LiteForex Analytics

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed correctional growth against the US dollar on Friday, retreating from local minima, updated the day before. At the end of last week, EUR was pressured by the ECB's revised forecasts for GDP and inflation in the Eurozone. In addition, the regulator announced the launch of the TILRO assistance program for credit institutions in September. There are no talks about raising the ECB rate, but if analysts had previously considered the end of the summer of 2019 as one of the possible options, now no action of tightening monetary policy is expected until the end of the year. On Monday, the euro is trading in both directions, and investors are expecting new drivers. The focus will be on statistics on industrial production and exports/imports in Germany in January. The USA will publish data on retail sales for the same period.

GBP/USD

The British pound remains under pressure and continues to develop a negative trend against the US dollar. There's almost no time left for the UK to make any changes to the agreement with the EU before the meeting of Parliament on March 12. If the parliamentarians reject the next version of the agreement, on March 13, a vote will be held to exit according to the "tough" scenario. If this vote ends in rejection, the Parliament will vote to postpone Brexit. Meanwhile, the domestic political situation in the UK is worsening now. According to British media reports, Theresa May is rapidly losing support among the cabinet ministers, and at present, she is supported by only two members of the government.

AUD/USD

The Australian dollar is trading in both directions, trying to correct after a decline last week. It is moderately supported by macroeconomic statistics from the United States published last Friday. The number of new jobs created by the American economy in February decreased from the previous 311K to 20K, while investors were expecting 180K. The average working week in February decreased from 34.5 to 34.4 hours. At the same time, the unemployment rate in February fell more strongly than forecasts, from 4.0% to 3.8%, and the average hourly wage in February rose by 0.4% MoM and 3.4% YoY with forecasts of 0.3% MoM and 3.3% YoY.

USD/JPY

The US dollar has stopped its decline against the Japanese yen and is trying to develop upward correctional dynamics. The ambiguous report on the US labor market, published on March 8, exerted only short-term pressure on the dollar, while investors are still optimistic about risk. In turn, the yen still receives support from Friday statistics from Japan. Investors were pleasantly surprised by the Japanese GDP for 4Q2018: it amounted to 1.9% YoY versus the previous 1.4% YoY, and household spending dynamics is growing steadily.

Oil

Oil prices showed ambiguous dynamics on Friday, having managed to update local lows of February 14. The reason for the strengthening of the "bearish" sentiment was the disappointing US report on employment, which again reinforced concerns about the slowdown in global economic growth. The pressure was also exerted by weak indicators from China, where exports in February fell by a record 20.7% YoY, which led to a sharp reduction in the trade surplus by almost 10 times. By the end of the Friday trading session, the instrument was able to play back most of its positions, supported by the Baker Hughes report on active oil platforms in the USA. For the week of March 8, the number of active drilling rigs decreased from 843 to 834 units, which is the third decline in a row.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro started a new week with moderate growth against the US dollar, continuing to regain last week's losses when the market reacted to a significant reduction in the ECB's economic growth and inflation forecasts for 2019. The macroeconomic background from Europe remains ambiguous. On March 11, investors were disappointed with the publication of German statistics. Industrial output in January decreased by 0.8% MoM after rising by 0.8% MoM in December. Analysts were expecting the growth of 0.4% MoM. YoY, the index slowed down from -2.7% to -3.3%. Exports in January showed zero dynamics after a growth of 1.5% MoM in December. In contrast, imports accelerated from 0.7% MoM to 1.5% MoM. This led to a decrease in the trade surplus from EUR 19.9 billion to EUR 18.5 billion.

GBP/USD

The British pound showed a sharp increase on Monday, amid news that Prime Minister Theresa May managed to agree with the European Commission on a number of amendments to the Brexit deal. In particular, May managed to settle differences on the Ireland border issue. The European Union will abandon the previously announced protective mechanism to ensure a free border on the island, and the parties will have to work out a final solution in 2020. The pound was also growing during the Asian session today, but now the “bullish” activity on the instrument has noticeably decreased. On Tuesday, investors are awaiting a vote in the British Parliament on an updated Brexit agreement. If the parliamentarians reject the agreement, on March 13 a vote will be held on withdrawal without an agreement. On March 14, there may be a vote for the postponement of Brexit.

AUD/USD

The Australian dollar strengthened against the US dollar on March 11, retreating even further from the local lows updated late last week. The growth of the instrument was largely technical since there were no interesting macroeconomic statistics. In turn, US data provided moderate support for USD. In January, retail sales rose by 2.0% MoM after a decrease of 1.6% MoM in December. Analysts were expecting zero dynamics. Today the instrument is stable and is trading near the opening levels. A certain pressure on AUD is provided by macroeconomic statistics from Australia. Mortgage loans issued in January decreased by 2.6% MoM after rising by 6.0% MoM last month. Analysts had expected growth of 1.0% MoM. The National Australia Bank (NAB) Business Confidence Index in February fell from 4 to 2 points, which was worse than analysts' forecasts. The index of conditions for the same period decreased from 7 to 4 points.

USD/JPY

The US dollar continues to grow moderately against the Japanese yen, gradually recovering from a decline last week. The macroeconomic background remains favorable for the US currency, which determines the recovery of "bullish" sentiment. In turn, the yen lacks support amid sufficiently high investor interest in risk. On Tuesday, investors will focus on the US consumer inflation statistics for February. Analysts do not expect significant changes in the dynamics of growth of CPIs, which, in general, may further strengthen USD.

Oil

Oil prices rose moderately on March 11, responding to Saudi Arabian Energy Minister Khalid al-Falih optimistic statements that corrections to the current OPEC agreement are unlikely until June when the next meeting of the cartel will take place. Quotes are also supported by the Baker Hughes report on active oil platforms published last week, reflecting a steady decline in the number of drilling rigs. However, it still has little effect on the rate of oil production in the United States, remaining at record levels. Today, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of March 4.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose markedly against the US dollar on Tuesday, updating local highs of March 7. Growth was happening in view of the publication of ambiguous macroeconomic statistics on consumer price dynamics from the United States. In addition, investors are still evaluating the report on the US labor market published at the end of last week. By the close of the day's session, EUR showed a correctional dynamics, which was a market reaction to the results of the British parliamentary vote on Brexit. As expected, despite Theresa May’s efforts and some concessions on the Irish border, parliamentarians rejected the agreement. Now, the country is waiting for a vote to leave the EU without the deal. If it fails (and the likelihood of this is extremely high), on March 14, Parliament will vote to postpone Brexit. On Wednesday, investors are awaiting publication of January statistics on industrial output in the Eurozone. Also, the market will be interested in speeches of the ECB representatives Yves Mersch and Benoit Coeuré.

GBP/USD

The pound fell sharply on Tuesday, departing from local highs of 28 February. The reason for the return of active sales were the results of voting in the UK Parliament on the country's withdrawal from the EU. There were 391 votes "against", while only 242 voted "for". The parliamentarians did not appreciate the efforts of Theresa May, which led to the fact that Brussels made some amendments to the agreement on the Irish border. On March 13, there will be another vote, about the withdrawal from the EU without the deal. This initiative is expected to also fail to be approved since it seems that parliamentarians are determined to keep the UK within the EU. On Tuesday, macroeconomic statistics from the UK provided some support for the pound. In January, GDP increased by 0.5% MoM after declining by 0.4% MoM in December. Analysts were expecting the growth of 0.2% MoM. Industrial output in January rose by 0.6% MoM after falling by 0.5% MoM last month.

AUD/USD

On Tuesday, the Australian dollar ended with moderate growth, which led to the update of the local maxima of March 6. Today, AUD is trading down, which is facilitated by weak macroeconomic statistics from Australia. Westpac consumer confidence index in March showed a decline of 4.8% MoM after rising by 4.3% MoM last month. The instrument is still pressured by the publication of statistics on mortgage lending and Business Confidence/Conditions indices on Tuesday.

