30.04.2014 - ​Markets waiting for the increased volatility

Major U.S. stock indexes ended the trading session with growth. The reason for optimism was the data on the housing market. Thus, the house price index in the 20 largest cities in the country grew by 12.9%, which coincided with forecasts of experts. Weakening growth on the housing market is a negative signal, because the construction sector is the key one in the U.S. economy. At the same time, the consumer confidence index dropped to 82.3, compared with an expected 82.9. Investors do not hurry to accumulate positions ahead of the Fed's statement on monetary policy. We maintain a long-term negative outlook on the U.S. market.

The price of euro dropped against the strengthening of the U.S. dollar, after the release of data on the house price index in the United States. A negative has become the growth of unemployment rate in Spain to 25.9% compared with an expected figure at 25.6%. M3 money supply in the euro area grew by 1.1% per year, compared with an expected growth to 1.4%. Today, in the focus will be the results of the meeting of the Federal Open Market Committee of the Federal Reserve (18:00 GMT). Also, we should pay attention to U.S. GDP growth in the 1st quarter (12:30 GMT), data on the U.S. labor market (12:15 GMT), the consumer price index in the euro area (09:00 GMT) and the change in the number of unemployed in Germany (7:55 GMT). In connection with the release of a large amount of important data, we expect increased volatility on the markets and maintain a long-term neg

The price of the British pound has not changed much after the release of data on the GDP growth of Great Britain. Thus, according to preliminary data, the growth of the economy in Q1 2014 was 0.8%, which is 0.1% better than the previous figure and 0.1% worse than the forecast of analysts. The consumer confidence index improved to -3 compared with an expected -4. Further movement of the pound today will depend on the dynamics of the U.S. dollar. We maintain our positive long-term outlook for the pair.

The price of USD/JPY after reaching the target level of 102.70 has corrected downwards on the background of statement of the Bank of Japan, which left its monetary policy unchanged and the growth of industrial production in March by 0.3% against a decline by 2.3% in February. At the same time manufacturing PMI in Japan has fallen below 50 to 49.4, which means a slowdown in the sector. On Friday will be published the data on the monetary base and the level of unemployment in Japan, which may lead to increased volatility. We reserve the medium and long term positive outlook for the USD/JPY.

The price of the Australian dollar corrected upwards after a sharp decline yesterday. In addition, prices for iron ore have also supported the quotes of AUD/USD. Investors fix short positions before the announcement of the decision of the Federal Open Market Committee of the U.S. Federal Reserve. The market expects easing of the Reserve Bank of Australia due to the decrease of inflation to 0.6%. Tonight (23:30 GMT), we should pay attention to the data on manufacturing PMI in Australia. We maintain a medium-term negative outlook for the Australian dollar.

The price of the New Zealand dollar has reached the target level of 0.8520 and started to correct upwards against the strengthening of the Australian currency and because of the rollback of prices upwards after a strong decline. The price growth has stopped after the release of data on the index of business confidence in New Zealand, which in March dropped to 64.8, that is 2.5 worse than the previous indicator. We expect the upward price movement in the medium term.

The price of Light sweet crude oil continues to trade near the strong level of $ 100 per barrel due to the implementing of the next round of sanctions against Russia by the U.S. and EU. The main factors on which traders pay attention are crude oil and petroleum products’ inventories in the United States, which are at record levels and the unstable situation in Ukraine. Today the course of trading may be influenced by data on oil and petroleum products inventories in the U.S. which will be released at 14:30 GMT. In addition, until May 11, is expected the worsening of the situation in Ukraine, which could lead to a sharp rise in oil prices. Despite this, we maintain a long-term negative outlook for oil.

The price of gold continues to consolidate around the level of $ 1,300 per troy ounce. We expect strong price movement of gold in the near future. The catalyst for this may be of the statement of the U.S. Federal Reserve on monetary policy or news from Ukraine, where tension is gradually increasing in the eastern regions of the country. We keep medium and long term positive outlook for gold.

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