07.05.2014 - The markets are waiting Janet Yellen speech

Major U.S. indexes finished the trading session lower on negative corporate news. So, the weak quarterly data was published by American International Group (AIG), and Twitter (TWTR) lost more than 10% due to the removal of restrictions on the sale of the company shares. The U.S. trade deficit decreased to 40.4 billion in March. It is worth noting the growth of imports and exports, indicating improvement in the economy. We maintain a long-term negative outlook on the U.S. market.

The price of euro increased significantly yesterday. Bulls were supported by positive statistics from the Eurozone. Thus, retail sales rose in March by 0.3% vs. the forecast of decline by 0.2%, the number of unemployed in Spain fell in April by 111.6 thousand, against the forecast of 49.1 thousand. The services PMI of the Eurozone remained at 53.1. Investors positively evaluate improvement in the problem euro zone countries like Spain and expect further growth in the region. Despite this, we expect the introduction of new measures to fight deflation in the euro area and maintain a long-term negative outlook for the euro. Today the course of trading may be influenced by the data on industrial production in Germany (06:00 GMT) and France (6:45 GMT), as well as statement of the head of the Fed J

The price of the British pound rose sharply yesterday amid weakening U.S. dollar and positive statistics on the growth of services PMI in the UK. Thus, the figure rose to 58.7, against an expected growth to 57.9. Today, we expect a slight correction and no significant activity of traders before the statement of the Bank of England on monetary policy, which will take place tomorrow. We maintain a long-term positive outlook for the pound, but note that the potential for further growth has dropped significantly.

The price of USD/JPY continued to decline amid weakening U.S. dollar. Potential of further decline decreased significantly and we expect the resumption of growth in the near future. Increased volatility on the yen is expected on Friday after the release of data on leading economic indicators. Due to the loose monetary policy of the Bank of Japan, we remain positive long-term outlook for the pair.

The price of the Australian dollar increased much after the statement of the Reserve Bank of Australia on monetary policy. Thus, the interest rate remained at 2.50% for the eighth time in a row. In addition, the RBA said that the policy of stable rates will be continued for a long time. At the same time, retail sales in March rose by 0.1% against the forecast of growth by 0.4%. Despite this, we expect the resumption of the downward movement in the medium term.

The price of the New Zealand dollar after the rapid growth returned to the level of 0.8700. The reason for these price movements was the statistics on the labor market in the 1st quarter. Thus, the employment rate rose by 0.9% vs. expected increase of 0.6%, while the unemployment rate remained unchanged at 6.0%, against the forecast of a decline to 5.8%. We need additional signals to determine the further movement.

The price of oil rose slightly on background of positive data on the UK and the Eurozone. Besides, high prices are maintained by the tense situation in Ukraine. Today the course of trading will be affected by the data on oil and petroleum products inventories (14:30 GMT), which are now at record levels since 1982. We maintain a long-term negative outlook, but the rise in prices may continue in case of worsening the situation in Ukraine, which is expected on May 8-11.

The price of gold after strong growth amid clashes in Ukraine, is consolidating above $ 1305 per troy ounce. Growth of quotations of the metal was also supported by a weaker dollar. Today, the dynamics of trading can be influenced by the speech of Janet Yellen. We keep medium and long term positive outlook for gold.

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