21.04.2014 - ​We see low activity on the markets after the holidays

Trading session on U.S. stock markets on Friday was not held due to official holiday on the eve of Easter. In recent days, the U.S. stock market grew on amid positive data on unemployment in the U.S., as well as strong results of corporate reporting season. Today we expect the weak activity of traders and low market volatility. Potential for further growth is quite small and we expect a decline of the U.S. stock market in the long term.

Quotes of euro in recent days continued to consolidate above the strong level of 1.3810. The reason for the low volatility has become the weekend in Europe and the U.S. and the lack of important macro. Today the course of trading may be affected by the report on the index of leading economic indicators, which will be released We keep medium and long term negative outlook for the euro.

The price of the British pound also did not show high volatility and is consolidating above the strong level of 1.6770. Increased activity of traders is expected on Wednesday when will be released the data on public sector borrowings and production orders. Considering steady growth of the economy and reducing unemployment in the UK we maintain a long-term positive outlook for the pound.

The Japanese yen continued to cheapen amid falling of the tertiary index of business activity in the services sector by 1.0%, compared with an expected 0.2% rise. In addition, investors took negatively the increase in the trade deficit of the country in March to 1.71 trillion vs. the forecast of 1.27 trillion. In the coming days, price consolidation is possible near the level of 102.70, followed by a continuation of the growth of USD/JPY. The ultra-soft monetary policy of the Bank of Japan aimed at increasing the monetary base by 60-70 trillion. yen per year and growth of inflation in the country to 2.0% gives reason to keep medium and long term positive outlook for the yen.

The price of the Australian dollar in recent days has not changed much due to long weekend. This week, we should pay attention to data on the index of leading economic indicators (00:00 GMT) and consumer price inflation (Wednesday). In addition, on Wednesday, will be released the data on the manufacturing sector in China, which is the main trading partner of the country. We expect the resumption of the price fall in the medium term.

Decrease of the New Zealand dollar has stopped amid falling activity of traders due to long weekend. The central event of the week will be a statement of the Reserve Bank of New Zealand on interest rate and monetary policy in general, which will be published on Thursday. To determine further price movement we will need new signals. We expect renewed price growth in the medium term.

The price of Light Sweet crude oil continues to be at high levels due to the tense situation in Ukraine and the positive data on the U.S. economy. Despite this, we expect growth in oil products inventories in the United States in connection with record volumes of oil production due to new technologies. Growth of supply from Iran and Libya should pull down oil prices. We expect a decline in oil prices in the long term.

The price of gold continued to fall due to strong reports of U.S. corporations, which increase the appetite for risk and weaken interest in defensive assets. Demand for the yellow metal remains weak on the Asian markets, which are major consumers of gold. The growth of interest in gold may resume in case of stock market decline after the end of corporate reporting season. In addition, May is approaching and during this period we traditionally observe fixation of long positions and reduction of the major indexes.

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