Eur/usd - page 230

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trading range keep getting narrower and the sideways trading is not broken yet. I hope we will see any progress soon.

 

European Commission Says Greek Reform Proposals 'Sufficiently Comprehensive'

The European Commission on Tuesday said that the economic reform proposals submitted by the Greek government were satisfactory to start work on concluding the review of the bailout programme.

Earlier in the day, Eurogroup President Jeroen Dijsselbloem confirmed that Greece presented its reform proposal 'yesterday in time' and that they were being assessed to grant 4-month extension.

In a letter to Dijsselbloem, European Commission Vice-President Valdis Dombrovskis and Commissioner Pierre Moscovici said, "The Commission services have carefully reviewed the Greek government's reform proposals...In the view of the Commission, this list is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review as called for by the Eurogroup at its last meeting."

"We are encouraged by the commitment to combat tax evasion and corruption, inter alia through efforts to modernize tax and custom administrations, as well as to pursue reforms to modernize the public administration," they said.

The top EU officials also noted the commitments in the area of statistics and said it was of vital importance that the institutional and operational independence of the statistical office ELSTAT and its senior management be respected at all times.

"The Commission looks forward to working with the new administration to elaborate what are at the moment still general commitments and transform these into clear policy actions," the letter said.

Further, the European Commission said it will continue to extend technical assistance to Greece in key areas of policy implementation. The officials also stressed on the importance of Greece fully respecting its commitment to refrain from any roll back of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.

"Determined and swift implementation of reform commitments will be key for a successful conclusion of the review," they concluded.

According to news agencies, the Greek government has promised to not to roll-back any ongoing or completed privatizations. The proposals, submitted by Finance Minister Yanis Varoufakis, also contains assurances to reform tax policy and enforcement.

They also include promises to fight corruption and smuggling and to review and control government spending. The government will also undertake measures to unify and streamline pension policies.

The Athens stock market surged on Tuesday on the news of submission of the reform proposal.

Speaking in the European Parliament, Dijsselbloem ruled out the possibility of 'Grexit', saying that Eurozone members are determined to stay together and improve the monetary union. He said that the Eurogroup is preparing for further economic recovery in the euro area and returning to old currencies is never an option.

On Friday, Greece reached a deal with its Eurozone creditors to extend its bailout agreement for four months. The deal calls for Greek and European officials to agree to a series of reforms by the end of April. The bailout programme was set to expire on February 28.

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European Commission Accepts Greek Economic Measures After Review

Euro-region finance ministers approved Greece’s package of new economic measures and paved the way for an extension to the country’s bailout agreement.

The agreement came on a conference call on Tuesday, according to an official involved in the talks who asked not to be named in line with policy. It was confirmed by Slovak Finance Minister Peter Kazimir on Twitter.

Based on the provisional agreement between Greece and its official creditors on Feb. 20, the approval of the list was a condition for extending the availability of bailout funds for another four months. The current program, which has been keeping Europe’s most indebted state afloat since 2010, was scheduled to expire at the end of this month.

The list of commitments includes maintaining current state-asset sales, consolidating pension funds to reduce costs and revamping tax collection and administration.

The European commission, the European Central Bank and International Monetary Fund assessed the list before it went to the euro-region group of finance ministers for approval.

Commission Vice-President Valdis Dombrovskis and Commissioner Pierre Moscovici said earlier that a careful review for the proposals had followed “constructive exchanges” with the Greek government over its reform efforts.

Yields on Greek three-year bonds extended their declines, dropping 279 basis points to 12.28 percent, the lowest since before the new government was sworn in on Jan. 27. Stocks also rallied, with the ASE index jumping as much as 8.6 percent.

The package needs to be put to national parliaments for formal consent. Lawmakers and officials in Germany, Finland and the Netherlands signaled they won’t stand in the way once their governments grant approval for the aid extension.

German lawmakers will vote on Feb. 27, Michael Grosse-Broemer, Chancellor Angela Merkel’s parliamentary whip, told reporters in Berlin on Tuesday. The Finnish government said in a statement on its website that the Greek list was comprehensive enough to grant the extension.

source

 

EURUSD pair initially fell during the course of yesterday session, but found enough support at 1.2388 near Mondays low to turn things back around and form a hammer. Also providing support to the pair was news that Eurogroup approved the list of reforms submitted by Greek authorities, thereby securing a four month extension of their financial rescue operation.

 

Thank you for the news

 

German Consumer Confidence Strongest Since Oct 2001

Germany's consumer confidence index rose to its highest level since October 2001, survey data from GfK showed Thursday.

The forward-looking consumer confidence index rose more-than-expected to 9.7 in March from 9.3 in February. The index was forecast to rise to 9.5. This was the highest score since October 2001.

Confidence remains on the upswing in Germany, the market research group said. Private consumer spending will once again a key role in economic development this year, it said.

The economic expectations index rose 4.7 points to 27.2 in February. The income expectations indicator gained 2.8 to 50.6 points.

