28.02.2014 - Japanese data have pleased investors
Major U.S. stock indexes ended the trading session with growth. The focus of investors was on a semi-annual report of the head of FED Janet Yellen, in which she made several statements. So, Mrs. Yellen noted that inflation is much below the target level of 2.0% in the last month was published a lot of weak data, the unemployment rate of 6.5% corresponds to full employment and the Fed will try to evaluate the role of weather in change of macroeconomic data. Also, yesterday, was published the data on the durable goods orders excluding transportation component, which increased by 1.1% vs. a forecast of decline by 0.1%. At the same time, the number of unemployment claims has grown to 348 thousand with analysts’ expectations of 333 thousand.
The price of euro increased on this background above 1.37. It is also worth noting that the growth of the money supply was 1.2% y/y vs. predicted growth by 1.1% . The number of unemployed in Germany in February decreased by 14 thousand although experts predicted a decline of 10 thousand. Today we expect growth of volatility in connection with the release of unemployment data and the consumer price index in the euro area (10:00 GMT). In addition in the United States will be published data on GDP growth in the USA for the 4th quarter (13:30 GMT) and the index of consumer confidence for February (14:55 GMT).
On Monday, traders should pay attention to the index of business activity in China, the euro area, the UK and the U.S. Also on Monday will be released a report on personal income and consumer spending in the USA. We maintain a long-term negative outlook for the euro.
The British pound continues to consolidate within the local downward channel. Lack of important macro in the UK and the weakening of the U.S. dollar resulted in a slight increase in price of the British pound. The country's economy continues to grow steadily and generate new jobs. The Bank of England keeps policy of low rates and will not revise it until it will become clear that the risks for the economy are minimal. We keep medium and long term positive outlook for the price of a pound. It is worth noting that in September will be held a referendum on Scottish independence that can negatively influence on the price of the pound.
Positive statistics on industrial production in Japan, which grew in January by 4.0% compared with an expected 3.1% and increase in retail sales by 4.4% which is 0.5% better than expected led to the strengthening of the yen. While unemployment remained at 3.7%, inflation at 1.3%, and household spending increased by 1.1% and exceeded analysts' expectations by 0,6%. We recommend to open short positions and we are expecting further decline of USD/JPY, but in the long term, we maintain our positive outlook for the pair. In case of reduction the price can reach the psychological level of 100.00.
The weakening of the U.S. dollar has led to the growth of quotations of the Australian currency, but the increase was not long. Now, the bulls look quite weak. Lack of important macro in Australia does not give a stimulus to build positions. On Sunday at 22:30 GMT, will be released the data on the index of business activity in the manufacturing sector in Australia in February. We expect a decrease in this figure, because of the slowdown in the industry in China. We expect the fall in the Australian dollar during the next few days, and in the long run. We need to wait for a signal to open short positions.
The New Zealand dollar extended gains because of the weakening of the U.S. dollar and positive data on the index of business confidence in New Zealand. So, in February the indicator increased to 70.8 against 64.1 in January. Positive mood in the economy will contribute to further growth of the currency. Among the risks are still the concerns about the pace of further growth of the Chinese economy. We revise our medium-term outlook to positive.
Prices for Light Sweet crude oil continues to consolidate. There are no new stimulus for continued growth of prices. At the same time, the Fed chief pointed at the weakness of macroeconomic data in the U.S. last month. Investors are still concerned about the growth prospects of the Chinese economy. Production growth and future reduction in demand due to the warming continues to put pressure on oil prices. We keep medium and long term negative outlook for oil prices.
The price of gold continues to consolidate around $ 1,330 per troy ounce. The support for the quotes had a weakening U.S. dollar. We recall that from the beginning of the year the price of metal has risen more than 10% amid fears about the future prospects of growth on the stock markets and economic growth of the largest consumer of gold in the world - China. We maintain a long-term positive outlook for gold. An obstacle for the further growth could be the strengthening of the U.S. dollar.