12.03.2014 - The volatility on the markets has fallen
Major U.S. stock indexes ended the trading session in the red. Wholesale inventories in the U.S. increased by 0.6%, which is 0.1% more than the forecast of analysts, this fact was negatively perceived by the market. Investors decided to fix some positions on the background of which we have seen a minor correction. It is worth noting that the positive dynamics of the market remains, but the potential for further growth on the U.S. market is limited. Today, among macro statistics we should pay attention to the mortgage applications (11:00 GMT) and the speech of the U.S. Minister of Finance Jack Lew (18:00 GMT).
The price of euro has fallen due to lower trade surplus of Germany trade balance of 17.2 billion against the forecast 19.3 billion. The quotes of EUR/USD continue to consolidate above 1.3850. The course of trading today will be affected by data on the industrial production in the Eurozone (10:00 GMT). We maintain a long-term negative outlook for the euro.
The price of British pound continued gradual decline. Industrial production in the UK in January rose by only 0.1%, while expected growth was 0.3%. At the same time, manufacturing production has risen by 0.4%, although it was expected to grow by 0.3%. Also yesterday, took place a speech of the head of the Bank of England in the Parliament in which was noted that the UK economy is growing faster than in other countries and that the program of quantitative easing will be reduced only after several uplifts of the interest rate. In the medium term prices may decline, but in the long term, we maintain our positive outlook.
The price of USD/JPY dropped and is consolidating around a strong level of 103.00. Growth of a pair of quotes is limited by the strong data on tertiary index of business activity in the services sector, which grew in January for 0.9% vs. the forecast at 0.7%. The consumer confidence index fell to 38.3, which is much worse than expected 40.3. We anticipate the growth resumption and keep medium and long term positive outlook for the USD/JPY.
The price of the Australian dollar continued to decline due to negative data on consumer confidence in Australia. Thus, the index fell by 0.7%, although the expected decline was 0.3%. In case of further decrease the price will reach 0.8925. The main event of the week will be the publication of data on unemployment in Australia (tomorrow 00:30 GMT). We maintain a long-term negative outlook for the Australian currency but the price movement tomorrow will depend on labor market data.
The New Zealand dollar fell following the Australian currency. In addition, traders preferred to fix some positions. Let us recall that tonight (20:00 GMT) will be published a statement of the Reserve Bank of New Zealand, at 01:10 will be held a statement of the head the Reserve Bank of New Zealand Graeme Wheeler. In addition, the dynamics of the pair will be affected by data on industrial production and retail sales in China (tomorrow 5:30 GMT). We maintain a long-term negative outlook for the NZD/USD.
The price of Light Sweet crude oil has broken through the psychological level of $ 100.00 per barrel. Now a slight correction is possible after which the fall will resume. At the same time, support for oil prices has an absence of an agreement at the Iranian nuclear program, the possibility of sanctions against Russia from the EU and the U.S., as well as continuing conflict in Libya. On the other hand warming in the U.S. and slower growth in China's economy continue to put pressure on the price of oil. The course of trading today will be affected data on oil and petroleum products' inventories in the U.S. (1430 GMT).
The price of gold has overcome the strong level of 1350 and continued an upward movement. Inflow into "gold" investment funds is explained on the one hand by the economic slowdown in China and other rising tensions on the Crimean peninsula. Further movement of the gold price will also depend on the decision of the Federal Open Market Committee of the Federal Reserve, which will be held March 18-19. We maintain our positive outlook for gold.