Fundamental updates by Solid ECN

SOLIDECN

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Nov 16, 2021
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EURUSD​

The European currency shows flat dynamics of trading against the US dollar during the Asian session, consolidating near local highs from March 1 and the level of 1.1170. Activity on the instrument at the beginning of the week remains restrained, as investors expect new drivers to appear on the market. The day before, the single currency showed a fairly active growth, supported by weak data from the US, while European statistics had only a slight impact. Revised data from the United States showed GDP growth in Q4 2021 at 6.9%, which is 0.1% worse than previous estimates. The Gross Domestic Product Price Index for the same period also corrected from 7.2% to 7.1%. European data pointed to a further decline in business sentiment in the euro area, as well as a record increase in inflation in Germany. The Economic Sentiment Indicator in the eurozone fell from 113.9 to 108.5 points in March, while the market forecast was at 109 points. Business Climate Indicator in March fell from 1.79 to 1.67 points. Consumer Confidence Level remained at -18.7 points. Consumer inflation in Germany accelerated from 5.1% to 7.3% in March, setting a new record high and beating market forecasts of 6.3%.​

GBPUSD​

The British pound is losing ground against the US dollar during the morning session, again preparing to test 1.3100 for a breakdown. Expectations of an early conclusion of a peace agreement between Russia and Ukraine are noticeably declining as market participants state that there have been no significant changes after the negotiations, and fundamental contradictions still persist. The Russian Federation is reducing the number of its troops in one direction in order to strengthen it in another, and this, of course, does not lead to a ceasefire. Demand for risky assets is also falling as April approaches, when new rules for paying for Russian gas come into force. If the mechanisms for paying for "blue fuel" in rubles do not work or the EU countries take a principled position, this may negatively affect supplies. It should be noted that the UK's dependence on resources from Russia is significantly lower than, for example, Germany's. Today, investors are focused on the updated statistics on the dynamics of GDP in the UK for Q4 2021. According to current forecasts, the British economy will grow by 1% QoQ and 6.5% YoY.​

AUDUSD​

The Australian dollar is falling against the US currency during the Asian session, correcting after an uncertain rise on Tuesday and Wednesday. The instrument is testing the level of 0.7500 for a breakdown, reacting to the general deterioration in market sentiment. Hopes for a de-escalation of the conflict in Eastern Europe are gradually fading, as the rhetoric of the Russian and Ukrainian authorities does not share the initial optimism expressed by the participants in the negotiation process in Istanbul. Meanwhile, the risks of possible interruptions in Russian energy supplies to Europe and a number of other countries are growing, since Russian President Vladimir Putin earlier ordered to switch to gas payments in rubles. Weak macroeconomic statistics from China exerts pressure on the AUD positions today. Non-Manufacturing PMI in March showed a sharp decline from 51.6 to 48.4 points, while analysts expected a further increase in the indicator to 53.2 points. NBS Manufacturing PMI for the same period fell from 50.2 to 49.5 points, which also turned out to be worse than market forecasts at 49.9 points.​

USDJPY​

The US dollar shows a fairly active growth against the Japanese yen during trading in Asia, recovering from a two-day "bearish" rally, which led to the renewal of local lows from March 25. Demand for the US currency is gradually recovering as expectations decline for a peace deal between Russia and Ukraine that would bring about a final ceasefire. However, buyers are cautious ahead of the publication of a large block of US macroeconomic statistics at the end of the week. The focus is on the Friday's report on the labor market for March, which will re-evaluate the prospects for an earlier tightening of monetary policy by the US Federal Reserve during the May meeting. Earlier, the Chair of the regulator, Jerome Powell, did not rule out the possibility of raising the rate by 50 basis points at once in response to the continuing growth of inflationary pressure. Macroeconomic statistics from Japan published today does not have a significant impact on the dynamics of the instrument. Industrial Production in the country rose by 0.1% in February, which is noticeably better than the 0.8% decline a month earlier, but falls far short of market expectations at 0.5%. In annual terms, Production added 0.2% after falling 0.5% in January.​

XAUUSD​

Gold prices are slightly declining during the morning session, correcting after rising the day before, which was triggered by the return of negative market sentiment. On Tuesday, gold updated the local lows of February 25, reacting to the optimistic statements of the participants in the negotiation process between Russia and Ukraine after the meeting in Istanbul. There was hope that military activity would noticeably decrease, and soon a ceasefire could be announced altogether. However, later it became clear that such conclusions were made somewhat prematurely. The Russian Federation announced the preservation of fundamental contradictions in the positions of the parties (first of all, on the territorial issue), and explained the reduction in the number of troops in two directions by the planned regrouping of the military contingent. Trading activity on the instrument remains low today. Investors are waiting for the emergence of new drivers in the market, and are also preparing for the publication of the March report on the US labor market on Friday.​
 

Solid ECN

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Morning Market Review​

EURUSD

The European currency shows slight growth against the US dollar during the Asian session, consolidating near 1.1050. EUR/USD is trying to partially win back the losses of the last two days of the last week, which did not allow the instrument to consolidate on local highs from March 1. Significant pressure on the positions of the single currency is still exerted by weak macroeconomic statistics published in the EU. Friday's data from the euro zone pointed to a sharp increase in inflation in March from 5.9% to 7.5%, which was well above the forecast at 6.6%. The increase in consumer prices remains one of the cornerstones in the recovery of not only the European, but also the global economy in the period after the coronavirus pandemic. The situation around Ukraine has had an extremely negative impact on inflation, which puts the world's financial regulators in a very vulnerable position, as many of them do not have time to change their monetary policy parameters accordingly. The European Central Bank (ECB), in particular, has not yet announced the launch of its policy tightening cycle, while the US Federal Reserve may raise the rate by 50 basis points at once at its May meeting.

GBPUSD

The British pound is trading higher against the US dollar during the morning session, trying to consolidate above 1.3100. GBP/USD is recovering after a predominantly "bearish" trend at the end of last week, but this does little to change the flat picture of trading that has developed in the short term. The macroeconomic statistics from the UK, released at the end of the last trading week, did not affect the dynamics of the instrument too much, while the data from the US occupied almost all the attention of investors. In March, the US economy created 431K new jobs, which was significantly lower than the previous figure of 750K. Analysts expected an increase of 490K. At the same time, as expected, the Average Hourly Wage in March rose by 0.4% in monthly terms and by 5.6% in annual terms, outpacing the previous growth rates of 0.1% and 5.2%, respectively. The Unemployment Rate in the US in March fell sharply from 3.8% to 3.6%, while experts expected 3.7%. The obtained data allow us to talk about a fairly strong labor market in the country, which so far allows the US Federal Reserve to implement its "hawkish" plans. The focus of investors today will be on speeches by representatives of the Bank of England, including the Governor of the regulator Andrew Bailey.

AUDUSD

The Australian dollar shows quite active growth against the US dollar during the Asian session, once again testing the level of 0.7500 for a breakout. The instrument is developing a "bullish" momentum formed at the end of last week; however, the overall dynamics of the short-term outlook remains flat for now. A rather strong report on the US labor market, published on Friday, did not allow the instrument to consolidate on new local highs; however, the data from Australia turned out to be quite optimistic. AiG Performance of Manufacturing Index in March rose from 53.2 to 55.7 points, which was ahead of the average market forecasts. Commonwealth Bank Manufacturing PMI for the same period rose from 57.3 to 57.7 points with neutral investor expectations. The Reserve Bank of Australia (RBA) Commodity Price Index accelerated from 34% to 40.9% in March, well above the expected 10% rise. However, the statistics on the credit market disappointed investors. In February, the volume of issued mortgage loans decreased by 4.7% after an increase of 1% a month earlier. Market forecasts also suggested a 1% increase. An additional "bearish" factor for the Australian dollar on Monday is the ANZ Job Advertisements index. In March, the indicator sharply slowed down from 8.4% to 0.4%, which turned out to be significantly worse than market forecasts at the level of 1.6%.

USDJPY

The US dollar shows flat dynamics in Asian trading, consolidating near 122.50. USD/JPY recovered sharply after a corrective pullback from last week's high at 125.10 after the publication of a strong report on the US labor market for March, which largely justified analysts' expectations. According to statistics, 431K new jobs were created outside the agricultural sector, which turned out to be slightly worse than preliminary estimates of 490K, while the Average Hourly Earnings grew even more than expected, adding 5.6%, and the Unemployment Rate fell from 3.8% to 3.6%, while investors expected only 3.7%. In general, positive indicators on the labor market allow the US Federal Reserve to continue to implement its "hawkish" plans. In May, the market expects an increase in interest rates by 50 basis points at once, as well as the launch of a quantitative tightening program, which will reduce the US regulator's balance sheet. The Bank of Japan in these terms lags far behind the US Federal Reserve and many other global financial regulators. Extremely low inflation rates allow the Japanese regulator to maintain an ultra-soft monetary policy, stimulating the recovery of the national economy. However, the demand for the yen as a safe-haven asset will continue to decline as the spread between the US Fed's and the Bank of Japan's interest rates widens.

XAUUSD

Gold prices are developing "bearish" dynamics, testing the level of 1920.00 for a breakdown. XAU/USD builds on the downward momentum that was formed at the end of last week, when the US currency received support after the publication of a strong report on US Non-Farm Payrolls for March. As expected, the economy created a little less than 500K new jobs, but at the same time showed a steady increase in Average Hourly Earnings and a drop in the Unemployment Rate from 3.8% to 3.6% (forecasts suggested a decrease to only 3.7%). Strong data confirmed the likelihood that the US regulator will decide to raise interest rates during its May meeting by 50 basis points at once. At the same time, markets are also reacting with a noticeable increase in the yield of US Treasury bonds: on 10-year securities, it rose to 2.414% on Monday morning after closing at 2.375% at the end of last week. In turn, gold is still supported by the tense situation around Ukraine. Peace talks, which the market was counting on at the beginning of last week, seem to have stalled. Western countries are preparing new sanctions packages against the Russian Federation, which threatens to further complicate the situation with rising energy prices.​
 

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Morning Market Review

EURUSD
The European currency shows mixed trading dynamics against the US dollar during the Asian session, consolidating near 1.1000. The euro is still under pressure and is developing a "bearish" momentum, formed last Thursday. At the beginning of a new trading week, negative sentiments again reign among investors amid reports that Europe is preparing a new package of sanctions against the Russian economy. These conversations were catalyzed by accusations by Ukraine that Russian troops had committed a number of crimes in the course of a special military operation. The EU is again discussing the possibility of a complete or partial ban on energy imports, although there is still no unified position on this issue among all members of the bloc. Buying sentiment on Monday was supported only by statistics from Germany. Export volumes from Germany in February increased by 6.4% after a decrease of 3% a month earlier. Analysts expected a growth of only 1.5%. Imports for the same period added 4.5% after declining by 4.0% in January. Thanks to a sharp increase in exports, the Trade Balance in February increased from 8.8 to 11.5 billion euros, which was also better than market expectations at 9.6 billion euros.​


GBPUSD
The pound shows a weak upward dynamics of trading during the morning session, developing the "bullish" momentum formed the day before, when GBP/USD retreated from the local lows of March 30. Demand for the British currency remains quite low, and in general, the instrument shows rather flat dynamics in the short term, due to growing risks of increased pressure against the Russian economy due to the situation in Ukraine. Western countries are discussing the introduction of another package of sanctions against the Russian economy, referring to the crimes of the Russian military in the Ukrainian city of Bucha. New restrictions could include a ban on Russian ships using EU ports, an embargo on coal, oil or gas supplies, and personal sanctions. The UK announced a complete embargo on Russian oil imports back in March, as the dependence of the British economy on energy from the Russian Federation is significantly lower than that of European countries. However, prices for "black gold", gasoline, and gas are growing here too, threatening the pace of national economic recovery. Earlier, the Governor of the Bank of England, Andrew Bailey, warned that the country could face the most powerful crisis since 1970, and inflation by the end of 2022 could reach 9%.​


