05.03.2014 - Traders are waiting for ECB meeting
Major U.S. stock indexes ended the trading session with steady growth, and once again renewed historical highs. Positive for the market was the announcement of the completion of military exercises of Russian troops near the eastern borders of Ukraine and their return to places of permanent dislocation. On the other hand, forces in Russian ammunition remain in Crimea, which maintains the risks of conflict escalation. Yesterday was not published important statistics from the United States, but the markets reacted positively to the reduction in the number of unemployed in Spain by 1.9 thousand, against the forecast of growth to 74.2 thousand. At the same time manufacturing inflation in the euro area decreased by 0.3%.
The price of euro continues to consolidate near the level of 1.3740. Traders expect publication of the results of the ECB meeting, that is to be held on Thursday, as well as data on the U.S. labor market, which will be released on Friday. Today the course of trading will be affected by data on the service PMI (09:00 GMT), retail sales and GDP growth in the Eurozone (10:00 GMT). In the U.S., will be released non-farm employment change (13:15 GMT), the non-manufacturing PMI in the U.S. (15:00 GMT). In addition, the Beige Book will be published at 19:00 GMT.
Dynamics of prices in the short and long term will be determined by the outcome of the ECB meeting. In the long term, we maintain a negative outlook on EUR/USD.
The quotes of the British pound at the beginning of yesterday's trading session were supported by a decrease in tension in Ukraine. We recall that the UK is the guarantor of the territorial integrity of Ukraine. Despite this, the pressure on the price of the pair had data on the index of business activity in the construction sector of the country, which fell to 62.6 in February, against analysts' forecast of about 63.6 and the previous figure of 64.6. Tomorrow will be published a statement of the Bank of England, and traders will not rush to build positions during today's session. Today, the course of trading may be influenced by data on the index of service PMI of Great Britain. We keep medium and long term positive outlook for the pound.
The price of USD/JPY continues to rise amid the reduction of tension in Ukraine. Moreover, an interest to the dollar is fueled by future release of data on unemployment in the U.S. Improvement of the U.S. labor market will lead to higher price of USD/JPY. However, after strong growth in previous days, has increased the possibility of correction. Strong growth in the U.S. economy and soft monetary policy of the Bank of Japan gives reasons to predict the growth of quotations of USD/JPY in the long term.
The Australian dollar continues to consolidate near the level of 0.8950. Data on GDP growth in the 4th quarter 2013 by 0.8% exceeded the forecast by 0.1% and the previous figure by 0.2%. On this background the price tried to reach the resistance level of 0.90, but was not able to overcome it. Tomorrow will be published statistics on the trade balance and retail sales in Australia. We expect a further reduction in the price of the Australian dollar in the medium and long term.
The New Zealand dollar continues a gradual growth and now is consolidating near the strong level 0.8390. In the near future price changes will depend on the data on the U.S. labor market, which will be published on Thursday and Friday. In the long term, we maintain a moderately negative outlook on the New Zealand dollar in relation to the expected strengthening of the U.S. dollar.
The price for Light Sweet crude oil reached a five-month high of $ 105 per barrel, but failed to gain a foothold above it. Despite the fact that the tension on the situation in Ukraine has decreased in Crimea, Ukrainian military bases are still blocked by soldiers in Russian army's ammunition, but with no marks at the uniform. Possibility of sanctions by Western countries is still real. Despite this, we consider current levels as acceptable to open short positions and keep a medium-term and long-term negative outlook for oil prices. The course of trading today will be affected by data on crude oil and petroleum products' inventories in the U.S. (15:30 GMT).
The price of gold continues to consolidate near the level of $ 1,330 per troy ounce, after Vladimir Putin announced the completion of military exercises near the borders of Ukraine. Nevertheless, interest in gold from investment funds continues to rise amid investor uncertainty in the future growth of the stock markets and political instability in the world. We keep a medium and long term outlook for gold.