MasterForex Trend analysis of currency pairs and Comments (Updated daily)

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Overview of the main economical events of the current day - 19/02/2014

The Euro Reached the Highs of the Beginning of the Year

On Tuesday February, 18 the US dollar was traded mixed; it fell Vs. the euro and the Swiss franc, but rose Vs. the pound sterling and the yen – amid negative statistics. The pound sterling fell after the weak UK Inflation report. The yen fell after the release of Bank of Japan Meeting Results.

On Tuesday the US dollar decreased after the release of weak US data, and lost 0.2% to the dollar index. Manufacturing PMI, Treasury International Capital Flows and Housing Market data in the USA were negative. Empire State Manufacturing Index sharply fell in February. Empire Manufacturing dropped to 4.48 p. Comparing with 12.51 p. in January, whereas less decrease to 9 p. was expected. New Orders and Supplies Index considerably decreased as well.

The US Treasury International Capital (TIC) data in December demonstrated considerable increase of its outflow in December. Total Net TIC Flows demonstrated outflow of $119.6B against $16.6B of the previous month. The Net Foreign Sales of long-term securities composed $45.9B comparing with the outflow of $28B in November, whereas capital inflow of $30B was predicted.

NAHB Housing Market Index sharply decreased in February and dropped lower than 50, which is the boundary between negative and positive forecast, for the first time over 9 months. Housing Market Index dropped in February to 46 p. (9 month low) comparing with 56 p. in the previous month. The decrease was probably entailed by extreme weather conditions of this winter, shortage of workers, and limited ground access.

On Tuesday the euro went on strengthening its positions, having increased Vs. the US dollar till the highs of the beginning of the year – despite the predictions of ECB’s monetary policy easing next month. The euro ignored slight decrease of German Business Confidence, which fell to three-month lows, though it is still at considerably high rates.

German ZEW Economic Sentiment decreased in February to 55.7 p. comparing with 61.7 p. in January having considerably exceeded the expectations of decrease to 61.5 p. At the same time German ZEW Current Situation increased in February to 50 p. from 41.2 p. in January having exceeded the expectations – it reached the highest rate since August 2011. ECB’s Peter Praet announced on Tuesday that in case of further restricting the Eurozone GDP growth may exceed the expectations.

The pound sterling fell on Tuesday due to the weak Inflation report on the UK, which appeared to be lower than the BOE target range for the first time for over 4 years. Annual change of CPI decreased in January to 1.9% against 2% in December, whereas no changes were predicted. Annualized core inflation dropped in January to 1.6% y/y from 1.7% in the previous month against the expectations of growth to 1.9%. Inflation decrease gives reason to believe that the Central Bank will save low interest rates for economy recovery support. Monetary Policy Committee Member Ian McCafferty announced that economy has enough space for growth before the increase of the rates.

The yen dropped after the release of BOJ Monetary Policy Statement, where the policy was left unchanged – but two special loan programs were doubled and extended for a year in order to increase the stimulation effect and to master the deflation. According to the Central Bank Loan Programs data is of the part of QE. This decision influenced the forecasts of further QE increase.

On Tuesday the Australian dollar reached monthly high Vs. the US dollar after the release RBA February Meeting Minutes, but then it fell. RBA announced the period of stable interest rates which it is reasonable to leave unchanged further. The Canadian dollar slightly strengthened its positions amid oil price hike to 4 month high – it ignores Foreign Securities in December, which appeared to be sold for the first time since June, 2013.

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Overview of the main economical events of the current day - 21/02/2014

China’s HSBC Flash Manufacturing PMI Dropped to 7-Month Low

On Thursday February, 20 the US dollar strengthened its positions Vs. most major currencies amid controversial statistic data in the USA. The euro decreased amid the Eurozone Manufacturing PMI decrease. The Australian dollar dropped after the release of Chinese Flash Manufacturing PMI decrease data.

The US dollar strengthened its positions by 0.1% to the dollar index amid controversial statistic data. Inflation and Unemployment Claims data in the USA crossed the line of the expectations. Philadelphia Fed Manufacturing Index sharply decreased in February to -6.3 p. (annual low) comparing with 9.4 p. in January, having dropped lower than zero point for the first time over 9 months. At the same time U.S. Markit Flash Manufacturing PMI rocketed in February almost to 4-year high at the level of 56.7 p. from 53.7 p. in January.

The euro dropped amid the Eurozone Manufacturing PMI decrease to 2-month low. All Flash Manufacturing PMI and Non-Manufacturing OMI in France, Germany, and Eurozone appeared to be worse than predicted, except for German Non-Manufacturing PMI. Final Eurozone Manufacturing PMI decreased in February to 2-month low of 52.7 p. from 52.9 p. in January against the expectations of growth. Producer Price Index in Germany, Consumer Price Index in France, and Euro-zone Flash Consumer Confidence appeared to be worse than it was expected as well.

On Thursday the pound sterling was traded downwards amid lower Factory Orders growth. CBI Industrial Order Expectations increased in February to +3 against -2 in January, whereas growth to +5 was expected. Bank of England’s Martin Weale announced on Thursday that interest rates are likely to be increased in spring 2015.

The Australian dollar sharply dropped after the release of Chinese Manufacturing PMI decrease to 7-month low, but then it gained back all the losses. HSBC Flash Manufacturing PMI suddenly dropped in February to 48.3 p., comparing with 49.56 p. in January, whereas decrease only to 49.4 p. was predicted. Weak readings might be caused by the Lunar New Year celebration. The index is being decreased for the second month in a row, and it is above 50 indicates industry expansion, below indicates contraction.

The yen increased after the release of weak Trade Balance data in Japan and Manufacturing PMI in China, but then it lost all the growth amid positive Stock Markets dynamics. Trade Balance deficit in Japan in January appeared to be record high – 2.79 trillion yen, which is twice more than the December level. The deficit growth was expected to reach only 2.79 trillion yen. Export increased only by 9.5% comparing with the reading of the previous year, whereas import increased by 25% y/y amid energy import increase.

 

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Overview of the main economical events of the current day - 25/02/2014

Commodity Currencies Were Leaders on Monday

On Monday February, 24 the US dollar was traded slightly downwards Vs. most major currencies amid weak statistic data in the USA. The pound sterling strengthened its positions Vs. the US dollar amid growth of Sentiment in the UK Services sector. Commodity currencies increased amid staple prices growth.

The US dollar dropped VS. the pound and major commodity currencies, and had almost no changes Vs. the euro and the yen – having lost about 0.1% to the dollar index. One more series of weak data was released in the USA, though it was not so important. Markit US Flash Services PMI dropped in February to 52.7 p. (4-month low) against 56.7 p. in January, whereas growth was predicted.

Dallas Fed Manufacturing Activity dropped in February to 9-month low at the level of 0.3 p. against 3.8p. in January, having considerably exceeded the expectations of decrease to 3 p. Chicago Fed National Activity Index decreased in January to 6-month low at the level of -0.39, comparing with -0.03 in December (revised from +0.16) – decrease to -0.20 was predicted.

The euro increased to year highs after the release of IFO Business Survey in Germany, which are still at its highs since the middle of 2011, but then it decreased after the release of Inflation data. German Business Climate increased in February to 111.3 p. from 110.6 p. in January, whereas no changes were predicted. Assessment of Business Situation considerably exceeded the expectations, whereas Business Expectations decreased.

Though annual Eurozone Inflation Rate in January composed 0.8% having no changes in comparison with December, and having exceeded preliminary estimations at the level of +0.7% - at monthly rate Inflation dropped in January by 1.1% m/m, which appeared to be the highest decrease rate since 2001, when its current practice account began.