USD/JPY

The US dollar is trading in both directions with the Japanese yen, playing out an ambiguous macroeconomic background and lasting uncertainty in the market. The pressure on the dollar on Tuesday was caused by weak macroeconomic statistics on consumer inflation in the United States. The Consumer Price Index in February rose by 1.5% YoY. In January, the prices increase was 1.6% YoY. The index excluding food and energy slowed from 0.2% MoM to 0.1% MoM. YoY, prices rose by 2.1% after growing by 2.2% last month. Today, the yen is pressured by data from Japan. The demand for machine-building products in January fell sharply by 5.4% MoM and 2.9% YoY, while analysts expected a decline of 1.7% MoM and 2.3% YoY.

Oil

Oil prices rose slightly on Tuesday, supported by optimistic statements from Saudi Arabia, which regularly fulfills its obligations under the OPEC agreement and is trying to accelerate the process of reducing exports. Additional support is provided by supply disruptions from Venezuela, where there are problems with electricity supply. The report on oil reserves of the American Petroleum Institute (API), published on Tuesday, indicated a decrease in reserves by 2.58 million barrels after rising by 7.29 million over the previous period. On March 13, investors expect the publication of the final report on oil reserves in the USA from the Department of Energy.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose against the US dollar on Wednesday, updating local highs of March 5. Moderate support for the euro was provided by good macroeconomic statistics from the Eurozone. Industrial output in January rose by 1.4% MoM after falling by 0.9% MoM last month. Analysts had hoped for the emergence of positive dynamics, however, they were counting on a more modest growth of 1.0% MoM. YoY, production still shows a negative trend of -1.1% (significantly higher than forecasts of -2.1%y). In turn, the published macroeconomic statistics from the USA has managed to please investors with an increase in the volume of orders for durable goods. In January, the indicator rose by 0.4% MoM after rising by 1.34% MoM last month. Analysts were expecting a decline of -0.5% MoM.

GBP/USD

The British pound rose significantly against the US dollar on Wednesday, rising to new record highs since June 14, 2018. After the failure of the vote on the Brexit deal in the British parliament on March 12, which caused the emergence of ambiguous trading dynamics, the pound is generally trading positively, hoping to postpone the exit from the EU. Yesterday, the Parliament also rejected the idea of a country leaving the European Union without the deal, which leads Prime Minister Teresa May to the only possible way out of the situation. On March 14, there will be the third vote, on the postponement of Brexit. Speaking yesterday, May once again called on parliamentarians to approve the current version of the deal with the EU, since, without an agreement, the UK would have to ask for a longer delay, and this can only lead to a general complication of the process. There are quite a few Brexit opponents, and they will definitely try to take advantage of this hitch to lobby for a re-referendum. In addition, in May 2019, regular elections to the European Parliament will be held.

AUD/USD

The Australian dollar showed ambiguous dynamics on Wednesday and is actively declining today. The instrument is pressured by weak statistics on industrial output from China. In January, sales increased by 5.3% YoY after rising by 5.7% YoY last month. Analysts were expecting the growth of 5.56% YoY. The retail sales index in China in January rose by 8.2% YoY without showing the expected decline to 8.1% YoY. Moderate support for AUD was also provided by expectations of consumer price inflation in Australia. In March, the index rose by 4.1% MoM after rising by 3.7% MoM last month.

USD/JPY

The US dollar shows an upward trend against the Japanese yen. The US currency is still supported by fairly optimistic market sentiment and moderate investor interest in risk. Published on Wednesday, macroeconomic statistics from the USA failed to meet all expectations of analysts but proved to be quite good, unlike Japanese statistics. Nondefense capital goods, excluding aircraft shipments, in January rose by 0.8% MoM after falling by 0.9% MoM last month. The experts counted on the growth of only 0.1% MoM. However, the producer price index in February rose by a mere 0.1% MoM and 1.9% YoY, with forecasts of 0.2% MoM and 1.9% YoY. Japanese statistics reflected a sharp decline in demand for machine-building products. In January, the indicator fell by 5.4% MoM and 2.9% YoY. Experts counted on -1.7% MoM and -2.3% YoY.

Oil

Oil prices are moderately rising, updating local highs of November 2018. One of the main growth factors was the EIA report on inventory dynamics published yesterday. As of March 8, oil and petroleum products in US warehouses decreased by 3.862 million barrels, after rising by 7.069 million over the previous period. Analysts expected growth of 2.655 million barrels. In addition, the report reflected a reduction in the overall production in the US from 12.100 million to 12.000 million barrels per day. During the Asian session on March 14, the instrument is trading in both directions, pressured by weak statistics on industrial output in China.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro ended the week with moderate growth. The instrument was able to update the local maxima of March 4, but, at the end of the daily session on Friday, investors returned to profit taking. EUR was supported by good data on consumer inflation in the Eurozone in February. As expected, the price index rose by 0.3% MoM and 1.5% YoY, against -1.0% MoM and 1.4% YoY. The core CPI remained at 0.3% MoM, coinciding with the forecasts. In turn, published macroeconomic statistics from the United States failed to meet market expectations. Industrial output in February rose by 0.1% MoM after declining by 0.4% MoM last month. Analysts were expecting growth of 0.4% MoM. New York FRB Manufacturing index in March fell from 8.8 to 3.7 points, with expectations of growth to 10.0 points. But the consumer confidence index from the University of Michigan has managed to support the dollar. In March, according to preliminary estimates, the index rose sharply from 93.8 to 97.8 points while the forecast was 95.3 points.

GBP/USD

In the past few days, the pound shows ambiguous dynamics. Investors are still focused on Brexit. Last week, the Parliament rejected the next version of the agreement on the country's withdrawal from the EU, after which it voted against Brexit without the deal and for extending the action of Article 50 of the Lisbon Treaty until June 30. Prime Minister Theresa May still hopes to convince parliamentarians to approve the current version of the agreement until March 21, which will allow the UK to request the European Council to slightly extend the dates. Otherwise, if the transaction is postponed until June 30 or a later date, the negotiations may be significantly delayed, and a full-fledged political crisis will take place in the UK. Among the EU countries, there is still no consensus regarding the postponement of Brexit. This issue is expected to be discussed at the EU summit this week.

AUD/USD

The Australian dollar returned to growth on Friday and continues to actively develop "bullish" dynamics today, updating local highs of March 1. AUD is supported by the tense situation around the US-China trade negotiations, as well as the possible refusal of North Korea from further negotiations on nuclear disarmament. Investors also follow the domestic political situation in the USA. March 15, it became known that President Donald Trump put a veto on Congress resolution, which was supposed to cancel the earlier state of emergency on the border with Mexico. Recall that in this way Trump expected to receive the required USD 8 billion for the construction of the wall, while only USD 1.375 billion was allocated for this in the budget.

USD/JPY

The US dollar shows ambiguous dynamic against the Japanese yen. After updating local highs on March 15, the dollar is trading downwards against the background of technical factors and uncertain prospects for the US negotiations with the PRC and the DPRK. Today, flat dynamics is observed, which is also characterized by an extremely low level of volatility. The yen is pressured by statistics on imports and exports from Japan. In February, exports dropped by 1.2% YoY after falling by 8.4% YoY last month. The decline in imports was 6.7% YoY after a drop of 0.8% YoY in January. The experts were expecting -5.8% YoY. Such a significant decrease in the indicator allowed the trade surplus to slightly increase in February to 339 billion Japanese yen, which turned out to be better than market expectations.

Oil

Oil prices showed a decline on Friday, which was a market reaction to new data indicating a slowdown in the global economy and growth in US production. However, by the end of the daytime session, the instrument managed to win back almost all the losses, in particular, due to the publication of the Baker Hughes report. For the week of March 15, the number of active oil platforms in the United States decreased from 834 to 833 units, which was the fourth decline in a row. The quotes are also supported by the actions of OPEC+. At the moment, the reduction in the volume of oil supplies is even slightly ahead of the initially agreed figures, which allows leveling the active growth of production in the United States. The next meeting of OPEC+, which will decide on the current agreement on limiting production, will be held on April 17-18.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro continues to grow moderately against the US dollar, updating local highs of March 4. On Monday, after the update of the highs, the euro declined significantly due to the strengthening of the US dollar index, but the "bullish" mood on the instrument remained. Moderate support for the instrument was provided by data on the Eurozone trade balance. In January, the balance surplus increased from 16.0 billion to 17.0 billion euros, which turned out to be significantly better than forecasts, which suggested a decrease to 13.2 billion. In turn, the American statistics was neutral. The NAHB retail housing prices index in March remained at 62 points, contrary to forecasts of growth to 63 points. On Tuesday, investors will be focused on a block of indicators on economic sentiment in the Eurozone and Germany from ZEW. Also, traders are interested in Construction PMI in the Eurozone in January.

