01.05.2014 - ​U.S. GDP growth slowed down significantly

Major U.S. stock indexes finished the day with a slight growth. Yesterday was published a lot of controversial macro statistics. Thus, the number of new jobs in April increased by 220 thousand which is 17 thousand better than the forecast. GDP growth in the first quarter, according to preliminary data was only 0.1%, compared with an expected growth by 1.2%. The slowdown was caused by the unusually cold weather during this winter. Chicago manufacturing PMI unexpectedly rose to 63.0, compared with the forecast of 56.6. Central news of the day was the statement of the U.S. Federal Reserve. Thus, the interest rate remained in the range of 0-0.25%, the volume of purchases of assets decreased by 10 billion to 45 billion. It has also been noted that the economy is experiencing a recovery after the slowdown in winter, labor and housing markets are rather weak. Considering these factors, we maintain a long-term negative outlook on the U.S. market.

The price of euro rose strongly against yesterday's statistics from the Eurozone and the U.S. Thus, the consumer price index in April rose to 0.7%, compared with an expected growth of 0.8%. German retail sales dropped by 0.7%, while the number of unemployed fell by 25 thousand. Growth of GDP in Spain was 0.4% in the 1st quarter against increase by 0.2% in the previous period. Today the course of trading will be affected by data on labor market, personal income of consumers in the U.S., the speech of Jeanette Yellen (12:30 GMT) and manufacturing PMI in the U.S. (14:00 GMT). Today, in many European countries is a holiday. We expect the price correction of the euro soon

The price of the British pound rose yesterday on the background of data from the Eurozone and the U.S. and the weakening U.S. dollar. Today the course of trading may be influenced by the data on mortgage lending in March and manufacturing PMI in the UK in April (8:30 GMT). We expect continued growth of pound in medium and long term with the target near 1.70.

The price of USD/JPY fell to 102.00 due to weakening of the U.S. dollar, but then has started growing again. The next reduction of quantitative easing program in the U.S. and ultra-soft monetary policy of the Bank of Japan give grounds to expect further growth of quotations of the pair. Increase in volatility is expected tonight (23:30 GMT) after the release of data on household expenditures, unemployment and monetary base in Japan. We expect continued growth in the short term and maintain long-term and medium-term positive outlook for the pair.

The price of the Australian dollar has not increased, despite the weakening of the U.S. dollar. The reasons for this were low prices for iron ore and the decrease in the manufacturing PMI in Australia to 44.8 against the previous figure 47.9. Considering weak economic data and slowing down of inflation, investors expect the easing of monetary policy by the Reserve Bank of Australia. We maintain a medium-term negative outlook for the Australian dollar.

The price of NZD/USD rose on weak data on U.S. GDP growth in the first quarter of 2014. The growth was limited due to the negative data on production in Australia and the growth of manufacturing PMI in China to 50.4, compared with an expected 50.5. Let us recall that China is a major trading partner of New Zealand. After a minor correction, we expect the price growth and maintain a medium-term positive outlook for the New Zealand dollar.

The price of the U.S. benchmark Light sweet crude oil continued to decline amid rising U.S. oil inventories to record levels. Thus, the crude oil inventories increased by 1.7 million barrels to 399.36 million and gasoline stocks grew by 1.56 million barrels. Growth of inventories was caused by the warming in North America and record levels of oil production in the United States. Prices are kept high due to the tense situation in Ukraine, the aggravation of which may happen over long holidays in the country in early May. We maintain a long-term negative outlook for oil.

The price of gold has continued a gradual decline, despite the weakening of the U.S. dollar. Reduction of the quantitative easing program has a negative impact on quotes of metal. Besides the demand for gold from investment funds and consumers in Asia remains low. We expect growth of interest for gold in case of decrease on the stock markets, as well as worsening of the situation in Ukraine and maintain medium and long term positive outlook.

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