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MikhailLF

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Morning Market Review
2019-08-19 08:27 (GMT+2)
EUR/USD

The euro closed last week with a steady decline against the US dollar, retreating to new local lows of August 2. The European currency remains pressured amid the publication of ambiguous macroeconomic statistics from the Eurozone. In addition, investors responded positively to Donald Trump’s recent statements that the US-China trade conflict could still end with the signing of a final agreement. Published on August 16, macroeconomic statistics from the United States was ambiguous. Investors were optimistic about the dynamics in the number of building permits, which reflected an increase of 8.4% MoM in July after a decrease of 5.2% MoM last month. However, the changes in the number of new residential houses in July fell by 4.0% MoM after a decrease of 1.8% MoM last month. The dollar was also pressured by The University of Michigan Consumer Sentiment Index. According to preliminary estimates, the index fell from 98.4 to 92.1 points with a forecast of 97.2 points.

GBP/USD

The British pound corrected against the US dollar late last week, updating local highs of August 8th. The pound was supported by technical correction factors, while the situation around Brexit continues to put pressure on GBP. UK citizens may face food and drug shortages during the first few months after the UK leaves the EU without an agreement. Meanwhile, the government of Boris Johnson still does not have any noticeable progress on the issue of concluding an agreement, so there is growing talk about a possible vote of no confidence. On the one hand, this supports the position of the British currency, since there is a real chance to avoid the "tough" Brexit. On the other hand, the growth of political competition threatens with a new crisis, which will be extremely painful for the prospects of the British economy in the face of growing uncertainty in world markets.

AUD/USD

The Australian dollar showed uncertain growth against the US one at the end of last week, recovering slightly after a noticeable decline on August 14. The instrument was supported by technical correction factors, as well as by weak macroeconomic statistics from the United States. The University of Michigan Consumer Sentiment Index in August fell from 98.4 to 92.1 points with a forecast of 97.2 points. Today, the instrument continues the previous trend. At the beginning of a new week, there are few interesting macroeconomic statistics on the market, so investors expect Tuesday when the minutes of the last RBA meeting will be published.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on August 16, continuing the development of the "bullish" impulse formed the day before. It is curious that the growth of the instrument proceeded against the background of the publication of ambiguous US macroeconomic statistics, which, in particular, indicated a drop in consumer confidence in August. Today, the dollar maintains a weak "bullish" mood. The yen is pressured by weak data on the dynamics of the trade balance. In July, the balance reached a deficit of 249.6 billion Japanese yen, which turned out to be worse than market expectations of 200.0 billion. Japanese exports in July fell by 1.6% YoY after a decline of 6.6% YoY last month. Imports for the same period declined by 1.2% YoY after declining by 5.2% YoY.

Oil

Oil prices showed ambiguous dynamics on Friday, interrupting the development of the "bearish" impulse that formed on August 14. Moderate support for quotes was provided by favorable data on the dynamics of retail sales in the USA, as well as rather optimistic comments by Donald Trump regarding the prospects for concluding a trade agreement between the USA and China. Negative forecasts from OPEC, as well as the published report by Baker Hughes, which reflected the growth of active oil platforms in the USA from 764 to 770 units, restrained more confident price increase.
 
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Morning Market Review
2019-10-23 08:41 (GMT+2)
EUR/USD

EUR showed a decline against USD on Tuesday, continuing the development of a correctional impetus formed the day before. The pair is trading under the influence of technical factors, while the fundamental background and macroeconomic statistics remain ambiguous. Some support for the euro is provided by the situation around Brexit. The British parliament approved a new version of the agreement, but this does not mean that Britain is ready to leave the EU. Now the parliamentarians need to consider all the amendments put forward earlier, and then the European Commission should ratify the agreement. Today, the pair is declining again. Today's macroeconomic background is rather poor; therefore, the instrument's motion vector is not expected to change much. Analysts expect the release of statistics on German 10-Year Bund Auction and preliminary data on Consumer Confidence in October from the euro area.

GBP/USD

After a confident rally which lasted a week and a half, GBP showed a correctional decline against USD on Tuesday. The development of negative dynamics in the instrument was facilitated by technical factors, as well as a marked decrease in optimism regarding Brexit before the current deadline, which is scheduled for October 31. The night before, it became known that the British Parliament expressed fundamental consent with the new version of the deal with the EU, but this cannot be called a full-fledged victory. Boris Johnson urges the Parliament to consider all additional amendments to the agreement within three days to close this issue before the end of the week. Parliament disagreed with Johnson’s schedule, which is likely to lead to a postponement of Brexit deadlines once again with EU consent.