AUDUSD
The Australian dollar shows confident gains against the US dollar during the Asian session, testing new psychological resistance at 0.7600 for a breakout. Last time, the Australian dollar traded above this level was only in June 2021. The instrument develops the "bullish" momentum formed the day before, when safe and commodity assets began to grow again against the backdrop of increasing risks associated with the introduction of new sanctions against the Russian economy. In particular, bans are expected on the import of Russian energy resources, which may lead to a new round of inflationary pressure. Australian macroeconomic data released on Monday confirmed further growth in consumer prices. Inflation data from TD Securities for March showed an increase of 0.8% after growth of 0.5% a month earlier. In annual terms, the price growth rate accelerated from 3.5% to 4.0%. The focus of the market today is on the results of the meeting of the Reserve Bank of Australia (RBA). As expected, the regulator left the monetary policy unchanged. In the follow-up statement, representatives of the regulator pointed to positive trends in the labor market, and also noted the risks of further price increases. At the same time, the RBA emphasized that inflation in Australia remains significantly lower than in many other countries.​


USDJPY
The US dollar shows a moderate decline against the Japanese yen in Asian trading, retreating from local highs updated last Friday. The American currency is testing the level of 122.50 for a breakdown, waiting for new drivers to appear on the market. The extremely tense situation around Ukraine remains in the spotlight. At the beginning of the week, market participants are again actively discussing the possibility of introducing new sanctions against the Russian economy, which may significantly limit the import of Russian energy resources to Europe, and the changes may also affect the financial sector. Moderate support for the yen today is provided by optimistic macroeconomic statistics from Japan. Jibun Bank Services PMI in March rose from 48.7 to 49.4 points, which was better than the neutral forecasts of analysts. Overall Household Spending rose 10.1% in February after rising 6.9% a month earlier. Market forecasts assumed an increase of only 2.7%. Labor Cash Earnings rose by 1.2%, accelerating from 0.9%, although analysts had expected a reduction of 0.5%.​


Gold
Gold prices stabilize during the Asian session near 1930.00. The market is dominated by "bearish" transactions; however, the overall activity on the instrument remains very low. On Monday, gold prices showed moderate growth, reacting to increased inflationary risks. The markets are again actively talking about the introduction of additional sanctions against the Russian economy, which threatens with a new round of price growth, primarily for energy. Inflation is already well above target levels in many countries, despite central banks hastily raising interest rates. At the same time, wage increases are clearly not keeping pace with rising prices, which, coupled with an increase in the cost of borrowing, has an extremely negative effect on the well-being of taxpayers. Today, the focus of investors will be on a block of macroeconomic statistics from the US, as well as speeches by a number of representatives of the US Federal Reserve. Tomorrow, traders are waiting for the publication of the minutes of the meeting of the US regulator, hoping to see them as signals for further tightening of monetary policy in the country.
 

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Mar 3, 2022
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USD strengthens moderately against EUR and JPY but weakens against GBP.​

The February data on industrial orders, published yesterday, were poor: the indicator fell by 0.5% after rising by 1.5% for January. In the future, the negative dynamics may continue to develop due to the uncertainty caused by the geopolitical crisis in Ukraine. During the day, traders will pay attention to the March data on the US ISM Non-Manufacturing PMI. The indicator is forecast to grow from 56.5 to 58.4 points, which may further strengthen the USD position. Investors are waiting for specifics on the further actions of the US Federal Reserve, which may be found in the minutes of the last meeting of the Open Market Committee published on Wednesday. So far, experts have not decided what outcome they fear more: a further gradual increase in the rate, which may not be enough to fight inflation, or a sharp increase by 0.50% or more, which may put pressure on economic growth.​

EUR is weakening against EUR and GBP but has ambiguous dynamics against JPY.​

Investors focus on the publication of the March Service PMI, which, contrary to forecasts, was positive: the EU index increased from 55.5 to 55.6 points instead of falling to 54.8 points, while the same indicator for Germany increased from 55.8 to 56.1 points instead of a decrease to 55.0 points. Experts note that positive values were due to the retreat of the coronavirus pandemic and an increase in demand for services from citizens. However, the protracted military conflict in Ukraine makes the further prospects for the sector as negative as in industry. Despite strong statistics, the euro remained under pressure as the market awaits the publication of a new package of anti-Russian sanctions, which could negatively affect the European economy. In particular, a ban on exporting Russian coal, which is 19.3% of the coal consumed in the bloc, may be imposed. However, its sales volume to European countries has already begun to decline over the past month. It is possible to introduce restrictions on the rental of aircraft, on the trade in aviation kerosene, steel products, and luxury goods.​

GBP is strengthening against its main competitors – EUR, JPY, and USD.​

The UK Service PMI was positive: the value increased from 60.5 to 62.6 points, significantly exceeding the market's preliminary estimates of 61.0 points. However, the future outlook for the sector is difficult to predict due to the continued rise in inflation, which could put pressure on household demand. According to the latest survey of purchasing managers, British service sector firms raised their prices at the fastest pace in at least 25 years last month, pushing down the cost of living. About 40% of companies increased prices in March, and only 3% reduced them.​

JPY is weakening against GBP and USD but has ambiguous dynamics against EUR.​

Today, Japan published a block of economic statistics. Service PMI for March rose from 44.2 to 49.4 points but remained in the stagnation zone. Experts believe it is due to the coronavirus pandemic, from which Japanese households have not yet fully recovered, which still curbs the strengthening of the sector. Also, further development prospects are overshadowed by the uncertainty caused by the Ukrainian crisis. In February, the Japanese household spending index fell by 2.8% MoM and rose by 1.1% YoY, well below the forecasted 2.7%. Citizens continue to be wary of spending due to the effects of the pandemic and soaring food and fuel prices. Today in the Japanese parliament, the head of the Bank of Japan, Haruhiko Kuroda, said that the recent fluctuations in the yen were too rapid, and the stability of the national currency is extremely important. The official reiterated that a poor yen is good for the economy as a whole, as it helps boost overseas profits for companies.​

AUD is strengthening against its main competitors – EUR, GBP, JPY, and USD.​

Investors focus on the regular meeting of the Reserve Bank of Australia. The regulator left the rate at the previous level of 0.10%, but the rhetoric officials became more “hawkish,” which strengthened the national currency. Namely, agency officials said they would evaluate inflation and wage data in the coming months to determine whether to proceed with raising interest rates. Previously, the market assumed that the tightening of monetary policy would begin in the fall, but now, many investors tend to the fact that the adjustment of indicators will begin in June. Meanwhile, Australia's March Service PMI was weaker than expected: the value fell from 57.4 to 55.6 points against the forecast of 57.9 points.​

Oil quotes move sideways.​

Several opposing factors influence prices. First of all, the instrument's position is strengthening due to the expectation of introducing new economic sanctions against Russia, which may further limit the entry of Russian raw materials into the market. It is assumed that the Eurozone may impose a ban on the purchase of coal, and German Foreign Minister Annalena Baerbock announced plans to abandon Russian oil and even gas. On the other hand, the growth of quotations is constrained by the possibility of concluding a nuclear deal with Iran, which State Department spokesman Ned Price reconfirmed. Investors are being held back by the coronavirus pandemic in China. Today, the Chinese authorities extended the quarantine in Shanghai, which covers 26M people. During the day, the market is waiting for the publication of a weekly report on the amount of oil reserves in the US from the American Petroleum Institute (API). The figure is forecast to fall by 1.558M barrels, strengthening the prices.​
 

Solid ECN

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Mar 3, 2022
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Morning Market Review​

EURUSD​

The European currency is trading with a slight decrease against the US dollar during the Asian session, testing 1.0900 for a breakdown and updating local lows from March 9. Market sentiment correlates with the predominantly "bearish" trend in EURUSD since the end of last week. Investors are assessing the prospects for further acceleration of inflation in the region as the EU considers the introduction of another package of sanctions against the Russian economy after evidence of war crimes in the Ukrainian city of Bucha. It is expected that the new restrictions will affect the import of coal for 4 billion euros per year, as well as equipment for the gas industry, transport and other industries for 10 billion euros per year. The sanctions will also affect the ban on investment, in particular; it is planned to introduce new measures against financial institutions and state-owned enterprises, as well as a number of representatives of the Russian authorities and their families. The European Union will stop buying fertilizers, timber and a number of food products from Russia, which in the current realities is estimated at about 5.5 billion dollars a year. Imports of Russian oil, as well as natural gas, remain practically unchanged, since for many EU countries this is a fundamental issue of energy security. In particular, Germany and Hungary oppose a complete embargo. Macroeconomic statistics from Europe published on Tuesday turned out to be restrainedly optimistic, but did not have a noticeable impact on the market. The Composite Manufacturing PMI in the eurozone in March rose from 54.5 to 54.9 points with a neutral forecast. The Services PMI for the same period increased from 54.8 to 55.6 points, while analysts did not expect any changes here either.

GBPUSD​

The British pound is trading ambiguously against the US currency during the morning session, consolidating near 1.3070. The day before, the instrument showed a rather active decline, despite the fact that in the first half of the day the pound traded with predominantly upward dynamics. Moderate support for the instrument during the European session was provided by optimistic data on business activity in the EU and the UK, which gave hope that some of the negative forecasts about a sharp economic slowdown due to anti-Russian sanctions may not come true. The UK Services PMI from Markit strengthened in March from 61 to 62.6 points, while investors did not expect any changes. With the opening of the US session, the focus of the market's attention shifted to the statistics from the US, and here the picture was not so unambiguous. Indices from Markit showed a moderate decline: the services sector fell from 58.9 to 58 points in March. In turn, similar statistics from ISM supported the buyers of the US currency: the Services PMI in March strengthened from 56.5 to 58.3 points, ahead of its forecasts at the level of 58 points.

AUDUSD​

The Australian dollar is consolidating against the US dollar during the Asian session near 0.7500, waiting for new drivers. The instrument still retains a fairly strong "bullish" momentum, formed at the end of last week. The day before, AUDUSD showed a sharp increase, having updated record highs since June 2021; however, by the close of the day session, the "bulls" had lost most of their gains. The active growth appeared due to the statements of the Reserve Bank of Australia (RBA) after the meeting on the interest rate, where, as expected, the monetary policy parameters were left unchanged. At the same time, representatives of the regulator complained about the growing inflation, and also promised to continue to be less restrained in the issue of tightening monetary policy conditions. Analysts regarded these words as a possible signal that the interest rate may be increased during the June meeting of the committee. The development of the "bullish" dynamics for the instrument was also constrained by macroeconomic statistics from Australia, published on Tuesday. Commonwealth Bank Composite PMI in March declined from 57.1 to 55.1 points. The Services sector in March fell separately from 57.9 to 55.6 points, while analysts expected the same level of activity to be maintained.

USDJPY​

The US dollar shows weak gains against the Japanese yen in Asian trading, testing 124.00 for a breakout. The USDJPY pair is developing an uptrend, formed at the end of last week, and is updating local highs from March 29. Moderate support for the US currency is provided by moderately optimistic macroeconomic statistics from the US on business activity from ISM. At the same time, the general situation on the market is changing little and the demand for the dollar is still held against the backdrop of deteriorating growth prospects for the global economy. In addition, traders expect further steps from the US Federal Reserve towards tightening monetary policy. In May, the American regulator will meet for a regular meeting, following which the interest rate can be increased immediately by 50 basis points. The Bank of Japan, in turn, is forced to maintain a soft monetary policy in an effort to overcome deflationary risks. Tuesday's macroeconomic statistics from Japan turned out to be ambiguous. Thus, the Jibun Bank Manufacturing PMI in March strengthened from 48.7 to 49.4 points. At the same time, Overall Household Spending in February slowed down sharply from 6.9% to 1.1%, which turned out to be noticeably worse than analysts' forecasts at the level of 2.7%.