The speech of ECB’s Mario Draghi negatively influenced the euro – after G20 Draghi announced that he is ready to act, if the price forecast will become worse, though he doesn’t notice signs of the Eurozone deflation. ECB will have full set of information necessary for decision making – till the meeting of March, 6 – he added. ECB’s Visco also announced the possibility of interfering negative deposit stake will be discussed at the March meeting of the ECB.

The pound sterling strengthened its positions on Monday amid the growth sentiment in the UK Services Sector. The last CBI survey demonstrated that the climate among the UK companies improved to very high level over the recent 3 months. The comments of BOE’s Marc Carney supported the pound sterling as well – he noted that the Central Bank will support the UK economy recovery, which is close to the moment of interest rate increase.

Commodity currencies increased amid risk appetite increase and staple prices growth. The biggest increase Vs. the Us dollar was demonstrated by the Australian dollar. S&P 500 on Monday reached intraday historical high. Oil refreshed 4-month high amid demand increase in the USA, which is connected with weather conditions, and Supplies risks. Gold prices on Monday considerably increased, having reached the level of the end of October 2013.

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Overview of the main economical events of the current day - 27/02/2014

US New Home Sales Reached More Than 5-Year High

On Wednesday February, 26 the US dollar increased Vs. almost all major currencies amid US New Home Sales Increase to 5.5 years high. The US dollar demonstrated the highest growth for almost a month, having strengthened its position to the dollar index by more than 0.3% - before the speech of Fed Chair Janet Yellen on the Semiannual Monetary Policy Report before the Senate Banking Committee, which will take place on Thursday.

The US New Home Sales in January suddenly rose by 9.6% m/m – to 468 000 of houses comparing with upwards revised December reading of 427 000. Decrease of sales to 400 000 was predicted. New Home Sales overcame the peak at the level of 452 000, and increased to the highest rate since July, 2008. Nonetheless, previously released indicators pointed the weakness of the House Market. So, Existing Home Sales, where there are the majority of deals – dropped in January to the lowest rate foe over the last 18 months.

FOMC Member Fisher announced on Wednesday that there are no delays predicted for the QE3 – and it will continue even at considerable Stock Market correction. At the same time FOMC Member Eric Rosengren pointed that QE3 may be corrected according to economy growth situation.

The euro dropped on Wednesday to almost 2-week low Vs. the US dollar after not being able to overcome yearly high Vs. the US dollar a bit lower than $1.38. Negative influence to the euro was caused by renewed speculation on the case of possible interest rate decrease in the face of forthcoming ECB Meeting, and situation of strain in Ukraine.

German Consumer Confidence is still at high levels of the middle of 2007; however, this data had no significant influence. GfK Leading Consumer Confidence Index rose in March to 8.5 p. Against 8.3 p. in February having exceeded the expectations.

The pound sterling insignificantly decreased after 2-day growth amid revised UK GDP data for the 4th quarter. The UK economy growth in the 4th quarter composed 0.7% comparing with the previous quarter, which coincided both with preliminary data, and expectations.

However, annual growth rate of the UK economy for the 4th quarter were reduced to 2.7%, whereas according to preliminary estimations they composed 2.8%. BOE’s Spenser Dale announced on Wednesday that the Central Bank doesn't plan to increase interest rates in the nearest future, in spite the recent improvement of the British economy situation.

The Australian dollar dropped amid ironstone prices decrease to almost 8-month low. Ironstone is the most important Australian export item. The prices may continue to decrease further, because its world resources are at a high level, and steel prices have dropped.

House building data in Australia also appeared to be worse than expected – Construction Work Done for the 4th quarter dropped by 1% comparing with the 3rd quarter, whereas increase by 0.4% was predicted. It adds concerns of possible weak country’s GDP in the 4th quarter of 2013. The Australian data will be released on March, 5.

 

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Overview of the main economical events of the current day - 28/02/2014

US Dollar Drops on Janet Yellen’s Testimony

On Thursday February, 27 the US dollar decrease Vs. most major currencies, having lost slightly less than 0.2% to the dollar index. The US dollar was strengthening its positions in the first half of the day, but dropped during FOMC Chair Janet Yellen’s speech in the Senate Banking Committee. The New Zealand dollar strengthened its positions most of all Vs. the US dollar – amid positive New Zealand Trade Balance data.

The report of FOMC Chair Janet Yellen in the US Senate distinguished itself from the previous report in the US House of Representatives two weeks ago, but this report seemed to be gentler. Yellen announced that in case of considerable change of economy prospects, FOMC may revise QE3 tapering. She also does not see necessity in Fedreserve balance reduction for policy tightening. Yellen admitted the influence of severe weather to recently released economic data, which point out weaker consumer spending.

Released US data appeared to be different, and did not cause much attention – Durable Goods Orders appeared to be better than it was expected, whereas Unemployment Claims increased. Durable Goods Orders decreased in January by 1%, which appeared to be less than expected decrease by 1.7% .The decrease was mainly caused by aircraft orders reduction. Durable Goods Orders Ex Transportation increased by 1.1% against the expectations of decrease and demonstrated the highest growth since May, 2013.

The US Initial Claims increased last week by 14 000 to 348 000 from downwards revised 334 000, which appeared to be worse than expected 335 000. Unemployment Claims appeared to be the highest for the last 4 weeks. Four-Week Moving Average of Initial Claims remained flat – 338 250. Poor weather conditions in the USA weakened the recovery process of Labor Market and Housing Market, which will probably slow down economy growth rate during the first month of this year.

The yen and the Swiss franc were in demand on Thursday as save heaven currencies amid aggravation of tension in Ukraine, which also lead to the euro sales. The Swiss franc increased Vs. The euro to the highest rate since April, 2013; it ignored weak GDP and Employment Level data in Switzerland. Swiss economy growth in the 4th quarter slowed down to 0.2% q/q from 0.5% in the previous quarter, against the expectations of growth by 0.4%, which was caused by export decrease by 1.7% q/q. Employment rate dropped in the 4th quarter to 4.19 million from 4.20 million in the 3rd quarter, whereas growth to 4.22 million was predicted.

The euro decreased in the first half of the day amid controversial statistics, but then it increased. German Inflation data appeared to be worse than expected, which especially essential before the Eurozone Inflation data release on Friday. Annual inflation rate in Germany slowed down in February to 1.2% from 1.3% in January, whereas no changes were predicted. Consumer Confidence in France decreased as well.

At the same time, German Labor Market and Eurozone Economic Confidence data appeared to be better than expected. Unemployment Change in Germany decreased in February by 10 000. German Unemployment Change stays at 6.8% level, which is close to 2 decades low, for the third month in a row. Eurozone Economic Sentiment Indicator increased in February to 101.2 p. (the highest rate since July, 2011) from 101 p. in January, against the decrease expectations. Confidence indices, except Consumer Confidence Index, increased.

The New Zealand dollar strengthened its positions amid positive Trade Balance data in New Zealand. Trade Balance proficit in January increased to 306 million of New Zealand dollars, which appeared to be better that the predicted 230 million. Fonterra, the largest world milk products exporter, stated the increase of payments to farmers-shareholders, and this fact also supported NZD growth.

The Australian dollar dropped on Thursday after weak Investment data in Australia, but then it gained all the losses. Private Capital Expenditure in Australia reduced in the 4th quarter by 5.2% q/q, whereas decrease by only 1% was predicted. The drop was the most considerable for almost 5 years.

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Overview of the main economical events of the current day - 04/03/2014

The US Dollar and the Yen Strengthened Its Positions on Monday


On Monday March, 3 the US dollar was traded upwards Vs. most major currencies amid ISM Manufacturing PMI growth in the USA. Markit PMI, Personal Income, and Personal Spending data appeared to be better than expected. The yen strengthened its positions due to the demand for save heaven currencies amid heightening of tension in Ukraine.

