29.04.2014 - Volatility dropped before the Fed statement
Major U.S. stock indexes slightly changed yesterday. Pending home sales in the U.S. grew by 3.4% against the forecast of 1.0%. Negative impact on the mood of markets had the introduction of the next round of sanctions against Russia from the West. In general, investors prefer not to accumulate positions before the statement of the U.S. Federal Reserve on monetary policy, which will be held tomorrow. We expect further reduction and maintain a long-term negative outlook on the U.S. market.
The price of euro after a strong growth at the beginning of yesterday's session fell on the background of data on the U.S. housing market. Low inflation could lead to new monetary easing measures and reduce the price of the euro. At the moment, the focus remains at the Fed's decision on monetary policy, which will be published tomorrow. Today we should pay attention to data on money supply in the Eurozone (08:00 GMT), house price index (13:00 GMT) and the index of consumer confidence in the U.S. (14:00 GMT). We maintain a long-term negative outlook for the euro.
The British pound showed considerable volatility amid rising cost of housing in the UK by 0.6% in April, but for continued growth were needed new incentives. At present time the price of the British pound continues to move within the corridor 1,6770-1,6840. Today the course of trading may be influenced by the preliminary data on GDP growth in the 1st quarter (8:30 GMT). Considering strong economic performance of the country, we maintain a long-term positive outlook.
The price of USD/JPY continued its upward movement, despite the growth in retail sales in Japan by 11.0% per annum with an expected growth of 10.9%. Today in Japan is the day off. Increase in volatility is expected today after the release of data on manufacturing PMI (23:15 GMT) and the industrial production in March (23:50 GMT). Also, tomorrow will take place a statement of the Bank of Japan on monetary policy. We maintain our medium-and long-term positive outlook for the pair.
The Australian dollar continued to decline due to low prices of iron ore. The price of the national currency continues to be under the pressure of the data on low inflation in the country, which may lead to easing of monetary policy of the Reserve Bank of Australia. Increase in volatility is expected after the statement of the U.S. Federal Reserve on monetary policy, tomorrow. We expect further price reduction of pair in the medium term.
The price of the New Zealand dollar declined, despite the positive trade balance of the country, the surplus of which totaled 920 million, that is 17 million worse than the forecast. Additional pressure on prices of pair had a decline in the Australian currency. It should be noted that economic indicators are strong enough. Tomorrow we should pay attention to the index business confidence in New Zealand. We expect the resumption of price growth in the medium term.
The price of Light sweet crude oil continues to decline gradually and now is consolidating around the level of 100 dollars per barrel. High oil prices are supported by the tense situation in Ukraine, as well as the blockade of ports in Libya. Overall record levels of inventories and oil production in the United States will help to reduce oil prices. We expect a decrease in oil quotes after the presidential elections in Ukraine in May-June, which will reduce the tensions in the region.
The price of gold declined after strong growth in the previous days. The reasons for the decline were the technical factors, as well as the slow-down of decline on the stock markets. Demand for the metal among investment funds and on the Asian markets remains weak. Investors are waiting for the U.S. Federal Reserve decision on monetary policy. We expect a strong movement in prices in the next few days and keep a long-term positive outlook for gold.