Forex Analysis by LiteForex

[MikhailLF]

Morning Market Review
2019-08-08 08:41 (GMT+2)
EUR/USD

The European currency showed ambiguous trading against the US dollar on Wednesday. Powerful pressure on the instrument was exerted by macroeconomic statistics published in Germany. Industrial production in June showed a decrease of 1.5% MoM after an increase of 0.3% MoM last month. Analysts had expected the decline of 0.4% MoM. In annual terms, the decrease in the indicator reached –5.2% YoY after –3.7% YoY in May. Experts counted on improving dynamics and reducing production by only 1.8% YoY. USD, in turn, is under pressure from the worsening trade relations between the US and China. The day before, China said it would refuse to purchase American agricultural equipment, and would also consider introducing additional reciprocal import duties. In addition, Donald Trump puts pressure on the Fed and literally demands to continue lowering interest rates.

GBP/USD

GBP fell slightly against USD on Wednesday, reacting to weak statistics from the UK. Halifax Housing price Index in July showed a decrease of 0.2% MoM after a decrease of 0.4% MoM last month. Analysts counted on the appearance of positive dynamics (+0.3% MoM). There were few interesting macroeconomic statistics from the USA yesterday, so investors generally adhered to the previous drivers. During the Asian session on August 8, GBP shows corrective growth, despite the continued negative macroeconomic background. RICS House Price Balance in July collapsed by 9% after falling by 1% last month.

AUD/USD

AUD showed ambiguous dynamics against USD on Wednesday. The instrument updated record lows at the opening of the session, responding to the publication of weak macroeconomic statistics from Australia and rather unexpected decision of the RBNZ to lower the rate immediately by 0.50 points. Then, with the opening of European sites, AUD managed to correct, and a further weakening of USD led to the restoration of the pair to the opening levels. During today's Asian session, the pair is trading with a raise. The instrument is supported by good macroeconomic statistics from China, which indicated an increase in exports and a slower decrease in the trade surplus. In July, China's surplus amounted to 45.06B dollars against 50.98B last month. Analysts had expected a decline to 40.00B.

USD/JPY

The US dollar maintains an uncertain downward trend against the Japanese yen, still located near local lows since the beginning of the year. The yen is in demand amid growing market turmoil triggered by a sharp deterioration in trade relations between the US and China. In addition, the market fears new steps from the Fed aimed at easing monetary policy, especially given the constant pressure on the regulator from Donald Trump. The Bank of Japan, in turn, took a wait-and-see approach. According to the latest protocols, the Japanese regulator notes the continued upward momentum for inflation and has not yet considered the possibility of additional stimulus at the next meetings. During today's Asian session, the instrument is trading in both directions, reacting to the publication of ambiguous macroeconomic statistics from Japan. Foreign Investments in Japanese Stocks for the week as of August 2 reduced by JPY 339.9B. Foreign Bonds Buying, in turn, increased by JPY 286.2B.

Oil

Oil prices showed a sharp decline on Wednesday, reaching new seven-month lows against a backdrop of continued deterioration in US-China trade relations. Additional pressure on the quotes was exerted on Wednesday by a report on oil reserves from the US Department of Energy. For a week as of August 2, oil stocks in US warehouses unexpectedly increased by 2.385M barrels, after a decrease of 8.496M barrels over the past period. Analysts had expected negative dynamics to remain at –2.845M barrels. US refining capacity utilization also rose by 3.4% to 96.4%, following an increase in production from 12.200M to 12.300M barrels per day.

 

[MikhailLF]

Morning Market Review
2019-08-09 08:23 (GMT+2)
EUR/USD

EUR showed ambiguous trading against USD on Thursday. Before the opening of the American session, the euro was trading upwards, receiving support from good statistics from China. In addition, investors continue to evaluate the prospects for a further reduction in the interest rate by the Fed amid a sharp deterioration in US-China trade relations and the CNY devaluation. Chinese data indicated an increase in exports of 3.3% YoY in July after a decline of 1.3% YoY in June. Analysts had expected negative dynamics to remain at –2.0% YoY. Imports for the same period decreased by 5.6% YoY after a decrease of 7.3% YoY. All this led to a slower decrease in the surplus of the trade balance from 50.98 to 45.06 billion dollars with a forecast of a decrease to 40.00 billion.

GBP/USD

The British pound showed a slight decrease against the US dollar on Thursday. In the absence of significant macroeconomic releases, investors continued to take a lead from previous factors. The main "bearish" driver for the instrument remains the prospect of a "tough" Brexit, which could cause significant harm to the UK economy. Already, investors fear a sharp decline in UK trade with EU countries, which could lead to food shortages in the country. During today's Asian session, the pair is trading with a slight growth. The focus of investors is on a large block of macroeconomic statistics from the UK. In particular, a preliminary estimate of UK GDP for the Q2 2019 is expected to be released.

AUD/USD

The Australian dollar rose significantly against the US currency on Thursday, continuing the development of the correctional impulse formed the day before. The instrument was supported by Chinese trade statistics, which, despite the continuing tensions between the US and China, showed an increase in July. Today, the pair is trading in both directions. Investors are focused on the speech of the RBA Governor Philip Lowe and the comments of the Australian regulator on monetary policy. No concrete hints were expected from Lowe's speech on further easing of monetary policy, so the reaction of the market to it was very restrained. The head of the RBA noted the insufficiently rapid increase in inflation in the country, as well as the growth of external economic risks, primarily due to the deterioration of trade relations between China and the United States.

USD/JPY

The US dollar continues a moderate decline against the Japanese yen, returning to local lows, updated on August 7. The development of the "bearish" trend is facilitated by the growth of the Japanese currency against the backdrop of worsening trade relations between the US and China and a decline in interest in risk. During today's Asian session, Japanese macroeconomic statistics provides little support for the yen. According to preliminary estimates, Japan's GDP in Q2 2019 showed an increase of 0.4% QoQ after an increase of 0.6% QoQ in the previous quarter. Investors had expected a slowdown to +0.1% QoQ. Annual GDP data reflected a slowdown from +2.2% YoY to +1.8% YoY, which also turned out to be better than market expectations.

Oil

Oil quotes rose slightly on Thursday, receiving support from the expectation of a decrease in production volumes amid a prolonged decline in prices. In addition, the instrument was supported by strong macroeconomic statistics from China, which signals a slight improvement in global demand, despite growing pressure from the US. The market also reacted positively to statements by Saudi Arabia, which, in addition to the current OPEC+ agreement, calls on all oil exporters to discuss an additional reduction in oil prices in order to maintain a balance of supply and demand in the market. Today, investors are waiting for Baker Hughes US Oil Rig Count report.

 

[MikhailLF]

Bitcoin: technical analysis
2019-08-12 09:10 (GMT+2) Bitcoin
Current trend

Last week, the price of Bitcoin repeatedly tested the level of 12000.00 but failed to consolidate above it and was corrected to the level of 11250.00 (Murrey [5/8]). Consolidation below it will let the correction to develop to the levels of 10625.00 (the middle line of Bollinger bands, Murrey [2/8] H4) and 10000.00 (Murrey [4/8]). Otherwise, the price may grow to the levels of 12500.00 (Murrey [6/8]) and 13125.00 (Murrey [5/8] H4).

