Market Analysis by Vistabrokers

[Vistabrokers]

Market Pulse 02.03

Monday's economic calendar is quite full. In many European countries, China and Canada the manufacturing PMI index will be published and in the US - the same ISM manufacturing PMI index. There will be some interest data in consumer price index flash estimate and the unemployment rate in the euro zone.

8:15 ** Manufacturing PMI - February (Spain)
8:45 ** Manufacturing PMI - February (Italy)
8:50 ** Manufacturing PMI - February (France)
8:55 ** Manufacturing PMI - February (Germany)
9:00 ** Manufacturing PMI - February (euro zone)

Moderate impact on the market (EUR). Analysts expect that the index of purchasing managers in the manufacturing sector, will mainly remain at the level of the previous month (in France, Germany, the euro zone) or slightly increase (in Spain, Italy).

9:30 *** Manufacturing PMI - February (UK)
9:30 ** Net Lending to Individuals - January (UK)
9:30 *** Mortgage Approvals - January (UK)

Strong impact on the market (GPB). In addition to data on the PMI index the statistics in lending, including mortgage approvals will be interesting. Growth in lending reflects a possible increase in consumer spending in the future, and the growth of mortgage lending shows the health of the housing market. Strong data on the PMI index and the growth of credit activity can support the pound.

10:00 *** Consumer Price Index Flash Estimate - February (euro zone)
10:00 ** Flash Core CPI - February (euro zone)
10:00 ** Unemployment Rate - February (euro zone)

Strong impact on the market (EUR). The greatest attention will draw the consumer price index flash estimate. It is expected that in February this index will show a decline of 0.5% after falling 0.6% in January, but there may be surprises. The unemployment rate is still at a very high level, and it is expected that this level in January will remain unchanged.

10:00 ** Annual Gross Domestic Product - 2014 (Italy)

Moderate impact on the market (EUR). It is expected that Italy's economy during the last year has fallen by 0.4%. This is less than the rate of 2013 - 1.9%, but it will hardly increase the optimism in common currency.

13:30 ** Core PCE Price Index - January (USA)
13:30 ** Personal Spending - January (USA)
13:30 ** Personal Consumption Expenditure Deflator - January (USA)

Moderate impact on the market (USD). The growth of private consumption expenditure tells us about the health of the economy, but we do not see a persistent increase in these direction yet, as well as in the growth of wages.

14:30 ** RBC Manufacturing PMI (s.a.) - February (Canada)

Moderate impact on the market (CAD). Manufacturing PMI index shows an improvement or deterioration in comparison with the previous month. Growth or exceeded forecast is favorable for the currency.

15:00 *** ISM Manufacturing PMI - February (USA)

Strong impact on the market (USD). Analysts expect a slight reduction of the index in February compared with the previous month, but the rate is still at a high level.

 

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Vista Borkers: Euro Tested Fresh Lows

On Monday, the single currency has rebounded slightly against the dollar amid quite positive statistics. Thus, in Italy and Germany manufacturing PMI index rose more than analysts had expected. Consumer price index flash estimate in the euro zone showed a decline of 0.3% against a more pessimistic forecast of 0.5%. The unemployment rate in the region in January unexpectedly fell by 0.1% instead of expected growth by the same amount.

However, as Vista Borkers analysts say, positive statistics did not make much impression on investors, and a recovery has stopped at about 1.1250. Market participants were waiting for strong data on the ISM manufacturing index in the US, and although these expectations were not met (index came out worse than forecast), it must be admitted that the rate is still at a high level. In January, the index was at 53.5, and in February fell to 52.9 vs. 53.4. A value above 50 is considered to be the growth of the industry.

It is worth noting that after the release of ISM data two world's largest bank have announced a reduction of forecasts for the US GDP growth in the first quarter of 2015. Goldman Sachs cut its forecast from 2.7% to 2.5%, arguing it with an unexpected decline in the cost of construction index and ISM data. Barclays also lowered the forecast for the 1st quarter from 2.1% to 1.9%.

 

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Vista Brokers: RBA Kept Rates Unchanged

On Tuesday, it was reported that the Reserve Bank of Australiaon on its meeting has decided to keep the interest rate at the same level - 2.25%, while the market has been expecting another decrease of it. Vista Brokers analysts point out that the absence of new stimulation measures led to a rise of the Australian dollar in the foreign exchange market. Immediately after the publication of the RBA decision, AUD / USD pair rose by 0.6%, exceeding the 0.78 level.

