Thursday, 9 February 2017
Oil goes against the tide
The last few weeks the positioning and local forces prevail over the fundamental statistics. Strong growth in US oil inventories for the week (13.8 million) caused a rise in prices of raw materials. News feeds give this to the fact that the earlier API reported an increase to 14.2 million. However, this is far-fetched explanation. After news from API oil lost 60 cents, and after the EIA data it increased by 120 cents. More difficult is to fit into this explanation the fact that the production has also increased to 8.98 million barrels/day - the maximum since April 2016. Oil is clearly accumulated in stocks, which are already at 8% above year-ago levels and 0.7% lower then historical records. It's only the beginning. Until April crude oil inventories will rise, if left in force of the traditional seasonality.
Policy as a driver of the dollar
Wednesday passed without critical economic data amid growing geopolitical uncertainty. According to the chief economic analyst at Bloomberg, now the markets are moving not from economic data and the decisions of the Fed, but from the new US president Donald Trump, who controls market assets.
EUR/USD recorded minimal growth during the last session closing the session at 1.0697, although during the day it was trading at 1.0640.
The British pound also ended on green territory, closing at 1.2539. Recent data for inflation showed that it has accelerated to 1.6% in December.
New Zealand dollar recorded a second consecutive decline after the central bank left interest rates unchanged. NZD/USD ended the day at 0.7263.
The Australian dollar recorded growth, closing at 0.7643, breaking the two-day decline.
The Canadian dollar rose against the US dollar after oil broke decline, which began on Monday. USD/CAD closed at 1.3142.
Gold continued its upward range having passed 1,240 and closed at 1241.28 dollars an ounce.
EUR/USD recorded minimal growth during the last session closing the session at 1.0697, although during the day it was trading at 1.0640.
The British pound also ended on green territory, closing at 1.2539. Recent data for inflation showed that it has accelerated to 1.6% in December.
New Zealand dollar recorded a second consecutive decline after the central bank left interest rates unchanged. NZD/USD ended the day at 0.7263.
The Australian dollar recorded growth, closing at 0.7643, breaking the two-day decline.
The Canadian dollar rose against the US dollar after oil broke decline, which began on Monday. USD/CAD closed at 1.3142.
Gold continued its upward range having passed 1,240 and closed at 1241.28 dollars an ounce.
Wednesday, 8 February 2017
Consolidation of the US dollar
The US dollar remains under pressure despite modest gains against the euro and the yen. USD/JPY rose to 112.50 during the American session, but eventually again the couple was dragged down and fell below 112 before settling slightly above that level. The only data published in the US yesterday were the trade balance in December, which showed that the deficit rose to its highest level since 2012.
The British pound made growth that has wiped out any downturn in the day after comments by the Bank of England, according to which, based on the current trend of inflation the bank may increase interest rates.
As the euro traded at lower levels against the dollar and fell to 1.0650, at the end of the day the single currency managed to erase some of the losses and ended the day at 1.0682. The initial decline was driven by a decline in German industrial production, which fell by 3% in December while investors had expected an increase. Turmoil in Greece also contributed to the decline of the euro as a 10 year bonds jumped by 8%.
The British pound made growth that has wiped out any downturn in the day after comments by the Bank of England, according to which, based on the current trend of inflation the bank may increase interest rates.
As the euro traded at lower levels against the dollar and fell to 1.0650, at the end of the day the single currency managed to erase some of the losses and ended the day at 1.0682. The initial decline was driven by a decline in German industrial production, which fell by 3% in December while investors had expected an increase. Turmoil in Greece also contributed to the decline of the euro as a 10 year bonds jumped by 8%.
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Sunday, 5 February 2017
Sberbank CIB expects breakthrough of the euro above 1.08
The outcome of the US Federal Reserve on Wednesday was not surprising to anyone. As expected, the interest rate remained at 0.75% and the regulator did not promised increase in the future. The text of the final statement barely changed, analysts say.
The Fed reiterated that it believed that the risks to its economic outlook are roughly balanced and expects a gradual tightening of policy. At the same time the regulator has made it clear that there is improvement in business and consumer sentiment, the analyst added.
For obvious reasons, given the uncertainty about the future policy of the new US President, Federal Reserve prefers to be careful and not to give specific dates for the next increase in interest rates, analysts said.
The probability of such an outcome during the meeting in March is estimated at only 30% and if the Fed wants to tighten its policy in March, it will have to make quite an effort to significantly change expectations and not to shock the markets, analysts say. From CIB still expect two increases in interest rates this year and are waiting for the next increase in the second quarter.
The Fed reiterated that it believed that the risks to its economic outlook are roughly balanced and expects a gradual tightening of policy. At the same time the regulator has made it clear that there is improvement in business and consumer sentiment, the analyst added.
For obvious reasons, given the uncertainty about the future policy of the new US President, Federal Reserve prefers to be careful and not to give specific dates for the next increase in interest rates, analysts said.
The probability of such an outcome during the meeting in March is estimated at only 30% and if the Fed wants to tighten its policy in March, it will have to make quite an effort to significantly change expectations and not to shock the markets, analysts say. From CIB still expect two increases in interest rates this year and are waiting for the next increase in the second quarter.
Saturday, 4 February 2017
Forecast of Danske Bank for EUR/USD
Analysts at Danske Bank continue to expect that EUR/USD will move in the range of 1.0350/1.0750 for the foreseeable future. They believe that currency markets saw broad weakness of the euro against the currencies of G10 on Monday after a representative of the European Central Bank Nowotny mentioned that any discussion about a narrowing of the stimulus program, as well as data on German inflation, which came below expectations, reduce the pressure on the ECB to cut incentive program of quantitative easing. EUR/USD fell to 1.0620, report analysts.
The euro rose amid market concerns about the ban on the entry of foreigners introduced by Trump. Bank analysts still expect that EUR/USD will trade in a range of 1.0350-1.0750 over the coming months.
The euro rose amid market concerns about the ban on the entry of foreigners introduced by Trump. Bank analysts still expect that EUR/USD will trade in a range of 1.0350-1.0750 over the coming months.
Wednesday, 1 February 2017
TDS sell the euro and the pound
Bank analysts at TDS have updated their forecasts and are now waiting for a raise in US interest rates twice this year and three times next year. The meeting of the FOMC on Wednesday will not be particularly interesting. In the first half of this week the trade likely will be in a range and from the bank prefer to buy the dollar on dips.
Yesterday's data on inflation in the eurozone showed significant growth, but the bank doubt that this will lead to an increase in nominal yields of European bonds (if this happens, then the real rate of return remains the main driver of the decline in EUR/USD). Acoording to TDS' analysts, it looks attractive to sell EUR/USD around 1.07 dollars.
As for the pound, political events may cause its further strengthening, but in the opinion of the bank, most of the news already have been calculated in prices, so analysts advise to sell in growth.
Yesterday's data on inflation in the eurozone showed significant growth, but the bank doubt that this will lead to an increase in nominal yields of European bonds (if this happens, then the real rate of return remains the main driver of the decline in EUR/USD). Acoording to TDS' analysts, it looks attractive to sell EUR/USD around 1.07 dollars.
As for the pound, political events may cause its further strengthening, but in the opinion of the bank, most of the news already have been calculated in prices, so analysts advise to sell in growth.
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