Personal Income increased in January by 0.3% comparing with the previous month, having exceeded the expectations of growth by 0.2% - whereas personal Spending strengthened its position by 0.4% m/m, which appeared to be more than forecasted +0.1%. Report confirms the last data pointing that Americans start overcoming the results of severe winter. ISM Manufacturing PMI in February increased to 53.2 p. from 51.3 p. in January, having considerably exceeded the expectations of growth to 52 p.

ISM Manufacturing PMI in the USA

Final Markit Manufacturing PMI also appeared to be better in February, and increased to 57.1 p. comparing with preliminary estimations at the level of 56.7 p. and January reading of 53.7 p. According to Markit, PMI signaled the most significant improvement of doing business terms for over 45 months.

The yen increased to its monthly high Vs. the US dollar due to the demand for save heaven currencies – amid escalation of tension in Ukraine on the weekend, when the President of Russia Putin got obtained admittance from the Parliament to use military forces in this country. Interference of Russia into Ukrainian events sparked concern about the big international conflict. On Monday gold prices increased to its high for over the last 4 months. Light Sweet Crude Oil (WTI) futures increased to the highest rate for more than 5 months.

The euro dropped on Monday from 2-month highs Vs. the dollar amid heightening tension in Ukraine – though ECB’s Draghi announced than economic influence of Ukraine to the Eurozone is limited, and commercial relations are not significant. Final Eurozone Manufacturing PMI decreased in February to 53.2 p., comparing with 54 p. in January, though it appeared to be better than preliminary estimations at the level of 53 p. German and Italian PMI decreased, whereas French and Spanish increased.

The pound sterling also decreased, having almost no reaction to the British data of manufacturing sectors, which appeared to be slightly better than expected. Manufacturing PMI increased in February to 56.9 p. comparing with 56.6 p. in January, whereas reduction was expected. According to Bank of England, Mortgage Approvals increased in January to its high for over more than 6 years – 76 900 against the expectations of growth to 73 500, but lending volume goes on reducing.

The Australian dollar gained back all the losses of the beginning of the day amid Non-Manufacturing PMI in China to 3-month high. Official Chinese Non-Manufacturing PMI increased in February to 55 p. comparing with 53.4 p. in January. Other data was also not so bad. ANZ Job Advertisements in February demonstrated the highest growth rate for over 2 years. AIG Manufacturing Index increased in February to 4-month high. The New Zealand dollar also negated part of losses amid Terms of Trade Index in New Zealand in the 4th quarter by 2.3% q/q to 40-years high.

 

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Overview of the main economical events of the current day - 06/03/2014

The US Non-Manufacturing Activity Dropped to 4-Year Low

On Wednesday March, 5 the US dollar decreased Vs. most major currencies after the release of weak US Non-Manufacturing Activity, but the reduction was moderate. ADP Employment Change also appeared to be worse than expected. The Canadian dollar strengthened its positions amid Bank of Canada Meeting. The Australian dollar increased amid strong Australian GDP data.

ISM Non-Manufacturing PMI suddenly dropped in February to its low since February 2010 at the level of 51.6 from 54 in January – whereas just slight decrease to 53.5 was expected. The largest decrease was demonstrated by Employment Index, which dropped in February to 47.5 from 56.4, having fallen lower than 50 for the first time for over 2 years - which is especially jittery before the release of Non-Farm Payrolls in the USA on Friday.

According to Automatic Data Processing (ADP), the US Non-Farm Employment Change increased in February by only 139 000, which appeared to be considerably worse than expected 160 000. Employment growth in January was also considerably revised downwards - to 127 000 from initial reading of 175 000. ADP data precede Non-Farm Payrolls key report of the US Department of Labor, which will be released on Friday, and it is frequently considered to be preliminary.

The US ADP Employment Change and Non-Farm Payrolls

The euro had almost no changes according to the results of the day before the ECB Meeting on Thursday – the euro had almost no reaction to Retail Sales growth and Services PMI of the Eurozone. ECB’s inflation forecast for the nearest years will attract attention on Thursday, as well as the press-conference of ECB’s Draghi. The markets wait for the ECB to take some actions to monetary policy easing. Barclays wait for interest rate reduction, whereas others believe that we may observe some liquidity injection.

Final Services PMI of the Eurozone increased in February to 52.6 p. comparing with 51.6 p., having exceeded preliminary estimations. Flash Manufacturing PMI and Services PMI rose in February to 53.3 p. from 52.9 p. in January, against the expectations of decrease – the highest rates since June, 2011 are still left. The Eurozone Retail Sales increased in January by .6% after decrease by 1.3% in December, having twice exceeded the expectations of growth.

The pound sterling strengthened its positions before the Bank of England meeting on Thursday, at which no policy changes are predicted. Services PMI decreased in February slightly less than it was expected – to 58.2 p. from 58.3 p. in January, which appeared to be better than predicted decrease to 58 p. Though it is the lowest rate since June, 2013, Services PMI activity growth for more than a year, Employment Change growth also accelerated.

The Australian dollar increased to its weekly high Vs. the US dollar amid strong country’s GDP data. Quarterly Economic Growth Rate in Australian in the 4th quarter composed 0.8%, having exceeded the expectations of growth by 0.7% q/q. Annualized GDP of the 4th quarter increased by 2.8% against growth by 2.4% in the previous quarter – having exceeded the expectations of growth by 2.5%. GDP growth acceleration happened mainly due to Export growth, which in 2013 increased by 6.5%, which was mainly promoted by AUD weakening.

The Canadian dollar strengthened it positions to 2-weeks high Vs. the US dollar amid Bank of Canada Meeting, where the policy was left unchanged, and it was also announced that inflation goes on strengthening its positions, but downward risks are still considerable. Time limits and course of further interest rate change depend on the influence of the new risk balance information - the Central Bank noted.

 

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Overview of the main economical events of the current day - 07/03/2014

The US Dollar Dropped In Expectation of Non-Farm Payrolls

On Thursday March, 6 the US dollar dropped Vs. most major currencies in anticipation of weak Non-Farm Payrolls, which is going to be released on Friday. US Factory Orders also appeared to be worse than expected. The euro increased after ECB’s Meeting Minutes release, at which new measures of monetary policy easing were not announced.

The US dollar lost 0.5% to the dollar index, having dropped to the lowest rate since October, 2013 according to DX – before the release of Non-Farm Payrolls on Friday. The data appear to be weaker than expected at the level of 150 000 working places – this is implied by the growth of average weekly Unemployment Claims during February. The largest growth Vs. the US dollar was demonstrated by the Australian dollar, which strengthened its positions amid positive statistics in Australia.

The US Initial Claims last week decreased by 26 000 to 3-month low at the level of 323 000, from 349 000 of the previous week - it appeared to be better than expected 336 000. 4 weeks average Initial Claims was decreasing for the second week in a row to 336 500 - from 338 500 last week. However, in February average weekly Initial Claims increased by 3 500 comparing with January, when it was created only 113 000 working places.

The US Factory Orders also appeared to be worse than expected – orders dropped in January by 0.7% against the expectations of decrease by 0.4%. This is one more mark of recent Manufacturing Index in the USA. Previous month’s data was also revised downwards – decrease of Factory Orders in December composed 2% m/m, but not 1.5% as it was reported earlier.

The euro sharply rose and opened above $1.38 to the dollar for the first time since October, 2013 – after the ECB left interest rates unchanged despite the Eurozone bottom inflation. New measures of monetary policy easing were not announced. According to Draghi’s comments, aggressive measures are excepted in the nearest future. ECB increased the Eurozone economy growth predictions in 2014 to 1.2% from December 1.1% - but decreased Inflation estimation from 1.1% to 1%. In 2015 the Eurozone GDP will increase by 1.5%, and inflation rate will accelerate to 1.3%, as it was expected in December. In 2016 GDP growth will compose 1.8%, and inflation rate – 1.5%.