GBP/USD

The British pound returned to decline on Monday, updating local lows of March 13. However, by the end of the day session, the instrument managed to win back almost half of the losses, and today's trading is going upwards. Yesterday, the pound was pressured by news that House of Commons Speaker John Bercow blocked Prime Minister Theresa May’s proposal to hold a re-vote on the current version of the agreement with the EU. Bercow stated that the government could not put the same proposal to the vote twice. Thus, May will have to ask Brussels for a longer delay, since the process of developing a new agreement will be extremely difficult. The process of postponement itself can also be very painful since this requires the unanimous decision of all EU member states. Today, investors will pay attention to the data on the UK labor market in January/February.

AUD/USD

The Australian dollar shows moderate growth, receiving support from the weak positions of the US currency. Today, the instrument is trading in both directions, responding to the publication of the RBA minutes of March 5 and the dynamics of housing prices. In 4Q2018, the housing price index decreased by 2.4% QoQ and 5.1% YoY, which was noticeably worse than the data for the previous period (-1.5% QoQ and -1.9% YoY). Analysts had expected -2.0% QoQ and -0.4% YoY. The published RBA protocol did not have a significant impact on the instrument since it did not show anything new. As before, the regulator complained about the growing external risks, especially in Europe and Asia, however, noted the positive impact of rising oil and coal prices.

USD/JPY

The US dollar has returned to decline against the Japanese yen, updating local lows of March 14 today. The US currency is weakening amid increasing uncertainty caused by the publication of ambiguous macroeconomic statistics. In addition, investors are anxiously awaiting news regarding the US-China trade negotiations. Recently, the media reported that the meeting of the two heads of state could be postponed from late March to April, but it has not yet received official confirmation. The data on industrial production in Japan published on Monday provided the yen with moderate support: in January, the index rose by 0.3% YoY against the zero dynamics of last month.

Oil

Oil prices continued moderate growth during the new week in the market, supported by the efforts of OPEC+. After the meeting of the OPEC+ member countries in Azerbaijan, it was decided to cancel the April meeting of the cartel, where, as expected, the future of the current agreement was to be discussed. Thus, it is actually extended until June, when a new meeting is scheduled. In addition, exporting countries report the toughening of the obligations under the agreement, which allows the market to remain stable in the context of growing US oil production. On Tuesday, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of March 15.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose rapidly against the US dollar on Wednesday, updating local highs of February 4. The reason for the emergence of a confident "bullish" dynamics was the weakening of the US currency amid the publication of the minutes of the Fed meeting. As expected, the regulator left the interest rate unchanged at 2.5%. At the same time, which turned out to be the most important, the Fed clearly stated that it is not going to make two planned rate hikes this year. In 2020, as before, the regulator expects only a one-time rate increase. The euro could not strengthen more confidently due to the uncertainty around Brexit, as there is still no consensus regarding the postponement of the UK exit from the EU.

GBP/USD

The British pound closed Wednesday's trading with a steady decline, updating local lows of March 13. The "dovish" rhetoric of Fed Chairman Jerome Powell practically did not support the weakened pound, although it contributed to the development of a minor correction. The instrument remains pressured by the rapidly delaying Brexit process, which threatens to exacerbate the internal political situation in the UK. Theresa May still expects a postponement to the end of June, while some representatives of the EU state the need for a longer delay. Some support for the pound yesterday was provided by the statistics on consumer inflation in the UK. In February, the consumer price index rose by 0.5% MoM and 1.9% YoY after the previous data of -0.8% MoM and 1.8% YoY. However, the core index in February slowed down from 1.9% YoY to 1.8% YoY.

AUD/USD

The Australian dollar shows strong growth against the US one, supported by the soft position of the Fed and published macroeconomic statistics from Australia. In addition, the growth of AUD is promoted by the continuing uncertainty in the Brexit process and in the US-China trade negotiations. Today, the instrument is also trading in an uptrend, however, the "bulls" are facing significant resistance. Investors are focused on the report on the Australian labor market in February. The level of unemployment suddenly decreased from 5.0% to 4.9%. The last time the unemployment rate fell below 5% was in July 2011. At the same time, the employment level in February showed an increase of only 4.6K jobs, which is significantly lower than the growth of 39.1K last month. Analysts were expecting growth of 14.0K jobs.

USD/JPY

The US dollar fell sharply against the Japanese yen on Wednesday, retreating to local minima of February 27. The reason for the appearance of the "bearish" dynamics was the decision of the Fed to abandon the two planned rate hikes this year. Additional support for the yen was provided by the reduced investor interest in risk. In particular, the market reacted to the publication of updated forecasts from the Fitch agency. The forecast for the growth rate of the world economy in 2019 was revised from 3.1% to 2.8%. Next year, the global economy may grow by 2.8% instead of previous forecasts of 2.9%. Today the instrument is relatively stable, partly due to the closed markets in Japan on the occasion of a national holiday.

Oil

Oil prices continue to grow moderately, updating local highs of November 2018. Quotes are supported by data from the US Department of Energy, indicating a sharp reduction in oil stocks. As of March 15, reserves in US warehouses declined by a record 9.589 million barrels after declining by 3.862 million last week. Analysts predicted a slight increase by 0.309 million barrels. The "bullish" dynamics is also supported by the policy of OPEC+ and the expansion of US sanctions against Venezuela.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed a confident decline against the US dollar on Thursday, departing from local highs of February 4, updated the day before. The decline in the pair was largely due to technical factors of the correction of USD after a long decline. In addition, investors fix their profits before the weekend. Macroeconomic statistics from the United States, which supported the dollar on Thursday, include the Philadelphia Fed Manufacturing Index. In March, the figure rose sharply from -4.1 to 13.7 points, with a forecast of growth only to 4.5 points. Initial Jobless Claims for the week on March 15 decreased from 230K to 221K, which turned out to be better than market expectations (225K). Today, investors are focused on the statistics on business activity in the Eurozone (and separately France and Germany) and the United States. Also, the market expects representatives of the ECB Luis de Guindos and Yves Mersch to speak.

GBP/USD

The British pound showed ambiguous dynamics on Thursday, updating the local minima of March 11. There were lots of drivers for GBP, so the dynamics was extremely mixed. As expected, the Bank of England left monetary policy unchanged. The key rate remained at 0.75%, and the decision was made unanimously. The QE program has kept its volume of 435 billion pounds. In the accompanying statement, the BoE spoke a lot about the risks around Brexit, noting that it is now reasonable to take a wait-and-see attitude. Meanwhile, the EU has approved a deferment option for the UK. If parliament manages to agree on the deal, the final date will be postponed to May 22. Otherwise, the new deadline will be April 12.

AUD/USD

The Australian dollar is developing a corrective decline, retreating from local highs, updated on March 21. The reason for the appearance of the "bearish" dynamics of the instrument was an ambiguous report on the Australian labor market in February. Investors were optimistic about the decrease in the unemployment rate from 5.0% to 4.9% but were disappointed with the extremely weak growth in the employment rate - by 4.6K after 39.1K last month. Additional pressure was provided by an indicator of credit card spendings. In February, it rose by 6.4% YoY after rising by 6.9% YoY in January. Experts expected a slowdown of only up to 6.8% YoY.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on Thursday, recovering previously lost positions and retreating from the updated local minima of February 15. Technical factors contributed to the development of correctional dynamics for the dollar, as well as moderate optimistic macroeconomic statistics from the US, published the day before. Today, the instrument again is traded in both directions. Investors are focused on Japanese data on consumer prices and the Manufacturing PMI. The national consumer price index in February rose by 0.2%YoY after a similar increase in January. Analysts expected growth of up to 0.3% YoY. Excluding the price of fresh food, the index slowed down from 0.8% YoY to 0.7% YoY, while the forecast was 0.6% YoY. The Nikkei Manufacturing PMI in March remained at 48.9 points.