Why did the Reserve Bank of Australia postponed the lowering of the rates which was expected by many of analysts? In anticipation of the publication of the meeting's decision their forecasts about the rate decline by 0.25% voiced Goldman Sachs, Morgan Stanley, Bank of America, Westpac.
They named such reasons as decline in world commodity prices, the highest since 2002 unemployment rate, a low level of confidence in the economy of consumers and businesses, the economic slowdown in China, which is the main buyer of Australian raw materials.

The arguments are sufficient, but nonetheless, the RBA decided to keep the rate. In the accompanying statement, the regulator noted the following: it is expected that economic growth will be weak, as a domestic demand; further depreciation of the national currency is necessary for balanced growth in the future; prospects for a rate cut will be discussed at further meetings. Thus, the RBA did not lower the rate, but showed that probably do so in the near future in order to stimulate the economy.

The head of the Reserve Bank Governor Glenn Stevens said that after the last meeting rate has already been reduced, at the moment it is advisable to leave it at that level. "Further easing of policy may be appropriate over the period ahead. The Board will further assess the case for such action at forthcoming meetings"- he said.

 

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Vista Brokers: Oil is above $60 per barrel

On Tuesday morning, April futures for Brent crude rose by 1.37% to $ 61 per barrel during London trading. Meanwhile, in New York April futures for WTI grew by 0.75% to $ 51.91 per barrel.

Vista Brokers analysts note that the growth factor for oil was the information from Baker Hughes that the number of active rigs in the US last week fell to its lowest level since 2011 - 986. However, there are still so many factors of pressures on oil. Thus, the US Department of Energy expects that in 2015 the growth of oil production in the country will be 7.8%. It will be produced 9.3 million barrels per day. In 2016, daily production could grow to 9.52 million barrels.

Note also that in February the volume of oil production in Saudi Arabia increased by 130 thousand barrels per day to 9.85 million barrels - a maximum since 2013.

 

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Market Pulse 03.03

Today Australia has already published data on building approvals, and the Reserve Bank has released its decision on interest rates, together with the accompanying statement. The RBA decided to leave the rate unchanged. Today interesting statistics will be also released in Canada and the UK.

7:00 ** Retail Sales - January (Germany)

Moderate impact on the market (EUR). Analysts expect that retail sales in January have risen. Growth of this index reflects higher consumer activity that strengthens the currency.

8:00 ** Unemployment Change - February (Spain)

Moderate impact on the market (EUR). One of the most important indicators showing the change in the number of unemployed people during the past month. The rate growth reflects negative processes, although in February it is expected a much smaller increase of the index than in the previous month.

9:30 *** Construction PMI - February (UK)

Strong impact on the market (GPB). The index of purchasing managers in the construction industry. Shows the improvement or deterioration compared with the previous month. The situation in the construction industry in Britain is always closely watched by the market.

10:00 ** Treasury Select Committee Hearings - March (UK)
10:00 *** BOE Governor Mark Carney Speaks - March (UK)

Strong impact on the market (GPB). Market participants will closely monitor statements of Mark Carney looking for some hints at the future Bank of England strategy in respect of monetary policy. Optimistic signals can enhance investors' hopes that the British regulator will raise rates after the Fed.

13:30 *** Gross Domestic Product - December (Canada)
13:30 *** Quarterly Gross Domestic Product Annualized - Q4 (Canada)
13:30 ** Raw Materials Price Index - January (Canada)

Strong impact on the market (CAD). Analysts expect that in December, Canada's economy has grown by 0.1%. It's quite a bit, but compared with the value of November, when GDP has fallen by 0.2%, it is a better result. During the 4th quarter of 2014, experts expect growth of 2%.

 

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Vista Brokers: Aussie Drops after Weak GDP Data

On Wednesday, the Australian dollar dropped after the release of Australia's GDP statistics for Q4 2104. Vista Brokers analysts note that the weak data made aussie fall to 0.7813 dollars compared with 0.7824 dollars late Tuesday.

Thus, it became known that the Australian economy in the 4th quarter increased by 0.5% qoq and 2.5% yoy against forecasts of 0.7% and 2.5%, respectively. As you can see, the data did not meet investors' expectations, and it is natural that they began to sell the currency of the Green continent.

Recall that the Australian dollar on Tuesday has received support after the announcement of the RBA decision, and has grown against the US dollar. The thing is that analysts expected the Reserve Bank to announce reduction of interest rates from the level of 2.25% to 2%, but this has not happened. The RBA accompanying statement also was rather neutral, without much pessimism, so aussie rose.