XAUUSD​

Gold prices are changing little during the Asian session, holding near 1920.00. The day before, the instrument showed a restrained decline, which was quite an expected reaction of the market to the publication of relatively optimistic macroeconomic data from the US. In particular, the ISM Services PMI in March showed a fairly active growth from 56.5 to 58.3 points, ahead of its forecasts at 58 points. This once again strengthened the market's confidence that the US Federal Reserve will take a more "hawkish" stance on monetary policy in the near future. As early as May, the rate is expected to rise by 50 basis points at once, and the Fed is expected to launch a quantitative tightening program in order to reduce its balance sheet. The rhetoric of the European Central Bank (ECB) is also gradually tightening as inflationary risks soar and prospects for improvement are not yet visible. Russia continues to conduct a special military operation on the territory of Ukraine, and the European Union is preparing a new package of sanctions against the Russian economy, which threatens a new round of rising prices for energy resources and a number of other goods.​
 

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Nov 16, 2021
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EURUSD​

The European currency shows a slight increase against the US dollar during the Asian session, again testing the level of 1.0900 for a breakout. EURUSD is trying to recover from a 5-day decline, which brought the euro back from local highs since March 1 to local lows since March 8. The European currency remains under pressure amid deteriorating economic growth prospects in the region, associated with a sharp increase in inflationary pressures. Analysts' forecasts remain disappointing as well, as the EU is considering imposing new sanctions against the Russian economy, which could further spur prices up. Macroeconomic statistics from Europe published yesterday turned out to be negative. The volume of Industrial Orders in Germany in February slowed down in annual terms from 8.2% to 2.9%. On a monthly basis, orders fell 2.2% after rising 2.3% in January. Market forecasts assumed a decrease of only 0.2%. The Producer Price Index in the euro area in February rose by 1.1% after rising by 5.1% a month earlier. In annual terms, producer inflation accelerated from 30.6% to 31.4%, which was only 0.1% lower than market forecasts.​

GBPUSD​

The British pound is trading upward against the US currency during the morning session, testing 1.3080 for a breakout. The growth in the instrument is due to technical factors, while fundamentally the picture changes only slightly. The EU and the UK have previously announced the introduction of new sanctions against the Russian economy, which, in particular, provide for a ban on the import of coal and a number of food products into the EU. There is no talk of an embargo on oil and natural gas yet, despite the extremely ambiguous position among EU members. One way or another, experts believe that the new sanctions will lead to another increase in inflationary risks not only in Russia, but also in Europe. Meanwhile, yesterday the British currency was supported by optimistic macroeconomic statistics from the UK. Construction PMI in March remained at the same level of 59.1 points, while analysts expected it to decline to 57.8 points. Today, investors are waiting for the publication of data on the UK House Price Index from Halifax for March, as well as a speech by the representative of the Bank of England Huw Pill.​

AUDUSD​

The Australian dollar shows a rather active decline during the Asian session, developing the "bearish" momentum formed the day before. Yesterday, the US Federal Reserve published the minutes of the meeting of the Federal Open Market Committee (FOMC), in which market participants noted an even more resolute attitude of the regulator regarding the prospects for further tightening of monetary policy in the country. In particular, the Committee spoke in favor of reducing the Fed's balance sheet by 95 billion dollars a month, although earlier experts assumed that the volume could be only about 60 billion dollars. The dollar was also supported by comments from US Federal Reserve Board member Lael Brainard, who warned that the agency may need more than one rate hike by 0.50% at once during 2022. Some pressure on the positions of the Australian currency today is exerted by weak macroeconomic statistics from Australia. Export volumes in February showed zero dynamics after an increase of 8% in January. Imports at the same time rose sharply by 12% after falling by 2% a month earlier. As a result, the trade surplus in February fell sharply from 12.891 billion to 7.457 billion Australian dollars, which was significantly below the market's expectations of 12.000 billion Australian dollars. AiG Services PMI in March fell from 60 to 56.2 points.​

USDJPY​

The US dollar is developing a flat dynamics of trading in pair with the Japanese yen in Asian trading, consolidating near 123.60. Despite a rather active attempt to grow the day before, the US dollar remains practically unchanged against the Japanese currency, signaling an increase in demand for the yen as a safe-haven currency. The published minutes of the US Federal Reserve, as well as a number of comments from the regulator's representatives, signaled in favor of a more rapid tightening of monetary policy in the US in the near future. In particular, already in May, investors expect a rate hike by 50 basis points at once, as well as the launch of a quantitative tightening program worth almost 100 billion dollars a month. In turn, inflation in Japan remains significantly below the regulator's target levels, and therefore there are still no prerequisites for changing monetary policy. Published today macroeconomic statistics from Japan has a slight downward pressure on the yen. The Coincident Index in February fell from 95.6 to 95.5 points, while analysts expected it to rise to 96.4 points. The Leading Index for the same period decreased from 102.5 to 100.9 points, while the forecast was for growth to 103 points.​

XAUUSD​

Gold prices are changing little during the Asian session, holding near 1920.00. Traders are in no hurry to open new positions, preferring to wait for the appearance of indicator signals. In the meantime, the situation on the market is not changing much, since there are no prerequisites for the completion of Russia's military operation on the territory of Ukraine yet. Moreover, the economic outlook is only getting worse as new sanctions against the Russian economy are introduced. In particular, the day before, the EU announced its intention to expand the list of goods prohibited from import from Russia, but analysts report that so far they have not been able to agree on a new package of sanctions. Among other things, a ban on coal imports and significant restrictions on the supply of agricultural goods, in particular potash fertilizers, are expected. Certain food products may also be subject to sanctions. All in all, according to experts, the new restrictions could cost the Russian economy about 9 billion euros a year. Meanwhile, the pressure on the position of gold is exerting an increase in the yield of US Treasury bonds. The minutes of the Federal Open Market Committee of the US Federal Reserve (FOMC) published the day before reflected the readiness of the regulator for a faster tightening of monetary policy, including through the launch of a quantitative tightening program. Similar sentiments can be traced in the speeches of US Federal Reserve officials, for example, Lael Brainard, who is known for her rather reserved​
 
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Solid ECN

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Mar 3, 2022
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Morning Market Review​



EURUSD
The European currency shows a moderate decline against the US dollar during the Asian session, building on the "bearish" momentum formed on March 31, when EUR/USD retreated from its March 1 local highs. Euro positions remain under pressure amid worsening prospects for global economic recovery due to the looming crisis associated with the conflict over Ukraine. Western countries continue to increase unprecedented sanctions pressure on the Russian economy, which, in turn, stimulates further inflation in almost all developed countries. In this regard, many financial regulators have moved to tightening monetary policy, but the European Central Bank (ECB) until recently tried to take a wait-and-see attitude. At the moment, it is expected that the European regulator will raise the rate in the summer, but plans for the near future may still change. Macroeconomic statistics from Europe published yesterday turned out to be mixed. The volume of Industrial Production in Germany in February rose by 0.2% after an increase of 1.4% a month earlier. Analysts had expected zero dynamics of the indicator. In annual terms, production rates accelerated from 1.1% to 3.2%. The volume of Retail Sales in the euro area for the same period accelerated from 0.2% to 0.3%, which was twice worse than analysts' forecasts. In annual terms, sales volumes slowed down from 8.4% to 5.0%, while the forecast was 4.8%.​


GBPUSD
The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.3060. Market activity remains quite low, while on Friday there are no releases of any interesting macroeconomic statistics from the US or the UK. The situation around Ukraine is still in the spotlight. Western countries continue to impose new restrictions on the Russian economy, aimed primarily at reducing or completely banning energy imports. The export of high-tech equipment, cars and agricultural machinery is also noticeably limited. However, these measures have not yet brought the expected effect, since the special military operation continues. At the same time, the position of the Western authorities has become a catalyst for updating record highs in commodity markets, which threatens to increase inflation in many regions of the world. The macroeconomic statistics of the United Kingdom released the day before only confirmed the fact of a rapid increase in inflation: the Halifax House Price Index accelerated from 0.8% to 1.4% in March, while analysts expected a slowdown in dynamics to 0.4%.​


AUDUSD
The Australian dollar shows ambiguous dynamics of trading against the US dollar during today's Asian session, consolidating near 0.7470. Investors are anticipating the emergence of new drivers in the market and fixing their short profits after a rather active two-day decline, provoked by the "hawkish" protocols of the US Federal Open Market Committee (FOMC), which reflected the readiness of the US regulator to launch a program of quantitative tightening in the amount of 95 billion dollars monthly . In addition, the Fed confirmed the possibility of raising the rate during the May meeting by 50 basis points at once, and it is not excluded that this may have to be resorted to repeatedly. Additional pressure on the instrument on Thursday was exerted by weak macroeconomic statistics from Australia. In particular, experts were disappointed by the sharp drop in Exports dynamics from 6% to 0%, which, against the backdrop of growing Imports, led to a noticeable decrease in the Trade Surplus in February from 11.786 billion to 7.457 billion Australian dollars. AiG Services PMI in March fell from 60 to 56.2 points.​


USDJPY
The US dollar is developing flat dynamics in tandem with the Japanese yen in Asian trading, consolidating near 124.00, above which the US currency has not been able to consolidate yet. Demand for the US currency as a safe-haven asset is still quite high; however, additional "bullish" factors are needed for the instrument to further rise to new record highs. It is possible that this could be facilitated by an increase in the US Fed's rate by 50 basis points at once or the launch of a quantitative tightening program, but this is likely to happen only in May. In the meantime, Japan is in a position to pursue an ultra-soft monetary policy, as the country has been largely unaffected by the global rise in inflation, except perhaps for minor losses from trade with Russia. Uncertain macroeconomic statistics from Japan put pressure on the yen yesterday. Coincident Index in February fell from 95.6 to 95.5 points, while the forecast was for growth to 96.4 points. Leading Economic Index for the same period fell from 102.5 to 100.9 points, which turned out to be significantly worse than market expectations at the level of 103 points.​


XAUUSD
Gold prices are consolidating near 1930.00 and are preparing to end the week with a rather calm flat. The situation on the market changes little, and the demand for the precious metal remains quite high, so are the geopolitical and economic risks. In turn, traders expect further tightening of monetary policy from the US Federal Reserve, and perhaps at a faster pace than previously expected. In addition, the pressure on the instrument is also exerted by the growth in the yield of US Treasury bonds, which are again traded at local highs. The US macroeconomic statistics released yesterday did not contribute to the formation of any stable trends during the day. At the same time, the dollar reacted positively to the decline in the number of Initial Jobless Claims from 171K to 166K, while analysts expected an increase to 200K. The Initial Jobless Claims 4-week average has dropped from 178K to 170K.​
 

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Morning Market Review​



EURUSD
The European currency shows the downward dynamics of trading against the US dollar during the Asian session, opening with a slight positive gap. The "bears" leveled the gap at the opening, and the instrument itself is again testing the level of 1.0880 for a breakdown. The general situation on the markets is changing little, and the demand for risky assets is still under pressure. Despite the growing sanctions pressure, the Russian Federation continues to conduct a special military operation on the territory of Ukraine, and peace negotiations have almost completely faded into the background. Last week, the EU countries agreed on a new, fifth package of sanctions, which, among other things, provides for new restrictions on the import of Russian coal: a complete ban on the purchase, import or transit of solid fuel. Part of the restrictive measures will come into effect from the summer of 2022, as the EU wants to prevent the situation from worsening with rising prices, which are currently reacting sharply to the dynamics in the commodity markets. In turn, the key issue with the import of oil and natural gas is still open. The European authorities have not yet developed a unified attitude towards the embargo on Russian "black gold", although certain steps are being taken in this direction. Meanwhile, market participants are watching the results of the presidential elections in France. After counting 97% of the ballots in the first round, incumbent President Emmanuel Macron takes the lead with 27.6% of the vote. Second place goes to the head of the right-wing National Rally party, Marine Le Pen. The second round of elections will take place on April 24.​


