Daily Market Analysis from NewForex Broker

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Forex News from New Forex: The euro goes down, while the greenback gains against the main currencies

The euro has dropped the most against the yen among the main currencies this year. It has declined 7.3% according to the data provided by NewForex analysts. On Tuesday the single currency was traded at 134.23 yen that turned out to be its local low in three months. David Fineberg, the member of NewForex team, supposes that the drop can be explained by the announce of Mario Draghi. The ECB president claimed that the central bank is going to purchase 60 billion euros a month. The purchasing program will start in March and continue until September, 2016. Last year the ECB actions were insufficient as the annual inflation rate lost 0.2% in the euro zone.

Meanwhile the dollar is strengthening as according to the US data release the unemployment level decreased by 10,000 and stopped at 307,000 last week. But analysts and policymakers expected a decline by 17,000. In the Asian trading session the euro has plummeted against the greenback. The EURUSD currency pair has slipped 0.17% and stopped at 1.1342. The support line of the instrument is at 1.0762 and the resistance line is at 1.1647, its local high registered on Tuesday. The dollar index has slipped to 0.26% and reached 94.41.

In the United Kingdom the retail sales level added 4.3% last month although analysts expected a 3% increase. The British pound is still under pressure as at the minutes the members of the Bank of England decided to keep the interest rate at 0.5% which appeared to be the lowest level. As a result the currency pair GBPUSD demonstrated the negative dynamics. The instrument has dropped 0.17% and reached 1.4985.

 

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Forex News from New Forex:The death of Saudi Arabia’s «oil» King

The oil prices have been rising after the death of Saudi Arabia’s King. This event added more uncertainty to the oil market where oil prices have already lost 50% of their price since June 2014.

King Abdullah bin Abdulaziz died early on Friday and now his brother Salman will succeed to the crown of the main oil-ехporting country in the world. Brent picked up 78 cents and is at $49.30, WTI added 39 cents and is at $46.70.

It is expected that the new King of Saudi Arabia will continue the policy of OPEC protecting oil from the market competitors, first of all from the USA where the shale production has turned the U.S. from the country importer into the leading oil exporter pumping out around 9 mln. barrels of oil a day.

 

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Forex News from New Forex: Hong Kong shares are going up in spite of the situation in Eurozone

The shares in Hong Kong are steadily rising five days in a row paying little attention to worries around instability in Eurozone due to the victory of a Greek party which is against the austere economic measures.

NewForex analyst Joseph Schwartz points out that the events in Eurozone have a little impact on Hong Kong stock market. The general sentiment of the market is cautious rather than negative. The Shanghai Composite index demonstrates positive dynamics. The Hang Seng gained 0,2% to 24,909.90, China Enterprises shed 0,3% to 12,228.16 points.

Among the most active shares in Hong Kong are the shares of China National Culture Group Ltd (+11,2%) and Cypress Jade Agricultural Holdings Ltd (+15,2%).

The Chinese investment from Shanghai to Hong Kong through the mutual market access equals 0,65 billion yuan out of 10,5 billion yuan of the daily quota. The total trading volume of companies included in the HSI index is 1,4 billion shares.

 

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Forex News from New Forex:
The results of the Greek elections have changed the economic situation in the financial market

The euro has been gaining against the American dollar for the first time in three days. The single currency reached 1.1099, its local low since September 2003, when the Syriza party won 149 out of 300 seat in the Parliament in the Greek elections. Its victory has provoked fears about the future of Greece. Alexis Tsipras, the Syriza party leader, claimed that it is necessary to renegotiate the austerity measures that were implemented by the European Union and the International Monetary Fund. Moreover, the party leader promised to reexamine the terms of the international bailout according to which Greece was provided by 240 billion euros. After this news the single currency has advanced a little and stopped at 1.1204.

Sara Rosenstein, the member of NewForex team, considers that the euro is still influenced by the decision of the European Central Bank to start the purchasing program. The ECB is planning to invest 1.2 trillion euros in order to stop the slowdown of the economic growth and inflation in the Eurozone.

The single currency has added against the yen. The EURJPY currency pair has gained 0.37% and stopped at 132.48. On the contrary, the euro has lost against the British pound. The EURGBP instrument is traded at 0.7405.

In the European trading session the currency pair NZDUSD is consolidated at 0.7455. The support level of the pair is at 0.7367 and the resistance level is at 0.7533, its local low on Friday. The Australian dollar remained almost unchanged against the American currency. The AUDUSD instrument is traded at 0.7908.