But, as it often happens in Forex, optimism was short term, and today, having received a reminder of the Australian economic problems (the GDP data) the Aussie fell again. Weak statistics has reminded the market that the Reserve Bank of Australia is set to easing of monetary policy, and if this has not happen yesterday, it is likely would happen at the next meeting. Westpac analysts expect a rate cut by 0.25% in April or May. ANZ economists are inclined to believe that it will happen at the May meeting.

The belief that the RBA will go with further rate cuts was strengthened by its member John Edwards comments. Today, he said that the GDP growth rate is significantly lower than those needed to effectively strike unemployment and to restore the labor market, they need the GDP growth of at least 3%. Therefore, Edwards considers further rate cuts necessary.

 

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Market Pulse 04.03

Wednesday is saturated, as the whole week is. Today Australia has already release data on changes in GDP for the 4th quarter, the Fed Chairman Janet Yellen has spoken in the USA. In many countries today PMI index will be published, this time for the services sector, as well as the PMI composite. The Bank of Canada today will announce its decision on interest rates, and in the US ADP non-farm employment change data will be released.

8:15 ** Services PMI - February (Spain)
8:15 ** PMI Composite - February (Spain)

8:45 ** Services PMI - February (Italy)
8:45 ** PMI Composite - February (Italy)

8:50 ** Services PMI - February (France)
8:50 ** PMI Composite - February (France)

8:55 ** Services PMI - February (Germany)
8:55 ** PMI Composite - February (Germany)

9:00 ** Services PMI - February (euro zone)
9:00 ** PMI Composite - February (euro zone)

Moderate impact on the market (EUR). Typically, the PMI composite index and Services PMI have less impact than the corresponding manufacturing index. Analysts expect that in the majority of countries of the euro zone indices will remain at levels of January, and only in Spain is expected a slight increase.

9:30 *** Services PMI - February (UK)
9:30 *** PMI Composite - February (UK)

Strong impact on the market (GPB). The UK purchasing managers' index in the service sector is considered important.Currently, the index is at a high level, and in February, experts also predict a rise.

13:15 *** ADP Non-Farm Employment Change - February (USA)

Strong impact on the market (USD). The indicator of employment in the private sector is the main reference to official statistics (non-farm payrolls) and often causes significant fluctuations in the market. Expectations regarding the index are optimistic, so that the US dollar could gain significant support.

15:00 *** BOC Overnight Rate - March (Canada)
15:00 *** BOC Rate Statement - March (Canada)

Strong impact on the market (CAD). Analysts do not expect the Bank of Canada will cut interest rates once again, but as the results of yesterday's meeting of the Reserve Bank of Australia have shown, the regulators are full of surprises. In any case, investors will pay much attention to the accompanying statement.

15:00 *** ISM Non-Manufacturing PMI - February (USA)

Strong impact on the market (USD). Analysts expect a slight decrease in the index for non-manufacturing sector, although the rate is still at a high level, so the market reaction may be ambiguous.

19:00 ** Beige Book - March (USA)

Moderate impact on the market (USD). The Overview of 12 US Federal Reserve banks on the state of the local economies may be interesting from the point of the current situation. Better-than-expected statements are able to support the dollar.

 

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Vista Brokers: EUR/USD Continues to “Swing”

On Tuesday, EUR / USD at first rose slightly amid the positive statistics from the euro zone, but then fell again. Vista Brokers analysts note that the pair is actively moving up and down in anticipation of the ECB meeting on Thursday.

The data on retail sales in Germany were much better than expected and the euro grew to the maximum of 1.1210. Thus, the retail trade in the euro zone's largest economy grew by 2.9% mom and 5.3% yoy (up to June 2010), against forecasts of 0.5% and 2.6% respectively. The sale of food, beverages and tobacco rose by 3.8%, while sales of non-food products increased by 6.3%.

As you can see, the difference between expected and actual data is significant, and it gave an upward impetus to the single currency. Much stronger than the forecast was also statistics on the unemployment change in Spain. The indicator has shown a 13.5 thousand decline of unemployed versus expected 10 thousand.

However, the euro could not held the growth too long, even with such a positive background. Pressure on the currency was put with expectations about the ECB meeting and comments that may sound at the traditional press conference. It is unlikely that they will be bullish for the euro, so that investors act out beforehand.