AUD/USD

AUD fell against USD on Tuesday, retreating from updated local highs of September 16. The decrease in the instrument is largely due to the technical factors of USD correction and the semi-empty macroeconomic background of the beginning of the week. Meanwhile, moderate support for AUD is provided by optimism regarding the conclusion of a trade agreement between the United States and China. Donald Trump is still betting on the APEC summit, which will be held in November in Chile. The Chinese side is also optimistic, noting that negotiations are ongoing at the moment.

USD/JPY

USD fell slightly against JPY on Tuesday, correcting after weak growth earlier this week. Japanese markets were closed on Tuesday due to the national holiday, so statistics from the United States were in the spotlight. Existing Home Sales in September decreased by 2.2% MoM after growth of 1.5% MoM a month earlier. Analysts expected a decline of 0.7% MoM. At the same time, Richmond Manufacturing Index in October unexpectedly increased from –9 to 8 points with a forecast of –7 points.

Oil

Oil prices showed moderate growth on Tuesday, responding to optimistic signals on the process of trade negotiations between the US and China. This time, the Chinese side made positive statements. China's Vice Foreign Minister Le Yucheng noted that the parties managed to achieve significant progress in the negotiations and expressed hope for concluding the agreement soon. More confident growth in quotes yesterday was hampered by the publication of API Weekly Crude Oil Stock report. For the week as of October 18, the indicator increased again by 4.45 million barrels after an increase of 10.50 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.
 

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Morning Market Review
2019-10-24 08:42 (GMT+2)
EUR/USD

EUR showed a slight increase against USD on Wednesday, despite the fact that during the day the instrument mainly declined. Some pressure on EUR was exerted by macroeconomic statistics released on Wednesday. According to preliminary estimates, the level of Consumer Confidence in the euro area in October fell from –6.5 to –7.6 points, which turned out to be worse than market expectations of –6.7 points. Today, the pair is strengthening again. Investors are waiting for statistics on business activity from Markit in the euro area in October, as well as the publication of the ECB decision on deposit and interest rates, followed by a press conference. It is expected that the European regulator will not change the basic parameters of monetary policy, but may resort to additional support measures before the end of the year.

GBP/USD

GBP strengthened against USD yesterday, recovering from a steady decline on Tuesday. The focus of investors remains on the situation with Brexit. Optimism from the approval by the British parliament of the agreement with the EU quickly gave way to negative sentiment, since Boris Johnson's initial plans do not seem to come true. The UK is again forced to ask for a postponement, which threatens with another delay and the further development of the internal political crisis.

AUD/USD

AUD showed flat dynamics on Wednesday, ending the daily session with almost no result. There are practically no interesting macroeconomic statistics at the market, therefore the movement of the instrument is mainly of a technical nature. In addition, the same factors remain in the focus of attention: trade negotiations between China and the United States and the situation around Brexit. Today, the instrument is trading with a slight decrease. Pressure on AUD is exerted by ambiguous macroeconomic statistics from Australia on business activity. The Commonwealth Bank Services PMI in October showed a decrease from 52.4 to 50.8 points with a forecast of 52.2 points. At the same time, Manufacturing PMI over the same period decreased from 50.3 to 50.1 points, which was significantly better than market forecasts of 49.0 points.

USD/JPY

USD showed moderate growth against JPY yesterday, but again returned to decline during the Asian session on October 24. The growth of USD is facilitated by a number of technical factors, while the macroeconomic background of the instrument remains ambiguous. Additional pressure on the yen is exerted by the expectation of the Bank of Japan meeting, which will be held next week. Given the latest macroeconomic statistics from Japan, it is likely that the regulator can take additional measures to stimulate the economy and lower interest rates. Today, JPY is growing, despite the publication of weak macroeconomic statistics from Japan. Jibun Bank Manufacturing PMI in October fell from 48.9 to 48.5 points, which turned out to be worse than market expectations of 48.8 points.

Oil

Oil prices rose significantly on Wednesday, receiving support from a report from the US Department of Energy, according to which US oil inventories unexpectedly fell by 1.699 million barrels over the week as of October 18, after rising by 9.281 million barrels over the past period. Analysts had expected positive dynamics to remain at 2.232 million barrels. US oil production remained unchanged at 12.600 million barrels per day, while refining capacity grew by 2.1% to 85.2%, which exceeded market forecasts of +0.9%.
 

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Morning Market Review
2019-10-29 08:37 (GMT+2)
EUR/USD

EUR showed moderate growth against USD on Monday, correcting from local lows updated last Friday. In addition to very strong technical factors, the euro was supported by uncertain macroeconomic statistics from the USA. Dallas Fed Manufacturing Business Index in October fell from 1.5 to –5.1 points, which turned out to be significantly worse than market expectations of 1.4 points. Chicago Fed National Activity in September fell from 0.15 to –0.45 points with a forecast of –0.37 points. Today, the euro is trading in both directions again, waiting for the appearance of new drivers at the market. Investors are focused on the data from the US on Redbook Retail Price Index, Pending Home Sales and CB Consumer Confidence.