 

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Forex News from New Forex:
S&P marked down the sovereign credit rating of Russia to «junk»

On Monday the rating agency S&P pulled down the sovereign credit rating of Russia to «junk» status placing it below the investment grade for the fist time in 10 years. S&P explained this downgrade from BBB- до BB+ by the worsening economic perspectives of Russia due to the oil price drop and the influence of Western sanctions on the economic state of the Russian Federation.

As a result the ruble fell to 68.65 against the American currency losing more than 6% in comparison with the previous trading session. NewForex analyst Sara Rosenstein considers that now large companies and banks will experience difficulties in refinancing as the rating agencies express obvious concern about the macroeconomic state of the country.

This decision can not only impact on the image of Russia among the investors but also increase borrowing costs. Other top rating agencies may follow the lead of S&P decreasing the sovereign credit rating of Russia and finally influencing on the policy of its president Vladimir Putin.

However, it is worth saying that Finance Minister of Russia Anton Siluanov tried to interpret the current situation in another way claiming that the decision taken by S&P is too negative and does not take into consideration strong points of the country, for instance, large international reserves.

 

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Forex News from New Forex:
Oil prices go up

Last year oil prices fell by one half as the USA boosted its production activity of crude oil and broke all the records in more than thirty years. Meanwhile, the Organization of Petroleum Exporting Countries refused to decrease the crude oil production. Luigi Campo, the member of NewForex team, comments the situation in the following way: «The prices are likely to plummet to 30 dollars a barrel. We deal with the global supply glut and highly need a decline in the current oil production».

At the meeting that took place on the 27th of November the OPEC did not change its production target. Saudi Arabia, the biggest oil producer in the world, refused to follow the calls of the OPEC members to plummet the output. Luigi Campo reminds that historically Saudi Arabia plays the role of a swing producer. If it is necessary to raise prices, it reduces the productive activity or it boosts the production to decrease prices.

Oil futures have left 0.6% in New York. Last week the crude oil stocks of the USA increased to 402.1 million barrels that turned out to be the record amount since August, 1982. Brent oil for March delivery has added 63 cents or 0.9% and stopped at $48.60 a barrel. West Texas Intermediate for March delivery has advanced 0.9%. Currently it is traded at $45.74 a barrel.

At the moment when the article was written the oil futures for March settlement were traded at $45.26 a barrel on the London-based exchange that turned out to be its sessional high. The crude oil is likely to find support at $44.35 and the resistance at $49.09. The US dollar index which measures the greenback against six major currencies is at 95.23.

 

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Forex News from New Forex:
European shares continue their decline

In the morning trading session on Wednesday the European shares keep negative dynamics. The FTSEurofirst 300 index lost 0.1% and is trading at 1,474.36. However, the shares of companies involed in technology business gain, for instance, the shares of ARM Holdings edged up to 2.6% amidst the reports from Apple which smashed all the analysts’ forecasts. Quarterly results showed record sales of big-screen iPhones and a 70% rise of sales in China.

The shares of Electrolux are also in the list of companies with a rallying rate (+8.9%) after the publication of a forecast with a steady market growth in 2015. Nordea, the biggest Scandinavian bank by market value, picked up 5.3% after the publication of its commercial profit in the fourth quarter.

About 5% of companies which are included in STOXX 600 presented their reports and 69% of them coincide with forecasts or display even better figures. The head of NewForex analytical department Aaron Kaufmann expresses his confidence that this fact will contribute to the long-expected recovery of Eurozone earnings. Proactive measures of the ECB orientate investors to change the mood.

From the beginning of this year the FTSE 100 gained 3.6%, the DAX is up 8,3%, the CAC up 7.9 %, whereas the American index S&P 500 lost 1.4%.

 

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Forex News from New Forex:
The Chinese currency has become one of the five most used currencies

The Chinese currency has become one of the five most used currencies in the world. The yuan has beaten the Australian and Canadian dollars. China’s currency is the fifth one as 2.17% of the global payments were made in terms of yuan. The American dollar with 44.6% has topped the chart and the euro and the British pound have followed it with 28.3% and 7.92%, respectively. This demonstrates that the yuan is strengthening. Now it is not an emerging currency, but a usual business payment currency.

The Government of China is trying to increase the yuan use so it appoints a lot of clearing banks overseas. In December there was a 20.3% increase of the global payments in yuan, while payments in main currencies added 14.9% for the same period of time. Last year the yean payments advanced 102%. NewForex analyst David Feinberg supposes that the Chinese currency is likely to be included into the IMF’s currency basket. It can even surpass the Japanese currency.