Technical indicators do not give a clear signal. Bollinger Bands are reversing upwards, confirming the relevance of the upward trend. The MACD histogram is stable in the positive zone. Stochastic is directed downwards but approaches the oversold zone, which does not exclude a limited correction. In general, in the near future, the instrument may resume its growth from current levels or the middle line of Bollinger Bands (10625.00).

Support and resistance

Resistance levels: 12000.00, 12500.00, 13125.00, 13750.00.
Support levels: 11250.00, 10625.00, 10000.00.

Trading tips

Long positions can be opened from the level of 11500.00 or 10625.00 with the targets at 12500.00, 13125.00 and stop loss 10950.00 and 10300.00, respectively.
Short positions can be opened below the level of 10625.00 with the targets at 10000.00, 9375.00 and stop loss 11000.00.

Implementation period: 4–5 days.

 

[MikhailLF]

XAU/USD: technical analysis
2019-08-13 10:06 (GMT+2) Gold
XAU/USD, H4

On the 4-hour chart, the instrument is trading on the upper line of the Bollinger Bands. The price remains above its moving averages that are directed up. The RSI is growing, having entered the overbought zone. The Composite is about to test its strong resistance region.

XAU/USD, D1

On the daily chart, the instrument is trading on the upper line of the Bollinger Bands. The price remains above its moving averages that are directed up. The RSI is growing, having entered the overbought zone. The Composite is approaching its strong resistance.

Key levels

Support levels: 1468.0 (local lows), 1440.0 (June highs), 1399.0 (local lows).
Resistance levels: 1532.0 (September 2011 lows), 1560.0 (March 2013 lows), 1584.0 (August 2012 lows).

Trading tips

The price is about to test its strong resistance near 1532.0. There is a chance of a short-term downward correction.
Long positions can be opened from the level of 1532.0 with targets at 1560.0, 1584.0 and stop-loss at 1510.0. Validity – 3-5 days.
Short positions can be opened from the level of 1399.0 with the target at 1365.0 and stop-loss at 1412.0. Validity – 3-5 days.

 

[MikhailLF]

XAG/USD: technical analysis
2019-08-14 09:42 (GMT+2) Silver
XAG/USD, H4

On a 4-hour chart, the instrument is trading within a sideways channel formed by the boundaries of Bollinger bands. The pair was corrected to the midline of the indicator, the formation of a side trend continues. The MACD histogram is in the positive area, keeping a signal to open long positions. Stochastic is in the neutral zone, the oscillator lines are reversing upwards.

XAG/USD, D1

On the daily chart, the uptrend is still in force. The instrument is trading near the upper border of Bollinger bands, the indicator cloud is narrowing. The MACD histogram is in the positive area, while keeping a confident signal to open buy orders. Stochastic is in the neutral zone, the oscillator lines are reversing downwards from the border with the overbought zone.

Key levels

Resistance levels: 16.98, 17.10, 17.24, 17.37, 17.51.
Support levels: 16.81, 16.67, 16.57, 16.49, 16.35, 16.25, 16.11, 15.92.

Trading tips

Long positions can be opened from the current level with the target at 17.37 and stop loss 16.67.
Short positions can be opened from the level of 16.65 with the target at 16.25. Stop loss 16.85.
Implementation period: 1–3 days.

 

[MikhailLF]

Brent Crude Oil: general analysis
2019-08-16 08:33 (GMT+2) Brent
Current trend

Oil prices are falling. One of the reasons for the fall of "black gold" is associated with a slowdown in the global economy. Thus, statistics from China reflected an unexpected record drop in industrial production to 4.8% against the forecast of 5.8%, the last time such data were recorded 17 years ago. Investors were also disappointed with the German GDP, which has declined in the second quarter.

The second factor, which also negatively affected quotes, was the publication of data on commercial US oil reserves, which grew by 1.58 million barrels against the forecast of –2.78 million barrels. As for the total oil production, it remained at the same level of 12.3 million barrels per day. If the trend continues, it is possible that OPEC may intervene in order to balance the market by reducing energy production.

Today, traders will focus on data on the number of active drilling rigs from Baker Hughes.

Support and resistance

Stochastic is around 23 points and does not give signals for opening positions.
Resistance levels: 59.55, 61.40.
Support levels: 57.71, 56.10.

 

[MikhailLF]

Morning Market Review
2019-08-19 08:27 (GMT+2)
EUR/USD

The euro closed last week with a steady decline against the US dollar, retreating to new local lows of August 2. The European currency remains pressured amid the publication of ambiguous macroeconomic statistics from the Eurozone. In addition, investors responded positively to Donald Trump’s recent statements that the US-China trade conflict could still end with the signing of a final agreement. Published on August 16, macroeconomic statistics from the United States was ambiguous. Investors were optimistic about the dynamics in the number of building permits, which reflected an increase of 8.4% MoM in July after a decrease of 5.2% MoM last month. However, the changes in the number of new residential houses in July fell by 4.0% MoM after a decrease of 1.8% MoM last month. The dollar was also pressured by The University of Michigan Consumer Sentiment Index. According to preliminary estimates, the index fell from 98.4 to 92.1 points with a forecast of 97.2 points.

GBP/USD

The British pound corrected against the US dollar late last week, updating local highs of August 8th. The pound was supported by technical correction factors, while the situation around Brexit continues to put pressure on GBP. UK citizens may face food and drug shortages during the first few months after the UK leaves the EU without an agreement. Meanwhile, the government of Boris Johnson still does not have any noticeable progress on the issue of concluding an agreement, so there is growing talk about a possible vote of no confidence. On the one hand, this supports the position of the British currency, since there is a real chance to avoid the "tough" Brexit. On the other hand, the growth of political competition threatens with a new crisis, which will be extremely painful for the prospects of the British economy in the face of growing uncertainty in world markets.

AUD/USD

The Australian dollar showed uncertain growth against the US one at the end of last week, recovering slightly after a noticeable decline on August 14. The instrument was supported by technical correction factors, as well as by weak macroeconomic statistics from the United States. The University of Michigan Consumer Sentiment Index in August fell from 98.4 to 92.1 points with a forecast of 97.2 points. Today, the instrument continues the previous trend. At the beginning of a new week, there are few interesting macroeconomic statistics on the market, so investors expect Tuesday when the minutes of the last RBA meeting will be published.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on August 16, continuing the development of the "bullish" impulse formed the day before. It is curious that the growth of the instrument proceeded against the background of the publication of ambiguous US macroeconomic statistics, which, in particular, indicated a drop in consumer confidence in August. Today, the dollar maintains a weak "bullish" mood. The yen is pressured by weak data on the dynamics of the trade balance. In July, the balance reached a deficit of 249.6 billion Japanese yen, which turned out to be worse than market expectations of 200.0 billion. Japanese exports in July fell by 1.6% YoY after a decline of 6.6% YoY last month. Imports for the same period declined by 1.2% YoY after declining by 5.2% YoY.

