05.05.2014 - ​The situation on the U.S. labor market is improving

The last trading session of the week ended with a slight decrease of the major U.S. stock indexes. Clashes in Ukraine neutralized strong positive indicators of the U.S. labor market. Thus, the number non-farm payrolls grew by 288 thousand, against the forecast of 216 thousand and the unemployment rate fell to 6.3% in March, which is 0.3% better than analysts' expectations and 0.4% better than the previous figure. At the same time, the growth in factory orders in March was 1.1%, against the forecast of increase by 1.5%. Further growth of the U.S. market is limited by the tense situation in Ukraine and the expectation of the traditional May correction. We maintain a long-term negative outlook on the U.S. market.

The price of euro on Friday dropped significantly on the background of positive data on the labor market in America, which may lead to a more rapid reduction of the quantitative easing program. Situation has changed radically after reports on new clashes in Ukraine, which has led to increased demand for defensive assets. Today, among macro statistics we should pay attention to the index of investor confidence in the euro area (8:30 GMT), the economic forecast of the European Commission (09:00 GMT) and non-manufacturing PMI in the U.S. (14:00 GMT). We expect price correction of euro

The price of the British pound declined on the background of positive data on the U.S. labor market. An additional factor for reducing of prices was the fall of construction PMI in the UK to 60.8, against the forecast of 62.2. Today in the UK is a holiday and we do not expect a significant activity of traders. We keep the medium and long term positive outlook for the British pound with the closest target at 1.70.

The Japanese yen has strengthened again on the background of the next round of tension in Ukraine. Clashes on the streets of Odessa and continued anti-terrorist operation in eastern Ukraine, have led to strong growth in demand for defensive assets. Today and tomorrow in Japan are the days off and we expect the price correction of USD/JPY. We maintain our medium-and long-term positive outlook for the pair, but the growth of geopolitical risks may lead to a revision of forecasts.

The price of the Australian dollar declined considerably amid the data on the U.S. labor market, but won back losses by the end of the last day of the week. Price reduction today is due to the weak data on the housing market in Australia and production in China. Thus, the number of building permits decreased in March in Australia by 3.5% against the forecast of growth by 1.3%. The China's manufacturing PMI dropped to 48.1, against the forecast of 48.3. The index value below 50 indicates the reduction in the sector. Tonight will be announced the statement of the Reserve Bank of Australia on monetary policy, and will be released the data on the trade balance of the country. We expect continued downward movement and keep a medium-term negative outlook for the Australian dollar.

The price of the New Zealand dollar after a strong increase in volatility on Friday is consolidating around the level 0.8650. Increased activity of traders is expected tomorrow night after the release of data on the labor market in New Zealand. The price movement will depend on the dynamics of the Australian dollar. We maintain a positive medium-term outlook for the pair.

The price of Light sweet crude oil rose slightly within the correction and reached the psychological level of $ 100 per barrel. The reason for the growth has also become a growing tension around the situation in Ukraine and the possibility of introducing another round of sanctions against Russia from the West. Strong labor market data also has led to increased optimism about the growth in demand for petroleum products in the United States. Despite this we maintain a long-term negative outlook for the oil and expect lower prices after the stabilization of the situation in Ukraine.

The price of gold has grown amid increased demand for defensive assets. The growth of geopolitical risks forced investors to reconsider their portfolios towards safer assets like gold. The growth of interest in gold is expected in case of reduction on stock markets. Despite weak demand for the metal in Asia, we keep medium-term and long-term positive outlook for gold.

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