The euro has lowered against the main currencies when the report showed that the number of orders for durable goods dropped 3.4% in December. This demonstrates that there is a growth slowdown in the manufacturing sector. Nevertheless, the consumer confidence index has risen to the highest level that was registered only seven years ago. The single currency has plummeted 0.09% against the greenback and stopped at 1.1422.

The dollar index has jumped to 94.35. The greenback has advanced 0.25% against the yen and reached 118.13. In the Asian trading session the NZDUSD currency pair was traded at 0.7456. The instrument found support at 0.7398 and resistance at 0.7533. The AUDUSD currency pair is consolidated at 0.7992 after gaining 0.71%. The support level of the instrument is at 0.7871 and the resistance level is at 0.8137.

 

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Forex News from New Forex:
The U.S. dollar continues taking off

On Wednesday, January 28th, the US Federal Reserve System presented a report from which it became obvious that the US economy continues strengthening amidst the unenviable conditions of Eurozone and Japan which are dragged into a crisis. According to the Fed report, interest rate rise is planned for this year, although approximate dates were not announced. NewForex analyst, Joseph Schwartz, points out that there was expressed some concern in the report over the constraining factors which leading economies can face with and suboptimal growth of inflation which might last longer than it was predicted.

In the trading on Thursday the US currency rose against the yen picking up 0.2% to 117.775, against the euro the grenback didn’t considerably change and stays at $1.1290. The NZ dollar which reached a 4-year low at $0.7297 after the Reserve Bank of New Zealand dropped a hint that it might cut in rates shed less than 0.1% in the morning session on Thursday.

The currency pair kiwi/dollar is trading at $0.7313, against the yen the NZ dollar shows positive dynamics and reached 86.10 after a 3-months low at 85.87.

 

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Forex News from New Forex:
Changes in oil prices

In Asia the crude oil for March settlement has advanced 0.20% and stopped at $44.54 a barrel. Last week oil stockpiles of the USA added 8.9 million barrels that bit all the expectations. Analysts and economists predicted an increase by 4.1 million barrels. Total US oil reserves have stopped at 406.7 million barrels which appeared to be the record amount since August 1982. The stockpiles of motor gasoline have lost 2.6 million barrels although a 0.4 million increase was prognosed.

Futures have hardly changed since Wednesday when they fell 3.9%. Nowadays we deal with the oil global surplus in the financial market as the Organization of Petroleum Exporting Countries refused to reduce the productive activity, while the USA boosted the crude oil production beating all the records in thirty years. It produces 27,000 barrels a day that is the largest amount since January 1983. Saudi Arabia, which has historically played the role of a swing producer, is planning to produce 9.6 million barrels a day this year and 9.4 million a day in 2016 in spite of the global oil glut.

Currently West Texas Intermediate for March settlement is traded at $44.42 a barrel in the electronic trading in New York after dropping 3 cents. On Wednesday the contract lost $1.78 and reached $44.45. Brent oil for March delivery has gained 12 cents and stopped at $48.59. NewForex analyst, Luigi Campo, reminds that on Wednesday it plummeted to $48.47.

 

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The FTSEurofirst 300 index sets a course for a rise

In the trading on Friday the pan-European index FTSEurofirst 300 shows a rise and as it is expected the figures of this month will be the highest in the last three years. Active retail sales in Germany which improve the market atmosphere and as a result have a positive impact on the DAX index contribute to it. In the morning trading session the FTSEurofirst 300 index picked up 0.1% to 1,473.99. In total it has gained 7.7% in January. The German DAX is also in the black edging up 0.3%.

Positive news from Spain show that the retail sales increased by 6.5% in December 2014. It is the biggest rise since 2003. NewForex analyst Luigi Campo notes that retail sales in Germany and Spain, as well as consumer spending in France surpass all the expectations. And these are the first signs of the positive impact from low oil prices which is a good support for shares. However, investors are still concerned about the continuous uncertainty with Greece.

Among the companies which made the highest jump it’s worth mentioning the Swedish company SCA, the shares of which picked up 7.9% after the report of its profit in the fourth-quarter.

 

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Forex News from New Forex:
The yen and the pound are growing against the dollar

The yen is improving against the American dollar. The economic situation in Japan has been bettering day by day. Japanese stocks have been growing for a second week. In Tokyo the Topix gained 0.1% and stopped at 1,415.01. The consumer price index added 2.5% that is 0.1% less that specialists expected. The industrial production in Japan gained 1% in December, economists and analysts predicted a 1.3% gain. The unemployment rate plummeted 3.4%, while the number of job seekers reached 1.15, its maximum since 1992.