Oil

Oil prices showed a decline on Thursday, retreating from local maxima following the large-scale correction of the US dollar. Quotes are still supported by the confident position of OPEC+, which promises a further restriction of production volumes by the largest suppliers. Additional support comes from data indicating a sharp decline in US oil stocks. On March 22, in addition to statistics on business activity, Baker Hughes will report on active oil platforms in the United States.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

EUR ended the week last week with a steady decline against USD, renewing its lows since March 12. The development of the “bearish” dynamics was largely due to poor macroeconomic EU statistics, as well as growing concerns about the Brexit process and the US-China trade negotiations, which contributed to a decrease in investors’ interest in risk. The statistics released on Friday reflected a decline in Composite Manufacturing Markit PMI in March from 51.9 to 51.3 points against a forecast of growth to 52.0 points. Services PMI fell from 52.8 to 52.7 points. In addition, investors paid attention to data from Germany. German Manufacturing PMI fell from 47.6 to 44.7 points against the forecasts of growth to 48.0 points. German Service PMI fell from 55.3 to 54.9 points.

Today, during the Asian session, the pair is growing slightly. Traders are awaiting the publication of a block of on German IFO business sentiment statistics.

GBP/USD

On Friday, GBP rose against USD, being corrected after a significant decline on Thursday. The currency was supported by the EU’s decision to grant the United Kingdom a postponement of Brexit until May 22. However, the EU has put forward several conditions. If the British Parliament does not approve the existing version of the agreement with the EU, the postponement will be valid only until April 12. The document also excludes the possibility of additional negotiations on the agreement. Thus, Theresa May has time until March 29 to convince parliament to accept the current version of the agreement. Meanwhile, in the UK, the political crisis continues to flare up, and a petition published on the Internet for the abolition of Brexit has gained over 5 million signatures. Increasingly, information appears in the media about the growing number of ministers in favor of Teresa May’s resignation.

AUD/USD

On Friday, AUD steadily declined, balancing the active growth of the instrument on Wednesday, March 20. The weakness of the currency is due to the growing uncertainty on the Brexit and the negotiations between the United States of America and China. Meanwhile, on Friday, during a television interview, Donald Trump noted that the negotiation process was going well and was likely to lead to an agreement. Trump also commented on the government’s intention to retain a number of protective duties after signing the agreement, stressing that this would not prevent the resolution of existing conflicts.

Today, investors expect a small block of American and Australian statistics. In the US, the Chicago Fed National Activity in February will be published, and Australia, the February import and export data will be released. Also, the traders are focused on the speech of the economic adviser to the head of the RBA Luci Ellis.

USD/JPY

On Friday, USD fell sharply against the JPY, renewing its lows since February 11, under pressure from poor US macroeconomic statistics. Thus, in March, Markit Manufacturing PMI decreased from 53.0 to 52.5 points, which turned out to be worse than the forecast of 53.6 points. Service PMI fell from 56.0 to 54.8 points, while the value was not expected to change. In turn, sales in the US secondary housing market in February rose sharply by 11.8% MoM after falling by 1.4% MoM last month. Analysts expected growth of + 2.2% MoM. Today, during the Asian session, the instrument is moderately reducing, and investors expect new drivers to appear on the market.

On Monday, the traders will focus on the publication of the Japanese activity index in all industries in January and the speech of the representative of the Bank of Japan, Yutaka Harada.

Oil

On Friday, oil prices declined moderately, continuing the development of the “bearish” impulse formed the day before. Investors avoid additional risk in the face of new signals of a slowing global economy. In addition, traders are concerned about the lack of visible progress in the US-China trade negotiations and the exacerbation of the political crisis in the UK amid problems with Brexit. Meanwhile, prices are still supported by a policy of further reducing oil production, taken by OPEC +. Friday’s Baker Hughes Oil Rig report also had a positive effect on the rate. During the reporting week, the number of US rigs decreased from 833 to 824 units, which is the fifth decline in a row.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR rose steadily against USD, retreating from lows since March 12, renewed late last week. EUR was supported by an unexpectedly strong IFO Germany business sentiment data. The March German Business Expectations rose from 93.8 to 95.6 points while the forecast was 94.0 points. German IFO Business Climate Index jumped from 98.7 to 99.6 points, while analysts expected a decline to 98.5 points. German Current Assessment for the same period rose from 103.6 to 103.8 points, against the forecasts of a decline to 102.9 points. Today, during the Asian session, the instrument slightly increases, waiting for the appearance of new drivers on the market. On Tuesday, traders will focus on US housing market data. In Germany, April GfK German Consumer Climate will be released.

GBP/USD

Yesterday, GBP moved horizontally against USD and closed in the red zone. The currency is still under pressure from the uncertain situation around Brexit. Until the end of the week, Theresa May has to get agreement between the British parliament and the EU but parliamentarians are not likely to unite. The media gets information that an increasing number of ministers insist on the imminent resignation of the Prime Minister, and the idea of a repeated referendum is growing stronger among the public sentiment. Yesterday, in her speech in the British Parliament, Theresa May acknowledged that she did not find enough support but would try to look for additional ways to bring the current version of the agreement to the third vote in parliament. Some analysts believe that May may take extreme measures and will offer parliamentarians approval of the agreement in exchange for his resignation. If the UK fails to approve a deal with the EU until March 29, on April 12, the country will have to follow the “hard” scenario.

AUD/USD

Yesterday, AUD was actively growing against USD, balancing a decline at the end of the last trading week. The correction was due to a number of technical factors, while the macroeconomic background remained neutral. On Monday, a speech was made by the economic adviser to the head of the RBA, Lucy Ellis, which had no noticeable influence on the rate. Ellis's speech was devoted to household issues and in many respects repeated the main position of the regulator but she emphasized strong growth in the labor market. Over the past year, the employment rate has increased by more than 2%, while the unemployment rate has fallen below 5% for the first time in a long time (since 2011).

USD/JPY

Yesterday, USD was trading ambiguously against the JPY, renewing its lows since February 8. The uncertain dynamics was due to the lack of significant macroeconomic publications at the beginning of the week. In addition, investors are concerned about the process of negotiations between the US and China on trade issues. Despite the assurances of Donald Trump that negotiations are proceeding well, the market fears a repetition of the North Korean scenario. A new round is due this week. Today, during the Asian session, USD is growing uncertainly. The instrument is supported by a document published on the eve of by Special Prosecutor Robert Muller, in which it is noted that a special commission did not find evidence of Donald Trump’s collusion with the Russian authorities during the 2016 election period.

Oil

Yesterday, oil prices rose moderately, partially balancing the active decline at the end of last week. More confident gain is hampered by concerns about a slowdown in the global economy. In particular, investors fear that the negotiations between the US and China on a trade dispute may end in failure, which will have a negative impact on the Chinese economy. In addition, the markets were afraid of a possible recession in the US, as the yield on 10-year Treasury bonds continues to decline steadily. On Tuesday, investors are focused on US Housing Starts data the dynamics of Retail Sales, and also on the report of the American Petroleum Institute on oil reserves in the United States.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR fell against USD, retreating to its lows since March 12, under pressure from technical factors and a further decline in investor interest in risk amid growing uncertainty in the market. In particular, traders have ambiguously reacted to the situation with Brexit in the UK after the British parliament adopted the amendment and took control of the country's exit from the EU. It is expected that today, in the parliament a vote on a number of issues with a discussion of possible options for the development of the situation will be held. Meanwhile, April GfK German Consumer Climate fell from 10.7 to 10.4 points against the forecasts of growth to 10.8 points, which was the lowest level since May 2017. During the Asian session on March 27, EUR is also weakening. Today, the investors are focused on the speech of the ECB President Mario Draghi and a number of other regulator’s representatives, such as Peter Praet, Sabine Lautenschlager, Yves Mersch, and Luis de Guindos.

