Technical and Market Analysis by Vistabrokers - page 26
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Vista Brokers: Bulls' Disappointment Pressures on US Dollar
On Wednesday, the US currency fell to a two-month low against the euro and was significantly loosing ground against the other competitors. Vista Brokers analysts note that the data on ADP non-farm employment change in the United States in April was disappointing. Put it to a very weak statistics on the trade balance - and we get a new wave of concerns that the Fed will raise interest rates in the near future.
Recall that at the last Fed meeting it has been said that in the first quarter of this year, the US economy faced a slowdown, but this is a temporary phenomenon, and in the second quarter things should get better. But the data is for April and this is the second quarter, but instead of expected 199 000 the number of non-farm employment in the US for the month increased by only 169 thousand. On Friday will be released official data on employment, and usually they are not very different from the ADP information, so the market will be prepared for the worst, in advance laying weak data in the price.
Analysts believe that in order to keep the dollar on the high position which it has achieved due to expectations of Fed rate increasing, bulls need more than just a phantom possibility of this increase. It should be confirmed by the statistics, that the US economy is indeed recovering, and then the central bank will simply have no choice but to tighten the monetary policy.
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Market Pulse 05/07
The main event of the day on Thursday will certainly be parliamentary elections in the United Kingdom, the results of which could affect the fact whether the country will remain a member of the European Union. Australia today has already published a number of data on the labor market, including such important statistics as the unemployment rate and the employment change for April. We also should not forget about the data on unemployment claims in the US, which will be released during the US trading session.
6:00 ** Factory Orders - March (Germany)
6:45 ** Industrial Production - March (France)
Moderate impact on the market (EUR). Analysts expect that in March, the volume of industrial orders in Germany rose after the previous month decline. The volume of industrial production in France, according to forecasts, should also show a slight increase.
12:30 *** Building Permits - March (Canada)
Strong influence on the market (CAD). Changing in the volume of permits for housing construction in Canada is an important leading health indicator of the real estate market and the economy as a whole. Strong data could support the currency.
12:30 *** Unemployment Claims - May (USA)
12:30 ** Counting Claims - April (USA)
Strong influence on the market (USD). Recently, these data have a significant impact on the the US dollar dynamics. The market takes them into account, since the statistics on the labor market is one of the main landmarks for the Fed.
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Vista Brokers: Oil Market Renewed Subject of OPEC Production Cuts
On Thursday, the oil is under the pressure again. Vista Brokers Analysts say that traders have fixed profits after a long rally in the market. In addition, OPEC once again reminded of themselves. The market expects that at the next meeting exporting countries will leave production quota of "black gold" on the same level.
Recall that from the beginning of the year oil prices rose by about 50% due to lower production in the US, as well as the volatile situation in the Middle East. On Wednesday, prices in oil market rose to this year highs amid the dollar weakness, caused by the negative statistics, as well as inventories decrease in the United States. For the first time in this year, crude oil inventories, according to EIA, were down by 3.9 million barrels. Inventories at Cushing terminal in Oklahoma fell last week by 12 thousand barrels that is rather a lot, given that in recently they have steadily increased.
However, the problem of oversupply in the market has not disappeared, and as soon as geopolitical risks cease to attract the active attention of traders, it is once again coming to the fore. During morning trading, Brent crude oil fell to $ 67.31 per barrel compared to $ 68 per barrel at the close of trading on Wednesday, as well as with a maximum of 2015 at $ 69.63, also reached on Wednesday. WTI fell to $ 60.44 from $ 61 a barrel at the close of the previous session. Note that after the data on the reduction of inventories in the US, this brand of oil rose in price at once by more than $ 2, reaching a high of $ 62.58 a barrel.
Analysts also say that the oil market is beginning to be affected with the approaching meeting of the Organization of Petroleum Exporting Countries on June 5. OPEC representatives have repeatedly expressed their unwillingness to reduce the quota production of the resource, arguing that with the fear of losing market share and injustice of this requirement, only facing these countries, but not the United States and Russia.
At the last meeting the organization left the daily production quota at 30 million barrels per day, while the world price at that time fell almost doubled in comparison with June. At the next meeting the quota will be even less likely reduced, since recently oil prices rebounded. Most likely, for the reduction will traditionally perform Venezuela and Algeria, as well as Iran. The main opponent of such a strategy is Saudi Arabia, which is the leader of the cartel.