Oil

Oil prices showed ambiguous dynamics on Friday, interrupting the development of the "bearish" impulse that formed on August 14. Moderate support for quotes was provided by favorable data on the dynamics of retail sales in the USA, as well as rather optimistic comments by Donald Trump regarding the prospects for concluding a trade agreement between the USA and China. Negative forecasts from OPEC, as well as the published report by Baker Hughes, which reflected the growth of active oil platforms in the USA from 764 to 770 units, restrained more confident price increase.

 

[MikhailLF]

Morning Market Review
2019-08-20 08:24 (GMT+2)
EUR/USD

The euro showed a decline against the US dollar on Monday but returned to growth today. Strengthening of the instrument is largely technical since the macroeconomic background particularly didn't change. The consumer price index in the Eurozone in July showed a decline of 0.5% MoM after rising by 0.2% MoM last month. Analysts had expected a decline by 0.4% MoM. YoY, the index growth slowed down from 1.3% to 1.0%, which also turned out to be worse than analysts' expectations of 1.1%. On Tuesday, investors are focused on a block of statistics on industrial inflation in Germany for July and the dynamics of production in the Eurozone's construction sector in June.

GBP/USD

At the beginning of the new week, the British pound returned to decline against the US dollar as fears of a recession in the US economy began to gradually fade. Recall that the market reacted quite sharply to the reversal of the yield curve of US treasury bonds, which is usually considered the first sign of the beginning of a recession. Nevertheless, the Fed representatives and President Donald Trump personally managed to calm the markets, as a result of which the yield curve returned to its "normal" form. In turn, pressure on the pound continues to increase as the Brexit deadline approaches. Investors fear that the British economy will face a shortage of food, medicines, and energy in the first few months after leaving the EU without a deal.

AUD/USD

The Australian dollar begins a new week with lateral dynamics against the US currency. A weak decline on August 19 gave way to uncertain growth today. Moderate support for the Australian dollar is provided by the published minutes of the RBA meeting of August 6, given that the meeting itself was neutral. As before, the regulator is ready to take additional measures to stimulate the economy but prefers to act with caution. A significant source of uncertainty in the actions of the RBA remains the growth of external tension, in particular, emanating from the US-China conflict. As for internal factors, the Australian regulator relies on positive dynamics in the labor market. According to the Central Bank, inflation will remain slightly below 2% during 2020 and will exceed this psychological level only in 2021.

USD/JPY

The US dollar is developing an upward trend against the Japanese yen, approaching local highs of August 13 and 15. The "bullish" sentiment on the instrument was strengthened by weak macroeconomic statistics from Japan, published on Monday. In addition, investors calmed somewhat regarding the onset of the recession in the US economy. Today, the pair is trading in both directions, waiting for the appearance of new drivers on the market. On Tuesday, the macroeconomic background remains fairly neutral, so a significant increase in activity should not be expected so far.

Oil

At the beginning of the new week, oil prices rose, having received support due to the aggravation of the conflict in the Middle East. The media got information that one of the Saudi oil fields was attacked by the Yemenite Hussites, although later Saudi Arabia stated that this incident did not affect the dynamics of oil production. In turn, the market welcomed the release of the Iranian oil tanker, which was captured by Gibraltar in July. On August 20, investors are awaiting the publication of an API report on oil reserves for the week of August 16. The previous report reflected growth in stocks by 3.7 million barrels.

 

[MikhailLF]

Morning Market Review
2019-08-22 08:28 (GMT+2)
EUR/USD

The euro showed a decline against the US dollar on August 21, continuing the development of a flat trend in the short term. Pressure on the European currency was exerted by news of possible aggravation of the US-China trade relations. Donald Trump previously thought about the possibility of introducing import duties on European goods, but the US Presidential Administration then refused this in the face of uncertain relations with China. This time, Trump proposed introducing duties on European cars. Another negative factor for the euro was the resignation of Italian Prime Minister Giuseppe Conte, which threatens another political crisis in the country. Recall that Italy is periodically criticized by the EU because it does not fit into its budget deficit norms (which is fraught with penalties). Today, the euro is trading in both directions, waiting for the appearance of new drivers on the market. Investors are focused on a block of statistics on business activity in Europe for August. The minutes of the ECB meeting on monetary policy are also expected to be published.

GBP/USD

The British pound weakened against the US dollar on Wednesday, offsetting the uncertain growth of the instrument the day before. The growth of the British currency is restrained by the problems around Brexit, which continue to worry the markets. In the near future, British Prime Minister Boris Johnson is due to hold a series of meetings with European leaders in order to create a coalition that would help him convince the European Commission to reconsider a number of issues in the current agreement. The backstop clause on the Irish border is the cornerstone in the agreement. Additional pressure on the pound on Wednesday was provided by macroeconomic publications from the UK. The volume of net public sector borrowing in July fell by −1.917 billion pounds, which turned out to be worse than market expectations of −2.650 billion.

AUD/USD

The Australian dollar showed ambiguous dynamics on Wednesday, but today returned to an active decline. AUD is pressured by published macroeconomic statistics from Australia. Commonwealth Bank’s Services PMI fell in August from 52.3 to 49.2 points, with an expected decline to 51.8 points. The composite index fell from 52.1 to 49.5 points, which also turned out to be worse than forecasts of 51.5 points. The Manufacturing PMI over the same period decreased from 51.6 to 51.3 points (forecast 51.0 points). The US currency was supported by data on the dynamics of sales in the secondary housing market. According to data for July, sales grew by 2.5% MoM against a decline of 1.3% MoM last month.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on August 21, having received support from good macroeconomic statistics on sales in the secondary housing market. The published minutes of the July meeting of the US Fed were mixed, and, as analysts estimate, are not a "bullish" factor for the dollar. Investors were confused by the big disagreements within the FOMC. Some participants suggested reducing the rate immediately by 50 basis points, while others advocated its preservation at the current level. Today, the pair is trading in a downtrend, ignoring weak macroeconomic statistics from Japan. Nikkei Manufacturing PMI in August grew from 49.4 to 49.5 points, which turned out to be worse than the expectations of 49.8 points. The activity index in all industries collapsed in June by 0.8% MoM after rising by 0.3% MoM last month (with a forecast of −0.7% MoM).

Oil

Oil prices showed a slight increase on Wednesday. Quotes were supported by a published report from the US Department of Energy. Over the week of August 16, crude oil inventories fell by 2.7 million barrels to 437.8 million, which was better than market expectations. At the same time, gasoline inventories rose again by 312K barrels, while investors expected a reduction of 200K. The volume of oil production in the United States did not change and amounted to 12.300 million barrels per day.

 

[MikhailLF]

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

The euro showed ambiguous dynamics against the US dollar on August 22, closing with a slight "bearish" advantage. The European currency was supported by published macroeconomic data on business activity. The Markit Manufacturing PMI for the Eurozone in August rose from 46.5 to 47.0 points against the forecast of a decrease to 46.2 points. Markit Services PMI for the same period increased from 53.2 to 53.4 points, which is also above forecasts of 53.0 points. The composite Manufacturing PMI strengthened from 51.5 to 51.8 points (forecast 51.2 points). Today, the euro is trading in a downtrend. Investors are waiting for Fed Chairman Jerome Powell to speak at the annual Jackson Hole symposium. Powell is expected to comment on future monetary policy plans.