GBPUSD
The British pound traded with a downtrend against the US currency during the morning session, testing 1.3000 for a breakdown. The instrument traded confidently below this level in November 2020. Activity on the instrument remains subdued, as market participants expect a large number of publications of macroeconomic statistics from the UK during the week. Thus, data on GDP dynamics and Industrial Production rates for February were released today. On Tuesday, the March report on the labor market will be published in the UK. Analysts' current forecasts are very optimistic and suggest, in particular, a steady increase in wages from 4.8% to 5.7%. On Wednesday, the focus of investors will be on the March statistics from the UK on the dynamics of Producer and Consumer Price indices. Analysts expect annual inflation in the country to accelerate from 6.2% to 6.7% in March, which in turn will put pressure on the positions of the Bank of England, which may return to tightening monetary policy.​


NZDUSD
The New Zealand dollar shows ambiguous dynamics of trading against the US dollar during today's Asian session, consolidating near the opening levels and 0.6835. The pressure on NZD/USD is exerted by weak macroeconomic statistics from New Zealand. Electronic Card Retail Sales in March decreased by 1.3% after a sharp decline of 7.8% a month earlier. Analysts had expected negative dynamics to remain at -0.6%. In annual terms, sales decreased by 0.5% after rising by 1.1% in February. Markets projected a sharp 9.7% growth. Later, buying activity on the instrument was supported by encouraging statistics from China. The Consumer Price Index in China in March showed an increase of 1.5%, accelerating from 0.9% shown in February. The real dynamics turned out to be noticeably better than analysts' forecasts at 1.2%. Another "bullish" factor is the new EU sanctions policy on the Russian economy. In particular, New Zealand coal exporters positively perceived the possibility of introducing restrictions on the supply of solid fuel from the Russian Federation this summer. Currently, New Zealand exports more than a third of all coal mined in the country.​


USDJPY
The US dollar shows strong growth against the Japanese yen during trading in Asia, continuing the development of the "bullish" trend from April 1. At the moment, USD/JPY is updating local highs from March 28 and is again preparing to test strong resistance at 125.00. At the beginning of the week, the "bulls" are very optimistic, but the growth factors change slightly: the US dollar is still receiving support as a "safe" asset, becoming more attractive to investors as the US Federal Reserve tightens its monetary policy. Earlier, representatives of the regulator spoke in favor of raising the rate by 50 basis points at once during the May meeting. At the same time, as expected, a program of quantitative tightening may be launched in order to reduce the balance sheet of the Fed. In turn, the Bank of Japan is far from a possible start of tightening monetary policy. The macroeconomic statistics released in Japan on Friday provided little support to the yen. Eco Watchers Current Situation Index in March rose from 37.7 to 47.8 points, which turned out to be 10 points better than market expectations. Eco Watchers Outlook for the same period strengthened from 44.4 to 50.1 points, while the forecast was 43.5 points.​


Gold
XAUUSD prices show a slight decline at the beginning of the week, consolidating near local highs from March 31. Moderate pressure on the instrument is exerted by the growth in the yield of US Treasury bonds, which compete with the precious metal for the title of safe investment. During the morning session, 10-year US Treasuries yielded 2.774% after closing at 2.715% on Friday. Another negative factor for gold is the expectation of further tightening of monetary policy by the US Federal Reserve. The rate increase is expected during the May meeting, and it can be increased immediately by 0.5%. At the same time, the regulator plans to launch a quantitative tightening program that will help reduce the Fed's balance sheet.​
 

Solid ECN

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Mar 3, 2022
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Morning Market Review​



EURUSD
The European currency shows flat dynamics of trading against the US dollar during today's Asian session, consolidating near the level of 1.0880. EUR/USD expects new drivers to appear on the market; however, current forecasts for the next macroeconomic publications are quite pessimistic. In particular, data on consumer inflation in Germany for March will be released today. The ZEW Research Institute will later release its traditional business sentiment report for April. Analysts project that inflation in Germany will rise by 2.5% MoM and 7.3% YoY, while the Harmonized Consumer Inflation Index could rise to 7.6%. ZEW Survey on Economic Sentiment in Germany in April may fall from -39.3 to -48 points. ZEW Survey on Current Situation is projected to fall from -21.4 to -35 points. Additional pressure on the positions of the single currency is exerted by the situation with a new package of sanctions against the Russian economy, as the EU authorities have not reached a consensus on the oil embargo.​


GBPUSD
The British pound is traded with mixed dynamics against the US currency during the morning session, holding near 1.3020. Activity on the market at the beginning of the week remains quite low, despite the publication of a large block of macroeconomic statistics from the UK on Monday. Data released the day before reflected a slowdown in UK GDP growth from 0.8% in January to 0.1% in February. Analysts had expected the dynamics to slow down to 0.3%. The pace of Industrial Production in February recorded a decline of 0.6% after an increase of 0.7% a month earlier. The real dynamics again turned out to be significantly worse than analysts' forecasts of growth by 0.4%. In annual terms, production rates slowed down from 3.0% to 1.6%, while the market expected 1.4%. Additional pressure on the position of the pound today is exerted by statistics on retail sales in the UK. BRC Like-For-Like Retail Sales in March showed a decrease of 0.4% after increasing by 2.7% a month earlier.​


AUDUSD
The Australian dollar is showing a weak corrective growth against the US dollar during the Asian session, recovering from a four-day "bearish" rally. The instrument is testing the level of 0.7420 for a breakout, retreating from its local lows of March 22. The situation on the markets is changing slightly, and traders still do not show any noticeable interest in risky assets. The US dollar is also in demand amid growing expectations of a sharp tightening of the US Federal Reserve's monetary policy already during the May meeting. In addition, it is expected that in May the regulator will announce the start of a quantitative tightening program in order to reduce its balance sheet. In turn, the Australian dollar was supported at the beginning of the week by optimistic macroeconomic statistics from China. The Consumer Price Index in China in annual terms in March accelerated from 0.9% to 1.5%, which was better than market expectations at 1.2%. On a monthly basis, however, inflation showed only zero dynamics after rising by 0.6% in February. Today's data support the buying mood for the instrument with strong statistics from Australia. National Australia Bank's Business Conditions in March strengthened from 9 to 18 points, while the Business Confidence index for the same period rose from 13 to 16 points, with a slowdown forecast to 8 points.​


USDJPY
The US dollar is traded mixed against the Japanese yen during the Asian session, consolidating near 125.40. The day before, the US currency again showed active growth against the yen and updated the record highs of June 2015, receiving support from the previous growth factors. First of all, investors expect further tightening of the US Federal Reserve's monetary policy at a somewhat more active pace. Market participants are also counting on the launch of a quantitative tightening program. The US currency is supported by the general demand for safe assets in connection with the extremely tense situation around Ukraine, on the territory of which Russia continues to conduct a special military operation, despite the unprecedented sanctions pressure from Western countries. The day before, the EU authorities agreed on a new package of restrictions, which, among other things, provides for a ban on the import of Russian coal. The issue of the embargo on oil and natural gas is still open; however, real steps are also being taken to gradually abandon the purchase of these energy carriers from the Russian Federation. Today, the yen is slightly supported by the Japanese macroeconomic data. Thus, the volume of Bank Lending in the country in March increased by 0.5% after an increase of 0.4% a month earlier. Analysts expected the dynamics to slow down to 0.3%.​


XAUUSD
XAUUSD shows moderate growth during Asian trading, testing the level of 1960.00 again. The day before, the instrument has already made attempts to consolidate above it, having updated local highs from March 14. Gold prices briefly rose to a monthly high on fears of increased inflationary risks in Europe and the United States, which was the reason for the purchase of the metal, but closer to the end of the Monday afternoon session, the "bulls" lost most of their gains. Tomorrow, investors are waiting for the publication of inflation data from the US. Despite a number of active measures taken by the US Federal Reserve to contain it, analysts expect the annual value to accelerate to 8.4% in March. The biggest contributor is likely to come from higher energy prices as commodity markets surged to new record highs due to the sanctions policy against the Russian economy. At the same time, further growth of gold is constrained by expectations of a 0.50% increase in interest rates by the US Federal Reserve already during the May meeting. In addition, representatives of the regulator spoke out in favor of launching a quantitative tightening program.​
 

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EURUSD
The European currency is showing insignificant growth against the US dollar during today's Asian session, recovering after moderate falling the day before. At the moment, EUR/USD is trading near 1.0840, not far from the local lows of March 7. The pressure on the positions of the single currency is exerted by the overall negative situation on the market, associated with a sharp slowdown in economic growth in the region with a simultaneous increase in inflation. The data released the day before confirmed the acceleration of inflation in Germany to 7.3%, while the outlook remains negative. The EU countries continue to impose new restrictions on the Russian economy, which so far only lead to a sharp increase in energy prices. The fifth package of sanctions, among other things providing for an embargo on the supply of coal and a number of other types of solid fuels from Russia, was agreed by the EU last week. However, the main fuel bans will come into effect only from August 2022. There is no embargo on oil or gas supplies in the new sanctions package, since this issue remains painful for Europe, due to the great dependence of many countries on Russian energy. In particular, Germany opposes the introduction of restrictions. Nevertheless, the general trend towards a gradual withdrawal of resources from the Russian Federation is unlikely to change even in the event of a hypothetical end of the conflict in Eastern Europe.

GBPUSD
The British pound traded with an uptrend against the US currency during the morning session, trying to regain a foothold above 1.3000. Activity on the market remains quite low, as market participants are waiting for the publication of a block of macroeconomic statistics from the UK on the dynamics of consumer prices. Inflation is one of the key indicators today, since it is on it that world regulators largely rely when choosing the vector of monetary policy. According to current forecasts, the UK Consumer Price Index in March will accelerate from 6.2% to 6.7%, updating record highs. At the moment, the positions of the pound are supported by relatively optimistic data on the UK labor market, which were published the day before. ILO Unemployment Rate unexpectedly decreased from 3.9% to 3.8% with a neutral forecast. Average Earnings Excluding Bonus for the same period accelerated growth from 3.8% to 4.0%, which coincided with analysts' forecasts. Average Earnings Including Bonus increased from 4.8% to 5.4%. Only BRC Like-For-Like Retail Sales were noticeably disappointing, dropping 0.4% in March after rising 2.7% a month earlier.

AUDUSD
The Australian dollar shows ambiguous dynamics of trading against the US dollar during today's Asian session, consolidating near 0.7450. After the release of a block of data from the US on the dynamics of consumer inflation, market participants expect the emergence of new drivers. Statistics reflected the acceleration of annual inflation in the US in March to 8.5%, which is the highest level in 41 years. On a monthly basis, consumer prices rose 1.2% from 0.8%, the highest since September 2005. Consumer Price Index excluding Food & Energy in the US slowed down from 0.5% to 0.3% in March. In annual terms, the indicator fixed at around 6.5%, accelerating only by 0.1%. One way or another, inflation in the United States is growing at a record pace, primarily due to a sharp increase in energy prices. The current geopolitical situation is not conducive to quick changes in the trend, and therefore the US Federal Reserve will probably still decide on a faster tightening of monetary policy in May, raising the rate by 50 basis points at once. Meanwhile, the Australian dollar was supported the day before by data from Australia. National Australia Bank's Business Conditions index rose from 9 to 18 points in March, while the Confidence index for the same period rose from 13 to 16 points, with a forecast of a decline to 8 points.