The pound sterling slightly strengthened its positions amid Bank of England decision to leave the key interest rate and the stake purchase program without changes. Housing Market data supported the pound sterling – according to Halifax, House Prices in the UK increased in February by 2.4% having demonstrated the highest growth rate for over 5 years. But the prices are still 10% lower than the peak of August 2007. Housing Price acceleration takes place amid country's economy recovery which supports demand for real estate.

The yen dropped to 5-week low Vs. the US dollar after Japanese Advisory Group announced on Thursday that the largest Government Pension Investment Fund GPIF has no need to focus investments to local bonds taking into consideration country’s inflations rate acceleration. GPIF should look for investment possibilities which may bring large profit. Increase of investments to foreign holdings may lead to further weakening of the yen.

The Australian dollar increased on Thursday to the highest rate Vs. the US dollar for almost three months - after positive statistic release in Australia. Retail Sales in January increased by 1.2% m/m, having exceeded the expectations of growth by 0.5%, and having demonstrated the highest monthly growth rate for almost a year. Trade Balance proficit increased in January to 1.43B AUD from 0.59B in December against the expectations of decrease. The proficit increases for the third month in a row, and appeared to be the highest for over 2.5 years.

The Canadian dollar strengthened its positions amid Ivey PMI growth to 4-month high. Building permits growth rate in Canada also exceeded the expectations and appeared to be the highest for over half a year.

 

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Overview of the main economical events of the current day - 11/03/2014

The Australian Dollar Dropped Amid Weak Chinese Data

On Monday March, 10 the US dollar increased vs. the pound sterling, the Australian dollar, and the Canadian dollar, having almost no changes vs. other major currencies amid absence of any significant macro statistics in the USA. The pound sterling decreased before Inflation Report Hearings, which will take place on Tuesday. The Australian dollar dropped amid weak data in China. The Canadian dollar got under the pressure amid fall of commodity prices.

The Australian dollar dropped amid weak data in China released last weekend and on Monday. Chinese Trade Balance deficit in February composed $23B, whereas balance proficit was expected at the level of $14.5B. At that the export dropped by 18.1% comparing with the similar period of the previous year (the highest decrease since 2009), against the expectations of growth by 5% y/y – at that import has almost no changes. Export from China is considered to be the gauge of global commodities demand. At the same time the data might be wrenched due to more early celebration of the Lunar New Year this year.

Annual growth rate of Consumer Price Index in China decreased in February to 13-month low at the level of 2% from 2.5% in January, against the expectations of decrease to 2.1% - which increased concerns about slow down of economy growth rate of PRC. New Loans in China in February decreased more than it was predicted and dropped more than twice comparing with January. New Yuan Loans reduced to 645B from 1320B in January – whereas decrease only to 730B yuans was predicted.

The yen increased at the beginning of the day amid weak Japanese data and decrease of Japanese stock market, but then negate the whole increase. According to final data, Japanese GDP annualized growth rate in the 4th quarter was decreased to 0.7%, against preliminary estimation of 1% and growth by 1.1% in the 3rd quarter. Current account deficit in Japan in January reached record high 1.589 trillion yuans. Import increased in January by 30.3% comparing with similar period of the previous year, due to energy source import price growth, entailed by falling in price yen.

According to the results of the two-day Meeting of the Bank of Japan, monetary policy was left without changes, as well as general economy assessment. It is a sign of confidence of the Central Bank that the economy is able to survive the forthcoming increase in sales tax in April. Bank of Japan decreased the estimation of export, but increased the estimation of capital investment and industrial production.

The euro had almost no changes according to the results of the day. Industrial Production in France appeared to be worse than it was expected, whereas in Italy it appeared to be better. Eurozone Sentix Investor Confidence in March appeared to grow slightly worse than expected, to 13.9 from 13.3 in February, and it still stays at 3-years highs. Bank of France left the estimation of country’s GDP growth for the 1st quarter without changes at the level of 0.2%. ECB’s Christian Noyer announced on Tuesday that he is not satisfied with the euro’s strength. ECB is open for all types of instruments and is ready to act if risks are revealed. ECB’s Sabine Lautenschlager also announced that ECB is open to the idea of negative rates and stake in purchase if necessary.

The pound sterling dropped on Monday before Inflation Report Hearings which will be held on Tuesday, and during which the Head of the British Central Bank Marc Carney will testify. BOE Deputy Governor Charles Bean announced that further pound’s growth may harm country’s export and economy overbalance from internal expenditures to foreign trading. Another negative factor according to Citigroup is investor quit of long positions of pound sterling, which previously were opened relying on growth connected with deal between Vodafone and Verizon, which finished in the end of February.

 

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Overview of the main economical events of the current day - 13/03/2014

Reserve Bank of New Zealand Was the First among Major Central Banks to Increase the Key Interest Rate

On Wednesday March, 12 the US dollar decreased vs. most major currencies before the release of Retail Sales report on Thursday. The New Zealand dollar increased vs. the American currency most of all – after the Reserve Bank of New Zealand (RBNZ) increased the Official Cash Rate (OCR) by 0.25%.

The New Zealand dollar sharply increased and refreshed the highs of the year vs. the US dollar after the RBNZ increased Official Cash Rate (OCR) by 0.25% to 2.75% as it was expected. But the tone of the announcement was stricter, and the rate forecast was higher. RBNZ’s Wheeler noted the impulse of the economy growth in New Zealand and strengthening of inflation pressure on the part of high prices and Housing market boom.

Further increase of OCR will depend on data and inflation. Thought RBNZ announced that the course of New Zealand dollar is overcharged, he didn’t point that OCR growth rate will be changed due to this fact. Wheeler expects that interest rates will increase by 1.00-1.25% this year, and by 2.00% during next two years. RBNZ was the first bank among the Central Banks of developed countries, which settled down the course of interest rates increase. The rate was not increased almost four years, and was at the level of 2.50% for three years, when in March, 2011 RBNZ decreased the rate due to the earthquake in New Zealand.
The sales of the US dollar were resumed on Wednesday at the American session amid absence of significant macro statistics in the USA. According to the results of Wednesday the US dollar index lost a bit more than 0.2%. The euro increased again above the mark of $1.39 vs. the US dollar, which he was reaching in the end of the last week.
The euro had almost no reaction to the Eurozone Industrial production data, which suddenly dropped in January. Industrial production decreased in January by 0.2% m/m against the expectations of growth by 0.2%. Data of the previous month was revised upwards. At the same time annualized data appeared to be better – industrial production increased by 2.1% y/y, having exceeded the expectations of growth by 1.9%.

The euro was given support by the testimony of ECB’s Coeure, who announced that there is no deflation in the Eurozone, and stimulation measures of additional liquidity inflow to the banking system are not necessary. German Finance Minister Wolfgang Schaeuble also noted on Wednesday that interest rates in the Eurozone are too low in mid-term, and he doesn’t notice deflation in the Eurozone.
The Australian dollar on Wednesday interrupted its three-day growth and increased before the Australian Labor Market report – thought it decreased in the first half of Wednesday after the release of weak Australian Consumer Sentiment which dropped to 10-month low. Home Loans and Investment Lending also appeared to be worse than predicted. The Australian dollar sharply increased to 4-day high vs. the US dollar – after the release of Australian Labor Market report on Thursday. Employment in Australia in February increased by 47 300 and thrice exceeded the expectations of growth by 15 000.

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Overview of the main economical events of the current day - 17/03/2014

Main Events of the Coming Week

On Friday March, 14 the US dollar decreased vs. the yen. The euro, and the pound sterling, but slightly increased vs. major commodity currencies having lost 0.2% to the dollar index amid the US Consumer Confidence decrease to 4-months low. The US Producer Price Index data appeared to be worse than expected.
Preliminary U. of Michigan Consumer Sentiment in March sharply dropped to 79.9 p. comparing with Revised U. of Michigan Consumer Sentiment in February at the level of 81.6 p., whereas the increase was not expected. Consumers’ concerns were related with economy prospects. Current Assessment in March slightly rose, whereas Expectations dropped to the lowest level since November.