In the Asian trading session the USDJPY currency pair presents the downtrend. It dropped 0.38% and reached 117.86. The currency pair greenback/yen has created a price range with the support at 117.23, its minimum on the 12th of January, and the resistance at 118.66, its local high, reported on the 27th of January.

For the first time in four days the British pound has gained against the greenback. Moreover, the British currency reached its high in seven years against the euro. On the data report the consumer confidence index has grown to 1. NewForex member Sara Rosenstein reminds that in December it was minus 4. In the European session the currency pair pound/dollar holds 1.5058. The support line is at 1.4973, its local low on the 26th of January, and the resistance at 1.5219, its local maximum on January, 28.

The American currency finds support in the policy of the Federal Reserve System as it declared that it is likely to raise the interest rate in the middle of the year. Following its policy it is planning to keep the rates at the lowest level until June in order to achieve the solid recovery of the US economy.

 

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Forex News from New Forex:
Oil prices fell amid the strike in the USA

Oil futures have dropped 3.3% in New York. West Texas Intermediate for March settlement has dropped $1.57 and reached $46.67 a barrel on the New York Exchange, while in Singapore it was $47.22. The contract has added 8.3% that appeared to be the largest increase since June 2012.

Brent for March delivery has plummeted $1.58 or 3% and stopped at $51.41 a barrel in London. The number of contracts has grown to 1.7 million. For the first time since early January this oil has been above $50 per barrel. Nevertheless, the price curve of Brent oil is still in contango as the contracts for deliveries in future are more expensive than prompt ones. In other words, contracts for the current year March delivery are approximately $10 cheaper than these contracts for the next year March delivery.

On Sunday the United Steelworkers Union stopped working at nine sites as it failed to conclude the labor contract. It demanded to increase significantly the wage, to establish strict rules to avoid the fatigue and keep the union workers on the job. This turned out to be the biggest refinery strike since 1980 when the stoppage lasted three months. Those refineries that are on strike usually produce 1.82 million barrels a day which equals 10% of the total US production activity. More and more refineries are planning to join the strike. Luigi Campo, the member of ;NewForex team, considers that if the union keeps on expanding, it will affect production levels and the least what may happen is the decline in the overall production.

 

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Forex News from New Forex:
The key Japanese indexes are plummeting

In the trading on Tuesday the Japanese stocks continued their decline and reached a 1-1/2-week low. A weak auction of the Japanese governement bonds contributed to it. The demand for 10-year bonds with the toal volume of 2.4 trillion yen was very low.

Currently the participants of the Japanese market are not expecting a global economic rise amidst the easing policy of the European Central Bank and the cut of the interest rates by the the Reserve Bank of Australia.

The Nikkei index shed 1.3% and is trading at 17,335.85, which is a low since January 22, 2015. The Topix index slumped to 1.2% to 1,392.39, JPX-Nikkei 400 lost 1,1% to 12,640.20.

The airline companies and rubber producers, which reaped benefits from low oil prices in the previous months, have considerably lost ground due to the rise of oil prices at the beginning of the week, oil picked up 11% in the last two trading sessions. As a result, Japan Airlines slipped to 5,2%, Bridgestone Corp and Yokohama Rubber slid 3,3% and 2,4%, respectively.

 

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Forex News from New Forex:
Chinese stocks and indexes show decline

In the trading on Wednesday, February 4, Chinese stocks moved in mixed ways. After the morning gains the main stocks and indexes of China had a downtrend. NewForex analyst, David Fineberg remarks that it was caused by the new data on the service sector where in January 2015 the growth turned out to be the lowest over the last 6 months.

The CSI300 index which includes the leading companies of Shanghai and Shenzhen lost 1.0% and reached 3,401.77. The Shanghai Composite Index slid 1.0% and is at 3,174.13. Among the most active shares in Shanghai were the shares of the Bank of China (-3.3%), CITIC Securities (-1.3%) and Baotou Steel (+0.6%).

The total volume of A shares (quoted in the stocks of China only in yuans) in Shanghai reached 24.9 billion shares, in Shenzhen the volume was considerably lower and equaled 15.6 billion shares.

 

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Forex News from New Forex:
The dollar steadies after its fall

The dollar index has steadied on Wednesday after its biggest day-fall in a year. On Tuesday it slipped to 0,9% which was the most considerable fall since October 2013. Today the dollar index takes back its lost positions and has already gained 0,25% and is at 93.826.

