Forex Analysis by LiteForex

[MikhailLF]

Morning Market Review
2019-10-15 08:44 (GMT+2)
EUR/USD

The European currency showed ambiguous dynamics against the US dollar on Monday, recording a slight decrease following the session. Pressure was exerted by contradictory macroeconomic statistics from the euro area, as well as increased skepticism regarding the Brexit negotiation process. The media got information that Brussels is not entirely satisfied with Boris Johnson's plan on the Irish border. Nevertheless, the parties continue active negotiations and hope to reach a compromise by October 31. Macroeconomic statistics showed the growth of Industrial Production in the euro area in August by 0.4% MoM after a decline of 0.4% MoM a month earlier. The indicator was stronger than the forecast of 0.3% MoM. However, in annual terms, Production continued to decline. In August, the indicator reached –2.8% YoY after a decrease of 2.1% YoY in July. Experts expected a decrease of 2.5% YoY.

GBP/USD

The British pound began the new week trading in both directions against the US dollar. The optimism regarding Brexit, which increased markedly at the end of last week, is gradually clouded by investor doubts, as it seems that Boris Johnson’s plan does not find support in Brussels. Today, GBP is trading with a slight increase. Investors are focused on the UK labor market report and the publication of the financial stability report from the Bank of England. It is expected that data on the labor market will indicate a slight slowdown in Average Earnings growth and maintaining Unemployment Rate at the previous level of 3.8%

AUD/USD

The Australian dollar fell against the US currency on Monday, starting a new week with correctional dynamics after strong growth last Friday. The decrease was largely technical in nature, since few new drivers appeared on the market. At the same time, the pressure on the pair was exerted by the deteriorating prospects for concluding an agreement between the UK and the EU within the framework of Brexit and not the most optimistic macroeconomic statistics from China. Chinese exports went down by 3.2% YoY in September after the decline by 1.0% YoY in the previous month. Analysts had expected decline by 3.0% YoY. Imports for the same period collapsed by 8.5% YoY after a decline of 5.6% YoY in August. The indicator also came out worse than its forecasts (–5.2% YoY).

USD/JPY

The US dollar showed ambiguous dynamics against the Japanese yen on Monday, halting the development of an uptrend in the short term, which brought the instrument to local highs of August 1. Japanese exchanges were closed yesterday due to the Health and Sports Day, so market activity remained fairly low. During today's Asian session, the instrument is trading in both directions, reacting to the publication of macroeconomic statistics from Japan. Industrial Production in August showed a decrease of 1.2% MoM and 4.7% YoY, which coincided with the forecasts and the pace of decline in July. At the same time, the Capacity Utilization indicator in August collapsed by 2.9% after an increase of 1.1% a month earlier. Analysts expected the appearance of negative dynamics, but expected a slight decrease of –0.2%. Tertiary Industry Index in August grew by 0.4% MoM after declining by 0.1% MoM in the previous month. The index turned out significantly better than its forecasts of –0.2% MoM.

Oil

Oil prices fell on Monday, departing from local highs, updated at the end of last week. Despite some progress in negotiations between the United States and China, investors are still skeptical about the conclusion of a full-scale trade agreement between the countries. In addition, the current increased tariffs on Chinese imports remain in force, as well as Huawei remains on the black list. Additional pressure on quotes is also exerted by the Baker Hughes Oil Rig Count report published at the end of the last trading week. For the first time in the last 2 months, the report indicated an increase in the number of rigs from 710 to 712 units.

 

[MikhailLF]

Morning Market Review
2019-10-16 08:43 (GMT+2)
EUR/USD

The European currency showed ambiguous dynamics of trading against the US dollar on Tuesday, ending the session with a slight increase. During the day, the instrument mainly declined, which was caused by the reaction of the market to the deteriorating prospects of concluding a preliminary trade agreement between the United States and China. Despite significant success in the new round of negotiations, the Chinese side is hesitant to sign the agreement, insisting on the cancellation of the planned increase in import duties in December. Donald Trump is unlikely to do this, because the US sees the December tariff increase as an additional guarantee of compliance with all conditions by Beijing. Macroeconomic statistics from ZEW had a contradictory effect on the euro. German ZEW Economic Sentiments in October showed a decrease from –22.5 to –22.8 points, which, however, turned out to be better than market expectations of –27.0 points. ZEW Economic Sentiment in the euro area fell to –23.5 points from previous –22.4 in October. Investors counted at –33.0 points.

GBP/USD

The British pound again showed strong growth against the US dollar on Tuesday, updating local highs of May 21. The reason for the next upsurge of "bullish" sentiments was media reports that the UK and the EU were close to concluding an agreement, and its final text could be published on October 16. However, this has not happened yet, and the leader of the Democratic Unionist Party of Northern Ireland hastened to comment on the situation, noting that some disagreements still persist. The UK labor market report, published on Tuesday, was left without due attention. Average Earnings ex Bonus in August showed a slowdown from +3.9% 3MoY to +3.8% 3MoY, which turned out to be slightly better than market expectations of +3.7% 3MoY. At the same time, the Unemployment Rate for 3 months increased from 3.8% to 3.9% with a forecast of 3.8%.

AUD/USD

The Australian dollar showed an active decline against the US currency on Tuesday, continuing the development of the "bearish" impulse formed earlier this week. Pressure on the instrument is exerted by the actions of the Chinese delegation in the trade negotiations between the USA and China. Beijing is hesitant to sign the elaborated interim trade agreement, continuing to insist on the complete abolition of the planned December tariff increase. Meanwhile, macroeconomic statistics from China released on Tuesday were able to slightly support the falling market sentiment. Consumer Price Index in September accelerated from the previous +0.7% MoM to +0.9% MoM, which turned out to be better than expectations. In annual terms, the figure reached 3.0% YoY, while analysts had expected growth to only 2.9% YoY.

USD/JPY

The US dollar rose significantly against the Japanese yen on Tuesday, updating local highs of August 1. The development of the uptrend is facilitated by weak macroeconomic statistics from Japan. Industrial Production in August showed a decrease of –1.2% MoM and –4.7% YoY, which coincided with the forecasts. Capacity Utilization fell by a record 2.9% after rising 1.1% in the previous month. Analysts expected a slight negative trend at the level of –0.2%. In addition, the markets reacted to the speech of the Bank of Japan Governor Haruhiko Kuroda, who again complained about the growing external pressure on the Japanese economy and emphasized that the regulator is ready for new stimulation measures if necessary.

Oil

Oil prices showed a moderate decrease on Tuesday, continuing the development of a negative trend, formed at the beginning of the week. Nevertheless, closer to the end of the afternoon session, quotes managed to rise slightly, which was caused by favorable comments by OPEC representatives who confirmed their intentions to stabilize markets after 2020. A more confident growth of the instrument was hindered by the tense situation after a new round of trade negotiations between the United States and China. Despite significant progress compared to previous negotiations, markets fear that the next stage will also come to a standstill, and the US will return to an increase in import duties on Chinese goods.

 

[MikhailLF]

Morning Market Review
2019-10-17 08:52 (GMT+2)
EUR/USD

The European currency rose significantly against the US dollar on Wednesday, updating local highs of September 16. EUR was supported by the macroeconomic statistics from the euro area. Core Consumer Price Index in September rose by 0.4% MoM and 1.0% YoY, which was slightly better than in the previous month (+0.4% MoM and +0.9% YoY). The euro area Trade Balance surplus in August rose from EUR 17.5 to 20.3 billion, exceeding forecasts of EUR 18.9 billion. Additional support for the instrument was provided by the newly improved prospects for a deal between the EU and the UK at today's summit. The EU representatives noted that all the differences were overcome and, theoretically, nothing prevents to conclude a deal before the end of this week. This Saturday, a vote on the final version of the deal is planned in the parliament.