Producer Price Index decreased in February by 0.1%m/m against the expectations of growth by 0.2%. Core Producer Price Index Ex Food and Energy Supplies dropped by 0.2% comparing with the previous month, whereas growth by 0.2% was expected.
On Friday the euro gained back all the losses of Thursday, when the European currency dropped after ECB Draghi’s testimony. The pound sterling appeared to be slightly worse amid extension of the UK Trade Balance deficit in January to 4-month low. The yen continued its growth amid concerns about weak economy data in China and aggravation of tension in Ukraine. AUD and NZD corrected downwards after considerable growth of the previous days.

According to the results of the previous week the US dollar lost 0.36% to the dollar index having continued the decrease to DX for the third week in a row. The US dollar demonstrated multidirectional dynamics vs. major currencies – it decreased vs. the yen, the New Zealand dollar, the Swiss franc, and the euro – but increased vs. the pound sterling, the Australian dollar, and the Canadian dollar. The yen increased vs. the US dollar most of all, and the US dollar demonstrated the largest growth vs. the pound and the Australian dollar.
The main event of the coming week will be Fed’s 18-19 March Meeting, during which QE3 Tapering is expected to reduce by another $10B. Meeting Minutes will be announced on Wednesday, and FOMC Press Conference will take place; FOMC Economic Projections will be released as well.
On Monday in the USA Industrial Production, Capital Inflow, Empire Manufacturing PMI, and NAHB Housing Prices data will be released; on Tuesday – Building Permits, New House Starts and Consumer Price Index; on Wednesday – Current Account; on Thursday – Existing Home Sales, Philadelphia Fed Manufacturing Index, and Bank Stress Test Results.
On Monday in the Eurozone Final Inflation data will be released; on Tuesday – Trade Balance; on Friday – Current Account and Preliminary Consumer Confidence. On Tuesday German ZEW Economic Sentiment will be released; and on Thursday – Producer Price Index. The Swiss National Bank Interest Rate Decision will be announced on Thursday.
On Wednesday in the UK Bank of England last Meeting Minutes and Labor Market data will be released; on Thursday - CBI Industrial Order Expectations; and on Friday – Public Sector Net Borrowing. BOE Governor Mark Carney is due to speak at the Annual Mais Lecture at CASS Business School in London. On Wednesday Chancellor of the Exchequer George Osborne will perform Annual Budget Release.
On Wednesday in Japan Trade Balance will be released. Bank of Japan Governor Kuroda is due to speak at the International Financial Symposium and on Thursday he is due to speak at the Japan Chamber of Commerce and Industry in Tokyo. On Tuesday in Australia Reserve Bank of Australian last Meeting Minutes will be released.
On Monday in New Zealand Westpac Consumer Sentiment is going to be released; on Wednesday – Trade Balance; on Thursday – 4th Quarter GDP data. On Tuesday in Canada Manufacturing Sales will be released, and on Friday – Inflation and Retail Sales. BOC Governor Stephen Poloz is due to speak at the Chamber of Commerce in Halifax.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 25/03/2014

The US Dollar Dropped after Fed’s John Williams Speech

On Monday March, 24 the US dollar dropped vs. most major currencies after Fed’s John Williams speech, where he announced that the rates will stay low for quite a long period of time. The largest growth vs. the US dollar was demonstrated by the Australian dollar, which increased amid hopes for stimulation in China, despite weak data of Manufacturing Index data in China.

The US dollar tried to increase amid weak data in the Eurozone, but it dropped after Fed’s John Williams speech, which decreased the hopes for earlier start of increase of base interest rates in the USA. Williams announced that Fed’s policy did not change deep down – he expects that rates will stay low for quite a long period of time. Rates will be increased not earlier than in the second half of 2015. Monetary policy may approach to normalization till the end of 2016, but even then the rate will stay much lower than 4%.

The US data released on Monday appeared to be mixed and had almost no influence to trading course. Chicago Fed National Activity Index increased in February after two-month decrease to 0.14 from -0.45 in January. At the same time, Markit Preliminary Manufacturing PMI decreased in March to 55.5 p. against the February reading of 57.1 p., which appeared to be the highest since May, 2010.

The euro was traded downwards in the first half of the day after the release of the Eurozone Composite PMI, which dropped in March to 2-month low. The Eurozone data appeared to be worse than expected – PMI in France increased having exceeded the reading of 50 – whereas in Germany the PMI dropped. Manufacturing Index in Germany decreased to 4-month low, Services PMI – to 2-month low. The Eurozone Flash Composite PMI decreased in March to 53.2 p. from 53.3 p. in February, whereas no changes were expected. The February reading was the highest since June, 2011.

In March in the monthly report Bundesbank announced that the German economy growth in the first quarter of the year should be strong, but in the second quarter it will slow down. ECB’s Liikanen announced that ECB will keep to soft monetary policy for economy stimulation, and is ready to take further decisive actions if necessary.

The Australian dollar refreshed the year high despite the fact that Manufacturing Activity in China decreased to 8-month low. Preliminary HSBC Manufacturing PMI in March continued its reduction for the 5th month in a row. PMI dropped to 48.1 p. from 48.5 p. in February against the expectations of growth. China is the main trade partner of Australia.

However, weak Chinese data strengthened expectations of economy stimulation on the part of Chinese authorities. The main Chinese economist HSBC announced that the situation of Chinese economy goes down amid ongoing weakening of domestic demand, and Beijing is expected to take a series of actions for growth stabilization. In the nearest future mainstreaming of economy growth is expected due to planned reforms, economic liberalization, and increase of expenses for infrastructure projects.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 31/03/2014

Main Events of the Coming Week

On Friday March, 28 the US dollar was traded mixed amid reduction of the US Consumer Confidence. The US dollar decreased vs. the pound sterling and the euro, but increased vs. the yen and major commodity currencies, having added about 0.1% to the dollar index. Commodity currencies were corrected downwards after considerable growth of the previous days. Consumer Confidence data appeared to be worse than it was expected.

UoM Consumer Sentiment dropped in March to 80 p. comparing with 81.6 p. of the previous month, but appeared to be slightly higher than preliminary estimations of 79.9 p. At the same time, final data was predicted at the level of 80.5 p. The index dropped in March to the lowest reading for over 4 months. Consumer Expectations reading decreased for the nearest 6 months. FOMC Member Charles Evans announced on Friday that interest rates will stay near zero level during considerable part of 2015.

On Friday the pound sterling continued strengthening its positions amid growth of the UK Consumer Confidence in March to the highest rate for more than 6 years. Country’s services sector in January demonstrated the highest annualized growth for almost 6 years since February, 2008. The yen weakened its positions before the finish of the financial year in Japan in the end of March and impositions of sales tax since April, 1 amid positive dynamics of stock markets. Citigroup expects that Bank of Japan will increase monetary stimulation program till July, due to this fact USDJPY may increase to 108-110 till summer.

The euro sharply dropped on Friday to 4-weeks low vs. the US dollar after release of weak Spanish inflation rate data, but then it gained back all the losses amid growth of Euro-zone Economic Sentiment. Euro-zone Economic Sentiment Indicator increased in March to 102.4 p. (the highest level since July, 2011) from 101.2 p. in February, having exceeded the expectations. The indicator grows for the 11th month in a row already. All confidence indices increased, which speak for the Euro-zone economy recovery continuation in the nearest future.

