     
  18. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-08-05 08:48 (GMT+2)
    EUR/USD

    EUR showed active growth against USD at the end of last trading week, correcting after a sharp decline on Wednesday and Thursday, which led to the updating of local lows of May 16, 2017. Strong data on retail sales in the euro area contributed to the development of corrective dynamics last Friday. The indicator grew by 1.1% MoM after the decline by 0.6% MoM a month earlier. In annual terms, sales growth accelerated from +1.0% YoY to +2.6% YoY, while analysts expected only +1.3% YoY. A more confident positive dynamics in the euro was hindered by the release of a moderately optimistic report on the US labor market, which, in particular, indicated an acceleration in Average Hourly Earnings in July from +3.1% YoY to +3.2% YoY. During today's Asian session, the pair is trading with a raise. At the beginning of the week, Investors are focused on statistics on business activity in Europe and the US.

    GBP/USD

    GBP showed moderate growth against USD at the end of last trading week, slightly correcting after a powerful "bearish" rally, which brought the pound to record lows of January 2017. The growth of the instrument on Friday was of a technical nature, since the macroeconomic background did not provide significant support to the British currency, and the previous negative factors associated with Brexit only intensified as the deadline approached. The British Construction PMI published on Friday showed a modest increase in July from 43.1 to 45.3 points, which turned out to be worse than market expectations of 46.0 points. The July US labor market report provided moderate support to the dollar. Nonfarm Payrolls met expectations of 164K jobs. Last month, the figure showed an increase of 193K. Average Hourly Earnings accelerated in July from +3.1% YoY to +3.2% YoY.

    AUD/USD

    AUD showed ambiguous dynamics against USD on Friday. Macroeconomic statistics published in Australia provided moderate support for the instrument. The growth in retail sales in Australia in June accelerated from +0.1% MoM to +0.4% MoM with a forecast of +0.3% MoM. Australia's Producer Price Index in Q2 2019 showed an increase of 0.4% QoQ and 2.0% YoY, which was better than market expectations of +0.2% QoQ and +1.9% YoY. During today's Asian session, the pair is trading with a decrease. AiG Services Index went down from 52.2 to 43.9 points in June. Commonwealth Bank Services PMI fell in June from 52.6 to 52.3 points. The Composite Index over the same period increased from 51.8 to 52.1 points, which turned out to be better than average expert estimates.

    USD/JPY

    USD closed last week with a steady decline against JPY, updating local lows of the beginning of the year. Despite the publication of a moderately optimistic report on the US labor market, the dollar is lower than the yen amid a decline in investor interest in risk. The minutes of Bank of Japan meeting published on Friday also contributed to a moderate increase in the Japanese currency, since they did not explicitly indicate a resumption of monetary easing in the foreseeable future. During today's Asian session, USD is trading with a decrease. Even the appearance of weak macroeconomic statistics from Japan does not impede the development of the "bearish" trend. Markit Services PMI in July decreased from 51.9 to 51.8 points with the forecast of the increase to 52.3 points.

    Oil

    Oil prices showed ambiguous dynamics of trading at the end of last week, slightly correcting after a steady decline the day before. The development of the "bearish" trend for the instrument was provoked by the threats of Donald Trump to introduce duties on the remaining Chinese imports. The increase is expected to be implemented in stages, and the first increase of 10% may take place on September 1, if the parties do not come to a consensus. Moderate support for the instrument on Friday was provided by Baker Hughes report on active oil platforms in the USA. For the reporting week, the number of oil rigs decreased from 776 to 770 units.
     
  19. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-08-06 08:47 (GMT+2)
    EUR/USD

    EUR rose against USD on Monday, updating local highs of July 23. EUR was supported by the actions of the US administration, which went on softening its position in the trade dispute with the EU. In particular, the parties managed to reach an agreement on increasing the volume of imported meat from the US to the EU countries. At the same time, trade relations between the US and China continue to deteriorate. Following the decision of Donald Trump to introduce an additional 10% duty on Chinese goods worth USD 300 billion, China promised to respond with tit-for-tat measures. In the meantime, the market can observe a sharp depreciation of the Chinese yuan against the US dollar, which Donald Trump commented on, calling the actions of the Chinese authorities a "serious violation".

    GBP/USD

    The British pound showed a slight increase against the US dollar on Monday. British Markit Services PMI supported GBP moderately. According to July data, the index rose from 50.2 to 51.4 points, which turned out to be better than neutral forecasts. A more confident growth of the instrument was hindered by increasing market tension as the Brexit date approached and the trade relations between the USA and China worsened. During today's Asian session, GBP is also trading higher, based on the publication of moderately optimistic macroeconomic statistics. BRC Retail Sales Monitor in July showed an increase of 0.1% YoY after declining by 1.6% YoY last month.

    AUD/USD

    AUD closed Monday with a steady decline against USD, reacting to another aggravation of trade relations between the US and China, which threatens to further slow down the global economy. The development of the "bearish" dynamics in the instrument was also facilitated by macroeconomic statistics. AiG Services Index in Australia went down from 52.2 to 43.9 points in June. Chinese Caixin Services PMI for the same period retreated from 52.0 to 51.6 points with a forecast of 51.9 points. During today's Asian session, the pair is trading with an increase. The focus of investors is on the RBA decision on the interest rate. As expected, the Australian regulator kept the interest rate unchanged at 1%, maintaining the same rhetoric. The RBA expects moderate growth in Australia's economy at 2.50–2.75% in 2019 and 2020. According to the regulator, inflation will return to the target level of 2% by 2020.