GBP/USD

The British pound showed growth against the US dollar on Wednesday, updating local highs of May 15. The pound is supported by good prospects for a deal between the EU and the UK at today’s summit. The summit Chairman Donald Tusk noted that the agreement is ready and it is likely to be signed by all 27 participating countries. Optimistic news also came from the UK, where DUP leaders said they agreed with the Brexit proposals and were ready to support them on Saturday’s vote. Meanwhile, the UK macroeconomic statistics put pressure on the pound. Retail Price Index fell by 0.2% MoM in September after rising by 0.8% MoM a month earlier. Analysts had expected decline by 0.1% MoM. Consumer Price Index in September showed an increase of 0.1% MoM and 1.7% YoY, which turned out to be worse than forecasts of +0.2% MoM and +1.8% YoY.

AUD/USD

The Australian dollar showed ambiguous dynamics against the US currency on Wednesday, but is again growing rapidly during today’s Asian session. Some support for the instrument was provided by improved prospects for concluding an agreement between the EU and the UK. In turn, an attempt by US lawmakers to review Hong Kong’s special trade status threatens with new problems in relations with China and a breakdown in the results of trade negotiations. Today, investors are focused on the September statistics on the Australian labor market. Employment Change in September grew by 14.7K against 37.9K a month earlier. Analysts had expected an increase of 15K. At the same time, Full Time Employment increased by 26.2K after a decrease of 13.2K last month, and Part Time Employment decreased by 11.4K after an increase of 51.1K in August. Unemployment Rate in September decreased unexpectedly from 5.3% to 5.2%.

USD/JPY

The US dollar fell slightly against the Japanese yen on Wednesday, reversing near its local highs of August 1. The pressure on the US currency, in addition to a number of technical factors, was exerted by weak statistics on the dynamics of US retail sales. Retail Sales in September showed a decrease of 0.3% MoM after an increase of 0.6% MoM a month earlier. Analysts had expected positive dynamics to remain at +0.3% MoM. Retail Sales Ex Autos MoM also declined in September by 0.1% MoM after growth by 0.2% MoM and with the forecast of +0.2%.

Oil

Oil prices showed a slight increase on Wednesday, responding to corrective sentiment in the US currency and optimistic signals from OPEC that the agreement on limiting oil supplies could be extended in December. The next meeting of the cartel is scheduled for December 5-6 and should be held in Vienna. Pressure on quotes was exerted by API Weekly Crude Oil Stock Report. For the week as of October 11, the indicator increased sharply by 10.50 million barrels after an increase of 4.13 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

 

[MikhailLF]

Morning Market Review
2019-10-18 08:44 (GMT+2)
EUR/USD

EUR rose against USD on Thursday, updating local highs of August 26. EUR was supported by Brexit deal consummation between the EU and Britain. The day before, the head of the European Commission, Jean-Claude Juncker, said that the parties managed to reach a compromise and form an agreement. Later, Prime Minister of Great Britain Boris Johnson announced the same. However, the detailed text of the agreement was not published. Its final version will probably be made public after the signing by all participants of the EU summit, which will end today. The development of "bullish" trend in the instrument was also facilitated by weak macroeconomic statistics from the USA on industrial production. Industrial Production in September fell by 0.4% MoM after rising by 0.8% MoM a month earlier. Analysts expected a decline of 0.1% MoM. Capacity Utilization for the same period fell from 77.9% to 77.5%, which also turned out to be worse than market expectations of 77.7%.

GBP/USD

The British pound showed strong growth against the US dollar on Thursday, updating local highs of May 13. The new impetus for the growth of GBP was due to the achievement of a joint agreement between the UK and the EU on Brexit. The UK has a new chance to avoid a no-deal Brexit, while the compromise reached seems to be really beneficial to all participants in the process. However, there are still some obstacles. On Thursday, the DUP leaders said they did not support the new customs rules, which are provided by a new version of the agreement. In addition, the party insists on preliminary approval of the agreement by Stormont (the autonomous parliament of Northern Ireland), although there is not enough time for that. The ratification of the agreement in the British Parliament is scheduled for Saturday, October 19.

AUD/USD

The Australian dollar rose against the US currency on Thursday, updating monthly local highs. The development of the uptrend in the instrument was facilitated by the fact that the UK and the EU managed to reach a compromise and form a new version of the agreement, which should now be signed by all EU member states and approved during the meeting of the British Parliament on October 19. Slight support for AUD on Thursday was also provided by contradictory data on the Australian labor market for September. Despite weak Employment growth, the report managed to support the markets by unexpected reduction in the Unemployment Rate from 5.3% to 5.2%. Today, the pair is trading in both directions, reacting to the weak data from China. In Q3 2019, China's GDP slowed down from +1.6% QoQ and +6.2% YoY to +1.5% QoQ and +6.0% YoY.

USD/JPY

The US dollar showed a slight decline against the Japanese yen on Thursday, retreating from local highs of early August, updated on the same day. The depreciation of USD was facilitated by the ambiguous macroeconomic statistics from the United States. Industrial Production in September decreased by 0.4% MoM after an increase of 0.8% MoM in August. Philadelphia Fed Manufacturing Index in October fell from 12.0 to 5.6 points, which was worse than market expectations of 8.0 points. Housing Starts fell by 9.4% MoM in September after rising by 15.1% MoM a month earlier. Analysts had expected decline by 8.6% MoM. Today, the pair maintains negative dynamics; however, weak data from Japan hinder the more confident growth of the yen. Japan's National Consumer Price Index in September showed a slowdown from +0.3% to +0.2% YoY, while the forecast assumed an increase to +0.4% YoY.

Oil

Oil prices rose moderately on Thursday, responding to joint statements by the UK and the EU about reaching an agreement on Brexit. In turn, pressure on quotes was exerted by the previously published API report, as well as recent data on oil reserves from the US Department of Energy. For the reporting week as of October 11, Crude Oil Inventories in the US grew by 9.281 million barrels after an increase of 2.927 million barrels over the past period. In turn, Gasoline Inventories decreased by 2.6 million barrels, which exceeded forecasts of –1.2 million barrels. The volume of oil production in the United States did not change and amounted to the previous 12.600 million barrels per day. Today, investors are waiting for Baker Hughes US Oil Rig Count report.

 

[MikhailLF]

Morning Market Review
2019-10-21 08:46 (GMT+2)
EUR/USD

The European currency showed steady growth against the US dollar last week, updating local highs of August 14. The growth of the euro during the week was promoted by weak macroeconomic statistics from the USA, as well as optimistic news from the UK, where the issue with Brexit was moving ahead at an unprecedented pace. Boris Johnson managed to agree on all the details of the new version of the agreement with the EU, after which the British Parliament was supposed to ratify this agreement on Saturday. Unfortunately, this did not happen, and Parliament ordered Johnson to request a new postponement of the country's exit from the EU until February.

GBP/USD

The British pound rose significantly against the US dollar last week, noting new local highs of May 13. The British currency was supported by Brexit news during the week. Investors were optimistic about the process of working out a new agreement between the UK and the EU, reacting to the positive comments of officials. Today, the instrument shows corrective dynamics, reacting to the results of the meeting of the British Parliament, held on Saturday, October 19. Instead of approving a new version of the agreement, the British Parliament legally ordered Boris Johnson to request a new deferral of Brexit from the EU. The amendment, which was put forward by former conservative Oliver Letwin, gained the support of 322 members of parliament, while 306 voted against it. However, by October 31, Johnson theoretically still has time to resolve the issues that have arisen, but the chances of this are very small.