Preliminary March CPI in Spain, the fourth Euro-zone economy, fixed the first case of deflation of consumer price index since 2009 (-0.2% y/y). German Inflation Rate data also demonstrated slowdown of inflation rate growth. Preliminary Consumer Price Index (y/y) increased in March by 1% against 1.2% in February and expectations of growth at the level of 1.1%. March Inflation data of the whole Euro-zone will be released on Monday March, 31. Weak Inflation data strengthened the expectations of further stimulation measures on the part of ECB.

According to the results of the previous week the US dollar demonstrated multidirectional dynamics, having added 0.1% to the dollar index. The US dollar decreased vs. major commodity currencies (more than 1%) and the pound sterling, but increased vs. the yen, the Swiss franc and the euro. According to the results of almost finished month, the US dollar increased vs. the yen, the Swiss franc, the pound sterling, and the euro – but decreased vs. AUD and NZD (more than 3%) having added 0.7% to the dollar index.

The main event of the week will be the release of key Non-Farm Payrolls on Friday in the USA, preliminary ADP data which will be released on Wednesday. In the USA on Monday Chicago PMI will be released, on Tuesday – ISM Manufacturing PMI and Construction Spending; on Wednesday – Factory Orders ж and on Thursday – ISM Non-Manufacturing PMI and Trade Balance. On Monday Fed’s Chair Janet Yellen is due to speak at the National Interagency Community Reinvestment Conference in Chicago.

The main event in the Euro-zone will be the Meeting of the European Central Bank on Thursday. Inflation decrease may provoke ECB to realize additional measures of stimulation. Recently many representatives of the ECB actively commented the possibility of interest rate decrease or even assets purchase. On Tuesday Final Manufacturing PMI and Final Services PMI will be released on Thursday; on Tuesday – Euro-zone Unemployment Change; on Wednesday – Producer Price Index; and on Thursday – Retail Sales. In Germany on Monday Retail Sales data will be released, on Tuesday – Labor Market data, and on Friday – Factory Orders.

On Monday in the UK Mortgage Approvals will be released, and since Tuesday till Thursday Manufacturing PMI, Services PMI, and Construction PMI will be released as well. On Monday Head of BOE Mark Carney is due to speak after Financial Stability Board Plenary Meeting press briefing. In Japan on Monday Industrial production data will be released, and on Tuesday – the Bank of Japan’s Tankan Quarterly Survey of Enterprises in Japan.

Meeting of the Australian Reserve Bank will be held on Tuesday, and no policy changes are expected. On Thursday retail Sales and Trade Balance data will be released, and speech of RBA’s Governor Glenn Stevens. On Monday in New Zealand ANZ Business Confidence will be released. Australia and New Zealand will revert to standard time on April, 6. On Monday in Canada GDP data will be released, on Thursday – Trade Balance data, and on Friday – Labor Market data. In China official Manufacturing PMI will be released on Tuesday, and on Thursday – Non-Manufacturing PMI.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 01/04/2014

The US Labor Market Is Still Weak

On Monday March, 31 the US dollar moderately decreased vs. most major currencies, having lost 0.1% to the dollar index – amid Janet Yellen’s speech, during which she announced the necessity of monetary policy easing continuation, referring to the weakness of the labor market. Chicago PMI dropped in March to semiannual low.

Performing at the Chicago Conference Fed Chair Janet Yellen announced that the Central Bank should continue soft monetary policy for some period of time due to considerable weakness of the US labor market. In some ways the situation at the labor market is more complicated than during the recession period, she added, referring to the large amount of long-term unemployed, fractional persons, and low growth rate of salaries.
Chicago Business Barometer dropped in March to semiannual low. Chicago PMI dropped to 55.9 p. against 59.8 p. in February and expectations at the level of 58.5 p. Employment and New Orders considerably decreased in comparison with March.

The euro compensated all the losses at weak Eurozone Inflation rate, which appeared to be the lowest since October, 2009. According to preliminary data, annual inflation growth rate of the Euro-zone decreased in March to 0.5% against 0.7% in February and forecast at the level of 0.6%. Inflation in Italy also decreased to 0.4% y/y from 0.5% in the previous month.

The data intensifies pressure for the ECB in terms of new measures directed for overcoming of low inflation. Retail Sales (m/m) in Germany appeared to be positive, the reading increased in February by 1.3% against the expectations of decrease. ECB’s Nowotny announced that the Euro-zone recession is over, and there will be economy growth in the region this year.

The pound sterling continued its growth for the fifth day in a row amid general weakness of the US dollar. According to the Bank of England, Mortgage Approvals decreased in February from the highest reading of more than 6 years, but it is still at considerably high level. Mortgage Approvals decreased to 70 300 against 76 800 in January, and expectations at the level of 75 000; but consumer credit increased in whole, which speaks for further recovery of Housing Market.

Then yen weakened its positions vs. all major currencies amid Russia and the USA tendency to find diplomatic solution of the Ukrainian crisis, which decreased demand for save haven currencies. On the weekend during the meeting of heads of foreign affairs of Russia and the USA confirmed the aspiration to regulate the crisis in a political way. Industrial production in Japan in February dropped at the highest pace for 8 months. The Bank of Japan’s Tankan Quarterly Survey of Enterprises in Japan demonstrated that the companies wait for deterioration а business conditions in the next quarter, which may increase expectations of further monetary policy easing by the Bank of Japan.

The Canadian dollar inconsiderably strengthened its positions after release of the Canadian economy growth data, which appeared to be better than expected. GDP in January increased by 0.5% comparing with December reading, and against the forecast of growth by 0.4% - these are the highest growth rates for over the last 6 months.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 02/04/2014

The Australian Dollar Dropped After RBA Decision

On Tuesday April, 1 the US dollar was traded mixed amid controversial statistic data in the USA. Manufacturing Activity growth in the USA reached 3-month high; still the data appeared to be worse than expected. The euro strengthened its positions amid positive German and Euro-zone labor market data. The pound sterling dropped after release of the weak UK Manufacturing PMI report, which demonstrated the lowest reading for over 8 months.

The US dollar increased vs. the yen, the pound sterling, the Australian dollar, and the New Zealand dollar, but decreased vs. the euro, and the Canadian dollar, having almost no changes to the dollar index. ISM Manufacturing PMI increased in March to 53.7 p. Against 53.2 p. In February, but appeared to be lower than expected 54 p. The PMI grows for the second month in a row. The growth in March provided considerable growth of manufacturing index. Final Final Markit Manufacturing PMI stayed in March without changes and composed 55.5 p.

The euro strengthened its positions amid positive German and Euro-zone Labor Market data. German Unemployment Change decreased in March by 10,000. Unemployment Change composed 6.7% having no changes in comparison with February, reading of which was downwardly revised from 6.8%. Euro-zone Unemployment Change remained in February without changes in comparison with the January reading of 11.9%, which was reduced from 12%. The same time, Italian Unemployment Change increased in February to 13% from 12.9% in January, whereas no changes were expected.

The euro was also supported by the Euro-zone Manufacturing Activity data, which exceeded the expectations in Spain, Italy, and France, but appeared to be weaker than forecasted in German. The Euro-zone data coincided with the expectations – Final Manufacturing PMI in March composed 53 p., having decreased from the February reading at the level of 53.2 p. ECB’s Board member Vitor Constancio announced on Tuesday that ECB doesn’t see further prospects of the Euro-zone deflation, and he expects that March reading will be revised.

The pound sterling dropped after weak UK Manufacturing Activity report, which demonstrated the lowest reading for over 8 months. Manufacturing PMI decreased in March to 55.3 p. From downwardly revised 56.2 p. In February, and appeared to be lower than forecasted 56.7 p. PMI decreased for the 4th month in a row.