USDJPY
The US dollar is again trading with an uptrend against the Japanese yen during the Asian session, holding near the record highs updated at the beginning of this week. Despite the publication of statistics on consumer prices in the US the day before, activity on the instrument remains rather low. Annual inflation in the US reached 8.5% in March, which was even higher than analysts' forecasts by 0.1%. However, these data do not change much: the US Federal Reserve has already announced its readiness for a more rapid tightening of monetary policy since May, and otherwise the US economy is still showing rather optimistic results. The prospects for the development of the current geopolitical crisis in Eastern Europe, which further pushes energy prices up, remain unclear. However, the markets have already gotten used to the growing uncertainty, and in addition, the United States still has leverage on commodity markets, since resource prices are largely determined today by the sanctions policy of the United States and its partners. Pressure on the yen is provided by macroeconomic statistics from Japan. Machinery Orders in February collapsed by 9.8% after falling by 2% a month earlier. Market forecasts assumed a decrease of only 1.5%.​
 

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Mar 3, 2022
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EURUSD​

The European currency shows a moderate decrease during the Asian session, testing the level of 1.0800 for a breakdown. EUR/USD is developing a fairly strong downward momentum, formed the day before, when the focus of investors was on the results of the meeting of the European Central Bank (ECB). As expected, the regulator did not change the monetary policy parameters and kept the rate at zero. At the same time, officials signaled the start of a gradual reduction in bond purchases under the quantitative easing (QE) program from the current 40B euros to 30B euros in May and 20B euros in June, after which the program will probably be completed in Q3. By this time, the ECB will also think about raising the interest rate, although analysts' opinions on this matter differ. The President of the European regulator, Christine Lagarde, also noted the high inflation rates in the region, which has a significant impact on the economy and makes it necessary to revise the previous criteria for changing the vector of monetary policy.

GBPUSD​

The pound is trading in different directions, consolidating near 1.3060. The day before, the British currency was actively declining, retreating from its local highs of April 5, and also offsetting a noticeable growth on Wednesday, when the instrument managed to find support in the expectations of traders regarding further tightening of monetary policy by the Bank of England. Data released the day before reflected the growth of the Consumer Price Index in March to 7% year on year, which became a new record high and was slightly higher than experts' expectations at the level of 6.7%. Today the markets are closed due to Good Friday, and therefore the activity remains quite low. In addition to the events in the geopolitical arena, investors are focused on a block of macroeconomic statistics from the US, published the day before. Retail Sales in March slowed down from 0.8% to 0.5%, which turned out to be worse than market expectations at the level of 0.6%. Initial Jobless Claims for the week ended April 8 increased from 167K to 185K, exceeding preliminary estimates at 171K. At the same time, the Michigan Consumer Sentiment Index showed positive dynamics in April, having strengthened from 59.4 to 65.7 points, while the forecast was for a decrease to 59 points.

AUDUSD​

AUDUSD shows a moderate decline during the Asian session, testing 0.7400 for a breakdown. The instrument is preparing to finish yet another trading week in the "red" zone; however, due to the active growth of the Australian currency last Tuesday, the total losses can be characterized as insignificant. In addition to the rising US dollar, quotes are under pressure from weak macroeconomic statistics from Australia, published the day before. Employment Change in March was recorded at around 17.9K, which was below market expectations at the level of 40K and significantly inferior to 77.4K shown in February. At the same time, Full-Time Employment decreased from 121.9K to 20.5K, while the dynamics of Part-Time Employment improved from -44.5K to -2.7K. The Unemployment Rate remained at 4%, while many experts were confident that it would stay below this psychological level. At the same time, Consumer Inflation Expectations rose from 4.9% to 5.2% in April, while analysts had projected a decline to 4.6%.

USDJPY​

USDJPY is testing 126.30 for a breakout, renewing all-time highs. The instrument has been developing an active uptrend since the beginning of March, while the dollar significantly corrected only once, at the end of last month. The weakness of the yen is primarily due to the position of the Bank of Japan, which maintains an ultra-loose monetary policy and implements an "endless quantitative stimulus" program without setting limits on bond purchases. As a result of these steps, the national currency is rapidly depreciating, but this has a positive effect on exports, as it increases the competitive advantages of Japanese goods in the market. In addition, a weak yen could help the economy fight the deflation problem. At the same time, Japan is facing the issue of a rapid depreciation of the savings of its citizens, which may lead to a decrease in living standards if inflation begins to rise rapidly against the backdrop of a global trend of rising energy prices.

XAUUSD​

Gold prices are slightly reduced during the Asian session, consolidating near 1970.00. The development of "bearish" sentiment on the instrument is primarily facilitated by technical factors of correction at the end of the week. In addition, many markets are closed on Friday due to the celebration of Good Friday, so the wave of closing current long positions began to be traced even the day before. Meanwhile, demand for the metal remains high enough as an inflation hedge. The crisis around Ukraine is still in its acute phase, despite the unprecedented sanctions pressure from Western countries on the Russian economy. World central banks are hastily tightening their monetary policy in an attempt to contain a sharp increase in consumer prices, which is also having a huge negative impact on the pace of global economic recovery during the retreat of the COVID-19 pandemic.​
 

Solid ECN

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Mar 3, 2022
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EURUSD​

The European currency shows mixed trading dynamics against the US dollar during the Asian session, consolidating near 1.0770 and local lows since April 2020, which were updated last Thursday. Market activity remains subdued, as the news background at the beginning of the week is relatively calm, and noteworthy macroeconomic publications from Europe and the US are not expected today either. Investors will focus on the US statistics on the dynamics of home construction in March, as well as the speech of the US Fed's Charles Evans. However, the policy of the regulator is currently quite transparent. The agency will almost certainly raise the rate by 50 basis points in May and also launch quantitative tightening mechanisms to reduce its balance sheet. But how much these measures will help curb inflation, especially against the background of the escalation of the conflict in Ukraine, is not yet very clear. On Wednesday, the eurozone will release February statistics on the dynamics of Industrial Production, and today the key data on consumer inflation for March will be released. On a monthly basis, prices are expected to accelerate from 0.9% to 2.5%, while in annual terms, consumer inflation could reach 7.5%.

GBPUSD​

The British pound is falling during the morning session, testing the strong support at 1.3000 for a breakdown. GBPUSD updates local lows from April 13, when the asset showed a sharp increase. The US currency is supported by expectations of further tightening of monetary policy by the US Federal Reserve and an increase in the key rate by 50 basis points at once during the May meeting of the regulator. In addition, investors are still reluctant to redirect their capital into risky assets, fearing a further deterioration in the global economy. Despite the unprecedented sanctions against Russia, the special military operation on the territory of Ukraine continues, and at the moment the peace talks have faded into the background. The parties, apparently, hope to take more advantageous positions in the negotiation process, having shown success at the front. Meanwhile, Western countries continue to introduce more and more restrictive measures. In the near future, EU officials will discuss the sixth sanctions package, which may relate to the most painful issue, restrictions on the import of oil and oil products. In the EU, there is still no consensus on the embargo on Russian supplies, due to the significant dependence on imported energy resources, but the general trend towards a gradual phase-out is still emerging. Today, investors are waiting for the speech of the representative of the Bank of England Catherine Mann, as well as the Governor of the British regulator Andrew Bailey.

NZDUSD​

The New Zealand dollar shows a slight increase against the US dollar during the Asian session, retreating from the local lows of February 28, updated the day before. The positive dynamics of the instrument today is largely of a technical nature, while the news background remains quite modest and does not encourage investors to buy risky assets. Traders drew attention to today's publication of Business NZ PSI. In March, the indicator unexpectedly strengthened from 48.9 to 51.6 points, which turned out to be better than the average analysts' forecasts. In addition, investors continue to evaluate macroeconomic statistics released yesterday from China. In Q1 2022, the country's GDP grew by 1.3% in quarterly terms and 4.8% in annual terms, which turned out to be noticeably better than market expectations at the level of 0.6% QoQ and 4.4% YoY. In turn, the pace of Industrial Production in China in March slowed down from 7.5% to 5%, while Retail Sales showed a sharp decline by 3.5% after an increase of 6.7% in February. Analysts attribute the decline in Retail Sales dynamics to quarantine, which China was forced to introduce in some provinces in response to an outbreak of coronavirus. This Thursday, New Zealand is expected to release statistics on Consumer Price Index for Q1 2022. Forecasts suggest acceleration in price dynamics from 1.4% to 2.0%, and in annual terms, inflation could reach a new record high of 7.1%.

USDJPY​

The US dollar continues to grow steadily against the Japanese yen in Asian trading, renewing 20-year highs. Demand for the dollar is supported by optimistic macroeconomic statistics from the US, as well as expectations of further tightening of monetary policy by the US Federal Reserve, and at a more active pace. As early as May, the Fed may raise the rate by 0.5% and launch a quantitative tightening program to reduce its balance sheet. The Bank of Japan, in turn, is still taking a wait-and-see attitude, due to the fact that inflation risks are significantly lower and have not yet reached the regulator's target levels. At the same time, the country's authorities are already cautious about the sharp depreciation of the national currency. Yesterday, Japanese Finance Minister Shun'ichi Suzuki expressed concerns about the current exchange rate of the yen, noting that sharp changes in the currency markets increase negative risks for the country's economic and financial security. The official also came up with the idea of discussing this issue with the United States at the upcoming G7 meeting.

XAUUSD​

Gold prices are consolidating at the beginning of the week, staying close to the psychological level of 2000.00. The activity of investors in the market after the Easter holidays remains quite low. In turn, the demand for the precious metal is held back by the risks of further deterioration of the global economic situation as inflation rises rapidly in the global economy. Traders have become disillusioned with the idea of a possible peace agreement between Russia and Ukraine in the near future, as the military conflict continues to intensify. Western countries, meanwhile, are imposing more and more economic sanctions against the Russian economy, pushing global inflation to new record highs. In turn, the further growth of the gold rate is hampered by expectations of tightening monetary policy on the part of the world's leading central banks. In particular, in May, the US Federal Reserve is expected to raise the rate by 50 basis points at once.​
 

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Mar 3, 2022
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EURUSD​

The European currency shows a moderate decline against the US dollar during the Asian session, correcting after a rather active growth the day before, which brought the instrument to new local highs from April 14. In general, the situation on the market is changing little and investors are only reacting to the emergence of mixed macroeconomic statistics in Europe and the US. In turn, the demand for the dollar is still supported against the backdrop of escalating tensions in Ukraine, as well as due to expectations of an early tightening of the US Federal Reserve's monetary policy in early May. The European Central Bank (ECB) in this sense lags behind the US regulator. Earlier, calls for a possible increase in interest rates were shattered by the skepticism of the President of the ECB, Christine Lagarde, who announced additional risks for the region's economy. However, the "hawks" do not leave attempts to put pressure on the European regulator against the backdrop of extremely alarming inflation data. The day before, the markets drew attention to the German Producer Price Index, which in March accelerated from 1.4% to 4.9%, while market forecasts assumed growth of only up to 2.6%. In annual terms, consumer inflation jumped from 25.9% to 30.9%, which also exceeded investors' estimates of an increase to 29.1%. Today, the focus of investors will be on statistics on consumer inflation in the euro area. Forecasts suggest acceleration in price dynamics to 2.5% in monthly terms and 7.5% in annual terms.

