04.04.2014 - Traders are waiting for data on unemploymen
Major U.S. stock indexes have barely changed by the results of the trading session. The reason for stopping the growth was the publication of important data on the economy of the country. Thus, jobless claims increased by 16 thousand to 326 thousand, the trade deficit in February rose by 3 billion to $ 42.3 billion and the non-manufacturing PMI grew to 53.1, compared with an expected growth of 53 5. In addition, investors decided to fix positions before the release of labor market data for March (12:30 GMT). In case of positive data, we expect continued growth of the stock market and the strengthening of the dollar.
The price of euro fell after the speech of the head or the ECB Mario Draghi who stated that the regulator does not exclude the possibility of quantitative easing to fight low inflation rate. At the same time, Mr. Draghi noted high unemployment and economic recovery in the 18 countries of the Eurozone. ECB interest rate remained at a record low 0.25%. The quotes of euro were supported by statistics on the growth of retail sales in February at 0.4% compared with an expected fall by 0.3%. Today, the course of trading will depend on data from the U.S. We maintain a long-term negative outlook for the euro.
On Monday, we should pay attention to the data on the investor confidence index in the Eurozone, industrial production in Germany and the index of leading economic indicators in Japan.
The price of the British pound fell below 1.6600 due to decrease in services PMI of Great Britain to 57.6 compared with an expected 58.2. It is worth noting that the service sector continues to grow quite rapidly, and we keep a long-term positive outlook for the British pound. In case of positive data on the U.S. labor market, we expect further downward price movement.
As was expected, USD/JPY stopped growth near the 104.00 mark. At the moment the price is consolidating below this level. Traders are waiting for the release of data on the U.S. labor market. In case of dollar strengthening yen will continue to cheapen also because of capital outflows from the country in connection with the beginning of the new fiscal year. After a long consolidation, the upward movement can be quite strong. We keep medium and long term positive outlook for the yen.
The price of the Australian dollar continues to move in the side channel amid a lack of important statistics in the country and controversial data from China. Purchasing Managers Index for China's services sector calculated by HSBC, grew to 51.9 against 51.0 in February. Nevertheless, the official index of manufacturing activity in China in March dropped to the mark 54.5 against 55.0 in February. Risks relative to the further growth of the Australian economy, the RBA soft monetary policy and strengthening of the U.S. dollar in the long run will lead to depreciation of the Australian dollar.
After a sharp decline in the previous days the quotes of the New Zealand dollar started to correct upwards. Positive trade balance and economic growth of the country indicate the prospect of strengthening of the New Zealand dollar in the medium term. Today, the dynamics of prices will depend on the level of unemployment in the United States. We expect increased volatility in prices during the session.
The price of oil has strengthened amid growing fears that the talks between the rebels and the government of Libya may fail, and oil exports from the country will be kept on a minimum level. Data on the U.S. labor market, which will be released today will help to determine the future dynamics of demand in the near future and will lead to increased volatility at the market. We expect a decline in oil prices in the medium and long term due to the expected increase in demand in the market.
The price of gold is trading in a side channel above $ 1280 per troy ounce. Despite the drop in gold prices, consumer activity in Asia remains low, while the reason for the low demand for gold as a defensive asset is the increase in the stock markets. We maintain a long-term positive outlook. In case of the traditional May correction gold price will rise.