The Australian dollar decreased after RBA Meeting, during which the rate was left without changes at record low 2.5%. But final RBA Rate Statement was more pessimistic in comparison with the previous ones. RBA noticed that AUD is high according to historical standards, and its recent strengthening creates potential risk for economy recovery, and also aggravates exporters’ situations. Final March HSBC Manufacturing PMI in China was downwardly revised to 48 p. against initial estimation of 48.1 p. and the February reading of 48.5 p.

The Canadian dollar strengthened its positions on Tuesday amid Raw Materials Price Index growth, which demonstrated the highest monthly growth rate for over almost three years, which was mainly due to energy prices growth. Raw Materials Price Index (m/m) increased in February by 5.7%, having twice exceeded the expectations. The index increases for the third month in a row.

The yen continued its weakening on Tuesday for the 4th day in a row amid start of the new financial year in Japan and positive dynamics at stock markets. The reduction of the yen was due to the Bank of Japan’s Tankan Survey of Enterprises, which demonstrated deterioration of Business Climate prospects in Japan due to sales tax initiation.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 015/04/2014

The Euro Dropped amid Draghi’s Speech

On Monday 14 April the US dollar increased vs. the euro and the yen, having added 0.33% to the dollar index amid positive Retail Sales data in the USA, which were growing in March at maximum rate for over a year and a half. The euro dropped after ECB’s Mario Draghi’s speech. The pound sterling had almost no changes according to the results of the day amid Housing Market data in the UK.

Retail Sales in the USA increased in March by 1.1% comparing to the previous month, having exceeded the expectations of growth by 0.8% m/m – the rise appeared to be the highest since September, 2012. February data was upwardly revised. Retail Sales Ex Auto rose by 0.7% against the forecast of growth by 0.5%. The leading factor of growth became the increase of auto sales, which rocketed in March by 3.1% after the increase by 2.5% in February. Sales of 10 out of 13 main categories of retail goods increased in March.

The euro dropped during the first day of the week after ECB Mario Draghi’s speech on Saturday during which he pointed the danger of excessive strengthening of the euro. Strengthening of the European currency course may provoke ECB to taking additional measures of monetary policy easing, Draghi announced. Lately the strong euro bears pressure on the inflation. The course of the euro becomes more important factor in terms of estimation of price tendencies on the part of the ECB, Draghi added.

ECB's Christian Noyer also stated on Monday that the more intensely the euro grows the more soft the monetary policy should be. The strength of the euro is in obstacle on the way to achieving price stability. The growth of the euro which was observed last year, is unacceptable. At ECB’s disposal there is a series of policy instruments: assets purchase, interest rates decrease, and additional guide marks of monetary policy – Noyer announced.

According to the results of the day the pound sterling had almost no changes – the support is still rendered by the Housing Market data in the UK. The UK Rightmove House Prices reached in April new record high for the second month in a row. House Price Index increased in April by 2.6% - average price of the house put up for sale reached record £262,600. The growth composed 7.3% annual rate of increase in asking prices and became the highest since October, 2007. The prices grow due to lack of houses and mortgage availability.

The Australian dollar decrease after the Tuesday release of the last RBA Meeting Minutes. Reserve Bank of Australia pointed the period of interest rates stability. But the course of the Australian dollar still stays high according to historical standards. Its recent recovery doesn’t promote economy growth – and decrease of the AUD course still helps to return back to the balanced economy growth.

Reserve Bank of Australian noted that strong growth of investments to Housing Market is expected. However, the drop of investment to mining sphere and weak government expenditures will limit the growth. Labor Market indicators improved but more should be done for Unemployment Rate reduction. The New Zealand dollar was downwardly traded – Global Dairy Trade auction which will take place on Wednesday is among the risks for NZD. During the late auction milk prices reached the lowest level for over 13 months.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 017/04/2014

The UK Unemployment Dropped to the 5-Years Low

On Wednesday April, 16 the US dollar was traded mixed, having almost no changes to the dollar index amid controversial statistic data in the USA. The US Industrial Output appeared to be better than expected, whereas Labor Market data appeared to be worse than expected. The pound sterling increased amid strong Labor Market data in the UK. The New Zealand dollar dropped after the release of weak Inflation Rate data.

The US dollar decreased vs. the pound sterling and the Australian dollar, but increased vs. the yen, the Canadian dollar, and the New Zealand dollar, having almost no changes vs. the euro. The US Industrial Output growth in March exceeded the expectations. Industrial Production increased in March by 0.7% m/m against the forecast of growth by 0.5%. The February growth of Industrial Production was revised from 0.6% m/m to 1.2%, which became the highest rise since May, 2010. Capacity utilization rate increased by 0.8% to 79.2% (it is the highest rate for over 15 months). Industrial Production increased for the second month in a row, and this fact is indicative of sector’s recovery after the winter recession.

At the same time Housing Market data didn’t reach the predictions. Building Permits dropped I March by 2.4% to 990,000, whereas decrease by 0.4% was expected. Housing Starts increase previous month only by 2.8% to 946,000 against the forecast of growth by 7%. New Housing Construction volume continued growing in March, but recovery is still unsteady and irregular due to mortgage loan rates increase and weak wages hike.

Fed’s Chair Janet Yellen announced on Wednesday that decisions regarding monetary policy will depend on three main factors: labor underutilization, low inflation, and possible disincentives for recovery. Yellen emphasized the weakness of Labor Market, its complicated dynamics and slow recovery, as well as the risk of low inflation. Economy prospects are not defined; Fed will watch the terms while policy formation.

On Wednesday the pound sterling almost exceeded the highs of 2009 after the release of strong Labor Market report in the UK, which demonstrated the decrease of Unemployment Rate to the lowest rate for over 5 years. ILO Unemployment Rate dropped in February to 6.9% from 7.2% in January. Decrease lower than 7% happened for the first time since 2009. Claimant Count Change reduced in March by 30,400 having coincided with the expectations – and reached the lowest rate since November, 2008.

The euro had almost no changes according to the results of the day. Final Inflation Rate data in the Euro-zone in March coincided with the initial estimations – Consumer Price Index growth decelerated in March to 0.5% y/y comparing to increase by 0.7% in February. Annual growth rate of Core Inflation Ex Energy and Food decreased to 0.7% from 1% in February, having slightly exceeded the forecast (+0.8% y/y).

The yen weakened its positions on Wednesday amid growth of Japanese stock market – Nikkei 225 rocketed by 3% after the most considerable weekly fall for over 3 years. BOJ’s Kuroda announced that the Central Bank will make every effort to achieve 2% target inflation rate.

The Canadian dollar decreased after the BOC decision to leave the key interest rate without changes. The Central Bank pointed downward risks for inflation and decreased the GDP growth forecast for 2014 due to deceleration of export and capital investment rate. BOC Poloz expressed neutral position in terms of interest rate, but he announced that on this very stage it is impossible to eliminate the possibility of its decrease.

The Australian dollar strengthened its positions amid Chinese economy growth data, which appeared to be better than it was expected. Chinese GDP growth rate in the first quarter decelerated to 7.4% y/y from 7.7% in the 4th quarter of 201, but appeared to be better than expected growth by 7.3%. At the same time, Industrial Output and Fixed Asset Investment in March appeared to be worse than expected. The New Zealand dollar dropped after the release of weak Inflation Rate data, but then it negated almost all the losses. Inflation increased in the 1st quarter only by 0.3% q/q against the forecast of +0.5%.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 18/04/2014

Philadelphia Fed Manufacturing Index Rose to 7-Month High

On Thursday 17th April the US dollar strengthened its positions vs. most major currencies amid Philadelphia Fed Manufacturing Index growth to the highest level for over 7 months. The US Labor Market data also appeared to be better than expected.