    USD/JPY

    USD continued to decline against JPY at the beginning of the new trading week, updating local lows from the beginning of the year. During today's Asian session, the instrument shows sharp growth, recovering to the levels of last Friday. The market is reacting violently to the aggravation of trade relations between the United States and China, which threatens a new round of deceleration of the global economy. In addition, China began to actively devalue the national currency in order to mitigate the damage from new import duties. Moderate support for the yen on Tuesday is provided by macroeconomic statistics published in Japan. Household Spending in June grew by 2.7% YoY after growth by 4.0% YoY last month. Analysts expected an increase of +1.3% YoY. Average Cash Earnings in June showed an increase of 0.4% YoY after a decline of 0.5% YoY in May. The indicator was better than expected –0.8% YoY.

    Oil

    On Monday, oil prices fell, reacting to the aggravation of the US-China trade conflict: on Friday, Donald Trump threatened to introduce 10% duty on the remaining Chinese imports in the amount of USD 300 billion from September 1. The PRC said that in this case it would go for retaliatory measures but for now, Beijing is actively depreciating the national currency in order to mitigate the potential damage from new restrictions. In addition to the risks of a slowdown in the global economy and a decrease in oil demand, an aggravation of the conflict could threaten the resumption of imports of Iranian “black gold” from China, bypassing US sanctions. Today, investors are awaiting the publication of an API report on oil reserves for the week of August 2. The previous report reflected a decrease in reserves of 6.024 million barrels.
     
  20. MikhailLF

    MikhailLF

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    Morning Market Review
    2019-08-07 08:34 (GMT+2)
    EUR/USD

    The European currency showed ambiguous trading against the US dollar on Tuesday. The instrument maintained an upward trend only at the opening of the afternoon session and showed a slight increase at the beginning of the American trading session. The technical factors contributed to a reduction in the pair, as the news background did not change much. As before, the market is widely discussing the aggravation of the trade conflict between the United States and China, which flows into a full-fledged currency war. The Chinese yuan has fallen against the dollar to its lowest level since 2008, which will significantly weaken the negative effect of Washington's introduction of new import duties from September 1. In addition, the market expects a possible reduction in the interest rate by the Fed in September. Macroeconomic statistics from Germany published on Tuesday did not support EUR. Factory Orders in June increased significantly by 2.5% MoM after the decline by 2.0% MoM in the previous month. Experts expected a growth of +0.5% MoM. In annual terms, the indicator decreased by 3.6% YoY, which is much better than the decrease by 8.4% YoY last month.

    GBP/USD

    GBP showed a slight increase against USD on Tuesday, continuing the development of corrective dynamics, formed on August 2. The instrument is moderately supported by exacerbation of trade relations between the US and China, which could lead to currency confrontation and force the US regulator to ease monetary policy again. In turn, investors are concerned about the approach of another deadline on Brexit, as the new British Prime Minister Boris Johnson has not yet made any progress in negotiations with the EU. Today, investors are waiting for the publication of data on Halifax House Price Index.

    AUD/USD

    The Australian dollar is showing a steady decline against the US currency during the Asian session on August 7, updating record lows of 2009. The development of negative dynamics in the instrument is facilitated by the aggravation of trade relations between the USA and China, as well as hints of a new currency confrontation between the countries. Additional pressure on the position of the pair is provided by weak macroeconomic statistics from Australia and the fact of a sharp decrease in the interest rate by the Reserve Bank of New Zealand from 1.50 to 1.00%. Commenting on the decision in the follow-up statement, the New Zealand regulator pointed to maintaining inflation below 2%, slowing GDP growth, weak growth in the employment market and exacerbating the risks of a slowdown in the global economy.

    USD/JPY

    The US dollar showed strong growth against the Japanese yen on Tuesday, but again returned to decline during today's Asian session. Investors react rather actively to the aggravation of trade relations between the US and China and fear the start of a currency confrontation amid a significant weakening of the Chinese yuan against the dollar. At the same time, market activity remains quite high, and interest in risk is gradually weakening. Macroeconomic statistics published in Japan yesterday turned out to be moderately optimistic. Average Cash Earnings in June increased by 0.4% YoY after a decline by 0.5% YoY in the previous month. Analysts had expected decline by 0.8% YoY. Household Spending in June grew by 2.7% YoY after growth by 4.0% YoY last month. Experts expected a slowdown to +1.3% YoY.

    Oil

    Oil prices showed a decline on Tuesday, despite the fact that during the day there was an upward trend caused by a technical correction after a steady decline last week. Pressure on quotes is still exerted by the aggravation of trade relations between the USA and China, which means a further weakening of global demand for "black gold". Support for the prices was provided by Iran’s statements, which threatened to block the oil flow through the Strait of Hormuz if it could not trade its own oil. API Weekly Crude Oil Stock report on Tuesday also provided moderate support for the quotes. Over the week as of August 2, US inventories decreased by 3.400 million barrels after a decrease of 6.024 million barrels in the previous period.
     
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