Dollar should not yet waiting for pleasant surprises from the Fed

After an impressive rally, the dollar shows a local correction against the major currencies. The euphoria of the bulls over the yield growth of the bonds faded - the yield indicator of 10-year securities has moved away from the highs of four years ago, although it is held near the 3% mark, keeping the American currency from a more significant drawdown.
In the wake of the rally in profitability, the expectations of four Fed rate increases this year instead of three were returned to the scene. Next week, the Fed will hold a meeting, but changes in monetary policy are not expected this time. The danger for the dollar in the context of this event is that recently the market's belief in more active policy tightening has significantly strengthened. Accordingly, players will expect more aggressive rhetoric from the regulator.
However, the Central Bank can still take a wait-and-see attitude and refrain from premature "hawkish" signals, so as not to run ahead. Moreover, the situation in foreign policy is not at all smooth, and, given Trump's unpredictability, new conflicts can await ahead.
However, at this stage, the chances for a peaceful resolution of trade contradictions with China are growing. China today urged Washington not to aggravate their trade relations. Next week, US Treasury Secretary Stephen Mnuchin and several other White House officials will travel to China to negotiate trade. If there are encouraging statements from this front, this will support both interest in risk and the dollar.

US vs. Iran: the game begins

The prices for oil on Thursday after correction in the last few days again moved to growth: Brent crude again continues to try to gain a foothold at $75 per barrel, North American oil WTI is in an attempt to overcome the mark of $68.5 per barrel.
The situation in the Middle East continues to worsen: the Iranian issue added to the Syrian issue, full of uncertainty: the peak moment will be May 12, as the question of the possibility of imposing new sanctions against Iran on the part of the US is being resolved because of the reluctance of the oil Middle East giant to meet halfway in the issue of revision of the nuclear deal.
If sanctions are imposed, one of the largest oil producers will again be withdrawn from the game, which can raise the cost of raw materials not only up to $80, but much higher.

Gold is down

Quotes of gold were down on the trading session on Wednesday, reached a new local maximum at around $1318.75, after which they recovered to the level of $1323 per troy ounce by the end of the day. Strengthening of the US dollar against most other assets was the main reason for the decline in gold. However, quotes are still traded in the range 1300 - 1350, and any attempts to go beyond the corridor quickly fail.
Reduction of the price of gold within the range is also connected with the fall of geopolitical tension without the development of the conflict between the US, Syria and Russia, and also thanks to the statements of Donald Trump about possible agreements with China to end the trade war.
In my forecast for today I expect a further decline in gold quotations to support levels of 1320, 1318 and 1315 dollars per troy ounce.

The US market once again received support, despite the strengthening of the dollar

The US currency continued its decisive offensive on the global currency market on Wednesday, adding 0.5% on the USDX index. In total, during this mini-rally since April 17, growth has exceeded 2% and sent the dollar to the highs since January. Strengthening is connected with the growth of interest rates, which makes purchases of dollar debt securities more attractive in comparison with analogues from Europe and Japan. In particular, the attractiveness of rates for further weakening of the USD is reduced: the interest for servicing this deal has grown, while the rate has not been able to update the lows.
The EUR/USD failed yesterday in the second half of the day below 1.22, touching on the lows of the 1.216 level, which was not seen from the middle of January. At the same time, US stock markets once again found support on the approach to the 200-day average. As a result, the main indices managed to demonstrate a small strengthening on the basis of the environment, and futures a little more (+ 0.2%) added at the start of trading on Thursday. Thus, the US stock markets can not yet cross the line, which is considered a signal for a serious sell-off.

Correction on crypto-markets

The main crypto-currencies on Wednesday are falling in price as part of the correction that began on the market to the rapid growth of the previous days, when bitcoin reached its monthly highs.
The bitcoin rate declined by 0.29% to $9,325 on Wednesday, with a capitalization of $158.9 billion. Other crypto-currencies suffered more serious losses.
Thus, the rate of litecoin fell by 6.66% to $152.7 with a capitalization of $8.6 billion. Ethereum has fallen in price by 8.20% to 641.5 dollars, its capitalization is 64.1 billion dollars. The rate of ripple fell by 10.71% to $0.84, with a capitalization of $33.4 billion. The total market capitalization of crypto-currencies by this time reached 409.2 billion dollars.
As a reason for the growth of the crypto-currencies in recent days, it is possible to designate the end of the tax period in the United States, when the participants of the crypto-markets paid taxes for operations with digital money. Now the market has matured correction.
On Thursday, we can expect that the bitcoin rate will go below $9,300, litecoin - below $150, ethereum will move to $630, and ripple will go to the level of $0.7.