Germans' willingness to buy improved for the fifth time in succession in February. The corresponding index rose 1.7 to 59.1. It topped the eight-year peak of the previous month.

source

 

EURUSD tried to rally during the course of yesterday session, but found enough resistance at the 10-day moving average that is acting as a pivot point. The pair is still consolidating since the start of February in a channel with a top at 1.1450 and a bottom at 1.1270. Until we see a clear break of these levels the pair should continue his sideways direction.

 

German jobless claims fall by 20,000 in February

The number of unemployed people in Germany declined for the fifth consecutive month in February, while the country’s jobless rate held steady at a record low, official data showed on Thursday.

In a report, Germany's Federal Statistics Office said the number of unemployed people fell by a seasonally adjusted 20,000 this month, compared to expectations for a drop of 10,000.

Jobless claims decreased by 10,000 in January, whose figure was revised from a previously reported fall of 9,000.

The report showed that Germany’s unemployment held steady at 6.5% in February, unchanged from January and in line with expectations.

EUR/USD was trading at 1.1353 from around 1.1357 ahead of the release of the data, while EUR/GBP was at 0.7316 from 0.7317 earlier.

 

Euro M3 Grows Above F'cast in Jan; Loans Markedly Ease Downturn

Loans to the euro area's private sector declined again in January, but at a slower pace, while the closely-watched M3 money supply rose more than expected, the European Central Bank said on Thursday.

In a monthly report, the Frankfurt-based bank said M3 money supply in the single currency bloc rose at annualized rate of 4.1% last month, above forecasts for a 3.7% gain. M3 money supply in the euro zone rose 3.6% in the preceding month.

The accelerating trend in the closely watched M3 base - measuring, in a nutshell, the amount of money in the economy - came as the ECB announced multiple unprecedented monetary policy packages, aiming to boost its balance sheet dramatically.

Loan figures

Meanwhile, private sector lending trashed -0.1% year-on-year during the first month of the year, markedly easing its downturn given the 0.5% drop seen in December. Analysts had been calling for a 0.3% fall.

Still, the gauge has remained in the red for the 33rd straight month.

As for sub-components of the gauge, the annual growth rate of loans to households stood at -0.2% in January, compared with -0.3% in December (adjusted for loan sales and securitization, the rate stood at 0.9%, compared with 0.8% in the previous month). The annual growth rate of lending for house purchase, the most important component of household loans, stood at 0.0% in January, compared with -0.1% in the previous month. The annual growth rate of loans to non-financial corporations was less negative at -1.2% in January, from -1.4% in the previous month (adjusted for loan sales and securitization, the rate was less negative at -0.9% in January, from -1.1% in the previous month). Finally, the annual growth rate of loans to non-monetary financial corporations (excluding insurance corporations and pension funds) increased to 3.0% in January, from 1.1% in the previous month.

Weak lending has been targeted by the ECB as one of the main impediments to growth in the bloc, as firms rely mostly on funding from banks. These, however, have been reluctant to hand out cash while they adapted to stricter regulation and underwent the ECB's landmark asset review, published last year.

source

 

EUR/USD: Dollar Bulls on the Rampage, $1.12 Next

The dollar rose towards $1.12 area versus the euro on Thursday, as dollar buyers went on a spree in reaction to core CPI data and above-expected durable goods orders.

The dollar jumped 1.33% to $1.1209 versus the euro on Thursday, after it was seen at an intraday low of $1.1379 earlier in the day.

Mixed US data

Consumer prices in the US dropped 0.1% in January year-on-year after the 0.8% growth last month, while a 0.7% fall was recorded on a monthly basis, the fresh report showed.

Excluding food and energy, prices rose 1.6% and 0.2% on a yearly and monthly basis, while it was expected to rise 0.1%.

Meanwhile, durable goods orders posted a rise of 2.8% for January, rebounding from the 3.7% fall in December, while analysts had forecast a a 1.6% gain.

Moreover, initial jobless claims advanced to 313,000 in the week ending February 21 after 282,000 a week before, compared to estimates of 290,000.

St Louis Federal Reserve (Fed) President James Bullard stated on Thursday that inflation in the US seems stable, but it will be important to watch the market measures of inflation expectations to gain confidence it is moving back to target, adding that he wanted to watch how the measures performed over the spring before starting to lift rates.

Later in the day, Fed Bank of Atlanta President Dennis Lockhart will be speaking about the economic outlook and monetary policy at the Fed's 2015 Banking Outlook Conference in Atlanta.

Technical analysis

EUR/USD is moving sideways on intraday charts, as it reached a multi week low at $1.109. The currency cross established a trading range between $1.15 and $1.11, which on a daily timeframe looks like a so-called downtrend continuation pattern "bearish flag formation".

On an intraday basis the range is even thinner, and the playground is outlined by resistance at $1.1450 and support of $1.13.

Any trading, as long as the cross remains in the pattern, should be avoided. In the short term we are more likely bullish, since if prices break above $1.15, a spike toward $1.17 will likely be seen.

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