AUD/USD

The Australian dollar showed moderate growth against the US currency at the end of last trading week. The growth of the instrument can be traced today, but the "bullish" activity is gradually weakening. A more confident growth of the instrument is hindered by the publication of not the strongest macroeconomic statistics from China. Last Friday, data on China's GDP for Q3 2019 reflected a slowdown in the Chinese economy from +6.2% YoY to +6.0% YoY, which turned out to be worse than market expectations at +6.1% YoY. On a quarterly basis, the indicator decreased from +1.6% QoQ to +1.5% QoQ. However, there are still some positive news. In September, Retail Sales in China increased from 7.5% YoY to 7.8% YoY, while Industrial Production growth rates for the same period significantly accelerated from +4.4% YoY to +5.8% YoY with a forecast of +5.0% YoY.

USD/JPY

The US dollar fell against the Japanese yen last Friday, continuing to develop the correctional impulse that formed in the middle of last trading week. The growth of the yen was not prevented by weak macroeconomic statistics from Japan. In September, the National Consumer Price Index fell from +0.3% YoY to +0.2% YoY, which turned out to be half the expectations of investors. Corporate Services Price Index slowed down from +0.6% YoY to +0.5% YoY with a forecast of +0.6% YoY. Today the instrument is trading in both directions. Pressure on the yen, in addition to the technical factors of the dollar correction, is put by weak statistics from Japan on exports. In September, export volumes decreased by 5.2% YoY after a decrease of 8.2% YoY last month. Analysts had expected decline by 4.0% YoY only.

Oil

Oil prices showed a decline by the end of the session on Friday, despite the fact that during the day quotations rose moderately. Ambiguous macroeconomic publications from China, which may signal a further slowdown in the global economy, contributed to the development of the "bearish" trend of the instrument. In addition, investors are still disappointed with the results of a new round of trade negotiations between the United States and China. Last week, US Treasury Secretary Steven Mnuchin said the parties will continue joint negotiations to sign a final agreement next month. Baker Hughes Oil Rig Count Report published on Friday also contributed to the development of the "bearish" trend of the instrument. For the week as of October 11, the number of active rigs increased from 712 to 713 units.

 

[MikhailLF]

Morning Market Review
2019-10-22 08:41 (GMT+2)
EUR/USD

The European currency showed ambiguous trading against the US dollar on Monday. At the same time, the euro was increasing during the day, which allowed the instrument to update the local highs of August 14. The development of flat trading yesterday was facilitated by the correctional sentiment in USD, which was significantly reduced last week. In addition, Monday's macroeconomic background remained half empty, so investors again focused on Brexit issues and the conclusion of a trade agreement between China and the United States, which did not add support to the instrument. Meanwhile, the German Producer Price Index in September showed an increase of 0.1% MoM after a decline of 0.5% MoM last month. Analysts had expected negative dynamics to remain at –0.1% MoM. In annual terms, the indicator fell by 0.1% YoY after rising by 0.3% YoY in August. Experts expected a decrease of 0.3% YoY.

GBP/USD

The British pound showed ambiguous dynamics against the US dollar on Monday, maintaining a "bullish" momentum by the end of the afternoon session. Pressure on the pound is still exerted by the uncertain situation around Brexit. After the failure of the urgent vote in the British Parliament last Saturday, the probability of Britain leaving the EU before October 31 significantly decreased, but Boris Johnson continues to insist on his plan. The parliament ordered Johnson to request a new deferment from the EU until January 31, 2020, which was done. Nevertheless, the British Prime Minister expects to resolve internal contradictions in parliament and ratify the agreement. Otherwise, Johnson insists that Britain leave the EU on October 31 without a deal, which could threaten him with problems with the law.

AUD/USD

The Australian dollar showed moderate growth against the US currency on Monday, updating local highs of September 16. Despite the attempt of correction of the US dollar, the position of the Australian currency remains quite stable. The instrument is supported by the market's anticipation of a preliminary trade agreement between the US and China in mid-November. Last Friday, Donald Trump expressed hope for a deal at a meeting with Chinese President Xi Jinping, which will be held in Chile in November.

USD/JPY

The US dollar rose against the Japanese yen on Monday, recovering from the "bearish" end of last week. The growth of the American currency was promoted by technical factors, as well as the publication of ambiguous macroeconomic statistics from Japan. Export volumes in September showed a decrease of 5.2% YoY after falling by 8.2% YoY in August. Analysts expected a decline of 4.0% YoY. Imports for the same period decreased by only 1.5% YoY after the collapse of 11.9% YoY last month. The indicator turned out better than its forecasts of –2.8% YoY. Trade Balance in September amounted to –123.0 billion Japanese yen, which turned out to be significantly worse than market expectations of +54.0 billion yen. In August, Trade Balance was –143.5 billion yen.

Oil

Oil prices showed ambiguous trading dynamics on Monday. Pressure on quotes is provided by the uncertain prospect of a trade agreement between the United States and China. Last Friday, US President Donald Trump expressed hope that an agreement could be signed at his meeting with Chinese President Xi Jinping in mid-November in Chile, but analysts are very skeptical about such statements. An additional uncertainty factor for the oil market remains the situation around Brexit. Everything is pointing to a new postponement, which, given Boris Johnson’s inflexibility, could turn into an aggravation of the domestic political crisis in Great Britain.

 

[MikhailLF]

Morning Market Review
2019-10-23 08:41 (GMT+2)
EUR/USD

EUR showed a decline against USD on Tuesday, continuing the development of a correctional impetus formed the day before. The pair is trading under the influence of technical factors, while the fundamental background and macroeconomic statistics remain ambiguous. Some support for the euro is provided by the situation around Brexit. The British parliament approved a new version of the agreement, but this does not mean that Britain is ready to leave the EU. Now the parliamentarians need to consider all the amendments put forward earlier, and then the European Commission should ratify the agreement. Today, the pair is declining again. Today's macroeconomic background is rather poor; therefore, the instrument's motion vector is not expected to change much. Analysts expect the release of statistics on German 10-Year Bund Auction and preliminary data on Consumer Confidence in October from the euro area.

GBP/USD

After a confident rally which lasted a week and a half, GBP showed a correctional decline against USD on Tuesday. The development of negative dynamics in the instrument was facilitated by technical factors, as well as a marked decrease in optimism regarding Brexit before the current deadline, which is scheduled for October 31. The night before, it became known that the British Parliament expressed fundamental consent with the new version of the deal with the EU, but this cannot be called a full-fledged victory. Boris Johnson urges the Parliament to consider all additional amendments to the agreement within three days to close this issue before the end of the week. Parliament disagreed with Johnson’s schedule, which is likely to lead to a postponement of Brexit deadlines once again with EU consent.

AUD/USD

AUD fell against USD on Tuesday, retreating from updated local highs of September 16. The decrease in the instrument is largely due to the technical factors of USD correction and the semi-empty macroeconomic background of the beginning of the week. Meanwhile, moderate support for AUD is provided by optimism regarding the conclusion of a trade agreement between the United States and China. Donald Trump is still betting on the APEC summit, which will be held in November in Chile. The Chinese side is also optimistic, noting that negotiations are ongoing at the moment.

USD/JPY

USD fell slightly against JPY on Tuesday, correcting after weak growth earlier this week. Japanese markets were closed on Tuesday due to the national holiday, so statistics from the United States were in the spotlight. Existing Home Sales in September decreased by 2.2% MoM after growth of 1.5% MoM a month earlier. Analysts expected a decline of 0.7% MoM. At the same time, Richmond Manufacturing Index in October unexpectedly increased from –9 to 8 points with a forecast of –7 points.