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Vista Brokers: Pound Drops prior to UK Parliamentary Elections
Today parliamentary elections started in the UK, and their results could materially affect the pound. Vista Brokers analysts say that prior to the opening of polling stations pound declined, updating session lows. At the time of writing, the election has already started and the British currency continues to fall against the US dollar.
Today's elections will determine the composition of the government and, therefore, a political course that the country will follow the next five years. The peculiarity of these elections is that chances of Conservatives and the Labour Party to win, according to preliminary surveys, are roughly equal. However, if the Conservatives win, the country expects a referendum on Britain's membership in the European Union. It shall entail great risks for business and the economy both for the country and the EU as a whole.
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GBP / USD is Back in the Game
After relatively moderate fluctuations observed since the beginning of this week the British currency has sharply reacted to the exit polls results publication, according to which the Conservative Party confidently wins the elections to the House of Commons of the British Parliament. The market reaction was probably caused with the fact that, given the wide margin (316 seats against 239 seats for the Labour Party), it will be not so hard to make decisions for parliamentarians, as the market had expected earlier, given the almost equal chances before the elections. At this time, the pair is at 1.55 (2-months maximum) where it has appeared at night - the growth is estimated more than two and a half figures.
At the same time, bulls, apparently, will be unable to storm the aforementioned level before the publication of official results later today, as well as prior to the data on the US labor market, which is expected during the US session (12.30 GMT). From a technical standpoint, trading goes in the uptrend, but given the strong news background, it is recommended to fix the result of current positions.
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EUR / USD Consolidates near Support Line
The single currency is reducing prior to the expected today employment data release in the United States, having reached the line of the trend support from the beginning of April 23rd.
It is recommended to fix current results on open positions before the the said statistics on the labor market release. It is expected that the number of employees will show the increase by 226 thousand, and, depending on which way and how much the real value differs, the market will be ready to resume growth or go into a steep dive.
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Vista Brokers: US Labor Market Data Encouraged Market Participants' Optimism
On Thursday morning, the euro continued to strengthen against the US dollar, renewing multi-months highs. Vista Brokers analysts say that market participants continued to take a lead from the weak data on the US employment from ADP, as well as comments of the Fed's chairperson, Janet Yellen. The dollar fell against most of its competitors in the foreign exchange market; German government bond yields rose.
However, later the dollar's decline was replaced by the growth, when during the US trading session was published data on unemployment claims in the United States. During the week ended May 2, the number of initial claims rose by 3,000 to 265,000, while analysts had expected the growth to 277,000.
Thus, the number of applications remains at 15-year low, being below 300,000 a ninth consecutive week. This picture can be regarded as a clear signal of the US labor market recovery. Of course, market participants could not ignore this signal, and the dollar has jumped to session highs against the euro after the publication. The strong data on unemployment claims has also encouraged investor's hope that today's statistics on the employment from the Labour Department would not be so disappointing as the data from ADP.
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Market Pulse 08.05
During the US trading session on Friday will be published most anticipated data of the day - the official employment data in the United States. After the ADP non-farm employment change data on Wednesday was much worse than forecast, investors expect the confirmation or refutation of this statistics from the Labour Department.
6:00 ** Industrial Production - March (Germany)
6:00 ** Trade Balance - March (Germany)
Moderate impact on the market (EUR). Expectations for these two indices are rather optimistic, although probably a greater impact on the dynamics of the euro against its main competitor today will have expectations regards the evening statistics on the US labor market. However, in March, analysts expect a slight increase in industrial production and an increase in the positive balance of foreign trade.
7:15 ** Consumer Price Index - April (Switzerland)
Moderate impact on the market (CHF). The Consumer Price Index is one of the key benchmarks for the central bank, so these statistics can affect the dynamics of the Swiss franc. In April, it is expected a weak growth on a monthly basis and a decline year on year.
8:30 ** Visible Trade Balance - March (UK)
8:30 ** Trade Balance Non EU - March (UK)
Moderate impact on the market (GPB). The trade balance is the difference between exports and imports in the reporting month. Higher values are favorable for the currency, reflecting the lower outflow of money from the country (as a rule, Britain suffers from a deficit).
12:30 *** Unemployment Rate - April (Canada)
12:30 *** Employment Change - April (Canada)
12:30 ** Full Time Employment Change - April (Canada)
12:30 ** Part Time Employment Change - April (Canada)
Strong influence on the market (CAD). Expectations for labor market data in Canada are not too optimistic: according to forecasts, the unemployment rate in April rose by 0.1%, while the number of employed increased much less than in March. Weak data may renew talks of new stimulus measures from the Bank of Canada.