GBP/USD

The pound has appreciably strengthened against the US dollar on Thursday, but today again returned to decline. Strong support for the British currency was provided by the comments of German Chancellor Angela Merkel, who recalled that there is time until the end of October to conclude a deal between the UK and the EU. Earlier, French President Emmanuel Macron expressed a tougher stance, emphasizing that the EU does not intend to revise the provision on the backstop of the Irish border. He believes that only minor changes are possible in the text of the final agreement. Additional pressure on the pound on Thursday was put by the published CBI report on retail. Sales in August fell by 49% MoM to their lowest levels since December 2008. Analysts had expected a decline of only 11%.

AUD/USD

The Australian dollar returned to active decline against the US dollar on August 22, amid the publication of disappointing macroeconomic statistics on business activity from Australia by Commonwealth Bank. American data on business activity also turned out to be worse than market expectations, however, this did not significantly affect the dynamics of the instrument. The Markit Manufacturing PMI index in the US fell from 50.4 to 49.9 points, while analysts expected growth to 50.5 points. The Services PMI, according to preliminary estimates, fell from 53.0 to 50.9 points with a forecast of 52.8 points. The composite business activity index over the same period decreased from 52.6 to 50.9 points (forecast 51.7 points).

USD/JPY

The US dollar fell against the Japanese yen on August 22, leveling the slight growth the day before. On Thursday, the macroeconomic background remained negative for both the yen and the dollar. Nikkei Manufacturing PMI in August grew from 49.4 to 49.5 points with the forecast of 49.8 points. The activity index in all industries dropped in June by 0.8% MoM after rising by 0.5% in May. The US data reflected a sharp decline in the composite PMI from 52.6 to 50.9 points. Today, the yen is trading with moderate growth. Investors analyze macroeconomic statistics on consumer inflation from Japan and expect Fed Chairman Jerome Powell to speak at the annual Jackson Hole symposium. The national consumer price index in July slowed down from 0.7% to 0.5% YoY, which coincided with analysts' forecasts.

Oil

Oil prices fell moderately on Thursday, responding to worsening forecasts for global economic growth. A more confident decline in quotes was hampered by the previously published EIA report, which reflected a strong decline in oil reserves for the week of August 16. On Friday, investors expect the Fed Chairman Jerome Powell to speak in Jackson Hole. Powell is expected to comment on the prospects for further interest rate cuts in the USA. Given the ongoing pressure on the Fed from President Donald Trump, it is likely that Powell will try to carefully hint at possible timing and ways to support the economy. In the evening, market participants are awaiting the Baker Hughes report on active oil rigs in the US.

 

[MikhailLF]

Morning Market Review
2019-08-26 08:34 (GMT+2)
EUR/USD

Euro rose against US dollar on Friday, returning to the local highs of August 15. The instrument grew sharply due to the rapid weakening of the US currency against the background of the speech of the Fed Chairman Jerome Powell at the Jackson Hole Economic Symposium. Powell noted that the regulator is ready to further reduce the interest rate if the economic situation so requires. According to him, the trade war with China and the threat of starting one with the EU significantly complicate the development of long-term scenarios for the Fed, as well as contribute to a further slowdown in the global economy. Immediately after Powell’s speech, Donald Trump attacked the Fed with criticism on Twitter, accusing the regulator of inaction. During the Asian session on August 26, the instrument is expected to correct. Investors expect publication of statistics from Germany on the dynamics of business sentiment in August.

GBP/USD

The British pound closed last week with moderate growth, updating the local highs of July 29. The instrument was supported by not the strongest positions in the American currency, which weakened against the background of the slurred speech of Fed Chairman Jerome Powell at a symposium in Jackson Hole. USD was also under pressure from macroeconomic statistics on new home sales in the US. In July, the index declined by 12.8% MoM after growing by 20.9% MoM a month earlier. Analysts had expected "bearish" trend to appear, but counted on only –0.2% MoM decline. The speech of the Bank of England Governor Mark Carney at the symposium was neutral. Carney ignored monetary policy issues and concentrated on finding a replacement for the dollar as a global reserve currency.

AUD/USD

The Australian dollar remains under pressure and shows mainly negative dynamics against the US currency. The growth of the "bearish" sentiment is due to the further aggravation of the trade conflict between the United States and China. Beijing said on Friday that it would introduce new USD 75 billion import duties on US goods in response to similar measures by the United States (new US duties will be imposed on September 1). In addition, China intends to introduce import duties on US cars in the amount of 25%.

USD/JPY

The US dollar showed a steady decline against the Japanese yen on Friday, reacting to a speech by Fed Chairman Jerome Powell at the symposium in Jackson Hole. Powell signaled that the regulator is ready for further stimulation measures if the situation in the economy so requires. After the symposium ended, the Fed action was heavily criticized by Donald Trump on Twitter. Additional support for the yen on Friday was provided by China's announcement of its intention to introduce reciprocal import duties on US goods in the amount of USD 75 billion from September 1. During the Asian session on August 26, the instrument shows corrective growth, opening with a negative gap. With the opening of the American session, statistics on the dynamics of orders for durable goods in the US for July are expected to be released.

Oil

Oil prices fell on Friday, continuing the development of an uncertain "bearish" impulse formed the day before. The development of negative dynamics in the instrument was facilitated by the aggravation of fears regarding a further slowdown in global economic growth. In particular, on Friday, China announced the introduction of reciprocal import duties on US goods in the amount of USD 75 billion, which could significantly postpone the possible signing of a trade agreement between the countries. Moderate support for the instrument on Friday was provided by Baker Hughes report on active oil platforms in the USA. During the week as of August 23, their number decreased by 16 units to 754 units. The previous report indicated an increase by 4 drilling rigs. During the Asian session on August 26, oil quotes showed moderate growth, following the general market trend.

 

[MikhailLF]

Morning Market Review
2019-08-28 08:35 (GMT+2)
EUR/USD

The European currency showed a moderate decline against the US dollar on Tuesday, continuing to develop a powerful "bearish" impulse formed the day before. Some pressure on the instrument yesterday was exerted by macroeconomic statistics from Germany. Germany's GDP for Q2 2019 showed a decrease of 0.1% QoQ, which coincided with the decline in the previous period. In annual terms, GDP grew by 0.4% YoY, which met the expectations of analysts and coincides with previous growth rates. Europe's leading economy has been declining for the second quarter in a row, which means the proximity of a technical recession and, coupled with a slowdown in the global economy, creates a very pessimistic picture for the euro. During the Asian session on August 28, the pair is trading downwards again. Investors expect publication of August data on consumer confidence in Germany and Italy, as well as statistics on Private Sector Loans in the euro area in July.

GBP/USD

The British pound showed growth against the US dollar on Tuesday, updating local highs of July 29. Positive dynamics in the instrument was facilitated by macroeconomic publications from the UK and the USA. Gross Mortgage Approvals in the UK in July increased from 42.8K to 43.3K, which turned out to be better than the forecasts of 42.8K. In turn, American statistics turned out worse than the forecasts. S&P/CaseShiller House Price Index in June slowed down from +2.4% YoY to +2.1% YoY with a forecast of +2.5% YoY. During today's Asian session, the instrument is trading in both directions. Pressure on the instrument is exerted by the BRC Shop Price Index. In July, the indicator crashed by 0.4% YoY after falling by 0.1% YoY last month.