 

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Vista Brokers: Euro Moves Closer to Parity with Dollar

On Thursday, the single currency has decreased during the trading day first on expectations of the ECB meeting and Mario Draghi press conference, and then on the information that the European Central Bank has given to the market. Vista Brokers analysts say that the euro against the dollar has freshed the 11-year low, reaching the level of 1.100. Thus, the euro zone currency is getting closer to parity with the US dollar, which many experts predict.

So, yesterday the ECB held its first meeting since the launch of quantitative easing program was announced. Rates remained unchanged as it was expected, and the central bank revealed some details about asset purchases. The program starts on March 9. In the accompanying statement, the regulator noted that the purchase will be carried out gradually and on a wide range of assets.

At the press conference Draghi reiterated that the ECB plans to buy assets in the form of private and public sector liabilities in the amount of 60 billion euros per month during the period from March to September 2016. The total volume of quantitative easing will be 1.1 trillion euros. The plans also include the ECB's purchase of assets with a negative yield if it is above the deposit rate (-0.2%). Analysts say that this fact has led to a sharp drop in European bond yields.

Meanwhile, the euro is at a minimum in September 2003 against the dollar. In tandem with the Japanese yen and other major competitors, the single currency also fell.

 

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Vista Brokers: Markets Wait for US Labor Market Data

Today during the American session will be released statistics that can influence the dynamics of major currency pairs, as well as affect stock markets. These are data on unemployment rate and non-farm payrolls in the US. Vista Brokers analysts note that the strong data would strengthen confidence regarding the Fed rates hike in June or even earlier.

It is expected that in February, the US non-farm payrolls rose by 240,000 after rising 257,000 in January. Thus, February may be the 12th consecutive month, when the number of jobs is increasing by more than 200,000 monthly, and it will be the longest period of growth since 1994.

In addition, experts expect a decline in the unemployment rate from 5.7% to 5.6%, as well as a small increase in the average wage: 0.2% after rising 0.5% in January. Recall that recently the largest US companies said that this year they will increase wages of their employees. So, the biggest retailer Wall-Mart will provide more than one billion dollars to raise wages of 40% employees. Other companies, like TJX Cos Inc and health insurer Aetna, have also announced wage increases.

Given all these facts, the US labor market looks really healthy, and it increases the likelihood of rising interest rates by the Fed. Analysts say that if today's data will be even more than expected, market participants can move their expectations of growth rates on May. The dollar may be able to gain versus all counterparts.

Expectations of strong data today have supported Asian stock indexes. The MSCI's broadest index of Asia-Pacific shares outside Japan grew up during the Asian session 0.4%. Japan's Nikkei gained 1% amid the yen falling against the dollar.

 

[Vistabrokers]

Market Pulse 06.03

7:00 ** Industrial Production - January (Germany)

Moderate impact on the market (EUR). Industrial production gives a small contribution to GDP, but it allows to predict the dynamics of interest rates. Therefore, the growth or exceeding the forecast may be favorable for the currency. Analysts expect a small growth of the indicator on a monthly basis.

8:15 ** Consumer Price Index - February (Switzerland)

Moderate impact on the market (CHF). Experts expect that the growth of the consumer price index on a monthly basis in February was 0.1% after falling 0.4% in January. Although it is unlikely to give support to the Swiss franc - the inflation is expected to fall by 0.6%.

10:00 ** Revised GDP - Q4 (euro zone)
10:00 ** Gross Fixed Capital - Q4 (euro zone)
10:00 ** Household Consumption - Q4 (euro zone)

Moderate impact on the market (EUR). According to forecasts, the GDP growth in the 4th quarter amounted to 0.3% mom and 0.9% yoy. The gross fixed capital is also the important business climate indicator.

13:30 *** Building Permits - January (Canada)
13:30 *** Trade Balance - January (Canada)
13:30 ** Labor Productivity - Q4 (Canada)

Strong impact on the market (CAD). These are sufficiently important indicators for Canada, which could affect the national currency. In January, analysts expect the growth of building permits by 5.5% after a significant increase in the previous month.

13:30 *** Trade Balance - January (USA)
13:30 *** Unemployment Rate - February (USA)
13:30 *** Non-Farm Employment Change - February (USA)
13:30 ** Change in Private Payrolls - February (USA)
13:30 ** Change in Manufacturing Payrolls - February (USA)
13:30 ** Average Hourly Earnings - February (USA)
13:30 ** Participation Rate - February (USA)
13:30 ** Two-Month Payroll Net Revision - February (USA)

Strong impact on the market (USD). The most anticipated data of the day, which can significantly affect the greenback dynamics against all major competitors. It is expected that the unemployment rate in February fell by 0.1%, while the number of non-farm payrolls rose by 241,000.