GBPUSD​

The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.3050. The pound showed a fairly active growth the day before, supported by weak macroeconomic statistics from the US, but on Thursday the "bullish" momentum faded noticeably, as trading participants await the publication of new data, as well as speeches by the representative of the Bank of England, Catherine Mann, and the Governor of the British regulator, Andrew Bailey. US statistics released on Wednesday showed a 2.7% drop in Existing Home Sales, after falling by a more significant 8.6% a month earlier. In absolute terms, Sales fell from 5.93 million to 5.77 million, slightly worse than market forecasts of 5.8 million. Until the end of the week, investors also expect the release of statistics on Retail Sales in the UK for March and business activity in the manufacturing and services sector from Markit in April. Forecasts for all indicators are rather negative, and therefore the pressure on the pound may increase by the end of the week.

AUDUSD​

The Australian dollar is showing mixed trading against the US dollar during the Asian session, holding near 0.7430. Since the opening of the daily session, the instrument has been trading mainly with the downtrend, but this still fits into the framework of a weak technical correction after active growth the day before. The Australian and New Zealand currencies rose significantly on Wednesday, reacting to the appearance of rather weak macroeconomic statistics from the US on the dynamics of Existing Home Sales. As a result of March, Existing Home Sales fell again by 2.7% after a collapse of 8.6% a month earlier, which turned out to be much worse than analysts' forecasts. In addition, the quotes of AUD/USD were supported by statements by representatives of the US Federal Reserve, which weakened the hopes of investors for more active actions of the regulator aimed at tightening monetary policy in the country. The President of the Chicago Fed, Charles Evans, said that he adheres to a plan to raise the rate twice, by 0.50% each time. In turn, Fed spokesman Rafael Bostic, who is the President of the Fed of Atlanta, noted that raising the rate by more than 0.50% would be premature and could have negative consequences for the growth of the US economy.

USDJPY​

The US dollar is recovering its position against the Japanese yen in Asian trading, correcting after a downtrend the day before, when the US currency showed a decrease in almost the entire spectrum of the market against the background of the rhetoric of the US Federal Reserve, which significantly corrected investors' expectations regarding a possible rate hike at the May meeting by more than 0.50%. In addition, traders drew attention to not the strongest statistics from the US on the dynamics of Existing Home Sales. In turn, pressure on the yen was exerted by data from Japan. In March, Exports from the country slowed down from 19.1% to 14.7%, which turned out to be worse than analysts' forecasts at the level of 17.5%, while Imports for the same period decreased from 34.1% to 31.2%, while investors expected 28.9%. All this led to a trade deficit in March at -412.4 billion yen, which was significantly worse than the -100.8 billion yen forecast by analysts. Additional pressure on the position of the instrument was exerted by the Tertiary Industry Index of Japan, which fell by 1.3% in February after a decrease of 0.7% a month earlier.

XAUUSD​

Gold prices are consolidating near 1950.00, showing multidirectional dynamics yesterday and during today's Asian session. The quotes were slightly supported yesterday by the statements of the US Federal Reserve, which reduced the likelihood of a more rapid tightening of monetary policy during the May meeting of the regulator. An additional growth factor was not the most confident macroeconomic statistics from the US, which allowed the USD Index to retreat from its record highs. The pressure on gold, in turn, is gradually increasing as there is talk of a possible overcoming of the peak of inflation in the foreseeable future. Today, traders are waiting for the publication of statistics on the dynamics of Jobless Claims in the US. In addition, the Fed's Chairman Jerome Powell is expected to give a speech during the day.​
 

Solid ECN

Trader
Mar 3, 2022
501
1
24
37
morning-market-review.png

EURUSD​

The European currency shows flat dynamics of trading against the US dollar during today's Asian session, consolidating near the level of 1.0840. The day before, the single currency showed active growth, having updated local highs from April 7, but closer to the end of the daytime session, the "bulls" lost some of their gains. The emergence of a strong "bullish" impetus was facilitated by the statements of the Vice President of the European Central Bank (ECB) Luis de Guindos, who made a "hawkish" statement about the possibility of raising the key interest rate in July. At the same time, the President of the European regulator, Christine Lagarde, last week spoke with the opposite point of view, reducing the likelihood of a rate hike in the coming months. One way or another, the ECB will have to consider a monetary tightening scenario as the region's economy faces rapid inflation, but it is important not to harm the economic recovery in the post-coronavirus period. Slight support for the single currency today was provided by statistics on consumer inflation in the eurozone. The Core Consumer Price Index from the ECB in March was revised from 3.0% to 2.9%. The monthly core inflation rate remained unchanged at 1.2%. The overall level of consumer price growth in March amounted to 7.4%, which is 0.1% lower than previous estimates.

GBPUSD​

The British pound traded with mixed dynamics against the US currency during the morning session, preparing to end the week with minimal changes. GBP/USD is testing 1.3020 for a breakdown, waiting for new drivers to appear on the market. Today, investors are focused on the statistics on the dynamics of Retail Sales in the UK. The data is likely to be negative, given the soaring consumer prices and the rather bleak prospects for further economic recovery. Also statistics from Markit on business activity in the manufacturing and services sector for April will be released during the day. Forecasts suggest a drop in Services PMI from 62.6 to 60 points, while the Manufacturing PMI may show a decline from 55.2 to 54.0 points. With the opening of the American session, the speech of the Governor of the Bank of England Andrew Bailey is expected. In the meantime, the British statistics on the GfK Consumer Confidence are at the traders' disposal. In April, the indicator fell from -31 to -38 points, which turned out to be significantly worse than the expected decline to -33 points.

NZDUSD​

The New Zealand dollar shows an active decrease against the US dollar during the Asian session, developing a strong "bearish" momentum that formed the day before. NZD/USD is testing 0.6700 for a breakdown and updating local lows from February 28. The pressure on the instrument is again exerted by the growing US dollar, which is supported by the expectations of an early tightening of the monetary policy of the US Fed. The regulator expects to raise the interest rate immediately by 50 basis points already during its May meeting. In addition, the Fed is likely to launch a quantitative tightening program that will help reduce its balance sheet. Additional pressure on the NZ dollar is exerted by the macroeconomic statistics from New Zealand released yesterday. The Consumer Price Index in Q1 2022 accelerated from 1.4% to 1.8%, which turned out to be only 0.2% worse than market expectations. In annual terms, inflation reached a new record high of 6.9%, although analysts had projected an increase to 7.1%.

USDJPY​

The US dollar shows a slight decline against the Japanese yen in Asian trading, again testing the level of 128.00 for a breakdown. In recent days, USD/JPY has been trading with multidirectional dynamics, but the dollar is still holding near record highs, which were updated on April 20. Moderate support for the Japanese currency today is provided by relatively optimistic macroeconomic statistics from Japan. National Consumer Price Index in March accelerated from 0.9% to 1.2%, which was only 0.1% worse than analysts' forecasts. Excluding fresh food prices, inflation in the country accelerated from 0.6% to 0.8%. Jibun Bank Services PMI was also positive. In April, the indicator unexpectedly rose from 49.4 to 50.5 points, while market forecasts suggested its decline to 49 points. In turn, Jibun Bank Manufacturing PMI still showed a decrease from 54.1 to 53.4 points, contrary to forecasts of growth to 55.7 points.

XAUUSD​

Gold prices are consolidating near 1950.00 during the Asian session, preparing to end the week with a moderate decline. The instrument continues to be supported by the existing geopolitical risks in connection with the conduct of a special military operation by Russia on the territory of Ukraine. In addition, the demand for the precious metal as a hedging instrument is growing against the backdrop of a sharp increase in inflationary pressures. On the other hand, the world's central banks have begun raising interest rates quite aggressively, which makes holding gold less attractive, since it does not generate interest income. In May, the market expects the US Federal Reserve to adjust the rate by 50 basis points. Today investors will focus on a block of macroeconomic statistics from the US on business activity in the manufacturing and services sector from Markit for April. Analysts' forecasts are neutral, and therefore significant fluctuations in the US currency against their background are not expected.​
 

Solid ECN

Trader
Mar 3, 2022
501
1
24
37

market-review-2.png

EURUSD​

The European currency shows a moderate decline against the US dollar during the Asian session, building on the "bearish" momentum formed at the end of last week, when the euro retreated from its local highs from April 7. The pressure on the instrument is exerted by the previous factors of a gradually strengthening dollar against the backdrop of deterioration in global economic prospects. The military conflict in Ukraine is intensifying, despite the unprecedented sanctions imposed on the Russian economy by Western countries. Meanwhile, the EU is preparing another, sixth in a row, package of sanctions, which will likely be announced on April 25-29 and will significantly reduce the possibility of energy supplies from Russia. The issue of oil and gas imports for European countries is still extremely painful. Nevertheless, quite clear trends have been identified, and, not without pressure from the White House administration, the EU is gradually reducing its energy dependence on Russian resources, which, in turn, leads to an upward correction in energy prices, simultaneously pushing up the already high inflation in region. The macroeconomic statistics from Europe published last Friday did not have a noticeable impact on the dynamics of the instrument, despite the fact that the data, in general, was not disappointing. The eurozone Composite Manufacturing PMI rose from 54.9 to 55.8 in April, beating its forecast of a decline to 53.9 points. The Services PMI for the same period strengthened from 55.6 to 57.7 points, contrary to forecasts of a decline to 55 points.

GBPUSD​

The British pound is trading with the downtrend at the beginning of the week, testing the psychological level of 1.2800 for a breakdown. The pound is developing a strong downward momentum, formed at the end of last week in response to the publication of disappointing macroeconomic statistics from the UK. UK Retail Sales fell 1.4% in March after falling 0.5% a month earlier. Analysts expected a decline of only 0.3%. In annual terms, sales volumes fell from 7.2% to 0.9%, while market forecasts assumed an increase of 2.8%. Additional pressure on the instrument was exerted by data on the GfK Consumer Confidence in the UK in April. The index fell from -31 to -38 points, which turned out to be noticeably worse than experts' estimates of a decline to -33 points. Finally, Markit Services PMI in April fell from 62.6 to 58.3 points, while analysts predicted a decline to 60 points. Thus, extremely weak macroeconomic statistics from the UK prompted investors to lower their expectations of further tightening of macroeconomic policy by the Bank of England in the near future.

AUDUSD​

The Australian dollar shows a steady decline during the morning session, updating local lows from February 28. The instrument has been developing a downtrend since last Thursday, when the Fed Chairman Jerome Powell once again announced the need to raise interest rates by 0.50% at once at the May meeting. In addition, the regulator may launch a quantitative tightening program, which its representatives have also often spoken about recently. Investors took the official's speech as an additional signal to reduce risky positions, which provoked a noticeable strengthening of the US currency. The macroeconomic statistics released on Friday from Australia failed to slow down the development of the "bearish" dynamics for the instrument, despite the fact that the data turned out to be quite positive in general. The Commonwealth Bank Manufacturing PMI in April rose from 57.7 to 57.9 points, while analysts had expected growth to only 57.8 points. The Services PMI for the same period strengthened from 55.6 to 56.6 points, but the market expected a much more noticeable increase to 58.5 points. At the same time, the Composite PMI rose from 55.1 to 56.2 in April.

USDJPY​

The US dollar shows flat dynamics against the Japanese yen in Asian trading, consolidating near 128.50 and new record highs, updated in the middle of last week. Low demand for risk still supports the positions of the US currency; however, the level of 130.00 still seems to be a barrier, for which there are few current drivers on the market. The macroeconomic statistics from Japan released at the end of last week turned out to be ambiguous. The National Consumer Price Index in Japan rose by 1.2% in March after rising by 0.9% a month earlier. Analysts expected growth of 1.3%. At the same time, Jibun Bank Manufacturing PMI in April fell from 54.1 to 53.4 points, which was worse than the expected 55.7 points. The yen is slightly supported by the Japanese macroeconomic data released today. Coincident Index in February increased from 96.3 to 96.8 points, while analysts expected a decrease to 95.5 points.