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W. Dudley: Gradual rising interest rates by the Fed

Fed chief William Dudley said the federal reserve will likely continue to stick to its plan for a gradual rise in interest rates unless inflation rises to an unexpected margin.
The official does not think we know how much interest increases we will see this year, Dudley said on Monday in an interview with CNBC. While inflation is relatively low, the Fed will raise interest rates smoothly. If the inflation rate rises above 2%, then the smooth rise in interest rates can be changed, according to Dudley.
During the Fed meeting in March, the Fed officials voted for three or four interest rises this year, including the meeting of the reserve that went on and the interest rate was raised.
According to Dudley, three or four interest rises seem like a reasonable decision for this year.
Dudley is expected to retire as head of the Fed in New York after more than nine years on that post. He will be succeeded by John Williams, currently head of the Fed San Francisco.

Despite the higher oil prices, raw materials are not expensive

Oil prices reached a three-year high. However, despite the upward appreciation of "black gold", investors should keep in mind that raw materials are still relatively cheap.
Looking at the better diversified index The Bloomberg DJ-UBS index, which tracks raw materials, which shows that raw materials such as agricultural, industrial metals, meat and possibly even natural gas, may still have good prospects.
The index reached its peak at 140 levels in 2014 and bottom in 2016 at a level of nearly 72. It is currently traded at levels of around 87.
And although it is unlikely to be expected to return to its highest levels historically, it would be reasonable to expect further increases in the levels of this index.

How did the attacks in Syria influenced stock markets?

Futures of the US indices are traded slightly on positive territory.
Traditionally, US indices dropped in the weeks before the start of military action, due to increased uncertainty. However, since the beginning of the conflict, which usually ends relatively quickly, this uncertainty is diminishing and the stock indices increase.
Based on statistics from seven US military invasions since 1983, it is clear that the Dow Jones blue chip index declined by an average of 0.6% in the month before the start of the conflict. By comparison, in the month after the start of the military conflict, the Dow index rose by 4%.
In addition, the strong performance of the index continued for several months. The average performance of the benchmark, three months after the start of the conflict, was an increase of 6.7%, and six months later, it was trading 7.2% higher, with an average performance of 4.8% for similar periods.

How did the attacks in Syria influenced markets?

The markets opened after a weekend marked by military strikes in Syria. How did the markets react? Almost nohow...
Oil lost about 1% of its value, and gold and silver almost did not react, contrary to the expectations of many investors, that they would appreciate.
The yen, traditionally considered as a rescue island, in moments of crisis or geopolitical tension, is not traded in any significant change in its levels.
If we had to be objective, the biggest increase over the weekend were crypto-currencies. And this is increasingly asking the question - will the crypto-currencies turn into the "new gold"?
Otherwise, gold is traded at levels of $1 346 per ounce, and its rise continues to decline from a level of $1,360. The silver is at 16.65 dollars per ounce, and the brent is exchanged at 72.25 dollars. Early in the morning, the valuable raw material had fallen below the psychological limit of $72 a barrel.

Positive data - bullish factor for AUD/USD

February retail sales and trade balance surpassed expectations. Will the growth of AUD/USD continue?
The Reserve Bank of Australia left an interest rate of 1.5% at the April 3 meeting. Australia's recent economic data was higher than expected: retail sales growth accelerated in February to 0.6% after rising 0.5% in January. The trade balance fell in February, but it was less than expected. The activity index in the construction sector (AIG) was 57.2 points in March, compared to 56.0 in February. Positive data is a bullish factor for AUD/USD. At the same time, consumer confidence in Australia declined to 102, 4, from 103.0 a month earlier. It is also expected that in the report, which will be published on April 19, the unemployment rate in March will rise to 5.6% from 5.5% in the previous month. The above factors could lead to a depreciation of the Australian dollar.