 

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Vista Brokers: Non-farms and Unemployment did not Disappoint the Market

On Friday, the dollar updated 11-year high against the euro and rose against the other competitors after strong data on the US labor market. Vista Brokers analysts note that the statistics was oppositely directed, but main landmarks of the Fed - employment in the non-agricultural sector (non-pharms), and the unemployment rate came out better than expected. This reinforces expectations of market participants that the Fed will raise rates in the middle of the year.

Thus, the euro fell to 1.0886 dollars from 1.0986 dollars loosing during the day 1.4% and breaking level of 1.09 for the first time since September 5, 2003. Against the Japanese currency, the dollar rose by 0.4% to 120.70 yen from 119.91 yen earlier.

Note that the number of people employed in the non-agricultural sector of the US in February rose by 295,000 against the expected 240 000. The unemployment rate fell to 5.5% compared to 5.7% last month, less than expected 5.6%. In addition, hourly wages - another important indicator for the Fed, rose in February, though slightly less than the market expected (0.1% vs. 0.2%).

Earlier, the Fed said that it would consider raising interest rates when the economic data, particularly data on inflation and the labor market will be strong.

 

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Vista Brokers: Oil Fell due to Strong Dollar

On Monday during morning trading Brent crude oil has lost 43 cents, falling down to $59.30. WTI fell by 27 cents to $49.34. Vista Brokers analysts point out that during the previous week both brands of oil have finished with a decline. The main reason is strong data on the US labor market, which provided significant support to the dollar. This factor has forced investors to forget about geopolitical tensions and the threat of a possible decline in production in Libya and Iraq.

On Friday, the dollar hit a 11-year high against a basket of currencies after data on the US labor market. Statistics showed that the unemployment rate in the US fell to a minimum of May, 2008 - 5.5%. Non-farm payrolls rose by 295,000, exceeding the forecast for 55,000.

Analysts expect that this week Brent will be traded in the range of $ 55.36- $ 63.04 and WTI - in the range of $ 48.45- $ 55.02.

 

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Market Pulse 09.03

A new busy week has started in Forex, though on Monday there is not so many important releases. Australia today has already published an ANZ job advertisements index. Japan has released Eco Watchers Surveys. The most important event of the day is a Eurogroup meetings.

7:00 ** Trade Balance - January (Germany)

Moderate impact on the market (EUR). The trade balance is the difference between exports and imports for the period. Positive values are favorable for the currency as it reflects flow of funds to the country's economy.

14:45 ** ECB Announces Covered Bond Purchase - March (euro zone)

Moderate impact on the market (EUR). ECB announces its weekly balance sheet, from which investors and market observers conclude about scale of the ECB bond purchase. Expansion of purchase is a signal for greater activity of the central bank, which puts pressure on the euro.

*** Eurogroup Meetings - March (euro zone)
** ECB President Mario Draghi Speaks - March (euro zone)

Strong impact on the market (EUR). Today's meeting of the Eurogroup, as well as the previous one will be held under the Greece sign. Over the weekend, Athens sent the Eurogroup chairman Jeroen Deysselblum a letter in which they urged to initiate discussions between representatives of Greece, the ECB, the European Commission and the IMF, as well as introduced a series of reforms that the country agrees to hold. The list consists of seven major reforms, including the establishment of an independent Economic Council, the introduction of an upper limit for government spending and Internet gambling taxation, measures to combat bureaucracy and financial support to the poorest people of Greece.

 

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Vista Brokers: Fed Rate Hike Probability Pressures on Metals

On Tuesday, the yellow metal has updated three-month low on expectations that the US Federal Reserve will raise rates in the middle of the year. Vista Brokers analysts note that the probability of the Fed rates hike for the first time since December 2008 from a historical low of 0-0.25%, is putting pressure on precious metals. Raising rates could lead to a significant strengthening of the dollar and the decline in demand for protective assets.

Today during morning trading, April gold futures on Comex fell by 0.49% to 1160.8 dollars per troy ounce, updating the three-month low at 1163.45 dollars per troy ounce. May futures for silver on the same stock exchange decreased by 0.42% to 15.71 dollars per troy ounce.