AUD/USD

The Australian dollar is again trading lower against the US currency, staying close to its record lows, updated on August 7. The pressure on the instrument intensified after the market did not receive confirmation from the PRC of its intention to resume trade negotiations with the United States, as previously stated by Donald Trump. Apparently, the parties will exchange mutual duties in early September, which will push the global economy to a recession. During the Asian session on August 28, the pair is under pressure from the weak macroeconomic statistics of Australia. Construction Work Done for Q2 2019 fell by 3.8% QoQ after a decrease of 2.2% QoQ in the last quarter. Analysts expected a decrease of 1.0% QoQ only.

USD/JPY

The US dollar fell against the Japanese yen on Tuesday, returning to decline after strong growth the day before. The increased demand for safe assets was due to growing concerns about a further slowdown in the global economy, after China did not confirm the possibility of a resumption of trade negotiations with the United States. At the beginning of the week, Donald Trump said that he had a telephone conversation with the Chinese side, in which China allegedly expressed a desire to go back to the negotiating table.

Oil

Oil prices showed steady growth on Tuesday, continuing the development of the "bullish" momentum that formed at the beginning of the week. Quotes were previously supported by hopes for a resumption of trade negotiations between the US and China. However, according to recent data, these hopes may turn out to be false, since the Chinese side has not yet confirmed Donald Trump's statements. Powerful support for the instrument was provided on Tuesday by the API Weekly Crude Oil Stock. For the week as of August 23, the indicator fell by 11.1 million barrels after a decrease of 3.5 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

 

[MikhailLF]

Morning Market Review
2019-08-29 08:32 (GMT+2)
EUR/USD

The European currency showed a decline against the US dollar on Wednesday, continuing the development of the "bearish" impulse formed at the beginning of the week. The development of negative dynamics is facilitated by the general pessimistic background in the market. Investors fear the onset of a global recession caused by a further escalation of trade tension and a decline in the world's leading economies. Macroeconomic statistics from Europe published on Wednesday turned out to be contradictory. GfK German Consumer Climate remained unchanged at 9.7 points, which turned out to be better than market expectations. At the same time, the Import Price Index continued to decline, decreasing in July by 2.1% YoY after falling by 2.0% YoY last month. Analysts had expected decline by 1.7% YoY only. During today's Asian session, the pair is trading with a raise. Investors expect the release of European statistics on business sentiment. In addition, Germany will report on the dynamics of consumer prices in August.

GBP/USD

The British pound returned to active decline against the US dollar on Wednesday, retreating from the local highs of July 29, updated the day before. The reason for the emergence of negative dynamics was the news that the government of British Prime Minister Boris Johnson intends to appeal to Queen Elizabeth II with a request to extend the break in the work of the British Parliament until mid-October. If Johnson’s plan is implemented, parliamentarians will have virtually no time to prevent Britain’s exit from the EU under a "hard" scenario. During today's Asian session, the instrument is quite stable, waiting for new drivers to appear in the market. Macroeconomic statistics from the UK will only appear on Friday, so today publications from the USA will be in the spotlight. Among other things, investors expect the release of preliminary data on the dynamics of US GDP for Q2 2019.

AUD/USD

The Australian dollar continues to decline moderately against the US currency, approaching its record lows, updated on August 7. Pressure on the instrument is exerted by further escalation of trade tension between the United States and China. This Sunday, countries will exchange mutual import duties, which will only increase the risks of a global economic recession. There is little hope that the United States and China may return to negotiations in the near future. Australian macroeconomic statistics also have a negative effect on the instrument. Construction Work Done for Q2 2019 fell by 3.8% QoQ after a decrease of 2.2% QoQ in the last quarter. Investors had expected a decline of only 1.0% QoQ.

USD/JPY

The US dollar shows ambiguous dynamics of trading against the Japanese yen, trying to develop a "bullish" momentum formed at the beginning of the week. Attitude to risk in the market is constantly changing, which allows the Japanese currency to periodically show moderate growth. In turn, pressure on the yen is exerted by the further escalation of the trade conflict between Japan and South Korea, while the US currency is under pressure from rising tensions on another front, where the United States and China are opposing parties. During the Asian session on August 29, USD is again trading lower, pending the publication of macroeconomic statistics from the United States. A preliminary estimate of US GDP for Q2 2019 is in the spotlight. In addition, investors are interested in Consumer Spending and Pending Home Sales in July.

Oil

Oil prices showed a moderate increase in trading on Wednesday, receiving support from a published report from the US Department of Energy, which confirmed the API data published earlier and reflected a decrease in US oil inventories by 10.027 million barrels. In addition, the Department of Energy reported a significant decrease in gasoline and distillate inventories by 2.1 million barrels. In turn, US oil production again showed growth from 12.300 to 12.500 million barrels per day. More confident positive dynamics in the instrument was hampered by concerns about the development of a recession in the global economy amid worsening trade relations between the US and China.

 

[MikhailLF]

Morning Market Review
2019-09-02 08:40 (GMT+2)
EUR/USD

The European currency fell significantly against the US dollar on Friday, updating record lows of mid-May 2017. The pressure on the instrument intensified at the end of last week amid the publication of disappointing macroeconomic statistics from Europe. Retail sales in Germany showed a decrease of 2.1% MoM in July after rising by 3.0% MoM last month. Analysts expected a decline of –1.3% MoM. The EU Core Consumer Price index in August remained at the previous level of +0.9% YoY, while investors expected it to accelerate to +1.0% YoY. Thus, inflation in Europe continues to remain significantly below the ECB target levels, forcing the latter to act more aggressively. A number of analysts believe that the European regulator may resort to new stimulation measures already at the September meeting. In particular, the market does not exclude the possibility of resuming the quantitative easing program.

GBP/USD

The British pound showed a moderate decline against the US dollar at the end of last week, continuing the development of the "bearish" impulse formed on August 28. The pound is still under pressure due to the aggravation of the domestic political situation in the UK amid the approach of the Brexit deadline. British Prime Minister Boris Johnson asked the Queen for permission to extend the Parliament summer recess until mid-October, so that they would not be able to pass a bill prohibiting the country from leaving the EU without a valid agreement. Members of the opposition parties said they would try to meet the deadlines. However, official statements often contain calls to declare a vote of no confidence in the government. At the end of last week, moderate support to the pound was provided by data on consumer lending. Net Lending to Individuals in July increased from 4.8 to 5.5 billion pounds. Mortgage Approvals in July rose from 66.51K to 66.26K, which also exceeded the market expectations of 66.17K.

AUD/USD

The Australian dollar maintains a moderate downtrend against the US currency, again approaching local lows of August 26. Pressure on the instrument is exerted by the uncertain situation surrounding the US-Chinese trade negotiations, which may resume in September, but, according to many analysts, are unlikely to lead to a noticeable improvement in the situation. Meanwhile, the parties introduced mutual import duties on September 1, which may already negatively affect the growth rate of the global economy. During today's Asian session, the instrument is trading in both directions. US markets are closed due to Labor Day, so the Australian dollar has a chance of correction. Moderate support for the instrument is provided by macroeconomic statistics from Australia and China. AiG Manufacturing index went up from 51.3 to 53.1 points in August. Terms of Trade index in Q2 2019 rose from 1.0% to 1.6%. Caixin Manufacturing PMI in August rose from 49.9 to 50.4 points, exceeding the forecast of 49.8 points.