XAUUSD​

Gold prices are falling during the morning session, developing a confident downtrend formed in the short term. The instrument is testing the level of 1915.00 for a breakdown, updating local lows from April 6. The pressure on the asset is still exerted by the prospects for further tightening of monetary policy by the US Federal Reserve. Last week, the Chair of the Fed, Jerome Powell, once again confirmed the intention of the regulator to raise the interest rate immediately by 0.50% already at the May meeting. In addition, in May, the US Federal Reserve may launch a quantitative tightening program, the need for which has also been discussed for more than one month. In turn, the demand for gold is supported by the general negative mood of investors, disappointed by the decline in global economic prospects. The problem of inflation, which updates record highs in many regions, reacting to the rapid rise in energy prices, is still acute.​
 

SOLIDECN

Trader
Nov 16, 2021
693
19
24
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morning-market-review-1.png

EURUSD​

Euro quotes are consolidating after a "bearish" start to the week, which led EURUSD to update record lows since March 2020. The reason for the emergence of upward dynamics on Tuesday are technical factors, while the news background continues to strengthen the dollar as a "safe" asset. Currently, traders are concerned about the prospects for the recovery of the global economy against the backdrop of further escalation of the conflict in Ukraine, which is the cause of the crisis in the commodity areas. In addition, there are reports from Beijing of a rapid increase in the incidence of coronavirus infection among the local population. Recently a large-scale lockdown ended in Shanghai, and now a similar prospect seems to threaten the capital of China. Over the past day, about 22K cases of COVID-19 were detected in the country, and more than 21K infected occurred in Beijing. Further tightening of coronavirus restrictions could lead to a decline in energy consumption in the Chinese economy. Meanwhile, macroeconomic statistics from Europe published on Monday turned out to be optimistic: the IFO Business Climate in Germany rose from 90.8 to 91.8 points in April, while analysts expected it to decline moderately to 89.1 points. The Current Assessment indicator for the same period rose from 97.1 to 97.2 points, which also turned out to be noticeably better than market expectations at the level of 95.8 points. The index of Economic Expectations in April strengthened from 84.9 to 86.7 points, ahead of forecasts at the level of 83.5 points.

GBPUSD​

The pound is showing an uptrend against the US currency, correcting after a sharp decline over the past two sessions, which caused the instrument to renew all-time highs for the instrument since September 2020. GBPUSD received a signal for a technical correction, but analysts note that the outlook for the British currency is very controversial. Against the background of the rapidly developing energy crisis in Europe, many experts believe that in the future one should not exclude the possibility of a recession in the British economy, which is most actively involved in the anti-Russian sanctions policy after the start of a special military operation on the territory of Ukraine. In addition, the consequences of Brexit, which at one time managed to be avoided relatively easily, can now reappear with a larger negative effect. Also traders pay attention to a rather difficult position of the Bank of England. Earlier, the Governor of the British regulator, Andrew Bailey, admitted that the issue of adjusting interest rates is now becoming more acute. On the one hand, officials are forced to fight record inflation; on the other hand, it is necessary to prevent the national economy from falling into recession.

AUDUSD​

The Australian dollar is correcting during morning trading, recovering from a three-day "bearish" rally, which led to the renewal of local lows from February 24. The growth of the instrument on Tuesday is supported by technical factors, while the informational background changes slightly. In turn, the pressure on the position of the Australian currency is still exerted by the disappointing prospects for the recovery of the global economy. The escalation of the crisis in Ukraine at the moment does not mean that the conflict, or at least its acute phase, will end in the near future. Meanwhile, sanctions pressure on Russia continues to intensify, approaching the most sensitive aspects of the bans, the energy imports. Any restrictions beyond those already in place will inevitably lead to additional price increases, which will aggravate the already difficult situation with inflation and the energy crisis in Europe and in the world as a whole. Today, the focus of investors will be on a block of statistics from the US on the dynamics of Durable Goods Orders, as well as data on New Home Sales in March. Interesting data from Australia will appear only on Wednesday, with the release of statistics on consumer inflation for Q1 2022, and analysts suggest acceleration in prices from 3.5% to 4.6% year on year.

USDJPY​

The US dollar is developing flat trading dynamics in tandem with the yen during the Asian session, consolidating near 128.00. The development of the uptrend stopped last week, when USDJPY made new record highs, and the market plunged into a correction. Meanwhile, demand for the US currency is increasing in anticipation of a more aggressive approach to tightening monetary policy parameters by the US Federal Reserve, pushing buyers to open new deals, while the Bank of Japan is only cautious about the risks of rising inflation in the country. The latter, however, does not frighten Japanese investors at all, who are accustomed to the deflationary characteristics of the national economy. The Bank of Japan is likely to keep its rate unchanged at -0.10% at its meeting on Thursday and refrain from major adjustments in its forecasts for further actions, as rising commodity prices force it to focus on maintaining the economic recovery after the coronavirus pandemic. Macroeconomic statistics from Japan, released the day before, turned out to be restrainedly optimistic: the Coincident Index in February rose from 96.3 to 96.8 points, which turned out to be better than the negative forecasts of analysts for a decline to 95.5 points. The Leading Economic Index for the same period fell from 101.2 to 100.0 points, while the market expected 100.9 points. The Unemployment Rate in the country in March also corrected down from 2.7% to 2.6%.

XAUUSD​

Gold prices are slightly increasing during the morning session, correcting after an active decline at the beginning of this week, which led XAUUSD to updating local lows from March 29. At the moment, the quotes are in the area of 1900.00 and are waiting for new drivers to move in the market. The pressure on the instrument is still exerted by expectations of further tightening of monetary policy by the US Federal Reserve. Already during the May meeting, members of the Fed can raise the key interest rate by 50 basis points, as well as launch a quantitative tightening program. In turn, the demand for "safe" gold is supported by the escalation of the conflict on the territory of Ukraine and the rapid growth of inflationary risks against the backdrop of further growth in energy prices.​
 

Solid ECN

Trader
Mar 3, 2022
501
1
24
37
morning-market-review.png


EURUSD
The European currency is showing multidirectional dynamics of trading in a pair with the US dollar during the Asian session, consolidating around 1.0500. Market activity remains subdued as traders await today's release of the US Federal Reserve's interest rate decision. Recall that the consolidated forecast assumes an increase in the indicator by 50 basis points at once, in addition, it is expected to announce the launch of a program to reduce the department's balance sheet by 9 trillion dollars. In turn, the European Central Bank (ECB) is still taking a wait-and-see position, despite the rapid growth of inflation in the region, although "hawkish" rhetoric is observed in the speeches of officials of this regulator as well. Earlier, the ECB executive board member, Isabel Schnabel, spoke in favor of the possibility of raising the rate in July, given that fuel and food prices will continue to increase. The macroeconomic statistics from Europe, published the day before, did not affect the dynamics of the instrument too much. Meanwhile, the Unemployment Rate in the euro area in March fell from 6.9% to 6.8%, which was only 0.1% worse than market expectations. The Producer Price Index confirmed the further acceleration of manufacturing inflation: in March, the indicator rose from 1.1% to 5.3%, and accelerated from 31.5% to 36.8% in annual terms.

GBPUSD
The pound shows flat trading dynamics against the US currency during the morning session on May 4, consolidating near the level of 1.2500. Traders are in no hurry to open new trading positions, preferring to wait for the publication of the US Fed Meeting Minutes. Analysts have little doubt that the key interest rate will be raised by 50 basis points at once; however, some of them allow for a correction by 75 basis points, citing record inflation over 40 years, as well as fairly stable trends in the labor market as arguments. Macroeconomic statistics from the UK released yesterday provided additional support to GBP. The Manufacturing PMI from Markit in April rose from 55.3 to 55.8 points, which turned out to be better than the neutral forecasts of analysts, and the BRC Shop Price Index released today showed an acceleration year-on-year from 2.1% to 2.7% in March, which coincided with analysts' estimates.

NZDUSD
The New Zealand dollar is slightly strengthening its position, recovering from the "bearish" start of the trading week, which led to the renewal of record lows since June 2020. Investors are cautious and do not rush to open new trading positions in anticipation of the publication during the day of the final minutes of the two-day meeting of the US Federal Reserve, at which the key interest rate is expected to be increased immediately by 50 basis points. As for the New Zealand macroeconomic statistics, it failed to provide significant support for the instrument quotes. The Unemployment Rate remained at the level of 3.2%, while the Participation Rate decreased from 71.1% to 70.9%, and the Employment Change increased by only 0.1% in the quarterly terms.

USDJPY
The trading instrument shows mixed dynamics, remaining close to the record highs updated at the end of last week. Now the USD/JPY pair is testing 130.00 for a breakout; however, the "bulls" prefer to wait for the US Federal Reserve meeting, at which the rate can be raised immediately by 50 basis points. The markets have already included such an outcome in the current quotes of the instrument, and therefore a noticeable increase in the US currency may not follow. However, officials' comments will continue to be extremely important for assessing the situation in the near future. In addition, the possibility of a rate increase by 75 basis points is not ruled out, although this scenario remains unlikely. Japanese markets are closed on Wednesday due to the national holidays, and therefore new drivers for the movement of the trading instrument will appear only at the end of the week, when the April statistics on consumer price dynamics in the Tokyo region will be published.

XAUUSD
Gold prices are consolidating near the level of 1865.00 after an attempt at corrective growth the day before, which did not allow XAU/USD to consolidate on new local lows from February 16. The pressure on quotes is exerted by the growth in the yield of US Treasury bonds: the indicator for 10-year bonds last Monday exceeded 3% for the first time since December 2018 and remains in this area at the present time. The investment attractiveness of the precious metal is decreasing before the start of the US Federal Reserve's meeting on monetary policy, which will be held today at 20:00 (GMT+2). US officials are expected to raise interest rates by 50 basis points at once, and also announce the launch of a quantitative tightening program, which should help to reduce the almost 9 trillion dollars balance sheet. Higher short-term interest rates and US bond yields tend to increase the opportunity cost of holding zero-yield bullion.​
 

Solid ECN

Trader
Mar 3, 2022
501
1
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Morning Market Review​


EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0600 and local highs from April 27. The day before, EUR/USD showed the strongest growth in the last few weeks, which was the market's reaction to the results of the two-day meeting of the US Federal Reserve. As expected, the US regulator raised the interest rate by 50 basis points to the range of 0.75%–1.00% and announced the start of a quantitative tightening program, but it will not immediately reach the final volumes of purchases. From June 1, the Fed will start selling securities for a total of 47.5 billion dollars, after which it will increase the total monthly sales to 95 billion dollars within three months. The "hawks", who expected that the regulator would immediately bring purchases to the final amount, were somewhat disappointed by this decision. Additional pressure on the dollar was exerted by the rhetoric of the Chair of the US Federal Reserve, Jerome Powell, who said that the issue of raising the interest rate by 50 basis points would also be discussed at the next meetings. Thus, the risks that the indicator will be corrected at a more aggressive pace have almost completely disappeared. In turn, pressure on the euro was exerted by frankly weak statistics on Retail Sales in the eurozone. In March, the indicator fell by 0.4% after rising by the same amount a month earlier, and in annual terms, the pace slowed sharply from 5.2% to 0.8%, while analysts had expected an increase of 1.4%.

GBPUSD
The pound is declining, correcting after the active growth the day before, which was caused by the publication of the final minutes of the meeting of the US Federal Reserve. The regulator, as expected, raised the rate by 50 basis points, but decided to slow down the pace of the quantitative tightening program. Also, the Chair of the Fed Jerome Powell signaled that the authorities have no plans to increase the rate by 75 basis points at the next meetings. Today, investors are actively closing their long positions on the pound, preferring to wait for the results of the Bank of England meeting. It is expected that the British regulator, following the US Federal Reserve, will raise the interest rate, but only by 0.25%, bringing it to the level of 1.00%. Traders will follow the updated forecasts and plans of the regulator in the field of monetary policy regulation.