On Monday metals received a short-term support before the Eurogroup meeting, where the situation in Greece was discussed. Economic problems of the country mean increased demand for safe-haven assets, so that each new round of negotiations, as a rule, support the price of gold. Yesterday the Eurogroup led by Jeroen Deysselblum rejected a revised list of reforms proposed by Athens, which means a happy ending is far away.

Amid the failure of Greece at the Eurogroup meeting on Tuesday markets returned to the subject of interest rates of the Fed. Impact on the precious metals still have data on the labor market, which came in the United States on Friday. It was reported that the unemployment rate in January fell from 5.7% to 5.5%, while the number of jobs in the non-agricultural sector grew by 295 000. Analysts have predicted a decline in unemployment to 5.6% and growth in the number of jobs by 235 000.

Thus, real values have exceeded forecasts, causing large fluctuations in the financial markets.
Analysts suggest that the labor market data, released on Friday, will have an impact on the gold in the medium term.

 

[Vistabrokers]

Market Pulse 10.03

On Tuesday the economic and financial affairs council (ECOFIN) meetings is held. In Australia, has already been published the NAB business confidence index, in China – the consumer price index and the producer price index. The most interesting event of the day promises to be the BOE governor Mark Carney's speech.

6:45 ** Unemployment Rate - February (Switzerland)

Moderate impact on the market (CHF). Analysts expect that in February, the unemployment rate in Switzerland rose from 3.1% to 3.2%. The growth of the rate may adversely affect the dynamics of the Swiss franc.

7:45 ** Industrial Production - January (France)

Moderate impact on the market (EUR). It is expected that industrial production in France in January has shown a decline of 0.2% since the previous month it had risen by 1.5%.

14:00 ** JOLTs Job Openings - January (USA)

Moderate impact on the market (USD). Job openings is considered to be a not too important indicator when compared with statistics on the US labor market, which was published last Friday. However, currently the US labor market receives much attention because of the expectations regarding to the Fed rates hike, so this indicator can also affect the greenback's dynamics.

14:35 ** House of Lords Economic Affairs Committee hearing - March (UK)
14:35 *** BOE Governor Mark Carney Speaks - March (UK)

Strong impact on the market (GPB). Market will look in the statements of Mark Carney for hints that the Bank of England will go on the path of monetary policy tightening after the US Federal Reserve. Positive comments about the economy, inflation, the real estate market investors may understand as a signal for a possible rate hike in the foreseeable future.

 

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Vista Brokers: Trend for EUR / USD is Still Downward

Despite weak attempts to rise, which the euro has made on Monday, the trend for EUR / USD is still downward, and the bears will be able to hold their positions for a long time. Vista Brokers analysts say that the single currency tends to parity with the US dollar, but perhaps even 1 mark will not be able to provide sustainable support to the euro.

There are many reasons for it, and in the first place is the difference in the monetary policy of the ECB and the Fed. If the first CB is just beginning a program of quantitative easing amid low rates to support the economy, the second one plans to raise rates amid its recovery. Also, the pressure on the euro puts the situation in Greece. Country where radical political forces have come to power, can not negotiate with creditors to restructure debt and the list of necessary reforms. And it begins to blackmail the eurozone with a referendum on Greece's exit from the monetary union.

According to the results of yesterday's Eurogroup meetings, a revised reform plan, submitted by Greece, has not been approved by ministers of finance, so probably this month, the country will not receive financial bailout. According to the Eurogroup chairman Jeroen Deysselblum, a list that Athens gave at the meeting was different from the first list of proposals which has been performed two weeks ago, and in such a "raw" form it can not be accepted. Deysselblum previously stated that the EU is willing to give Greece the first tranche of 7.2 billion euros in March, but only with the consent of all reforms.

 

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

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

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

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

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

 

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Vista Brokers: AUD / USD Freshed its Lows

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

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

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

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

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

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

 

[Vistabrokers]

Market Pulse 11.03

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

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

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

9:30 *** Industrial Production - January (UK)
9:30 ** Manufacturing Production - January (UK)
15:00 ** NIESR GDP Estimate - February (UK)
15:00 ** MPC Member Martin Weale Speaks - February (UK)

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

20:00 *** Official Cash Rate - March (New Zealand)
20:00 *** RBNZ Rate Statement - March (New Zealand)
20:00 ** RBNZ Monetary Policy Statement - March (New Zealand)
20:05 *** RBNZ Press Conference - March (New Zealand)

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