08.04.2014 - The corporate reporting season starts today

Major U.S. indexes finished the first trading session of the week with decline. The greatest decrease occurred in the high-tech sector. Due to the small number of important macro, investors will be focused on corporate reports in the coming days. In addition, investors were concerned about the situation in the eastern regions of Ukraine, where they fear a repetition of the Crimean scenario. Positive data on the growth of consumer lending in the U.S. to $ 16.5 billion in February, were not able to change the mood of traders on the market.

The quotes of euro have grown amid rising industrial production in Germany by 0.4% in February, which is 0.1% better than the forecast of experts. In addition, investor confidence index in Eurozone rose in April by 0.2 to 14.1. Today, the course of trading may be affected by the data on the number of jobs openings in the U.S. (14:00 GMT), and the speeches of the Fed Presidents of Minneapolis (17:30 GMT) and Philadelphia (18:45 GMT). Increase in volatility is expected tomorrow after the publication of minutes of the previous meeting of the U.S. Federal Open Market Committee (Wednesday). We maintain a long-term negative outlook for the euro due to the possibility of launching a quantitative easing in the euro area to fight deflation and the expectation of U.S. dollar strengthening.

The British pound resumed its upward movement against the weakening U.S. dollar. We expect the rising price movement in the medium and long term. The course of trading today will be affected by data on industrial production in the UK (8:30 GMT) and forecast on GDP growth in March (14:00 GMT). Increase in volatility is expected after the release of data on balance of payments (Wednesday) and the statements of the Bank of England on monetary policy (Thursday).

The quotes of USD/JPY reached a strong level in the area of 102.70. Balance of payments deficit of the country in February, as expected, fell to 0.04 trillion against the previous figure at 0.59 trillion. Monetary policy of the Bank of Japan remains soft and aims to increase the monetary base by 60-70 trillion per year. We maintain our positive outlook for the pair and expect renewed growth of prices. The growth of geopolitical tensions may increase demand for the yen as a defensive asset that will force us to reconsider our forecasts.

The price of the Australian dollar increases within the side corridor on higher iron ore prices. Reduction of index business sentiment in Australia to 4, which is worse than the previous figure by 3 points could not disappoint traders. In addition, the quotes are supported by expectations of stimulating the Chinese economy. Tomorrow we should pay attention to data on lending in China and consumer confidence in Australia.

The New Zealand dollar continues to strengthen amid rising Australian currency and the prospects of stimulating the Chinese economy. After the restoration of previously lost positions, we expect slower growth and considering a high probability of a minor correction, after which we expect renewed growth to the level of local maximum. We maintain our positive outlook for the medium-term.

The price of an American benchmark Light Sweet crude oil continues to consolidate around 100-101 dollars per barrel. Rising tensions over the situation in Ukraine partly offset opening of some ports for oil exports in Libya. Increase in volatility is expected tomorrow after the release of data on oil and petroleum products’ inventories in the U.S. and publication of minutes of meetings of the Federal Open Market Committee of the United States.

The price of gold is trying to gain a foothold above the psychological mark of $ 1,300 per troy ounce. Decline on the stock markets, rising geopolitical tensions and a weakening U.S. dollar contribute to higher prices. At the same time, the demand for physical gold in Asia remains quite weak and this fact restrains the bulls. We expect growth of quotations for gold in the medium and long term. The increase may be stimulated by cutting down the import restrictions in India, where the deferred demand on the metal was formed before.

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