Crypto-markets has risen sharply

Crypto-market actively grows on the good news about the possible creation of a European partnership in the field of blockchain. Bitcoin rose above $8,000.
The bitcoin price increased by 11.29% - to 8122 dollars with a capitalization of 116.2 billion dollars. The rate of Litecoin strengthened by 5.68%, to 130.3 dollars with a capitalization of 7.3 billion dollars. Ethereum at the same time increased in price by 12.00 to 10.88% - to 519.3 dollars, its capitalization was 51.1 billion dollars. The ripple rate climbed 13.85% to $0.65 with a capitalization of $24.8 billion. At the same time, the total capitalization of the market is 323.6 billion dollars.
Last week the crypto-currencies sharply increased in connection with the decision of some countries of the European Union to sign a declaration on the creation of a European partnership in the field of blockchain. They are ready to cooperate and exchange experience in the technical and regulatory sphere, as well as to prepare the launch of common applications using blockchain technology for the public and private sectors.
It is likely that the market has completed the period of corrective decline and has entered an upward trend.

RBC lowered its forecast for the S&P 500

The RBC Capital Markets financial institution downgraded its forecast for the broad US index S&P 500, highlighting high political uncertainty.
Now the institution expects levels of the broad index of 2,890 points, compared with the previous expectations of 3000 points. And although a decline, the forecast still points to an index growth of nearly 8% of current levels.
Some of the obstacles to the US index include the fears of a trade war with China and Trump's behavior.
There is also an expectation that the US president may go to impeachment as a result of his not very thought-out comments.
Serious negatives are also infront the technological shares that have lost 7% last month after the Facebook scandal.
The concerns of investors and analysts are that the US government will increasingly look into regulating Facebook's social network and its main competitor - Google.
The technology sector was the best performing sector in the past year, with a growth of nearly 30%. RBC downgraded the market valuation of the sector from "market weight" to "underweight", highlighting the company's high financial estimates in the light of expectations for their quarterly results.
In the last month, the blue chip index S&P 500 fell by more than 5%.

Currency volatility is surprisingly low (2)

It's not like news to lead to some major trend in the dollar or the euro, according to Maer, an analyst at Deutsche Bank. There is no perception among market participants that the news currently produced will lead to a complete change in the game, said the expert.
As an example, the ruble can be given. In the light of US sanctions, the 1-month volatility of the dollar-ruble currency pair is at a two-year high. However, this is an isolated case, against the backdrop of what is happening with other major currency pairs, experts say.
Even the Chinese president's comments for "an eye for an eye" play would trigger a serious trade war failed to scare investors. Traditionally during trade wars, the dollar is cheaper. However, this does not seem to be the case at the moment.

Currency volatility is surprisingly low (1)

The Russian ruble is cheaper, the Turkish lira is close to a record low against the dollar, and there is speculation about the devaluation of the yuan by the Chinese government. Hardly, however, you will find out all these things if you look at the volatility of currency markets.
The $5.1 trillion dollar market price measure per day is extremely weak, despite the political instability and expectations of a trade war between the US and China.
Deutsche Bank's exchange rate volatility index for the next one and three months is close to a three-month minimum.
The reason - beyond the ruble and the pound, the widely traded couples, such as the euro-dollar and the dollar-yen, have to break through their ranges of trade to see more serious movements and consequently greater volatility, according to market observers.
The lack of more serious news that would point the dollar in one direction and pull it out of its consolidation are among the main reasons for low volatility. In other words, at the moment of struggle, between bulls and bears, no one manages to last forever. This leads to the dollar and other major currency pairs moving to range.

Two companies that can beat Apple on the way to $1 trillion (2)

Amazon.com, Inc. (AMZN)
This is the company with the best chance to beat Apple on the way to a $1 trillion.
First of all, because Amazon's capitalization of $690 billion is not far from the $1,000 billion.
Secondly, Amazon's growth is far ahead of Apple. Company revenue grew by nearly 40 percent, while Apple's revenue rose 13 percent in the past quarter. Amazon's profit rose more than two times in the past quarter on an annual basis, while Apple rose 16%.
In addition, Amazon shares are rising in value much faster than Apple's. Over the past three years, the stock of the retail chain has risen by 300%, against a 40% growth in Apple shares.
Last but not least, Amazon is still in the phase of accelerated growth of its business, at Apple's expense.
Put it another way, if someone goes ahead of Apple on the way to $1 trillion, then it's very likely to be Amazon.