Oil

Oil prices showed moderate growth on Tuesday, responding to optimistic signals on the process of trade negotiations between the US and China. This time, the Chinese side made positive statements. China's Vice Foreign Minister Le Yucheng noted that the parties managed to achieve significant progress in the negotiations and expressed hope for concluding the agreement soon. More confident growth in quotes yesterday was hampered by the publication of API Weekly Crude Oil Stock report. For the week as of October 18, the indicator increased again by 4.45 million barrels after an increase of 10.50 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

 

[MikhailLF]

Morning Market Review
2019-10-24 08:42 (GMT+2)
EUR/USD

EUR showed a slight increase against USD on Wednesday, despite the fact that during the day the instrument mainly declined. Some pressure on EUR was exerted by macroeconomic statistics released on Wednesday. According to preliminary estimates, the level of Consumer Confidence in the euro area in October fell from –6.5 to –7.6 points, which turned out to be worse than market expectations of –6.7 points. Today, the pair is strengthening again. Investors are waiting for statistics on business activity from Markit in the euro area in October, as well as the publication of the ECB decision on deposit and interest rates, followed by a press conference. It is expected that the European regulator will not change the basic parameters of monetary policy, but may resort to additional support measures before the end of the year.

GBP/USD

GBP strengthened against USD yesterday, recovering from a steady decline on Tuesday. The focus of investors remains on the situation with Brexit. Optimism from the approval by the British parliament of the agreement with the EU quickly gave way to negative sentiment, since Boris Johnson's initial plans do not seem to come true. The UK is again forced to ask for a postponement, which threatens with another delay and the further development of the internal political crisis.

AUD/USD

AUD showed flat dynamics on Wednesday, ending the daily session with almost no result. There are practically no interesting macroeconomic statistics at the market, therefore the movement of the instrument is mainly of a technical nature. In addition, the same factors remain in the focus of attention: trade negotiations between China and the United States and the situation around Brexit. Today, the instrument is trading with a slight decrease. Pressure on AUD is exerted by ambiguous macroeconomic statistics from Australia on business activity. The Commonwealth Bank Services PMI in October showed a decrease from 52.4 to 50.8 points with a forecast of 52.2 points. At the same time, Manufacturing PMI over the same period decreased from 50.3 to 50.1 points, which was significantly better than market forecasts of 49.0 points.

USD/JPY

USD showed moderate growth against JPY yesterday, but again returned to decline during the Asian session on October 24. The growth of USD is facilitated by a number of technical factors, while the macroeconomic background of the instrument remains ambiguous. Additional pressure on the yen is exerted by the expectation of the Bank of Japan meeting, which will be held next week. Given the latest macroeconomic statistics from Japan, it is likely that the regulator can take additional measures to stimulate the economy and lower interest rates. Today, JPY is growing, despite the publication of weak macroeconomic statistics from Japan. Jibun Bank Manufacturing PMI in October fell from 48.9 to 48.5 points, which turned out to be worse than market expectations of 48.8 points.

Oil

Oil prices rose significantly on Wednesday, receiving support from a report from the US Department of Energy, according to which US oil inventories unexpectedly fell by 1.699 million barrels over the week as of October 18, after rising by 9.281 million barrels over the past period. Analysts had expected positive dynamics to remain at 2.232 million barrels. US oil production remained unchanged at 12.600 million barrels per day, while refining capacity grew by 2.1% to 85.2%, which exceeded market forecasts of +0.9%.

 

[MikhailLF]

Morning Market Review
2019-10-28 08:51 (GMT+2)
EUR/USD

EUR showed a moderate decline against USD last Friday, updating local lows of October 17. The development of negative dynamics in the instrument at the end of last week was contributed by uncertain macroeconomic statistics from Germany. GfK German Consumer Climate index in October showed a decrease from 9.8 to 9.6 points against a forecast of 9.8 points. Ifo Current Conditions in October fell from 98.6 to 97.8 points, while analysts expected a decrease to 98.0 points. At the same time Ifo Expectations index for the same period rose from 90.9 to 91.5 points with a forecast of 91.0 points. German Business Expectations index in October remained at the previous level of 94.6 points, contrary to expectations of a slight decrease to 94.5 points. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. On Monday, investors expect one of the last speeches by the ECB President Mario Draghi who will soon be replaced by Christine Lagarde.

GBP/USD

GBP is mainly falling, retreating from local highs, updated on October 22. The focus of investors remains on the situation with Brexit. At the end of last week, EU members agreed on a new postponement for the UK, which did not manage to ratify the new version of the agreement on the country's exit from the EU. The deadline for the new postponement has not yet been approved. European Council President Donald Tusk still insists on a postponement until January 31, 2020, but not all EU members agree. France takes the toughest stance on this issue. Meanwhile, Boris Johnson continues to insist on holding early elections to the British parliament, but is not expected to receive unanimous support in this matter.

AUD/USD

AUD showed a slight correctional growth against USD at the end of last week, recovering after a steady decline of October 24. Technical factors contributed to the development of the "bullish" trend in the instrument, while the fundamental picture remained the same. The macroeconomic statistics from the US published on Friday was contradictory. Michigan Consumer Sentiment in October fell from 96.0 to 95.5 points with a forecast of 96.0 points. In turn, Monthly Budget Statement in September indicated a surplus of 83B dollars against the deficit of –200B dollars a month earlier.

USD/JPY

USD ended last week with a slight increase against JPY, updating local highs of October 17. Macroeconomic statistics from Japan released on Friday showed little or no support to the yen. Foreign Investments in Japanese Stocks for the week as of October 18 slightly increased from 508.2B to 522.3B yen. At the same time, Foreign Bonds Buying for the same period fell sharply from 1,062.2B to 536.1B yen. Today, the pair retains a weak "bullish" advantage, waiting for new drivers to appear on the market. Today, not much interesting macroeconomic statistics are expected, so investors will focus on the data on consumer inflation in Japan which will be published on Tuesday.

Oil

Oil prices showed moderate growth last Friday, continuing the development of the "bullish" momentum formed earlier. Active support for the quotes was provided by a report from the US Department of Energy, which indicated an unexpected reduction in oil reserves by 1.7M barrels. Additional support for the instrument was provided by OPEC comments. Representatives of the organization said that they are considering more significant restrictions on oil production, which will compensate for the low demand, which is expected in 2020. Friday's Baker Hughes report on active oil rigs in the USA also provided moderate support for quotes. For the reporting week, the number of active oil rigs decreased sharply from 713 to 696 units.

 

[MikhailLF]

Morning Market Review
2019-10-29 08:37 (GMT+2)
EUR/USD

EUR showed moderate growth against USD on Monday, correcting from local lows updated last Friday. In addition to very strong technical factors, the euro was supported by uncertain macroeconomic statistics from the USA. Dallas Fed Manufacturing Business Index in October fell from 1.5 to –5.1 points, which turned out to be significantly worse than market expectations of 1.4 points. Chicago Fed National Activity in September fell from 0.15 to –0.45 points with a forecast of –0.37 points. Today, the euro is trading in both directions again, waiting for the appearance of new drivers at the market. Investors are focused on the data from the US on Redbook Retail Price Index, Pending Home Sales and CB Consumer Confidence.

GBP/USD

GBP rose against USD, having received support from the development of correctional sentiment in the US currency across the entire market. The pound also reacted positively to the formal approval of the Brexit deadline extension until January 31, 2020. Thus, the UK will be able to leave the EU before the end of January next year, as soon as it ratifies the final version of the agreement in parliament. Boris Johnson has not been able to secure the support of the majority yet, so he insists on holding early parliamentary elections in early December. Today, British investors expect publication of data on Consumer Credit for September, Nationwide Housing Price Index, and Mortgage Approvals for September in the UK.

AUD/USD

AUD rose against USD on Monday also maintaining upward momentum during today's Asian session. Moderate support for the instrument is provided by increased prospects for concluding a preliminary trade agreement between the US and China by the end of this year. Participants of the ongoing negotiation process respond very positively to the progress made. The final version of the agreement can be signed at the APEC summit, which will be held on November 16-17 in Chile.