NewForex analyst Sara Rosenstein claims that investors trimmed long dollar positions and made profit although it will not last long taking into account the difference in monetory policies between the USA on the one hand and the Eurozone and Japan on the other hand. The recovery of the euro amidst the expectations that Greece will secure its new debt holdings seems absolutely hopeless. The fact that the official authorities of Eurozone are quite cold towards the suggestions of Greece means that this optimism around the debts of Greece will soon vanish.

The euro slumped to $1.1450 after its growth on Tuesday. However, the currency did not breach its 11-year low at $1.1098 set in January.

 

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Forex News from New Forex:
Oil prices are declining due to high oil stocks in the USA

After serious losses in the trading on Wednesday oil markets continue to drop on Thursday, record high oil stocks in the USA stopped a 4-day rally of oil prices. The markets are still very volatile, the American oil shed 9%, although in the previous four trading sessions it picked up almost 20% after its 6-year low.

Brent oil for March delivery lost 19 cents and is now at $54.02 a barrel.The US oil dropped losing 36 cents and is currently at $48.09 a barrel. The stocks of crude oil in the USA increased to 6.3 mln. barrels last week. The rise holds firm the fourth week in a row.

NewForex analyst notes that oil prices began to rise last week after the longlasting drop due to the information about the decline of rig activity in the USA which may lead to the slowdown of shale oil production growth.

Moreover, it is expected that the season demand for oil will reduce in the second quarter as refineries enter the period of spring technical control which will lead to further increase of oil stocks.

 

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Forex News from New Forex:
Greece pulls down the stock markets of Eurozone

The euro has rallied a bit on Thursday after the fall yesterday. The decline was caused by the decision made by the ECB not to accept Greek bonds as collateral for its liquidity operations. Today the euro has been traded 0.1% higher than yesterday getting closer to $1.1353. Against the yen the euro has been trading at 133.18 picking up 0.1%, which is far from a 2-week high at 135.35 set earlier.

The step of the European central Bank, which required a firm support of most of the bank chiefs in Eurozone, demonstrates the concern over the plans of the new Greek government not only in Frankfurt but in all EU countries.

However, NewForex analyst Sara Rosenstein points out that not all the market participants consider that the situation in Greece will have a significant influence on the economic state of Eurozone. Some of them treat Greece as a short-term factor rather than a trigger to weaken the euro.

In the first part of the day the FTSEurofirst 300 index, which includes the shares of the leading European companies, lost 0.5% and is at 1,479.92. The EURO STOXX 50 index slipped to 0.98%, the French CAC 40 edged down to 0.76%, the German DAX 30 slid 0.41%.

The financial stocks of the European companies plummeted, the French banks BNP Paribas and Societe Generale shed 3.21% и 2.23%, the German Deutsche Bank and Commerzbank slumped to 1.40% and 1.70%, respectively.

Against this backdrop today positive data from Germany were issued according to which the factory orders in December gained 4.2% exceeding the forecasts at 1.5%.

 

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Forex News from New Forex:
Gold futures changed the direction

In the trading on February 6th gold prices gained in anticipation of the U.S. employment data and amidst the complex situation in Greece. In the New York Mercantile Exchange gold futures for April delivery edged up to 0.39% and are trading at $1,267.60.

April contracts in the trading on Thursday closed 0.14% lower and reached $1,262.70 an ounce. The futures found support at $1,255.80 and resistance at $1,286.50. NewForex analyst Joseph Schwartz explains that the decline was noted after the report about the economic situation in the USA. According to the U.S. Department of Labor the number of citizens who apply for initial jobless benefits increased last week by 11,000 to 278,000 in comparison with the previous data — 267,000.

At the present moment traders are looking forward to the U.S. report of nonfarm payrolls.

 

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Forex News from New Forex:
The Japanese indexes on the rise

The Japanese stocks are advancing after the rise of oil prices but the investors are cautious before the U.S. employment report. This data will probably give a hint when the US Federal Reserve is going to increase rates.

At the end of the trading session on February 6th the Nikkei index picked up 0.8% and is at 17,648.50. Observing the week dynamics the index lost 0.1%. The Topix index climbed 0.5% and reached 1,417.19. JPX-Nikkei Index 400 edged up to 0.6% to 12,847.97.

NewForex analyst Luigi Campo states that the situation in China was the opposite. The main indexes had a downtrend as investors remain cautious after the decision of the central bank to loosen liquidity.

The Hang Seng index shed 0.4% and is at 24,679.39. China Enterprises Index slipped to 0.8% and is traded at 1,697.32.

Among the most active shares in Hong Kong it is worth mentioning China National Culture Group Ltd (+ 8.9%), South East Group Ltd (+16.7%) and Bank Of China(-1.6%).