15.04.2014 - U.S. retail sales boosted optimism on the markets
Major U.S. stock indexes finished the first trading session of the week with growth on positive macro statistics and corporate reporting of Citigroup Inc. Thus, retail sales in the U.S. rose in March by 1.1% to 433.9 billion dollars with an expected growth of 0.8%. The figure was the best since September 2012. We recall that retail spending are more than two thirds of the U.S. economy and the improvement of this indicator shows steady growth in the world's largest economy. Business inventories in the U.S. increased by 0.4%, which is 0.1% worse than the forecast. Growth of inventories indicates weak demand and carries risks for the economy. We maintain a long-term negative outlook on the U.S. market.
The price of euro fell to a strong level of 1.3810 and is consolidating above it. Reason for decline of the European currency was the strengthening of the U.S. dollar on the background of positive macro statistics. Furthermore, the volume of industrial production in the euro area in February increased by 0.2%, which is 0.1% worse than the forecast. At the same time, traders fixed long positions after the statement of Mario Draghi concerning the fact that the high exchange rate will lead to a softening of ECBâs monetary policy to ensure the price stability. Today the course of trading can be influenced by the data on the trade balance and the business sentiment of the eurozone (09:00 GMT), as well as consumer price inflation in the U.S. (12:30 GMT).
The British pound dropped on the background of increase of the house price index by 2.6% in April, compared to 1.6% in March. Among the reasons for the increase is called a limited supply on the housing market. Today the course of trading will be affected by data on consumer inflation and production, as well as house price index (8:30 GMT). Negative impact on the price of the pound will have data on retail sales in the country, which fell by 1.7% yoy in March, against a decline of 1.0% in February. We maintain a long-term positive outlook for the British pound.
The price of USD/JPY continues to strengthen gradually amid positive economic data from the U.S. At the same time the price moves in a narrow range and with low volatility. Increased activity of traders is expected tomorrow after the release of data on industrial production (04:30 GMT) and the speech of the head of the Bank of Japan Haruhiko Kuroda (6:15 GMT). We recommend holding long positions and maintain medium and long term positive outlook for the USD/JPY.
The price of the Australian dollar declined after the publication of minutes of the last meeting of the Reserve Bank of Australia, which confirmed the stability of monetary policy and indicated that the currency remains at record high levels and its weakening will return to a balanced growth of the economy. We expect continued downward movement of the Australian dollar in the medium-term due to overbought price and maintain a negative outlook.
The price of the New Zealand dollar continues to trade in the corridor 0,8630-0,8700. The reason for the price drop today was the data on China, where the monetary base M2 in March showed an increase of 12.1% per annum, against the forecast 13.1%. At the same time, the volume of new loans increased to 1,050 billion, which is 50 billion better than the forecast. Increase in volatility is expected tomorrow after the release of data on GDP growth, industrial production and retail sales in China, which is the main trading partner of the country (2:00 GMT). We maintain a positive medium-term outlook for the New Zealand currency.
Oil prices remain at high levels on the background of emergency situation in Ukraine. The possibility of hostilities in the country can lead to new sanctions against Russia. Negative impact on the price of oil had a message on the resumption of oil supplies from the Libyan port of Zawiya. Particular attention of traders will be focused on tomorrowâs statistics on GDP growth and industry in China, which is the second largest oil consumer in the world. We maintain a long-term negative outlook for oil.
The price of gold continues a gradual growth on the tense situation in the eastern Ukraine. Investors prefer to shift some funds into defensive assets. Additional support to prices gives the downward trend on the stock markets. The demand for gold on Asian markets remains weak. We expect continued growth in the medium term, but do not exclude the correction in the near future.