USD/JPY

USD showed growth against JPY on Monday, updating local highs of August 1. An increase in the instrument at the market was promoted by an increase in investor interest in risk amid a decrease in concerns about Brexit. In addition, traders respond positively to preliminary results of the negotiation process between the United States and China and hope that a trade agreement that will avoid escalating the tariff war can be signed in November. Today, the pair is trading in both directions. Investors take a lead from Japanese statistics on Tokyo consumer inflation. October Consumer Price Index remained at the previous level of 0.4% YoY, while forecasts assumed its growth to 0.5% YoY. CPI Tokyo Ex Food and Energy rose from 0.6% YoY to 0.7% YoY, which turned out to be better than the forecast of 0.5% YoY.

Oil

Oil prices returned to decline on Monday, retreating from local highs after a moderate upward rally last week. Investors are optimistic about progress in US-Chinese trade negotiations, but negative macroeconomic statistics and disappointing forecasts of energy demand have a restraining effect. Some support for oil quotes is provided by OPEC+ actions. The organization intends to expand the current agreement on limiting oil production, but the next meeting of the cartel is planned only for December. Today, investors are focused on the American Petroleum Institute Weekly Crude Oil Stock report as of October 25.

 

[MikhailLF]

Morning Market Review
2019-10-30 08:45 (GMT+2)
EUR/USD

EUR showed an increase against USD on Tuesday, continuing the development of a "bullish" impetus formed the day before. Moderate support for the euro is provided by the newly improved prospect of a trade agreement between the United States and China. Earlier this week, Donald Trump confirmed his intention to discuss all the final details of the agreement with Chinese President Xi Jinping at the APEC summit in November. In addition, it became known that the US is preparing an expanded list of Chinese goods that will be exempted from high import duties. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. Investors are focused on the Fed meeting on the interest rate followed by a press conference. The US regulator is expected to reduce rates from 2% to 1.75%.

GBP/USD

GBP showed multi-directional dynamics of trading against USD on Tuesday, ending the session with almost zero result. The development of negative dynamics in the instrument was facilitated by the fact that the British parliament expectedly rejected the idea of Boris Johnson to hold early elections in December. However, today the Prime Minister will try to push his initiative again. Another negative factor was uncertain macroeconomic statistics from the UK. BoE Consumer Credit in September fell more than predicted from 0.969B to 0.828B pounds, while analysts expected a decrease to 0.9B. Net Lending to Individuals for the same period fell from 4.8B to 4.6B pounds.

AUD/USD

AUD rose significantly against USD on Tuesday, updating local highs of October 22. The "bullish" trend strengthened due to the optimistic comments by officials regarding the process of working out a trade agreement between the United States and China. In addition, USD is under pressure from the upcoming US Fed meeting, at which, as expected, the rate will be reduced by 0.25%. Today, the pair is trading in both directions due to the uncertain statistics from Australia. HIA New Home Sales in Australia in September slowed down from +7.3% MoM to +5.7% MoM, which turned out to be worse than the average forecasts. Australia's Consumer Price Index in Q3 2019 expectedly slowed down its growth from +0.6% QoQ to +0.5% QoQ. Trimmed Mean CPI for the same period remained at the previous level of +0.4% QoQ.

USD/JPY

USD showed a slight decline against JPY on Tuesday, after updating local highs of August 1. Investors do not rush to buy USD, waiting for the upcoming Fed meeting, at which, most likely, the key interest rate will be reduced by 0.25%. On the other hand, investor interest in risk is supported by optimistic signals from US and PRC officials regarding a trade deal. Today, the pair is trading in both directions. The Japanese currency is supported by good data from Japan on the dynamics of retail sales. In monthly terms, sales in September accelerated from +4.6% MoM to +7.1% MoM. In annual terms, the growth was even more significant: from +1.8% YoY to +9.1% YoY.

Oil

Oil prices fell on Tuesday, but managed to recover closer to the end of the afternoon session. The quotes were pressured by the comments of officials, which led to an increase in doubts about the continuation of the OPEC+ policy aimed at limiting oil production in 2020. In addition, API Weekly Crude Oil Stock report for the week as of October 25 again reflected growth in stocks by 0.592 million barrels after growth by 4.45 million barrels for the previous period. Today, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.

 

[MikhailLF]

Morning Market Review
2019-10-31 08:54 (GMT+2)
EUR/USD

EUR rose significantly against USD on Wednesday, continuing the development of the "bullish" momentum formed at the beginning of the week. The development of the uptrend was due to the weak position of the US currency, which retreated before the Fed meeting, while the macroeconomic background from Europe remained ambiguous. Industrial Sentiment Index in euro area in October fell from –8.9 to –9.5 points with a forecast of –8.9 points. Business and Consumer Survey fell from 101.7 to 100.8 points, which also turned out to be worse than market expectations. At the same time, Business Climate indicator increased from –0.23 to –0.19 points for the same period against the forecast of –0.24 points. The data on inflation from Germany were not much better. Germany Harmonized Index of Consumer Prices in October showed an increase of 0.1% MoM and 0.9% YoY, which was better than market expectations of 0.0% MoM and 0.8% YoY, but still worse than target levels of the ECB.

GBP/USD

GBP rose against USD on Wednesday and continues to develop upward momentum during today's Asian session. The pound is supported by the fact that the British Parliament approved early elections in the UK in December. These elections will be the third ones in the last four years, which characterizes the instability of the British political system on the Brexit issue. Also, this opportunity will be the last one for parties that oppose Brexit. The pound grew on Wednesday also due to the results of the Fed meeting. As expected, the US regulator lowered the interest rate by 0.25%. The Fed officials noted that this reduction does not mean the beginning of a large-scale period of reduction in rates, although President Trump would like it to happen. The regulator acts "according to the situation", which, however, still shows few signs of improvement.

AUD/USD

AUD showed strong growth against USD on Wednesday, updating local highs of July 30. The main reason for the growth of the instrument was the weakening of the US currency against the backdrop of another decrease in the interest rate by the Fed. In turn, Wednesday's statistics on consumer inflation from Australia were ambiguous. In Q3 2019, Consumer Price Index slowed from +0.6% QoQ to +0.5% QoQ, which coincided with market expectations. In annual terms, inflation remained positive, and the rate rose from +1.6% YoY to +1.7% YoY. Today, the instrument also is trading with a raise. Moderate support for the Australian dollar is provided by Building Approvals indicator. In September, it sharply increased from –1.1% MoM to 7.6% MoM, with a forecast of +0.5% MoM.

USD/JPY

USD showed ambiguous dynamics against JPY on Wednesday. During the day, the instrument was trading higher, despite the publication of strong macroeconomic statistics on retail sales in Japan. Closer to the opening of the American session, the "bullish" activity began to decline significantly, as investors expected the outcome of the Fed meeting. The regulator lowered the key interest rate from 2% to 1.75%, which coincided with market expectations. During the Asian session, the dollar is losing ground again. Support for the yen is provided by the data on industrial production in Japan. In September, Industrial Production showed an increase of 1.4% MoM after a decrease of 1.2% MoM last month. Analysts had expected the increase of 0.4% MoM. In annual terms, the indicator grew by 1.1% YoY, being much better than the forecast of –4.1% YoY.

Oil

Oil prices fell markedly on Wednesday, reacting to the emergence of negative news regarding the process of trade negotiations between the US and China. Washington noted that the parties continue to work on a joint agreement, which is expected to be signed at the APEC summit in November. However, there are risks that the parties will not have time to agree on all the necessary details before the start of the summit, and the US will continue to increase pressure on China by raising import duties. Another negative factor for the quotes was the published report from the US Department of Energy, according to which over the week as of October 25, oil reserves unexpectedly rose by 5.702 million barrels, while analysts expected them to increase by only 0.494 million barrels. The previous report reflected the reduction of stocks by 1.699 million barrels.

 

[Svetlana Loboda]

I am also bullish on EURUSD trading pair; and really excited to see the buyer’s response on the nearest daily resistant level!