12:30 *** Unemployment Rate - April (USA)
12:30 *** Non-Farm Employment Change - April (USA)
12:30 ** Change in Private Payrolls - April (USA)
12:30 ** Change in Manufacturing Payrolls - April (USA)
12:30 ** Average Hourly Earnings - April (USA)
12:30 ** Participation Rate - April (USA)
12:30 ** Two-Month Payroll Net Revision - April (USA)
Strong influence on the market (USD). These may cause a surge in volatility in financial markets and attract attention of traders. Forecasts are quite optimistic: reduction of unemployment by 0.1% and a strong enough job growth in April. However, the picture is spoiled by the ADP data, which showed a much smaller increase than expected. As a rule, official statistics as a whole repeats this data.
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Vista Brokers: Pound Rose amid Likely Conservatives Victory in Parliamentary Elections
During morning trading on Friday, the British pound continued to recover ground against the US dollar. Vista Brokers analysts note that the currency has returned to the upward trend on Thursday evening, when the first data of exit polls on the results of parliamentary elections in the UK was released. Just a few minutes after polls were closed, the media have published survey results, according to which a majority in parliament will probably get the Conservatives.
Recall that this elections were called one of the most unpredictable in the history of Great Britain, as a preliminary survey had showed virtually the same chance of winning for the Conservatives and the Labour party. Many experts have suggested that none of major parties will be able to form a majority in parliament, so they will have to negotiate a coalition. However, it seems that the Conservatives, led by the current Prime Minister David Cameron will remain at the helm for another five years. And by the way, Cameron may also keep the post.
According to a survey published by the British media, the Conservatives won 316 seats, while the opposition Labor party - 239. Scottish nationalists should get 58 seats.
Amid this information, the pound rose from $ 1.5245 to $ 1.5448, moving further away from the reached last month six-year low of $ 1.4567. Also currency rose against the euro.
Analysts warn, that enthusiasm, due to the fact that the Conservatives can keep the lead, is premature, because the official results have not yet been announced. In addition, in the case of his re-election David Cameron promised to hold a referendum on Britain's membership in the EU, so that the country will soon face the new turmoil. Do not forget about the Scottish nationalists, who can make a coalition with the Labour party. The question of the independence of Scotland in the United Kingdom is also acute.
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Vista Brokers: Weak Data from China Supported Gold
On Friday, the precious metal is growing, restoring the position after the previous day decline. Vista Brokers analysts say that gold has increased from 1181.6 to 1186.1 dollars per ounce after the release of disappointing statistics on the trade balance, as well as export and import in China. Risks associated with the slowdown of the Chinese economy increased investor interest in gold as a safe asset.
Balance of foreign trade in April has reached the point of 34.1B, but analysts expected an increase to 34.5B. The volume of exports from the country decreased by 6.4% against the expected growth of 1.6%. The volume of imports showed a significant decline - by 16.2%, after the March figure was also down by 12.7%.
Recall that on Thursday gold was losing ground after the US data on unemployment claims was stronger than expected. The Labor Department reported that the number of initial claims for the week ended May 2 rose by 3,000 to 265,000. Analystsexpected the rise in the number of applications to 277 thousand. Despite the increase, the index remains at the 15-years low.
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Market Pulse
06/
22
The most important event on Monday
is
the Euro summit and the meeting of the Eurogroup. At
the
unscheduled
meeting will
be
discuss
ed
the possibility of providing
the
financial assistance to Greece. At the last meeting Eurogroup representatives have not reached an agreement with representatives of Athens on the reform program, it is possible that the country may leave the euro zone. The deadline for
the
agreement
is
the
30
[SUP]th
[/SUP]of
June.
14:00 **
Flash Consumer Confidence
- June (euro zone)
M
oderate impact on the market (EUR). Eurozone consumer confidence index is based on a survey of households on the level of confidence in the current state of the economy and development in the future. The growth rate reflects the confidence in the economy, favorable affecting the currency.
14:00 **
Existing Home Sales
- May (USA)
M
oderate impact on the market (USD). The volume of home sales in the secondary market.
The
important indicator of the US housing market health, has a tendency to affect markets. The excess of the forecast is favorable for the currency.
17:30 **
BOE Deputy Governor for Financial Stability Jon Cunliffe Speaks
- June (UK)
M
oderate impact on the market (GPB). John Cunliffe takes the post of
BOE
Deputy Governor of financial stability. Traders and investors
take his words into account
, because they may contain clues to changes in the regulation or evaluation of the state of the economy.