USD/JPY

The US dollar showed a moderate decline against the Japanese yen last Friday, interrupting the development of a "bullish" impulse formed in the middle of the week. The yen was supported by macroeconomic data from Japan published on August 30. The unemployment rate in July fell from 2.3% to 2.2%, while the market expected its growth to 2.4%. Industrial production in July grew by 1.3% MoM and 0.7% YoY, which was significantly better than market expectations. During today's Asian session, the dollar is trading with an increase. The yen is under pressure from Nikkei Manufacturing PMI, which reflected a further decline in business sentiment. In August, the index fell from 49.5 to 49.3 points.

Oil

Oil prices showed a negative trend on Friday after moderate growth throughout the past trading week. The quotes decreased against the background of the corrective growth of the American currency, as well as due to published data from Reuters, which indicated an increase in oil production by OPEC. In August, production increased by 80K barrels, showing growth for the first time in 2019. A more confident negative dynamics in the instrument at the end of the last trading week was hindered by the published Baker Hughes report, which reflected a decrease in the number of active drilling rigs over the week as of August 30 from 754 to 742 units. Additional support for quotes is provided by Hurricane Dorian, which last weekend intensified to the highest category and reached the Bahamas, and this night can reach the coast of Florida.

 

[MikhailLF]

Morning Market Review
2019-09-03 08:48 (GMT+2)
EUR/USD

The EUR/USD pair continues to decline, renewing record lows since May 2017. EUR is under pressure amid worsening of the global economic outlook. In particular, investors are seriously concerned about the further escalation of the US-China trade conflict, which could lead to a slowdown in global economic growth. However, the parties agree to return to the negotiating, and the market expects the start of a new round in September. Yesterday’s EU macroeconomic statistics was ambiguous. Thus, Markit Manufacturing PMI in France increased from 51.0 to 51.1 points, while the same indicator in Italy rose from 48.5 to 48.7 points. However, the index in Germany fell from 43.6 to 43.5 points again. In general, EU PMI remained at the previous level of 47.0 points.

GBP/USD

Yesterday, the GBP/USD pair fell steadily, retreating to local lows since August 12. Despite the closed markets in the United States on the occasion of Labor Day, GBP remained under pressure due to the publication of poor UK macroeconomic statistics. So, Markit Manufacturing PMI in August fell from 48.0 to 47.4 points, while analysts' forecasts predicted an increase to 48.4 points. Another negative factor for the price is the prospect of a hard Brexit. The Queen of the United Kingdom approved the plan of Prime Minister Boris Johnson to extend the vacation for the British Parliament until mid-October, which will significantly hinder the adoption of a bill banning the country's exit from the EU without a deal. It is predicted that such a bill could be introduced today.

AUD/USD

AUD is actively falling against USD, renewing local lows since August 26. The development of the “bearish” dynamics, as before, is due to the growth of tension in the market. Last Sunday, China and the United States exchanged mutual import duties, which will negatively affect the dynamics of the world economy in the near future. At the same time, macroeconomic statistics published on Monday moderately supported the instrument. Thus, AiG Manufacturing PMI in Australia in August rose from 51.3 to 53.1 points. The Chinese Caixin Manufacturing PMI over the same period increased from 49.9 to 50.4 points against the forecast of 49.8 points. Today, during the Asian session, the pair is also trading in a downward direction. Investors are waiting for the publication of the RBA decision on the interest rate but do not count on any changes in the monetary policy vector.

USD/JPY

USD has been growing moderately against the JPY since the beginning of the current trading week, approaching the local highs, renewed on August 29. The development of upward dynamics is facilitated by corrective sentiment in USD, as well as the publication of poor macroeconomic statistics from Japan at the beginning of the week. Thus, the volume of Q2 2019 Capital Spending in Japan increased by 1.9% QoQ, slowing down against the previous growth rate of +6.1% QoQ. Nikkei Manufacturing PMI in August fell from 49.5 to 49.3 points, remaining in the stagnation zone. Today, investors are awaiting the publication of a block of macroeconomic statistics on business activity in the United States.

Oil

Yesterday, oil prices fell slightly, weakening the “bearish” momentum formed at the end of last week. The development of negative dynamics is due to the aggravation of the trade conflict between the United States and China after the introduction of mutual import duties on September 1. Also, the market expects the start of a new round of trade negotiations at the end of September, as Donald Trump has repeatedly stated. China also welcomes the opportunity to solve the problem through negotiations but continues to insist on the abolition of part of import duties imposed by Washington earlier. Today, investors are focused on the report of the American Petroleum Institute for Oil Reserves. The previous report reflected a sharp decline in oil reserves by 11.1 million barrels, which was later confirmed by an official report from the US Department of Energy.

 

[MikhailLF]

Morning Market Review
2019-09-04 08:36 (GMT+2)
EUR/USD

The European currency showed moderate growth on Tuesday, departing from the updated local lows of May 2017. The reason for the appearance of correctional dynamics, in addition to a number of technical factors, were comments by US Fed officials regarding the prospects for a further reduction in interest rates by the regulator. James Bullard, St. Louis Fed President, said that the current level of rates remains "excessively high" and it would be better if the regulator immediately reduced it significantly, rather than doing it gradually. Later Bullard was supported by Boston Fed President Eric Rosengren, who pointed out the growing risks for the American economy. Today, EUR is trading in both directions. Investors are waiting for the publication of statistics on Services PMI from Europe. In addition, the market is awaiting the speech of Christine Lagarde, who is due to become the new ECB President from November 1, 2019.

GBP/USD

The British pound traded in both directions on Tuesday, managing to recover by the close of the session. During today's Asian session, the pair shows moderate growth, partially offsetting the "bearish" beginning of the current week. The pound reacted positively to news from the UK, where the majority of the House of Commons MPs voted to seize control over parliament's agenda. Parliament may now consider a bill that would oblige British Prime Minister Boris Johnson to request a new deferral of Brexit until January 31, 2020. Johnson is a staunch opponent of deferrals, so he said in response that he would push for early parliamentary elections. Today, investors expect the publication of statistics on the UK Markit Services PMI in August. Construction PMI published the day before fell from 45.3 to 45.0 points against the forecast of growth to 45.9 points.

AUD/USD

The Australian dollar showed strong growth against the US currency on Tuesday and continues to actively develop the "bullish" dynamics during today's Asian session. The growth of the instrument was facilitated by the publication of weak macroeconomic statistics from the US. ISM Manufacturing PMI in August declined significantly from 51.2 to 49.1 points with the forecast of 51.1 points. Today, the pair is supported by released data from Australia and China. Australia's GDP in Q2 2019 grew by 0.5% QoQ, which coincided with the estimates. In annual terms, the Australian economy slowed down from +1.8% YoY to +1.4% YoY, which also came as no surprise. At the same time, the AiG Services Index in August rose significantly from 43.9 to 51.4 points. Chinese data reflected an increase in Caixin Services PMI in August from 51.6 to 52.1 points.