 

[MikhailLF]

Morning Market Review
2019-11-01 08:49 (GMT+2)
EUR/USD

EUR showed ambiguous trading against USD on Thursday. At the same time, the instrument managed to update the local highs of October 21, since the position of the American currency remains unstable. Investors were focused on the results of the Fed meeting, where the interest rate was expectedly reduced. Macroeconomic data from Europe also had a significant impact on the dynamics of the instrument. The eurozone Core Consumer Price Index rose slightly from 1% YoY to 1.1% YoY in October, which was better than the neutral forecast. Eurozone GDP in Q3 2019 increased by 0.2% QoQ and by 1.1% YoY, which roughly coincided with market expectations: +0.1% QoQ and +1.1% YoY. The Unemployment Rate in the euro area in September remained unchanged at 7.5%, while analysts had expected it to decline to 7.4%.

GBP/USD

GBP showed uncertain growth against USD on Thursday, updating local highs of October 22. The decline in purchasing activity on GBP was contributed by not the strongest macroeconomic publications from the UK, as well as by a decrease in optimistic sentiments regarding the trade deal between the US and China. Earlier the parties prepared the final version of the preliminary agreement, which was to be signed at the highest level during the APEC summit in Chile. The day before, the Chilean authorities had to cancel the summit due to ongoing civil unrest, so the new date for the possible signing of the agreement is not yet known. Today, the pound is trading with an increase. The US dollar is under pressure in anticipation of the publication of the October labor market report. In addition, investors expect speeches by representatives of the Fed (John Williams, Richard Clarida and others).

AUD/USD

AUD showed a decline against USD on Thursday, retreating from its local highs of July 26. Pressure on the Australian dollar was exerted by deteriorating prospects for a trade agreement between the US and China against the backdrop of the cancellation of the APEC summit in Chile, as well as uncertain macroeconomic statistics from Australia and China. Non-Manufacturing PMI in China fell from 53.7 to 52.8 points in October, with the forecast of 53.9 points. NBS Manufacturing PMI in October also showed a negative trend from 49.8 to 49.3 points with a neutral forecast. Today, the instrument is growing, despite the publication of weak macroeconomic statistics from Australia. AiG Manufacturing index went down from 54.7 to 51.6 points in October. Commonwealth Bank Manufacturing PMI fell from 50.1 to 50 points in October with a neutral forecast.

USD/JPY

USD fell significantly against JPY on Thursday, updating local lows of October 11. The development of correctional dynamics was facilitated by weak macroeconomic indicators from the United States, as well as by deterioration in market sentiment regarding the conclusion of a trade agreement between the United States and China. Earlier, investors were counting on signing the final document at the APEC summit in Chile, which was canceled the day before due to ongoing protests in the country. Macroeconomic statistics from Japan, as well as comments by the Bank of Japan on the interest rate, had a noticeable impact on the instrument on Thursday. As expected, the Japanese regulator left the rate at the same negative level of –0.1%. At the same time, the head of the Bank, Haruhiko Kuroda, emphasized that the regulator can continue its further reduction if the impetus to inflation does not recover. Today, the yen is relatively stable. Further growth of the Japanese currency is hindered by weak data from Japan. Unemployment Rate in Japan in September unexpectedly increased from 2.2% to 2.4% with a forecast of 2.3%. Manufacturing PMI from the Jibun Bank in October fell from 48.9 to 48.4 points against the forecast of 48.5 points.

Oil

Oil prices showed negative dynamics on Thursday, responding to the publication of weak macroeconomic statistics from China and remained under pressure from data indicating a sharp increase in US crude oil inventories. Chinese Manufacturing PMI showed a decline in October for the sixth time in a row, which casts doubt on the hope of an early recovery in demand for oil. The market also reacted negatively to the cancellation of the APEC summit in Chile, at which it was planned to sign the final agreement between the United States and China. Today, investors will be focused on the October report on the US labor market. In addition, investors are waiting for Baker Hughes US Oil Rig Count.

 

[MikhailLF]

Morning Market Review
2019-11-05 08:39 (GMT+2)
EUR/USD

EUR showed a steady decline against USD on Monday, retreating from local highs, updated at the end of last week. Pressure on the euro was exerted by moderate growth in the US currency amid improved prospects for a trade agreement between the US and China. In addition, support to the dollar is still provided by strong data from the October labor market report published last Friday. Macroeconomic statistics released on Monday provided little support to the euro. Markit Manufacturing PMI in October rose from 45.7 to 45.9 points with a neutral forecast. German Manufacturing PMI for the same period strengthened from 41.9 to 42.1 points, which, however, is still far from the 50-point mark. Sentix Investor Confidence indicator rose from –16.8 to –4.5 points in November against a forecast of –13.8 points.

GBP/USD

GBP showed a slight decline against USD on Monday, falling after an increase of last week. The development of negative dynamics in the instrument was facilitated by the strengthening of the American currency across the entire spectrum of the market after the publication of strong statistics on business conditions from ISM and the growth of investor expectations regarding the successful conclusion of a trade agreement between the United States and China. The British currency, in turn, remains under pressure from the development of the political crisis in the country preparing for the early elections on December 12. There is still no unity of opinion among the political forces, and therefore there is no reason to count on a favorable outcome for Boris Johnson. UK macroeconomic statistics released today are worse than market expectations. BRC Retail Sales Monitor in October showed an increase of 0.1% YoY after declining by 1.7% YoY in the previous month. Analysts had expected growth rate at 0.5% MoM.

AUD/USD

AUD showed a steady decline against USD on Monday, retreating from local highs, updated at the end of last week. Today, the instrument is growing moderately, responding to improved prospects for a US trade partnership with China and Europe. The focus of investors is also on the RBA decision on the interest rate. As expected, the regulator left it at the level of 0.75%. Australian statistics published today is contradictory. Commonwealth Bank's Composite PMI in October fell from 50.7 to 50 points. Services PMI fell from 50.8 to 50.1 points. AiG Services index went up from 51.5 to 54.2 points in October.

USD/JPY

USD rose against JPY on Monday, continuing to develop a weak "bullish" impulse formed at the end of last week. Japanese markets were closed on Monday to celebrate Culture Day, so investors focused on official statements of last week and the publication of recent macroeconomic statistics. Declining demand for a safe yen was facilitated by statements by US Secretary of Commerce Wilbur Ross, who noted that US companies would soon be able to resume cooperation with the Chinese Huawei. In addition, Washington said it was considering freezing the growth of import duties on European and Japanese cars. Today the pair is also growing. Investors expect macroeconomic statistics from the United States on business activity and economic optimism in October-November.

Oil

Oil prices showed moderate growth on Monday, responding to positive statements about the process of working out a trade agreement between the US and China. It is expected that a preliminary version of the deal will be signed in mid-November. In addition, the market is optimistic about the statements of US officials about the possibility of an early resumption of cooperation between US enterprises and the Chinese Huawei. An additional factor in the growth of oil quotes was Iran’s statements about its intention to support the idea of further reducing oil production at the OPEC+ meeting in December. Today, investors are awaiting the publication of API Weekly Crude Oil Stock report for the week as of November 1. The previous report reflected an insignificant increase in volumes of 0.592M barrels.

 

[MikhailLF]

Morning Market Review
2019-11-06 08:56 (GMT+2)
EUR/USD

EUR showed a steady decline against USD on Tuesday, updating local lows of October 16. The development of negative dynamics in the instrument was facilitated by the publication of ambiguous macroeconomic statistics, as well as the general growth of the American currency across the entire spectrum of the market. The strongest support for the dollar was provided by data on ISM Services PMI. In October, the indicator rose from 52.6 to 54.7 points, exceeding its forecast of 53.5 points. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. Investors are focused on business activity indices in Europe for October. Separately, traders expect publication of the dynamics of Factory Orders in Germany for September.