AUDUSD
The Australian dollar shows negative dynamics against the US currency during the Asian session, correcting after a sharp rise the day before, which contributed to the movement of AUD/USD quotes to new local highs from April 22. Investors evaluate the results of a two-day meeting of the US Federal Reserve, at which officials raised interest rates by 50 basis points to 1.00%, and also announced a phased introduction of a quantitative tightening program. From June this year, the regulator will begin to reduce its balance sheet by 47.5 billion dollars a month, and from September the pace will increase to 95 billion dollars. In turn, the positive macroeconomic statistics provided significant support to the Australian dollar. The volume of Retail Sales in Australia increased by 1.6% in March after an increase of 1.8% a month earlier, although analysts had expected a sharp slowdown in the value to 0.6%. Today, the AUD/USD quotes are strengthening after the release of statistics on the Trade Balance, the surplus of which in March increased from 7.457 to 9.314 million Australian dollars, ahead of forecasts at the level of 8.500 million Australian dollars, while the current dynamics is fixed against the backdrop of a 5% decrease in imports, and export volumes remained virtually unchanged.

USDJPY
The day before, the US dollar showed a moderate decline against the yen, reacting to the publication of the minutes of the meeting of the US Federal Reserve. Despite the expected increase in the interest rate, as well as the launch of the quantitative tightening program, market participants were still disappointed by the rather cautious actions of the US financial regulator, as they were counting on a more aggressive approach in adjusting monetary policy parameters. An additional negative factor for the dollar was weak macroeconomic statistics from the US. The ADP report on employment in the private sector in April showed a drop in Nonfarm Payrolls from the previous 479 thousand to 247 thousand, while analysts expected a value of 395 thousand. The ISM Services PMI in April also showed an active decline from 58.3 to 57.1 points, while the market expected the index to rise to 58.5 points.

XAUUSD
Gold prices are actively growing, again trying to consolidate above 1.9 thousand dollars per troy ounce. The "bulls" are developing an upward momentum formed on Tuesday, when the instrument retreated from its local lows of February 16. The investor activity was facilitated by the results of the meeting of the US Fed. As expected, the regulator raised interest rates by 50 basis points and also announced the start of a quantitative tightening program starting June 1. Initially, it is planned to buy securities for a total of 47.5 billion dollars, but then within three months the volume will be increased to 95 billion dollars. Thus, the US financial authorities decided not to rush to tighten monetary policy, which crossed out the premature conclusions of traders on the upcoming rate hikes by 75 basis points at once. An additional negative factor for the dollar was weak macroeconomic statistics from the US. The ADP report on employment in the private sector in April showed a drop in Nonfarm Payrolls from the previous 479 thousand to 247 thousand, while analysts expected a value of 395 thousand. The ISM Services PMI in April also showed an active decline from 58.3 to 57.1 points, while the market expected the index to rise to 58.5 points.​
 

Solid ECN

Trader
Mar 3, 2022
501
1
24
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market-review-2.png


EURUSD
The European currency loses value against the US dollar during the Asian session on May 9, testing the level of 1.0500 for a breakdown. The EUR/USD pair develops flat dynamics in the short term and remains around record lows, renewed on April 28. Market sentiment does not have excessive demand for risky assets, which does not allow the trading instrument to change the trend. Also, the dollar is supported by the rather active course of the US Federal Reserve for further tightening of monetary policy, while the European Central Bank (ECB) is not ready for decisive action. The representatives of the European regulator are only discussing the possible start of the interest rate hike cycle, despite the alarming rise in inflation in the region due to the military crisis around Ukraine. The timing of the possible start of tightening monetary policy is called the end of summer, but there have been no official statements on this subject so far. The March macroeconomic statistics from Germany, published last Friday, put additional pressure on the currency positions. Thus, the volume of industrial production in the EU's largest economy fell by 3.9% after rising by 0.1% last month, although analysts expected a correction of only 1.0%. Experts believe that the risks of recession in the German and European economies continue to rise in the current situation.

GBPUSD
The pound starts trading with a rather active decline against the US currency, renewing record lows of June 2020 and testing 1.2270 for a breakdown. After a sharp rapid fall last week, the GBP/USD pair remains under pressure from the development of a military conflict on the territory of Ukraine. At the same time, the EU countries and their partners continue to impose new sanctions against the Russian economy, thereby exacerbating the situation with inflation in the region. An embargo on the supply of Russian oil and gas, which is currently impossible due to the lack of agreement between all bloc members, may become a particularly harmful issue. The pound practically did not react to the tightening of monetary policy by the Bank of England last week and only strengthened the downward dynamics against the backdrop of a revision of economic prospects for the near future. The British regulator raised the interest rate by 25 basis points to 1.00% per annum. The decision was taken unanimously by all nine board members.

AUDUSD
The Australian dollar is actively decreasing during the Asian session, renewing local lows since the end of January this year and testing the level of 0.7000 for a breakdown. The trading instrument remains under pressure from the rapidly strengthening US dollar and low investors' demand for risky assets. Traders react to the report on the US labor market, published last Friday, which largely fell short of analysts' expectations. Thus, the number of new jobs created by the national economy in April increased by 428K, exceeding experts' forecasts of 391K, while the average wage rate slowed down from 0.5% to 0.3% MoM, with preliminary estimates of 0 .4%, and from 5.6% to 5.5% YoY. The unemployment rate in the US remained at the same level of 3.6%, while the market expected a decline to 3.5%. In general, the labor market shows resilience, and the US economy is close to full employment. At the beginning of the new trading week, the pressure on the position of the Australian currency is exerted by poor macroeconomic statistics from China. Thus, for April, exports slowed sharply from 14.7% to 3.9%, while imports showed a negative trend at –2% YoY after a decrease of 0.1% last month. At the same time, the Chinese economy manages to maintain a trade surplus of 51.12B dollars, slightly higher than the previous value of 47.38B.

USDJPY
The US dollar is strengthening its position against the Japanese yen during the Asian trading session, retesting the level of 131.00 for a breakout and approaching the local highs of April 28 within the general market trend, which contributes to the strengthening of the "safe" dollar amid worsening global economic prospects. Investors are less interested in the yen as a shelter asset since the difference in interest rates between the US and Japan supports the US currency. Meanwhile, macroeconomic statistics published at the end of last week provide more support to the yen. Thus, April's inflation in the Tokyo region showed a sharp acceleration from 1.3% to 2.5% YoY, which significantly outstripped analysts' forecasts of 1.9%. Excluding food and energy prices, the figure accelerated to 0.8%, while the market expected a decline of 0.5%. At the beginning of a new trading week, the yen quotes are strengthening after the publication of business activity in the manufacturing sector. According to data from Jibun Bank, in April, the index rose from 50.5 to 50.7 points.

XAUUSD
Gold prices are correcting, leveling last week's corrective growth attempt, which allowed the XAU/USD pair to retreat from the local lows of February 16. The metal noticeably loses to the dollar as a shelter asset because, unlike the American currency, it does not bring interest income to its owners. As the US Federal Reserve tightens monetary policy and raises interest rates, this difference becomes more and more noticeable, provoking market participants to form new short positions on the instrument. Meanwhile, the demand for gold remains quite high due to the general uncertainty in the global economy. Investors are also concerned about the situation with COVID-19 in China, where authorities are still trying to contain the outbreak, which has led to significant restrictions in Shanghai and Beijing.​
 

SOLIDECN

Trader
Nov 16, 2021
693
19
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EURUSD
The European currency showed weak growth against the US dollar during the Asian session, correcting after a sharp decline the day before, as a result of which the single currency updated record lows for the instrument since January 2017. EUR/USD is trying to consolidate above 1.0400, but so far there are clearly not enough drivers for the growth of the single currency. During the day, investors will pay attention to the publication of statistics on the dynamics of Industrial Production in the eurozone for March, but the current forecasts of analysts do not suggest that the euro will be able to get any support for them. However, the instrument may show growth solely on technical factors, given that the macroeconomic calendar from the US is also neutral. The dollar is still in high demand in the market amid concerns about the prospects for growth in the global economy. US consumer inflation data released on Wednesday indicated that prices may be peaking but still high enough to prevent the US Fed from easing monetary tightening pressure.

GBPUSD
The British pound shows an uptrend in trading, correcting after another decline the day before, as a result of which GBP/USD updated its lows since May 2020. The growth of the pound on Friday is due to the strengthening of technical factors, while the fundamental picture changes slightly and still contributes to the further weakening of the British currency. The macroeconomic data released the day before in the UK turned out to be disappointing, which increased fears of a possible recession in the national economy. In March, the country's GDP fell by 0.1%, while analysts expected it to increase by 0.1%. In quarterly terms, growth slowed down from 1.3% to 0.8%, which was also worse than forecasts at 1.0%, while in annual terms, the economy is still showing positive dynamics and, according to the latest data, strengthened from 6.6% to 8.7%, only a little short of the expected value of 9%. The pace of Industrial Production in the country in March showed a decrease of 0.2% after falling by 0.3% a month earlier, although preliminary market estimates suggested a positive trend at the level of 0.1%.

AUDUSD
The Australian dollar is showing active corrective growth against the US dollar during the morning session, recovering from a strong decline the day before, as a result of which AUD/USD hit its record lows since June 2020. Investors fix short positions, which leads to a technical correction, while the fundamental picture of the instrument changes slightly. The US dollar is still in high demand in the market as a safe-haven currency, as investors fear a further slowdown in the global economy, which may be exacerbated by the "hawkish" policy of the world's leading central banks. The latest data from the US indicated that consumer inflation may be at its peak, but so far its slowdown is slower than analysts' expectations. There is no need to count on a quick change in the vector of the US Federal Reserve's monetary policy, and as the interest rate rises in the future, the growth prospects of the American economy are likely to decline. In turn, pressure on the positions of the Australian currency today is exerted by weak macroeconomic statistics from Australia. HIA New Home Sales fell 1.2% in April after rising 3.9% in March.

USDJPY
The US dollar shows corrective growth against the Japanese yen in Asian trading, correcting after a sudden decline the day before, which led to the renewal of local lows from April 27. The Japanese yen is one of the few currencies on the market against which the dollar showed a negative trend on Thursday. Among other things, analysts attribute this behavior to the "hawkish" policy of the US Federal Reserve, which in the foreseeable future may lead to a slowdown in economic growth in the country. In its turn, the Bank of Japan still maintains a wait-and-see attitude and has not yet launched a cycle of raising the interest rate. Existing inflationary risks have quite a positive effect on the Japanese economy, which is fairly prone to deflationary phenomena, which makes the yen quite an attractive safe-haven currency, despite the growing gap in Japanese and US interest rates. The yen was additionally supported yesterday by optimistic macroeconomic statistics from Japan. In April, Eco Watchers Current Situation index rose from 47.8 to 50.4 points, and Eco Watchers Outlook strengthened from 50.1 to 50.3 points.

XAUUSD
Gold prices are recovering during the Asian session, retreating from the local lows of February 7, updated at the opening of Friday's trading. The growth of quotes is facilitated by technical correction factors, while the fundamental picture still supports the further strengthening of the US currency. US inflation statistics published in the past few days indicated that prices are still demonstrating an alarming increase, despite the passage of its peak. This may require the US Federal Reserve to strengthen measures aimed at curbing price growth, including through an increase in interest rates. The risks of a 75 basis point increase during the June meeting of the regulator are still quite low, but one should not forget that the US Federal Reserve has other leverage. In particular, the department may accelerate the launch of the quantitative tightening program.​