GBP/USD

GBP continues to trade ambiguously, sharply reacting to any changes around Brexit. Earlier this week, British parliamentarians adopted an amendment to the law, which allowed parliament to take control of the Brexit process (previously it was held by the government of Theresa May). Now the parliament can feel lighter and discuss the most varied exit scenarios. However, this can only help to clarify the preferences of parliamentarians, while there is no time and possibilities left to coordinate new changes with the EU. The UK must approve a version of the agreement by the end of the week; otherwise, on April 12 it will have to leave the EU without a deal.

AUD/USD

Yesterday, AUD rose steadily against USD, renewing its lows since March 21, after the publication of poor US macroeconomic statistics. Thus, Building Permits decreased by 1.6% MoM in February after decreasing by 0.7% MoM last month. Analysts had expected a slight improvement in the indicator to –0.6% MoM. Housing Starts index also fell from 1.273 million to 1.162 million in February, which was worse than the forecast of 1.213 million. March Richmond Manufacturing Index decreased from 16 to 10 points, while the forecast was 12 points. However, today during the Asian session, AUD is weakening, quickly losing positions gained yesterday. The instrument is under pressure from statistics from China, indicating a sharp decline in profits of a number of large Chinese enterprises in January-February by 14%. The profit of large industrial enterprises decreased by 24.2% over the same period.

USD/JPY

Yesterday, USD rose steadily against the JPY, partially balancing a sharp decline at the end of last week. The emergence of poor US macroeconomic statistics and the overall low level of traders’ interest in risk did not support JPY. Instead, investors focused on a summary of updated forecasts from the Bank of Japan. The document is of a generalizing nature and is published once a year after the next meeting of the regulator on interest rate issues. The Bank reaffirmed its commitment to a target inflation rate of 2%, which is one of the key parameters in choosing the vector of monetary policy. At the same time, the regulator devoted a significant part of the report to external economic risks, noting the slowdown in China’s economy and the uncertainty of the UK’s exit from the EU.

Oil

This week, oil prices are rising and approaching local highs, renewed a week ago, supported by market uncertainty, as well as interruptions in oil supplies from Iran, Venezuela, and several other countries. Yesterday’s weekly report of the American Institute of oil reserves in the United States reflected the growth of reserves by 1.927 million barrels at March 22. The previous report indicated a reduction in reserves by 2.133 million barrels. Today, investors are awaiting the publication of a report on energy reserves from the US Department of Energy. If the official statistic confirms the growth of the indicator, the quotes may be slightly corrected downwards.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR fell against USD, retreating to its lows since March 12, under pressure from technical factors and a further decline in investor interest in risk amid growing uncertainty in the market. In particular, traders have ambiguously reacted to the situation with Brexit in the UK after the British parliament adopted the amendment and took control of the country's exit from the EU. It is expected that today, in the parliament a vote on a number of issues with a discussion of possible options for the development of the situation will be held. Meanwhile, April GfK German Consumer Climate fell from 10.7 to 10.4 points against the forecasts of growth to 10.8 points, which was the lowest level since May 2017. During the Asian session on March 27, EUR is also weakening. Today, the investors are focused on the speech of the ECB President Mario Draghi and a number of other regulator’s representatives, such as Peter Praet, Sabine Lautenschlager, Yves Mersch, and Luis de Guindos.

GBP/USD

GBP continues to trade ambiguously, sharply reacting to any changes around Brexit. Earlier this week, British parliamentarians adopted an amendment to the law, which allowed parliament to take control of the Brexit process (previously it was held by the government of Theresa May). Now the parliament can feel lighter and discuss the most varied exit scenarios. However, this can only help to clarify the preferences of parliamentarians, while there is no time and possibilities left to coordinate new changes with the EU. The UK must approve a version of the agreement by the end of the week; otherwise, on April 12 it will have to leave the EU without a deal.

AUD/USD

Yesterday, AUD rose steadily against USD, renewing its lows since March 21, after the publication of poor US macroeconomic statistics. Thus, Building Permits decreased by 1.6% MoM in February after decreasing by 0.7% MoM last month. Analysts had expected a slight improvement in the indicator to –0.6% MoM. Housing Starts index also fell from 1.273 million to 1.162 million in February, which was worse than the forecast of 1.213 million. March Richmond Manufacturing Index decreased from 16 to 10 points, while the forecast was 12 points. However, today during the Asian session, AUD is weakening, quickly losing positions gained yesterday. The instrument is under pressure from statistics from China, indicating a sharp decline in profits of a number of large Chinese enterprises in January-February by 14%. The profit of large industrial enterprises decreased by 24.2% over the same period.

USD/JPY

Yesterday, USD rose steadily against the JPY, partially balancing a sharp decline at the end of last week. The emergence of poor US macroeconomic statistics and the overall low level of traders’ interest in risk did not support JPY. Instead, investors focused on a summary of updated forecasts from the Bank of Japan. The document is of a generalizing nature and is published once a year after the next meeting of the regulator on interest rate issues. The Bank reaffirmed its commitment to a target inflation rate of 2%, which is one of the key parameters in choosing the vector of monetary policy. At the same time, the regulator devoted a significant part of the report to external economic risks, noting the slowdown in China’s economy and the uncertainty of the UK’s exit from the EU.

Oil

This week, oil prices are rising and approaching local highs, renewed a week ago, supported by market uncertainty, as well as interruptions in oil supplies from Iran, Venezuela, and several other countries. Yesterday’s weekly report of the American Institute of oil reserves in the United States reflected the growth of reserves by 1.927 million barrels at March 22. The previous report indicated a reduction in reserves by 2.133 million barrels. Today, investors are awaiting the publication of a report on energy reserves from the US Department of Energy. If the official statistic confirms the growth of the indicator, the quotes may be slightly corrected downwards.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

On Friday, EUR declined steadily against USD, renewing its lows since March 8. The tense situation around Brexit and the protracted US-China trade negotiations continue to exert considerable pressure on the EUR. However, the course is supported by positive macroeconomic statistics from Germany. Retail sales rose by 0.9% MoM in February after rising by 2.8% MoM in the previous month. Analysts had expected a decline of 0.9% MoM. In annual terms, sales growth accelerated to 4.7% YoY from the previous +3.1% YoY, which was significantly better than market forecasts +2.8% YoY. March Unemployment Rate fell from 5.0% to 4.9% as expected, while the Unemployed Number fell by 7K after falling by 20K in February. Today, during the Asian session, EUR is trading upwards, and investors are awaiting the publication of statistics on EU March Consumer Inflation. The instrument is also supported by data from China. March Caixin PMI index strengthened from 49.9 to 50.8 points, which was noticeably better than analysts' expectations.

GBP/USD

GBP is trading in different directions, renewing the lows since March 11. On Friday, UK macroeconomic statistics provided some support for the course, while tensions around Brexit did not allow the instrument to grow more confidently. 2018 Q4 GDP rose by 0.2% QoQ and 1.4% YoY, which was slightly better than the market forecast +0.2% QoQ and +1.3% YoY. On March 29, another vote on Brexit deal was taken in the country's parliament. Despite all the efforts of Theresa May and the proximity of the deadlines set by the EU, the parliamentarians rejected the document again, which increases the risks of exit under the “hard” scenario. The country will have to leave the EU on April 12 if the agreement is not approved.

AUD/USD

On Friday, AUD rose moderately against USD, being corrected after a steady decline in the middle of the week. The course was supported by poor macroeconomic publications from the United States, as well as the expectation of a positive outcome of the US-China trade negotiations. Today, during the Asian session, which opened with an upward gap, the instrument is trading in different directions. A positive gap was due to the PRC decision to postpone the introduction of new import duties on a number of American goods and strong data from China. Thus, March Service PMI rose from 54.3 to 54.8 points, while the forecast was 54.1 points. The March NBS Manufacturing PMI strengthened from 49.2 to 50.5 points. Analysts predicted growth only to 49.5 points.