GBP/USD

GBP showed flat dynamics on Tuesday, ending the session with almost zero result. Moderate support for the pound was provided by Markit Services PMI in the UK. In October, the indicator rose from 49.5 to 50.0 points, which was slightly better than the forecasts of 49.7 points. In turn, BRC Retail Sales Monitor data came out worse than expected. In October, retail sales rose by 0.1% YoY after a 1.7% YoY decline in September and a forecast of 0.5% YoY growth.

AUD/USD

AUD showed strong growth on Tuesday, updating local highs of October 31. However, the instrument failed to consolidate at new highs, and by the time the US trading session opened, it had lost most of its gains. Australian currency was supported by the results of the RBA meeting and the comments of the head of the regulator. As expected, the Reserve Bank of Australia kept its key interest rate at 0.75%. At the same time, investors hope that in the near future the regulator will not change the parameters of monetary policy significantly. RBA head Philip Lowe supported such sentiments, noting that the period of low interest rates will be quite long. Correction of the instrument was facilitated by the publication of ISM Services PMI with the opening of the American trading session. In October, the index showed growth from 52.6 to 54.7 points, which turned out to be better than market expectations of 53.5 points.

USD/JPY

USD strengthened against JPY on Tuesday, rising to local highs of October 30. The growth of the US currency was due to the publication of a number of positive macroeconomic indicators from the United States, as well as a decrease in market demand for safe-haven currencies, as investors are still optimistic about the process of trade negotiations between the US and China. Today, the pair is trading in both directions, despite the publication of weak macroeconomic statistics from Japan. Jibun Bank Services PMI in October showed a decrease from 52.8 to 49.7 points against the forecast of 50.3 points.

Oil

Oil prices showed moderate growth on Tuesday, receiving support from increased optimism regarding a preliminary trade agreement between the US and China. In addition, since China continues to insist on the abolition of the planned increase in import duties on December 15 as well as the tariffs introduced in September, investors expect Washington to make concessions in this issue, which will significantly reduce the degree of trade tension in the market. OPEC's updated forecasts for production volumes over the next few years also provided moderate support for quotes on Tuesday: by 2024, oil production should be reduced to 32.8M barrels per day. In addition, API Weekly Crude Oil Stock report for the week ending November 1 reflected sharp growth in stocks by 4.26M barrels after a decline of 0.708M barrels for the previous period. Today, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.

 

[MikhailLF]

Morning Market Review
2019-11-07 08:50 (GMT+2)
EUR/USD

EUR showed an insignificant decline against USD on Wednesday, continuing the development of the "bearish" impulse formed at the beginning of the week. The euro returned to decline closer to the opening of the American trading session, while the morning was characterized by growth, which was supported by good macroeconomic statistics from Europe. German Factory Orders rose by 1.3% MoM in September, after falling by 0.4% MoM in the previous month. Experts expected a growth of 0.1% MoM. Markit Composite PMI in Germany in October rose from 48.6 to 48.9 points, which also exceeded neutral market forecasts. The EU Services PMI in October increased from 51.6 to 52.2 points with the forecast of 51.8 points. Retail sales in September showed an increase of 3.1% YoY, accelerating from the previous +2.7% YoY and with a forecast of +2.5% YoY.

GBP/USD

GBP keeps downward direction, updating local lows of October 29. The development of negative trend is facilitated by the newly arisen uncertainty regarding the process of trade negotiations between the USA and China. The parties still have not agreed on the time and place for signing the preliminary agreement, while China continues to insist on the abolition of both previously introduced import duties and the planned tariff increase in December. The US are in no hurry to make concessions to the PRC on this issue, considering the December increase in duties as a guarantee that China will be forced to make a deal. Brexit and the upcoming early parliamentary elections in December remain as negative factors for the pound. Today, investors expect the Bank of England meeting on the interest rate. It is expected that the regulator will not change the parameters of monetary policy in the face of significant uncertainty. Nevertheless, investors will be interested in updated forecasts of the BoE, as well as in a quarterly report on inflation.

AUD/USD

AUD declines against USD, updating close local lows of October 30. The development of negative trend is facilitated by a moderate growth of the US dollar across the entire spectrum of the market, while investors expect new drivers to appear. Today, the Australian currency is declining, despite the publication of positive macroeconomic statistics from Australia. AiG Construction Index went up from 42.6 to 43.9 points in October. Exports from Australia increased by 3% in September after falling by 3% in the previous month. Imports also increased by 3% after zero dynamics in August. Due to strong export growth, Australia's Trade Surplus in September rose significantly from AUD 5.926B to 7.180B. Analysts had expected a decline to AUD 5B.

USD/JPY

USD showed a slight decline against JPY on Wednesday, retreating from local highs, updated the day before. Pressure on the yen was exerted by the published minutes of the Bank of Japan meeting on monetary policy, as well as by macroeconomic statistics from Japan. As expected, the protocols reflected the regulator’s commitment to low interest rates, which stimulate weak inflation in the country. It is expected that rates will remain unchanged until Q2 2020 (while the head of regulator Haruhiko Kuroda does not deny the possibility of a new stimulation of inflation in case of urgent need). Wednesday's statistics on Manufacturing PMI from Jibun Bank reflected a decline in October from 52.8 to 49.7 points against the forecast of 50.3 points.

Oil

Oil prices showed an active decline on Wednesday, retreating from local highs. Pressure on the quotes was exerted by the results of EIA Crude Oil Inventories report, according to which, over the week ending November 1, oil reserves increased by 7.929M barrels after an increase of 5.702M barrels over the past period. Analysts had expected an increase of only 1.515M barrels. US oil production remained unchanged at 12.600M barrels per day. Additional pressure on the quotes was also exerted by the news that some OPEC+ participants are more interested in following all the regulations of the current agreement to limit production, rather than expanding the volume of restrictions in the future.

 

[MikhailLF]

Morning Market Review
2019-11-08 08:45 (GMT+2)
EUR/USD

EUR showed a decline against USD on Thursday, updating local lows of October 16. Pressure on the euro was exerted by moderate growth in the US currency amid improved prospects for a trade agreement between the US and China. There was information in the media that the parties are ready to mutually cancel part of the previously imposed higher import duties, which indicates some progress in the negotiations. However, the timing and venue of signing the agreement are still unknown. Yesterday's macroeconomic statistics from Germany had an additional negative impact on the euro. Industrial Production in September decreased by 0.6% MoM after an increase of 0.4% MoM a month earlier. Analysts had expected decline by 0.4% MoM. In annual terms, the decline has accelerated from –3.9% YoY to –4.3% YoY, with the forecast of –2.9% YoY.

GBP/USD

GBP fell against USD on Thursday, noting a new local low since October 24. The results of the Bank of England meeting, as well as the continued moderate growth of the dollar against the backdrop of improving prospects for a trade agreement between the United States and China, contributed to the decrease in the instrument. As expected, the British regulator kept the key interest rate at 0.75%, and the volume of the quantitative easing program remained at 435B pounds. At the same time, the vote to maintain the rate was not unanimous. Two representatives of the regulator spoke out for its decline due to the high level of uncertainty in the global economy and the risks that Brexit brings.

AUD/USD

AUD rose slightly against USD on Thursday, but again returned to decline during today's Asian session. The Australian currency was boosted yesterday by positive data from Australia on September export dynamics, which allowed for a stronger trade surplus. Additional support for the instrument was provided by positive news regarding the process of trade negotiations between the USA and China. Today, the instrument is again declining, despite the publication of moderately optimistic statistics on exports from China. In October, exports fell by 0.9% YoY after a decrease of 3.2% YoY in the previous month. Analysts had expected further deterioration in the dynamics of the indicator to –3.9% YoY. Imports for the same period decreased by 6.4% YoY after a decrease of 8.5% YoY in September. The trade surplus in October increased from 39.65B to 42.81B dollars, which exceeded market forecasts of 40.83B dollars.

