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18.02.2015 - Bank of Japan left monetary policy parameters unchanged

The price of euro yesterday showed strong growth amid expectations of reaching agreement between Greece and the creditors after the statement of the Greek representatives on the desire of reaching mutually beneficial solution. It is worth noting the positive statistics on the index of business confidence in Germany, which rose in February to 53.0, against 48.4 in January and in the euro area that rose to 52.7 against 45.2 previously. Data on the index of business activity in the manufacturing sector of New York showed a decrease to 7.8, which is 2.2 worse than the forecast. Today the dynamics of trading will depend on the statistics from the US, where will be released the data on producer price index, housing market (13:30 GMT), industrial production (14:15 GMT) and will be published minutes of the previous meeting of the Fed (19:00 Greenwich Mean Time). Our medium-term outlook for the euro remains negative.

The price of the British pound yesterday was consolidated near the strong level of 1.5350 after has been published statistics on the consumer price index, which fell to 0.3%, against the same period of the last year. The main reason for the decline was the fall in prices for energy and food. Investors were in no hurry to build up positions before the publication of important statistics on the labor market in the country and voting on monetary policy (09:30 GMT). In addition, the course of trading today will be affected by data from the US. We maintain our medium-term negative view on the British pound, but we expect growth in the near future.

The price of the Japanese yen showed a decline after the statement of the Bank of Japan, which has kept parameters of monetary policy. Thus, the annual purchase of government bonds will make 80 trillion yen, in order to accelerate inflation, to support consumption and production in the country. It is worth noting that according to the Bank of Japan forecasts, inflation will rise to 1.9% in 2015 fiscal year, which begins in Japan in April. The course of trading tomorrow will be affected by the data on the trade balance and the index of business activity in the country. It is worth noting that investors are closely watching the situation with the Greek debt crisis, which increases the demand for defensive assets. Our medium-term outlook for the yen remains negative.

The price of the Australian dollar continues to rise gradually after the publication of minutes of the previous meeting of the Reserve Bank of Australia which had a lower tendency for further easing of monetary policy in the country. In addition, the US dollar weakened against most currencies in the world. Today the dynamics of trading will depend on a large block of data from the US. Australian currency is still under the pressure of low commodity prices and a decline in imports from China. We maintain our medium-term negative outlook and recommend holding short positions.

The price of the New Zealand dollar strengthened slightly against the backdrop of rising prices for milk at the last auction by 13.7%. We recall that the milk production is a key export commodity of the country. At the same time, we see no plans to soften the monetary policy in the country. Trade deficit also steadily reduced, which gives reason to expect an increase of quotations in the near future. At the same time, it is worth noting the negative impact of the risks associated with a slowing Chinese economy. We are revising the medium-term negative outlook and recommend to wait for new signals for opening positions.

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