USD/JPY

USD continues to grow moderately against JPY, renewing its highs since March 20. Last Friday, the market received a fairly large number of key macroeconomic statistics from Japan and the United States. Japanese data pleased traders with a confident increase in the Tokyo CPI from +0.6% YoY to +0.9% YoY but disappointed with a slowdown in the growth of Retail Sales and Industrial Production in annual terms. Statistics from the United States reflected the continued growth in New Home Sales in February and an increase in Consumer Confidence in March. Among the negative aspects are poor statistics on Personal Income and Expenditures of citizens in January-February, which was worse than market forecasts. Today, during the Asian session, JPY is moderately supported by statistics on the Nikkei Manufacturing PMI. In March, the figure rose from 48.9 to 49.2 points, with the forecast of the preservation of the value.

Oil

On Friday, oil prices rose, renewing record highs since November 13, 2018. US sanctions on Iranian and Venezuelan oil and the policy of OPEC+, aimed at a systematic reduction in oil production, significantly support the instrument. US pressure on the Venezuelan energy source leads to a gradual abandonment of it in a number of other countries, in particular, in Japan. Baker Hughes report on the active oil platforms also had a positive effect on quotes. During the week, the number of drilling rigs in the United States of America decreased from 824 to 816 units, which was the sixth decline in a row.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

EUR continues to decline against USD, renewing its lows since March 8. The instrument is under pressure from poor macroeconomic statistics from Europe and uncertain prospects around the Brexit process. Yesterday, investors were disappointed by March Markit manufacturing PMI, which fell sharply from 49.3 to 47.5 points, almost coinciding with analysts' forecasts of 47.6 points. According to preliminary estimates, CPI slowed down from +1.5% YoY to +1.4% YoY for the same period, while the forecasts did not suggest any changes. Core CPI rose by only 0.8% YoY in March after rising 1.0% YoY last month. Today, during the Asian session, EUR is also trading within a downtrend, and investors are awaiting the publication of European PPI statistics and a speech by ECB representative Peter Praet.

GBP/USD

Yesterday, GBP rose, being corrected after a steady decline last week, due macroeconomic statistics from the UK and the United States of America, in addition, investors continued to monitor the situation around Brexit. March Markit manufacturing PMI rose from 52.1 to 55.1 points, contrary to forecasts of a decline to 51.0 points. US index data were not so straightforward. The ISM manufacturing PMI rose from 54.2 to 55.3 points but Markit PMI indicated a decline from 53.0 to 52.4 points, which was worse than market expectations of 52.5 points. As for the situation around Brexit, there is no progress here. On Monday, the British parliament rejected all four alternatives, and earlier, on Friday, rejected the current version of the agreement with the EU for the third time. The situation leads to the fact that Britain will have to leave the EU on April 12 without a deal but some analysts expect that if the final transaction is not agreed, the government will have to ask for a significant postponement of the deadlines.

AUD/USD

AUD started trading a new week on Forex with a slight upward gap, which was caused by optimistic macroeconomic publications from China. In addition, Beijing has suspended the introduction of new import duties on a number of American goods, which indicates that in the process of trade negotiations with the United States there has been some progress. At the moment, the parties are preparing for the next round of talks to be held in Washington. Today, during the Asian session, the instrument is declining after the publication of the minutes of the RBA meeting on interest rates. As expected, the regulator left the rate at 1.5%, noting that the current level is optimal for maintaining the economic situation in the country. The RBA complained about the growing external economic risks affecting the growth dynamics of the national economy again. The regulator has practically achieved the planned results on inflation, and in 2020, it expects consumer price growth over the target level of 2%.

USD/JPY

Yesterday, USD rose steadily against the JPY, renewing its highs since March 20, with the support of poor macroeconomic data from Japan. Thus, 2019 Q1 Tankan Large Non-Manufacturers Index decreased from 24 to 21 points, while Tankan Big Manufacturing Outlook Index fell from 15 to 8 points over the same period, while investors expected a decline only to 12 points. At the same time, March Nikkei manufacturing PMI rose from 48.9 to 49.2 points, which exceeded analysts' forecasts but still indicates negative trends in production. American statistics also was ambiguous. In particular, investors were disappointed with the data on Retail Sales. In February, the indicator fell by 0.2% MoM after rising 0.7% MoM last month. Analysts predicted growth by +0.3% MoM.

Oil

At the beginning of the new week, oil prices rose steadily, renewing its highs since November 2018. The quotes are still supported by a significant reduction in production, which was achieved thanks to the efforts of OPEC+ and, in particular, Saudi Arabia, which has noticeably exceeded its supply reduction plan. The development of "bullish" dynamics was also due to US sanctions against Venezuelan and Iranian oil. Today, the focus of investors is the report of the American Petroleum Institute on oil reserves for the week of March 25.

 

[MikhailLF]

LiteForex. Morning Market Review


EUR/USD

The euro showed strong growth against the US dollar on Wednesday, having corrected upwards after a 6-day downward rally, which led to the update of the local lows of March 7. EUR was supported by macroeconomic data from the Eurozone published on Wednesday. The Markit Services PMI in March rose from 52.8 to 53.3 points, while the forecast was for a decline to 52.7 points. The composite Manufacturing PMI for the same period decreased from 51.9 to 51.6 points, which nevertheless turned out to be better than the forecast of 51.3 points. Retail sales in the Eurozone in February showed an increase of 0.4% MoM and 2.8% YoY, which is higher than market expectations (0.2% MoM and 2.3% YoY). In turn, the dollar reacted negatively to the release of the ADP report on employment. According to it, in March the figure increased by only 129K against the expected growth of 170K and growth of 198K last month. Today, traders are focused on the publication of the minutes of the last ECB meeting on monetary policy.

GBP/USD

The British pound is trading upwards, updating local highs of March 28. Despite the serious problems around the Brexit process, investors are optimistic about the prospects for a new delay. Yesterday, Teresa May announced her readiness to hold a series of negotiations with the opposition Labor Party to agree on a joint action plan. This decision has already caused criticism from the Conservative party members, which could potentially lead to an exacerbation of the political situation. However, May now cares only about the Brexit, and she is trying hard to prevent the country from leaving without a deal. Yesterday, the head of the European Commission, Jean-Claude Juncker, said that the EU would not agree to a new postponement for the UK and that the agreement must be approved by April 12.

AUD/USD

The Australian dollar showed an increase against the US dollar on April 3, offsetting the decrease in the instrument the day before. Growth was supported by strong macroeconomic statistics from Australia and China, as well as improved prospects for concluding the US-China trade agreement. Retail sales in Australia in February showed a growth of 0.8% MoM after rising by 0.1% MoM last month. Analysts were expecting growth of 0.2% MoM. AUD was supported by an unexpected increase in the trade surplus. In February, it reached 4.801 billion Australian dollars against the previous 4.351 billion. Analysts had expected a decline to 3.800 billion.

USD/JPY

The US dollar continues to grow uncertainly against the Japanese yen, updating local highs of March 20. The development of "bullish" dynamics in the instrument is supported by a moderate increase in investor interest in risk amid optimistic prospects for concluding the US-China trade deal. The macroeconomic background from the United States is often quite weak, but Japan cannot boast of strong publications. Markit Services PMI was published yesterday. In March, the indicator fell stronger than forecast, from 52.3 to 52.0 points. Disappointing statistics on employment in the private sector and business activity indices came from the USA. The ISM Services index in March fell from 59.7 to 56.1 points, while the forecast was 58.0 points. A similar index from Markit slowed down from 56.0 to 55.3 points, which, however, turned out to be slightly better than the forecast of 54.8 points.

Oil

Oil prices slightly corrected on Wednesday, departing from local maxima amid the publication of the report of the US Department of Energy. According to it, the US crude oil and petroleum product inventories for the week of March 29 rose from 2.800 million barrels to 7.238 million, while analysts expected a decline by about 0.5 million. The report also reflected the growth of oil production in the USA from 12.100 million to 12.200 million barrels per day.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed a decline against the US dollar on April 4, breaking the correctional growth that was formed the day before. The negative dynamics was supported by weak macroeconomic data on the volume of orders in the production sector from Germany, as well as published minutes of the ECB meeting. In February, the volume of orders collapsed by 4.2% MoM and by 8.4% YoY, which was significantly worse than market expectations + 0.3% MoM and -5.4% YoY. In January, the indicator decreased by 2.1% MoM and 3.9% YoY. The published protocols once again reflected the "dovish" position of the ECB. The head of the regulator, Mario Draghi, decided to postpone a possible rate hike for next year, noting that a long period of low interest rates could adversely affect the stability of the region’s banking system, but at present these risks are acceptable. Additional pressure on the euro has an uncertain situation around Brexit and the proximity of the EU summit on April 10, at which the fate of the postponement for the UK will be decided.