The US dollar increased vs. the Australian dollar, the New Zealand dollar, the yen, and the Swiss franc, but had almost no changes vs. the euro, the pound sterling, and the Canadian dollar. The US dollar gained back the losses of the first half of the day after release of positive statistic data in the USA. Philadelphia Fed Manufacturing Index increased in April to 16.6 p. comparing to 9 p. in March, having considerably exceeded the expectations at the level of 10 p. New Orders, Shipments, and Employment considerably increase as well.

Initial Unemployment Claims appeared to be better than expected and still stay at low rates since May, 2007. Initial Unemployment Claims in the USA increased last week by just 2,000 to 304,000, whereas growth by 13,000 to 315,000 was predicted. Four-Week Moving Average of Initial Claims continued its reduction, having dropped by 4,750 from 316,750 to 312,000, which became the lowest reading since October, 2007.

On Thursday the pound sterling reached the highest rate vs. the US dollar since November, 2009, but then it decreased. The euro also had almost no changes according to the results of the day amid decrease of Producer Price Index in Germany, which dropped more than it was expected. Producer Prices decreased by 0.3% to the previous month, whereas no changes were expected. In an annual rate Producer Price Index dropped by 0.9% against expectations of decrease by 0.7% y/y.

The yen continued its weakening amid positive dynamics of stock markets and weakening of geopolitical tension after the start of negotiations about Ukraine in Geneva. The Japanese Government reduced the estimation of economy situation for the first time since November, 2012 due to the fact that consumers reduced spending after recent sales tax increase in the country. Consumer Confidence in Japan dropped in March to the lowest rate for over 2.5 years.

On Thursday AUD and NZD decrease most of all. The Australian dollar was traded downwards amid drop of Business Confidence in Australia and decrease of Chinese Actual Foreign Direct Investment. NAB Business Confidence decreased in the 1st quarter to 6 p. from 3-years high at the level of 8 p. in the previous quarter. New Motor Vehicle Sales dropped in Australia in March by 0.3% m/m after decrease by 0.1% in February. Actual Foreign Direct Investment in China in March reduced by 1.5% y/y against the expectations of growth.

The Canadian dollar had almost no changes according to the results of the day amid Consumer Price Index increase in Canada. Inflation annual growth rate accelerated in March to 1.5% from 1.1% in February, having exceeded the expectations of growth by 1.4% y/y. Core inflation increased by 1.3% comparing with the growth by 1.2% in the previous month, which coincided with the forecast. Canadian Inflation Rate data reduced the probability of taking measures for monetary policy easing.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 22/04/2014

The Yen Dropped after the Release of Trade Balance in Japan

On Monday 21 April the US dollar was traded mixed amid Easter holidays in majority of developed countries and absence of any significant macro statistics. The yen dropped after the release of weak Trade Balance data in Japan.

The US dollar strengthened its positions vs. the euro and the yen, but had almost no changes vs. the pound sterling and major commodity currencies – having added 0.14$ to the dollar index. Chicago Fed National Activity Index considerably decreased in March, but February data was upwardly revised. CB Leading Indicator increased in March more than it was expected.

Chicago Fed National Activity Index dropped in March to 0.20 p. from 0.53 p., but not to 0.14 p. as it was forecasted earlier. The index’s three-month moving average (CFNAI-MA3) increased to a neutral reading in March from –0.14 in February. The index still marks the growth of the activity, though its deceleration was pointed. The biggest contribution was made by industrial indicators and Sales.

CB Leading Indicator increased in March by 0.8% after its strengthening by 0.5% in February; it has exceeded the expectations of growth by 0.7%. The index grows for the third month in a row. After the winter break the economy growth recovers. Steady growth of Employment, rise of Consumer Confidence, and Demand promote increase of household spending. Five out of ten readings of the index improved in March, but decrease of Building Permits didn’t let the indicator demonstrate a more significant growth.

The yen dropped to the lowest rate vs. the US dollar for over two weeks after the release of weak Trade Balance data in Japan. Trade Balance deficit in Japan expanded in March to 1.45 trillions of yen in comparison with the deficit of 0.80 trillions of yen in the previous month, having considerably exceeded the predictions at the level of 1.07 trillions of yen.

Increase of Trade Balance deficit in Japan was caused by weakening of export from Japan, which increased by 1.8% y/y against the expectations of growth by 6.3%. Import increased to 18.1% y/y having exceeded the forecasts of growth by 16.2%. Trade Balance deficit in Japan is fixed for the 21th month in a row – it is the longest period since 1979.

The euro dropped at the American session lower than the reading of $1.38 after several days of trading that was higher than this rate. Market volatility decreases: weekly range of the EURUSD pair last week appeared to be the lowest throughout the trading history of the common European currency – just 75 p.

German Ministry of Finance announced on Monday that there are no visible deflation tendencies in the country – German economy enjoys a boom which will expand in 2014. German GDP growth will be weaker in the 2nd quarter in comparison with strong rise in the 1st quarter on which the mild weather affected.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 23/04/2014

The Australian Dollar Sharply Dropped Amid Inflation Rate Data

On Tuesday 22 April the US dollar was traded slightly downwards vs. most major currencies amid persisting fall of Existing Home Sales in the USA. The euro and the pound sterling were traded upwards. The Australian dollar sharply dropped after the release of weak Inflation Rate report in Australia.

The US dollar decreased vs. the euro, the pound sterling, the Australian dollar, and the New Zealand dollar; increased vs. the Canadian dollar ad had almost no changes vs. the yen and the Swiss franc. The US dollar gained back part of the losses against the euro after the release of Housing Market data, which appeared to be better than expected.

Existing Home Sales in the USA decreased in March by 0.2% in comparison with the previous month – to 4.59 m of houses, whereas decrease by 0.9% m/m was expected. Sales stayed at the lowest level since July 2012 as it was in the previous month – and they decrease for seven months in a row from the last eight months. Persistent fall of Existing Home Sales points that the recovery of Housing Market will be slower than it was expected earlier.

FHFA House Price Index increased in February by 0.6% m/m which coincided with the expectations. Richmond Manufacturing Index appeared to be better than forecasted – it increased to 7 p. in April against -7 p. in March, whereas growth only to 0 p. was expected. The Richmond Fed's regional manufacturing activity recovers after the reduction in February and March.

On Tuesday the euro was traded upwardly amid increase of Consumer Sentiment in the Euro-zone, the pound sterling also strengthened its positions. Preliminary Consumer Confidence in the Euro-zone increased in April to -8.7 p. against -9.3 p. in March, having exceeded the expectations of growth to -9.1 p. The reading became the best since October 2007 before the financial crisis. Consumers of the Euro-zone started evaluating their prospects in a more optimistic way; improvement of the Labor Market situation promotes increase of confidence supporting the economy recovery.

Construction volume in the Euro-zone increased in February by 0.1% m/m after the growth by 1.6% in January. Increase of Construction decelerated in February, though it continues for the third month in a row. ECB’s Benoit Coeure announced on Tuesday that ECB follows the euro’s course in order to evaluate the influence of persistent power of the European currency for the strong inflation rate in the Euro-zone. Citigroup estimates more than 50% possibility of ECB’s asset purchase this year.

The Australian dollar strengthened its positions on Tuesday before the key Inflation Rate report in Australia. CB Leading Index increased in February by 0.3% m/m, the growth continues for the sixth month in a row. However Inflation data appeared to be worse than expected, and AUD sharply dropped. Consumer Price Index increased in the 1st quarter by 0.6% q/q, whereas growth by 0.8% was predicted. Preliminary HSBC Manufacturing PMI also increased in April less than expected (48.4 p.) – to 48.3 p.

The Canadian dollar slightly decreased after the release of the US data, which appeared to be better than expected. CAD had almost no reaction for Wholesale Sales data in Canada, which exceeded the expectations. Wholesales Sales increased in February by 1.1% m/m against the expectations of growth by 0.7%. The growth rate appeared to be the highest for over seven months.

By MasterForex Company