Alphabet Inc (GOOG)
Outside of Amazon, the other company that has a good chance of overtaking Apple's leading position is Alphabet Inc.
Like Amazon, Google is not much farther from Apple in terms of market capitalization. The latter amounts to 720 billion dollars.
And just like Amazon, Google is growing much faster than Apple. Google's revenue growth is 24%, compared to 13% growth for Apple. Google's profit rose 28%, compared to 16% for Apple.

Two companies that can beat Apple on the way to $1 trillion (1)

After reaching a bottom of below 700 points in 2009, the blue chip index S & P 500 rose almost four times to a level of 2,600 points. This is a serious growth, leading the capitalization of many companies, such as Apple, to record values.
Historically, since 1990, five different US companies have reached and passed the psychological limit of $500 billion in market capitalization, but have not been able to last long enough to stay above that level.
Currently, five different companies have a market capitalization of over $500 billion and one of them is Apple. And while many investors and analysts are betting that Apple will be the first company to reach the covenant boundary, here are the main competitors of the iPhone manufacturer to reach that value.
Of course, it should be borne in mind that Apple's chances are still the highest, given the market capitalization of the company at $860 billion.

Trump conducts moods on the oil market

At the end of Thursday's trading, Brent oil found the strength to return to positive territory and closed at around 68.50. The extinction of escape from risks brought temporary relief to the raw materials segment, which simultaneously had to put up with the strengthening of the dollar. But already at the start of today's trading the situation has changed - quotes of black gold opened with gap down and again traded below level 68.
A new wave of risk aversion, which covered the oil market, was raised by Trump, who spoke about considering the introduction of tariffs on Chinese goods for another $100 billion. After a small lull, this was another blow to the markets, which renewed concern over the incitement of a trade war. Considering that China is serious and has repeatedly expressed its readiness for this confrontation, after some time, Beijing can voice the next response measures, which creates an additional negative for risky assets.

Crypto-currencies: fall continues

The main crypto currency - bitcoin - is significantly cheaper, reaching yesterday below the mark of 7 thousand dollars and striving on Thursday to the level of 6700 dollars.
Other crypto-currencies also show negative dynamics with a decrease in capitalization. This occurs within the framework of the downward trend that has formed on the market, which was not broken by the short-term growth of the previous days.
Thursday morning, the bitcoin fell in price for a day at 2.53%, with a capitalization of $116.4 billion. Alternative crypto-currencies are also cheaper. Ethereum fell in price by 0.6%, with a capitalization of 37.7 billion dollars, Ripple - 2%, to 0.49 dollars with a capitalization of 19.6 billion dollars. The rate of Litecoin thus fell by 0.78% - to $120.03. The capitalization of Litecoin is 6.7 billion dollars.
The market has recently seen a decline in trading volumes, which leads to an outflow of speculative capital from the crypto-market.

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Experts: Poor April and further weakness for the dollar

The US currency rose this week, neutralizing its loss from the past. This, however, does not mean that the dollar's growth has resumed, according to market participants.
The dollar index added 0.6% this week, despite its weakness on Thursday.
The dollar rises to a one-month high against the Japanese yen on Wednesday and a two-month high against the Swiss franc. Green money recorded substantial losses against the two currencies that have been seen as rescue in recent weeks.
However, the rise in the dollar is largely determined by end-of-month and quarter-month factors, market observers said.
Indeed, the dollar index has risen in each of the weeks of March, except for one. US deficit concerns remain on the agenda as well as potential trade wars that offset the positive impact of expectations of interest rates on the Fed.
And while at the end of each month, some rebalancing is observed in investors' portfolios, March is a bit more special when it comes to far more serious capital flows. Otherwise, fundamentally nothing has changed for the dollar.
April is traditionally a weak month for the dollar, from a historical point of view. Last April, the dollar index lost 0.9% and in the previous two years the loss for the index was 2.2%, recall from Scotiabank.