GBP/USD

The British pound dropped significantly on Thursday, offsetting almost all of the growth since the beginning of the week. The instrument correction is largely due to technical factors, since the situation with Brexit, which is the main source of uncertainty, has changed slightly. Yesterday, the Parliament approved a bill on a new postponement, but there is still no consensus on this issue within the EU. Moreover, earlier the head of the European Commission announced that the UK would not receive new deferments and would have to leave the European Union on April 12 if the current version of the agreement was not approved. The fate of Britain is likely to be decided at the EU summit on April 10. Until that time, Theresa May has the opportunity to create a coalition with the opposition Labor Party to work out joint decisions on Brexit and to get approval for an agreement in parliament.

AUD/USD

The Australian dollar continues to grow moderately against the US one, supported by strong macroeconomic statistics from China and Australia. Optimistic signals from the US-China trade negotiations also make a positive impact. Yesterday, US President Donald Trump said at a meeting with Vice Premier of the PRC State Council Liu He that the final agreement could be signed within a month. Both participants noted that the negotiations are very optimistic and at the current time have managed to achieve "tremendous progress". Today, the Australian currency is supported by the previously published AiG activity index in the construction sector. In March its value increased rapidly from 43.8 to 57.2 points. Also, investors are awaiting the publication of the March report on the US labor market.

USD/JPY

The US dollar maintains an upward trend against the Japanese yen, updating local highs of March 15. The dollar is supported by data on applications for unemployment benefits published on Thursday. For the week of March 29, the number of Initial Jobless Claims decreased from 212K to 202K, with a forecast of growth to 216K. The number of secondary applications for the week of March 22 also decreased from 1.755 million to 1.717 million. The forecast assumed a decline only to 1.750 million. Today, the development of "bullish" dynamics is due to weak statistics from Japan. The index of wage changes in February dropped sharply by 0.8% YoY after falling by 0.6% YoY last month. Analysts were expecting the growth of 0.8% YoY. Household expenses in February slowed from 2.0% YoY to 1.7% YoY, while the forecast was 2.1% YoY.

Oil

Oil prices are consolidating at the end of the week, but remain close to USD 70 per barrel. Quotes are pressured by published statistics from the United States, which indicated a sharp increase in stocks. In addition, production in the USA continues to increase. However, the actions of OPEC+ and the improved prospects for resolving the US-China trade dispute provide significant support to the instrument. Today, investors are focused on the March report on the US labor market, which may not meet all market expectations. In addition, the Baker Hughes report on active oil rigs in the US is to be published.

 

[MikhailLF]

LiteForex. Morning Market Review


EUR/USD

The euro showed strong growth against the US dollar on Wednesday, having corrected upwards after a 6-day downward rally, which led to the update of the local lows of March 7. EUR was supported by macroeconomic data from the Eurozone published on Wednesday. The Markit Services PMI in March rose from 52.8 to 53.3 points, while the forecast was for a decline to 52.7 points. The composite Manufacturing PMI for the same period decreased from 51.9 to 51.6 points, which nevertheless turned out to be better than the forecast of 51.3 points. Retail sales in the Eurozone in February showed an increase of 0.4% MoM and 2.8% YoY, which is higher than market expectations (0.2% MoM and 2.3% YoY). In turn, the dollar reacted negatively to the release of the ADP report on employment. According to it, in March the figure increased by only 129K against the expected growth of 170K and growth of 198K last month. Today, traders are focused on the publication of the minutes of the last ECB meeting on monetary policy.

GBP/USD

The British pound is trading upwards, updating local highs of March 28. Despite the serious problems around the Brexit process, investors are optimistic about the prospects for a new delay. Yesterday, Teresa May announced her readiness to hold a series of negotiations with the opposition Labor Party to agree on a joint action plan. This decision has already caused criticism from the Conservative party members, which could potentially lead to an exacerbation of the political situation. However, May now cares only about the Brexit, and she is trying hard to prevent the country from leaving without a deal. Yesterday, the head of the European Commission, Jean-Claude Juncker, said that the EU would not agree to a new postponement for the UK and that the agreement must be approved by April 12.

AUD/USD

The Australian dollar showed an increase against the US dollar on April 3, offsetting the decrease in the instrument the day before. Growth was supported by strong macroeconomic statistics from Australia and China, as well as improved prospects for concluding the US-China trade agreement. Retail sales in Australia in February showed a growth of 0.8% MoM after rising by 0.1% MoM last month. Analysts were expecting growth of 0.2% MoM. AUD was supported by an unexpected increase in the trade surplus. In February, it reached 4.801 billion Australian dollars against the previous 4.351 billion. Analysts had expected a decline to 3.800 billion.

USD/JPY

The US dollar continues to grow uncertainly against the Japanese yen, updating local highs of March 20. The development of "bullish" dynamics in the instrument is supported by a moderate increase in investor interest in risk amid optimistic prospects for concluding the US-China trade deal. The macroeconomic background from the United States is often quite weak, but Japan cannot boast of strong publications. Markit Services PMI was published yesterday. In March, the indicator fell stronger than forecast, from 52.3 to 52.0 points. Disappointing statistics on employment in the private sector and business activity indices came from the USA. The ISM Services index in March fell from 59.7 to 56.1 points, while the forecast was 58.0 points. A similar index from Markit slowed down from 56.0 to 55.3 points, which, however, turned out to be slightly better than the forecast of 54.8 points.

Oil

Oil prices slightly corrected on Wednesday, departing from local maxima amid the publication of the report of the US Department of Energy. According to it, the US crude oil and petroleum product inventories for the week of March 29 rose from 2.800 million barrels to 7.238 million, while analysts expected a decline by about 0.5 million. The report also reflected the growth of oil production in the USA from 12.100 million to 12.200 million barrels per day.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose significantly against the US dollar on Monday, marking a new local maximum since March 27. The growth was mainly due to technical factors, while macroeconomic statistics from Europe remained ambiguous. February data from Germany indicated a sharp decline in imports and exports. Imports slowed down by 1.6% MoM after rising by 1.4% MoM last month. Exports collapsed by 1.3% MoM after rising by 0.1% MoM. However, due to a sharp decline in imports, it was possible to achieve an increase in the trade surplus from 18.6 billion to 18.7 billion euros, while analysts expected a decline to EUR 17.0 billion. Today, the euro is trading with a slight "bullish" margin. It is likely that the dynamics of trading on Tuesday will remain moderate, since interesting macroeconomic publications are not planned. Investors are focused on Wednesday when the ECB’s interest rate decision is published and the EU Brexit summit begins.

GBP/USD

The British pound is trading upwards, awaiting positive outcomes of the EU summit, which will be held on April 10. To date, Teresa May has not been able to get closer to the approval of the current agreement in Parliament, so everyone is only betting on the postponement of the terms of Brexit. Yesterday, the House of Commons approved a bill that bans the "tough" Brexit, that is, the country's withdrawal from the EU without an agreement. Previously, this bill was approved in the House of Lords. However, in the matter of postponement, everything will depend on the EU, and not on the UK, since the consent of all the member countries is necessary to change the deadlines. On Tuesday, Teresa May will hold a series of meetings with Angela Merkel and Emmanuel Macron and try to convince them to give a longer respite.