USD/JPY

The US dollar showed a decline against the Japanese yen on Tuesday, reacting to the publication of weak macroeconomic statistics from the US. During today's Asian session, the instrument is trading in both directions, responding to comments by US Fed officials who spoke out in favor of a possible aggressive reduction in interest rates in the near future. Japanese statistics provide moderate support for the yen. Markit Services PMI rose from 51.8 to 53.3 points in August, which was only 0.1 points worse than expectations.

Oil

Oil prices showed a moderate decline on Tuesday, but managed to correct closer to the end of the afternoon session. Pressure on quotes was exerted by the fact that oil production by OPEC members and the Russian Federation increased, which cast doubt on the relevance of the current agreement on limiting production volumes. In addition, investors remain concerned about the development of the US-China trade conflict. Earlier, Donald Trump said that the parties are ready to return to the negotiations, but the date for their resumption has not yet been set. Today, investors are awaiting the release of API Weekly Crude Oil Stock report, the publication of which was delayed by one day due to the celebration of Labor Day in the United States.

 

[MikhailLF]

Morning Market Review
2019-09-11 08:43 (GMT+2)
EUR/USD

The European currency showed ambiguous dynamics paired with the US dollar on Tuesday, closing with almost zero result. Investors remained focused on the prospects for US-Chinese trade negotiations. The market was supported by statements by US Secretary of the Treasury Steven Mnuchin, who noted that the parties are close to forming the fundamental points of the agreement in the field of intellectual property protection in the USA. In turn, China may increase the volume of orders for American agricultural machinery and products in order to achieve a number of concessions from the United States, in particular, delaying the introduction of new high import duties. Additional pressure on the euro is exerted by the expectation of the ECB meeting, which will be held this Thursday. Investors expect rather sharp steps from the regulator aimed at further easing of monetary policy.

GBP/USD

The British pound showed flat dynamics against the US dollar on Tuesday. Investors were focused on the statistics on the UK labor market. Average Earnings ex Bonus in July slowed down from +3.9% 3MoY to +3.8% 3MoY, which coincided with the forecasts. Average Earnings Index + Bonus for the same period increased from 3.8% 3MoY to 4.0% 3m / g. The Unemployment Rate in July for 3 months fell from 3.9% to 3.8%, although analysts did not expect any changes. Claimant Change in August increased from 19.8K to 28.2K. Thus, investors were somewhat reassured regarding a possible recession in the British economy. Nevertheless, despite the very decisive actions of the British Parliament, the threat of a hard Brexit still remains. The Parliament rejected the bill on holding of early elections, but soon it will have to go on an extraordinary recess until mid-October.

AUD/USD

The Australian dollar showed ambiguous dynamics against the US currency on Tuesday, closing near the levels of the beginning of the afternoon session. The reason for the emergence of ambiguous trading was the correctional sentiment in favor of the US dollar. Additional pressure on the instrument was provided by weak data from Australia. NAB Business Confidence in August fell from 4 to 1 point. NAB Business Survey for the same period receded from 2 to 1 point. During today's Asian session, the instrument again shows steady growth. Statistics published in Australia turned out to be negative, but did not affect the instrument significantly. Westpac Consumer Sentiment in September showed a decline of 1.7% YoY after rising by 3.6% YoY last month.

USD/JPY

The US dollar continues to grow steadily against the Japanese yen, updating local highs of August 1. Positive dynamics in the instrument proceeds against the backdrop of increased interest in risk, despite persisting factors of uncertainty in the market. Statistics from Japan published the day before puts pressure on the yen. Machine Tool Orders in August showed a decrease of 37.1% YoY after a decrease of 33.0% YoY. During today's Asian session, moderate support for the yen is provided by BSI Large Manufacturing Conditions index. In Q3 2019, the index fell by only 0.2 points after a decrease of 10.4 points in the previous quarter.

Oil

Oil prices showed moderate growth on Tuesday, receiving support from the statements of the new Minister of Energy of Saudi Arabia, Prince Abdulaziz bin Salman, who noted that the OPEC+ alliance will exist in the long term, and the current agreement on limiting oil production is likely to be extended. Nevertheless, the instrument failed to consolidate at new highs, and by the time the afternoon session closed, sales were prevailing in the market. However, the development of the "bearish" sentiment could not be stopped by API Weekly Crude Oil Stock report. For the week as of September 6, the indicator dropped by 7.200 million barrels after an increase of 0.401 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

 

[MikhailLF]

Morning Market Review
2019-09-12 08:46 (GMT+2)
EUR/USD

European currency showed a steady decline against the US dollar on Wednesday, updating local lows of September 4. Investors corrected their open long positions on EUR before the ECB meeting on monetary policy. It is expected that the European regulator can go for an additional reduction in the deposit rate from –0.4% to –0.5% and keep the key rate at zero level. In addition, the ECB is expected to take other steps aimed at stimulating the European economy. In particular, the head of regulator Mario Draghi previously actively discussed the possibility of resuming the quantitative easing program. The ECB activities are likely to affect the decisions of other regulators. In particular, the Fed and the Bank of England are expected to hold meetings next week.

GBP/USD

The British pound is showing ambiguous dynamics paired with the US currency, consolidating near its local highs, updated at the beginning of the week. Investors are still focused on the Brexit situation. The day before, it became known that Scottish appeal court found that Boris Johnson suspended the Parliament unlawfully. The government, in turn, noted that they were disappointed with such a court decision and would appeal it to the Supreme Court. During today's Asian session, the RICS Housing Price Index provides some support for the instrument. In August, the indicator fell by 4% MoM after a decline of 9% MoM last month. Analysts had expected a significantly sharper decline of 11% MoM.

AUD/USD

The Australian dollar closed trading on Wednesday with ambiguous dynamics against the US currency. The instrument was under pressure from weak macroeconomic statistics from Australia. Westpac Consumer Sentiment in September showed a decline of 1.7% after rising by 3.6% last month. At the same time, American statistics came out better than the forecasts. The Core PPI in August showed an increase of 0.3% MoM after a decrease of 0.1% MoM in July. In annual terms, the indicator accelerated from +2.1% YoY to +2.3% YoY, while analysts expected +2.2% YoY. MBA Mortgage Applications for the week as of September 6 strengthened by 2.0% after a decrease of 3.1% over the past period. During today's Asian session, the Australian dollar is showing strong growth, updating local highs from July 31. Support for the instrument is provided by Donald Trump's decision to postpone the introduction of regular import duties on Chinese goods from October 1 to October 15.

USD/JPY

The US dollar continues to grow steadily against the Japanese yen, updating local highs of August 1. Support for the US currency is provided by moderately optimistic macroeconomic statistics on industrial inflation in the United States, published the day before. In addition, a slight improvement in the prospects for future US-Chinese trade negotiations contributes to increased demand for risk. China announced the abolition of part of import duties on American goods, and Donald Trump in response announced the postponement of the introduction of new increased duties. Thus, the market has received confirmation that the parties are preparing for a new round of negotiations in October and are interested in ending the conflict. Statistics from Japan published during today's Asian session turned out to be contradictory and did not provide significant support to the yen. The PPI in August fell by 0.9% YoY after a decline of 0.6% YoY last month. Analysts had expected decline by 0.8% YoY. Core Machinery Orders in July fell by 6.6% MoM after growth of 13.9% MoM last month. Analysts had expected the decline of 9.0% MoM.