USD/JPY

USD rose against JPY on Thursday, updating local highs of May 31. The development of the "bullish" dynamics of the instrument was facilitated by the depreciation of the Japanese currency against the background of an upbeat sentiment regarding the conclusion of a trade agreement between the United States and China. Despite the fact that currently the new terms for signing the preliminary trade agreement have not been agreed upon, the comments of the officials allow one to believe in real progress in the ongoing negotiations. Today, the pair is trading in both directions. The yen is moderately supported by the Japanese macroeconomic data. Household Spending in September grew by 9.5% YoY after growth by 1.0% YoY a month earlier. Analysts had expected growth by 7.8% YoY. Overall wage income of employees in September rose by 0.8% YoY after a decrease of 0.1% YoY in the previous month, with a forecast of +0.4% YoY.

Oil

Oil prices showed moderate growth on Thursday, responding to news that China and the US agreed on a plan to mutually reduce existing high import duties after a preliminary trade deal was concluded. However, the timing of the signing of this agreement is not yet known, although earlier information appeared in the media that the date could be postponed to early December. Today, oil quotes are relatively stable and expect new drivers to appear at the market. On Friday, investors are focused on Baker Hughes Oil Rig Count report in the United States.

 

[MikhailLF]

Morning Market Review
2019-11-11 08:52 (GMT+2)
EUR/USD

EUR showed a confident decline against USD last Friday, updating local lows of October 15. The development of the "bearish" trend was promoted by optimistic news around the US-Chinese trade negotiations. PRC representatives said that the parties are ready to mutually cancel a number of increased import duties as part of the conclusion of a preliminary trade agreement. However, later this information was not confirmed by the American side, and Donald Trump, commenting on the spreading rumors, said that the issue remains unresolved. In addition, Trump noted that in order to conclude the first phase of a trade agreement, the PRC president will have to come to the United States. The timing of a possible signing of the document is still unknown.

GBP/USD

GBP fell against USD on Friday, continuing to develop a downtrend and updating local lows of October 16. Positions of the pound at the end of last trading week were under pressure amid the publication of optimistic news regarding the process of trade negotiations between the US and China. Later, however, optimism about the imminent signing of the preliminary agreement somewhat diminished, and investors turned their attention to the upcoming early parliamentary elections in Great Britain in December. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. The focus of investors is on macroeconomic statistics from the UK. Among other things, investors are interested in the UK GDP data for Q3 2019. Also, markets will be interested in statistics on Industrial Production and Manufacturing Production for September.

AUD/USD

AUD showed a steady decline against USD on Friday, updating local lows of October 30. The development of negative dynamics was facilitated by technical factors that intensified by the end of the trading week, as well as the moderate growth of the American currency against the background of increased investor optimism regarding trade negotiations between the US and China. Friday's macroeconomic statistics was contradictory. Australian Home Loans in September grew by 1.4% MoM after growth of 2.5% MoM in the previous month. Analysts had expected a slowdown in the increase to 1.3% MoM. Chinese statistics reflected improvement in the dynamics of foreign trade. In October, Exports fell by 0.9% YoY after a decrease of 3.2% YoY in the previous month. Imports for the same period decreased by 6.4% YoY after a decrease of 8.5% YoY in September. The trade surplus in October amounted to 42.81B dollars against the previous value of 39.65B dollars. Analysts had expected surplus growth to only 40.83B dollars.

USD/JPY

USD ended last week with ambiguous dynamics against JPY. Despite the publication of quite positive Japanese data, the instrument received support from optimistic market sentiment regarding the conclusion of a preliminary agreement between the United States and China. Coincident Indicators Index in October rose from 99 to 101 points with a forecast of growth of only 99.5 points. The Leading Indicators Index for the same period fell from 91.9 to 92.2 points with a forecast of 91.7 points. Today, the instrument shows a moderate decline, despite the publication of weak macroeconomic statistics from Japan. Core Machinery Orders in Japan in September decreased by 2.9% MoM after a decrease of 2.4% MoM in the previous month. Analysts had expected growth rate at 0.9% MoM.

Oil

Oil prices showed ambiguous dynamics on Friday, reacting to the publication of conflicting information on the process of trade negotiations between the US and China. The quotes were pressured by the comments of Donald Trump, who stated that he had not agreed to abolish previously imposed import duties on Chinese goods just yet. Last week the media reported that the US and China are preparing for the mutual abolition of import duties as part of the signing of the first phase of the trade agreement. Moderate support for the instrument on Friday was provided by Baker Hughes US Oil Rig Count report. For the reporting week, the number of oil rigs decreased from 691 to 684 units.

 

[MikhailLF]

Morning Market Review
2019-11-12 08:46 (GMT+2)
EUR/USD

EUR showed correctional growth on Monday, recovering slightly after a steady decline of last week. The uptrend appeared due to technical factors, since no interesting macroeconomic statistics from the US or Europe were released yesterday. American markets were also closed due to Veterans Day. One way or another, investors are still focusing on trade negotiations between the United States and China. Optimism regarding the early conclusion of a preliminary agreement gave way to doubts after Donald Trump announced that he was not going to revise the current policy on increased import duties. Today, the instrument is relatively stable, expecting new drivers to appear on the market. Investors expect the publication of November statistics on ZEW Economic Sentiment, as well as statements by ECB representatives, Coeure and Mersch.

GBP/USD

GBP rose significantly against USD yesterday, rising to the local highs of November 5. The pound managed to show growth on Monday, despite the publication of disappointing macroeconomic statistics from the UK. Industrial Production in September fell by 0.3% MoM after a decline of 0.7% MoM in the previous month. Analysts had expected decline of 0.2% MoM. In annual terms, production decreased by 1.4% YoY, slightly improving dynamics from the previous month at –1.8% YoY. UK GDP in Q3 2019 showed an increase of 0.3% QoQ after a decrease of 0.2% QoQ in Q2 2019. Analysts had expected growth rate at 0.4% QoQ. In annual terms, the British economy slowed down from +1.3% YoY to +1% YoY, which also turned out to be slightly worse than forecasts of +1.1% YoY. Today, the pound remains prone to further growth. Traders are awaiting the publication of UK labor market data for September/October.

AUD/USD

AUD fell against USD on Monday, continuing to develop a "bearish" momentum, which has been preserved since the end of last week. Pressure on the instrument is exerted by noticeably worsened prospects for concluding a trade deal between the USA and China. At the end of last week, Donald Trump said that he was not currently considering the possibility of canceling part of the previously imposed import duties, which Beijing insists on. In addition, the parties still did not agree on the time and place of the possible signing of the agreement, which reduces the likelihood that the deal may be concluded in November. Today, the Australian dollar, which opened with the usual decline, is recovering some of the lost ground. The instrument is supported by fairly positive macroeconomic statistics from Australia. NAB Business Confidence rose from 0 to 2 points in October with the neutral forecast. NAB Business Survey rose from 2 to 3 points in October, which exceeded the expectations as well.

USD/JPY

USD fell against JPY on Monday, as the negative sentiment regarding the prospects for a trade agreement between the US and China outweighed the publication of weak macroeconomic statistics from Japan. Core Machinery Orders in Japan in September decreased by 2.9% MoM after a decrease of 2.4% MoM in the previous month. Analysts had expected growth rate at 0.9% MoM. In annual terms, the indicator increased by 5.1% YoY after the decrease by 14.5% YoY in the previous month. Forecasts suggested an increase of 7.9% YoY. Economy Watchers Current Index in October fell sharply from 46.7 to 36.7 points, while analysts had expected growth to 47.1 points.

Oil

Oil prices showed ambiguous trading dynamics on Monday, interrupting the development of weak correctional dynamics. Pressure on quotes is still provided by the uncertain prospect of a trade agreement between the United States and China. Last Saturday, Donald Trump once again emphasized that the deal would be concluded only if it is "useful" for the United States. As for the possible cancellation of some of the introduced import duties, Trump has not yet considered this possibility, which may become another stumbling block for the current negotiations.