AUD/USD

The Australian dollar strengthened markedly against the US dollar on Monday, receiving support against the background of the development of corrective sentiment on the US currency. The macroeconomic statistics published yesterday did not significantly support any of the currencies. The ANZ job vacancy rate in Australia in March fell sharply by 1.7% MoM after falling by 0.8% MoM last month. American statistics pointed to a reduction in production orders by 0.5% MoM after zero dynamics last month. Today, AUD is trading in an uptrend, receiving support from macroeconomic statistics. The volume of mortgage loans in February rose by 2.0% after declining by 2.5% last month. Analysts expected -2.0%. Investment borrowing for home construction in February also rose by 2.6% MoM after a decrease of 2.3% MoM last month.

USD/JPY

The US dollar is falling against the Japanese yen, retreating from local highs of March 15. At the same time, publications from Japan strengthen the yen a little. On Monday, investors were disappointed with data on the consumer confidence index, which fell in March from 41.5 to 40.5 points, while the forecast was for growth to 42.3 points. The Eco Watchers current situation index in March fell from 47.5 to 44.8 points, which was worse than market expectations of 46.7 points. The development index for the same period adjusted from 48.9 to 48.6 points (forecast 49.3 points).

Oil

Oil prices continue to grow steadily, updating record highs. Brent crude updated its highs on November 12, receiving support from the escalation of the conflict in Libya and a confident reduction in oil supplies under the leadership of OPEC+. Additional support for the instrument is provided by continued US sanctions on Iranian and Venezuelan oil. Today, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of April 5. Recall that the last API report reflected growth of 2.963 million barrels, which was later confirmed by steady growth in stocks according to the US Department of Energy.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed a decline against the US dollar on Tuesday, retreating from local highs of March 27. The reason for the emergence of negative dynamics were the statements of US President Donald Trump about the readiness to impose duties on goods from the EU worth USD 11 billion. In his speech, Trump referred to the WTO report, according to which European Union subsidies to Airbus caused damage to the US economy. Immediately after the speech, it became known that the European Commission had begun to develop a response, which may cause a new trade war. The US trade dispute with China has not yet been crowned with the signing of a final agreement, but, according to Trump's assurances, this may take place by the end of April. Today, the euro is trading in both directions, and investors are awaiting the publication of the ECB's interest rate decision with the accompanying press conference of Mario Draghi. Also, on Wednesday, an extraordinary EU summit on Brexit will be held.

GBP/USD

The pound is trading ambiguously against the US dollar, remaining close to the level of 1.3000. Investors are waiting for a resolution of the impasse with Brexit on Wednesday, at an EU summit devoted entirely to this problem. The UK will receive a delay either until June 30, as requested by Teresa May, or till the end of the year, as suggested by the head of the European Council, Donald Tusk. Also on Wednesday, a block of interesting macroeconomic statistics is expected, namely data on industrial output, the index of services, and the growth rate of the UK economy in February (on a monthly basis).

AUD/USD

The Australian dollar showed a decline against the US on Tuesday, despite the fact that during the day updated local maxima of March 21. Moderate support was provided by strong data on the housing market. Investment loans for the construction of new homes in February rose by 2.6% MoM after declining by 2.3% MoM last month. The volume of mortgage loans issued in February rose by 2.0% MoM, contrary to forecasts of a decline by 2.0% MoM. Today, AUD began with a decline but managed to recover after the publication of Westpac consumer sentiment and the speech of the RBA Deputy Head, Guy Debelle. In April, the confidence index rose sharply by 1.9% MoM after falling by 4.8% MoM last month. Debelle's speech was of a general nature and did not have a noticeable effect on the dynamics of the instrument. However, the official again complained about external economic risks, in particular, at the slowdown of the Chinese economy and noted a weaker growth of the Australian economy, which does not correspond to forecasts of the second half of 2018.

USD/JPY

The US dollar showed a steady decline against the Japanese yen, continuing the development of the correction impulse formed at the beginning of the week. The yen is supported by the risks of the US-EU trade conflict, despite the fact that the conflict with China has not been finally resolved. Today, the instrument is traded in both directions due to the emergence of ambiguous macroeconomic statistics and the expectation of a speech of the head of the Bank of Japan Haruhiko Kuroda. The volume of bank lending in Japan in March increased by 2.4% YoY, which was better than forecasts, suggesting a slowdown from 2.3% to 2.0% YoY. The demand for machine-building products in February showed an increase of 1.8% MoM against expectations of 2.5% MoM. In annual terms, orders accelerated the decline from -2.9% to -5.5% YoY, which also turned out to be worse than analysts' expectations of -5.2% YoY.

Oil

Oil prices showed correctional dynamics on April 9, retreating from the five-month highs amid Russia's statements about the further decline in production. In particular, Russia may consider the possibility of increasing production after the next OPEC meeting, as circumstances require further reduction of reserves. Yesterday, Russian President Vladimir Putin said that the country does not support an uncontrolled rise in oil prices and that the current prices for commodities are quite acceptable. Quotes were also pressured by the American Petroleum Institute report, published yesterday. For the week of April 5, oil reserves in the United States increased by 4.091 million barrels after rising by 2.963 million over the previous period.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

EUR/USD

EUR showed growth against USD on Wednesday, reaching a new local maximum since March 26. However, the trading was ambiguous, which was caused by the publication of the ECB decision and the subsequent press conference of Mario Draghi. As expected, the rates were left unchanged and would not change until the end of the year. Draghi’s comments turned out to be full of negativity, which provoked a sharp decline in the euro immediately after the speech. However, the head of the ECB focused only on the growth of external risks, which do not allow recovery in economic growth in the region in the near future. The euro was supported on Wednesday by the successful completion of an emergency EU summit, at which the leaders of the European Union and the United Kingdom managed to agree on a new postponement for Brexit.

GBP/USD

The British currency showed moderate growth on April 10, receiving support from macroeconomic publications from the UK. But the main "bullish" news for the pound was the approval of a new postponement for Brexit at an emergency EU summit. Now the deadline is October 31, and the UK has the right to both ratify the withdrawal agreement and refuse Brexit altogether. Macroeconomic publications showed growth in the UK industrial output in February by 0.6% MoM and 0.1% YoY, which was significantly better than analysts' forecasts of 0.1% MoM and -0.9% YoY. Manufacturing production increased by 0.9% MoM and 0.6% YoY, which also exceeded market expectations of 0.2% MoM and -0.7% YoY. UK GDP growth in February slowed from 0.5% MoM to 0.2% MoM, with the forecast of 0.0% MoM.

AUD/USD

The Australian dollar showed strong growth against the US one on Wednesday, updating local highs of February 27. It was supported by strong macroeconomic data from Australia on consumer confidence, as well as the agreement on a new postponement for Brexit. Westpac Consumer Sentiment showed an increase of 1.9% in April against a decrease of 4.8% last month, which was significantly better than the average forecast. In turn, the macroeconomic statistics from the United States was ambiguous. Consumer price index excluding food and energy in March increased by 0.1% MoM and 2.0% YoY, which was worse than analysts' expectations of 0.2% MoM and 2.1% YoY. The general inflation rate in March, according to the consumer price index, increased from 1.5% to 1.9% YoY.

USD/JPY

The US dollar closed Wednesday's trading with a decline against the Japanese yen, updating local lows of April 1. The "bearish" dynamics is promoted by not very strong macroeconomic publications from the United States, as well as by the general decline in risk investors. However, publications from Japan also were ambiguous. In particular, investors were disappointed with the release of data on the demand for machine-building products. In February, orders rose by 1.8% MoM against the expected growth of 2.5% MoM. YoY, stagnation is still observed: -5.5% against -2.9% last month. Today, the instrument shows a long-awaited correction, partly due to the new postponement for Brexit.

Oil

Oil prices showed an increase on Wednesday, having updated record highs since November 8. Curiously, the growth of quotes was observed amid a sharp increase in oil and petroleum stocks in the United States. According to a report from the Department of Energy, reserves for the week of April 5 rose by 7.029 million barrels after rising by 7.238 million over the previous period. Analysts were counting on a much more modest increase of 2.294 million barrels. The negative effect of such an increase in oil reserves was offset by a significant decrease in gasoline stocks by 7.7 million barrels to 229.1 million, which turned out to be noticeably better than market expectations. Quotes were also supported by the published OPEC report, which, among other things, indicated a sharp decline in production volumes in Venezuela amid power outages and the US sanctions.