Oil

Oil prices fell significantly on Wednesday, retreating under the onslaught of the rising USD and the publication of a report from the US Department of Energy. According to the report, over the week as of September 6, Crude Oil Inventories fell by 6.9M barrels after a decrease of 4.8M barrels over the past period. Analysts had expected a decrease of only 2.6M barrels. At the same time, the oil refining capacities grew by 0.3% and reached the level of 95.1% against the forecast of a decrease of 0.6%. US oil production remained unchanged at 12.400M barrels per day.

 

[MikhailLF]

Morning Market Review
2019-09-13 08:48 (GMT+2)
EUR/USD

EUR rose against USD on Thursday, updating local highs of August 29. At the same time, during the day the instrument traded mainly with a decrease, and the published ECB decision on monetary policy even led to a short-term collapse of EUR to the lows of September 3. As expected, the European regulator kept the key interest rate unchanged at 0.0% and lowered the deposit facility rate to –0.50%. The ECB also announced the launch of a new quantitative easing program of EUR 2.6 trillion at a rate of EUR 20 billion per month in November. Despite the fact that the regulator’s decision coincided with forecasts, analysts note that a certain split has been outlined in the ECB camp, and this may threaten new problems in the future. However, the European regulator is waiting for changes soon as Christine Lagarde, who now heads the IMF, will take the chair.

GBP/USD

GBP showed a slight increase against USD on Thursday, continuing the development of flat dynamics in the short term. The focus of investors remains on the situation with Brexit. Despite the efforts of the British Parliament, the threat of the hard Brexit persists, since a new deal has not yet been developed, and the British Prime Minister remains adamant about the Irish border backstop. Yesterday's US statistic was ambiguous. In August, the Consumer Price Index slowed from +0.3% MoM to +0.1% MoM, which coincided with the forecasts. In annual terms, consumer inflation grew by 1.7% YoY, which turned out to be worse than market expectations of +1.8% YoY. Core CPI showed an increase of 0.3% MoM with a forecast of +0.2% MoM.

AUD/USD

AUD showed moderate increase against USD, updating local highs of July 31. At the same time, the instrument failed to consolidate at new highs, and by the time the afternoon session closed, USD won back part of the losses amid cautious optimism from the publication of consumer inflation in the US. AUD is supported by emerging progress in the US-Chinese trade negotiations. Earlier the parties made concessions to each other: Washington postponed the date of another increase in import duties, and Beijing resumed import of agricultural machinery, raw materials and medicines from the US. Investors today are focused on macroeconomic statistics on US retail sales in August. In addition, traders are interested in data on import prices and Michigan consumer expectations in September.

USD/JPY

USD continues a confident upward rally against JPY, updating highs of August 1. USD is supported by a high demand for risky assets amid some improvement in global prospects. In particular, investors are optimistic about the start of a new round of trade negotiations between the United States and China, because this time the parties approach this process with some groundwork. During today's Asian session, the instrument is trading in both directions. Traders are interested in data on retail sales and Michigan consumer expectations in the US. It is possible that at the end of the week the instrument will try to correct against the background of the closure of part of the long dollar positions.

Oil

Oil prices fell on Thursday, responding to OPEC+ decision to leave the parameters for reducing oil production unchanged. The central place in the discussions was given to the reduction of production in Russia, Nigeria and Iraq to the indicated levels, and it was decided to postpone the discussion of the issue of changing these levels to the December meeting of the cartel. Additional pressure on the instrument was provided by the ECB decision to lower deposit rates and to launch a new program of quantitative easing. Immediately after the publication of the decision of the European regulator, Donald Trump again criticized the Fed and demanded immediate action. It is possible that the decision of the American regulator next week will be adjusted according to the example of the ECB, and the market will see a more active easing of monetary policy. On Friday, investors expect the Baker Hughes Oil Rig Count in the US to be published.

 

[MikhailLF]

Morning Market Review
2019-09-16 08:40 (GMT+2)
EUR/USD

The European currency ended last week trading with moderate growth against the US dollar, updating local highs of August 27. Positive dynamics of the instrument was facilitated by the improved prospects for resolving the US-Chinese trade conflict. After a series of concessions by the parties, the negotiations, which should begin in October, have a high chance of ending successfully. In addition, Donald Trump spoke out for the possibility of reaching some kind of interim solution by signing a temporary agreement that would resolve a number of basic issues. The focus of European investors remained on the outcome of the ECB meeting on Thursday. As expected, the regulator lowered the deposit rate to the level of –0.50%, and also announced the resumption of the quantitative easing program. In addition, the ECB has revised its basic forecasts for GDP and inflation.

GBP/USD

The British pound rose significantly against the US dollar on Friday, updating local highs of July 25. The instrument was supported by news on Brexit, according to which the Democratic Unionist Party, which is an ally of the ruling Conservative party, said it would approve an agreement with the EU if an item on the Irish border was excluded from it. British Prime Minister Boris Johnson also spoke on the "moderate optimism" in the matter of concluding a deal with the EU. During today's Asian session, the instrument is trading in both directions. The Rightmove House Price Index decreased by 0.2% MoM after a decrease of 1.0% MoM in the previous month. YoY, the indicator slowed from +1.2% to +0.2%.

AUD/USD

The Australian dollar showed growth against the US currency on Friday, updating local highs of July 31. Optimistic signals about the US-Chinese trade negotiations, which may end with the signing of an interim agreement between the parties, contributed to the "bullish" sentiment on the instrument. During today's Asian session, the pair is also trading higher. However, the overall activity of buyers remains restrained. More confident development of the uptrend is hindered by weak statistics from China. In August, Retail Sales in China slowed from +7.6% YoY to +7.5% YoY, which turned out to be much worse than market expectations of +7.9% YoY. Industrial Production growth rate decreased from +4.8% YoY to +4.4% YoY against the forecast of +5.2% YoY.

USD/JPY

The US dollar closed last week with a fairly steady growth against the Japanese yen, updating local highs of August 1. "Bullish" activity remains on Monday, but the instrument showed a significant gap down at the opening and is now forced to recoup to its previous local highs. The US dollar is in demand amid improved prospects for US-Chinese trade negotiations, after the parties made mutual concessions, and Donald Trump announced the possibility of concluding an interim agreement. The macroeconomic statistics from the US published on Friday was contradictory. Retail Sales in August decreased from +0.8% MoM to +0.4% MoM, which, however, turned out to be better than expectations of +0.2% MoM. At the same time, Michigan Consumer Sentiment in September showed an increase from 89.8 to 92.0 points with a forecast of 90.9 points.

Oil

Oil prices showed a decline last week, despite the fact that on September 10 quotes updated local highs of early August. The instrument was supported on Friday by Baker Hughes Oil Rig Count, which reflected a decrease in the number of rigs from 738 to 733 units. The new week trading opened with a sharp gap up. The rise in oil prices was facilitated by news from Saudi Arabia, where on September 14 supporters of the Yemeni rebel movement started a fire at an oil refinery, which halved oil production.