GBP/USD

GBP rose against USD, having received support from the development of correctional sentiment in the US currency across the entire market. The pound also reacted positively to the formal approval of the Brexit deadline extension until January 31, 2020. Thus, the UK will be able to leave the EU before the end of January next year, as soon as it ratifies the final version of the agreement in parliament. Boris Johnson has not been able to secure the support of the majority yet, so he insists on holding early parliamentary elections in early December. Today, British investors expect publication of data on Consumer Credit for September, Nationwide Housing Price Index, and Mortgage Approvals for September in the UK.

AUD/USD

AUD rose against USD on Monday also maintaining upward momentum during today's Asian session. Moderate support for the instrument is provided by increased prospects for concluding a preliminary trade agreement between the US and China by the end of this year. Participants of the ongoing negotiation process respond very positively to the progress made. The final version of the agreement can be signed at the APEC summit, which will be held on November 16-17 in Chile.

USD/JPY

USD showed growth against JPY on Monday, updating local highs of August 1. An increase in the instrument at the market was promoted by an increase in investor interest in risk amid a decrease in concerns about Brexit. In addition, traders respond positively to preliminary results of the negotiation process between the United States and China and hope that a trade agreement that will avoid escalating the tariff war can be signed in November. Today, the pair is trading in both directions. Investors take a lead from Japanese statistics on Tokyo consumer inflation. October Consumer Price Index remained at the previous level of 0.4% YoY, while forecasts assumed its growth to 0.5% YoY. CPI Tokyo Ex Food and Energy rose from 0.6% YoY to 0.7% YoY, which turned out to be better than the forecast of 0.5% YoY.

Oil

Oil prices returned to decline on Monday, retreating from local highs after a moderate upward rally last week. Investors are optimistic about progress in US-Chinese trade negotiations, but negative macroeconomic statistics and disappointing forecasts of energy demand have a restraining effect. Some support for oil quotes is provided by OPEC+ actions. The organization intends to expand the current agreement on limiting oil production, but the next meeting of the cartel is planned only for December. Today, investors are focused on the American Petroleum Institute Weekly Crude Oil Stock report as of October 25.
 

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Morning Market Review
2019-10-30 08:45 (GMT+2)
EUR/USD

EUR showed an increase against USD on Tuesday, continuing the development of a "bullish" impetus formed the day before. Moderate support for the euro is provided by the newly improved prospect of a trade agreement between the United States and China. Earlier this week, Donald Trump confirmed his intention to discuss all the final details of the agreement with Chinese President Xi Jinping at the APEC summit in November. In addition, it became known that the US is preparing an expanded list of Chinese goods that will be exempted from high import duties. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. Investors are focused on the Fed meeting on the interest rate followed by a press conference. The US regulator is expected to reduce rates from 2% to 1.75%.

GBP/USD

GBP showed multi-directional dynamics of trading against USD on Tuesday, ending the session with almost zero result. The development of negative dynamics in the instrument was facilitated by the fact that the British parliament expectedly rejected the idea of Boris Johnson to hold early elections in December. However, today the Prime Minister will try to push his initiative again. Another negative factor was uncertain macroeconomic statistics from the UK. BoE Consumer Credit in September fell more than predicted from 0.969B to 0.828B pounds, while analysts expected a decrease to 0.9B. Net Lending to Individuals for the same period fell from 4.8B to 4.6B pounds.

AUD/USD

AUD rose significantly against USD on Tuesday, updating local highs of October 22. The "bullish" trend strengthened due to the optimistic comments by officials regarding the process of working out a trade agreement between the United States and China. In addition, USD is under pressure from the upcoming US Fed meeting, at which, as expected, the rate will be reduced by 0.25%. Today, the pair is trading in both directions due to the uncertain statistics from Australia. HIA New Home Sales in Australia in September slowed down from +7.3% MoM to +5.7% MoM, which turned out to be worse than the average forecasts. Australia's Consumer Price Index in Q3 2019 expectedly slowed down its growth from +0.6% QoQ to +0.5% QoQ. Trimmed Mean CPI for the same period remained at the previous level of +0.4% QoQ.

USD/JPY

USD showed a slight decline against JPY on Tuesday, after updating local highs of August 1. Investors do not rush to buy USD, waiting for the upcoming Fed meeting, at which, most likely, the key interest rate will be reduced by 0.25%. On the other hand, investor interest in risk is supported by optimistic signals from US and PRC officials regarding a trade deal. Today, the pair is trading in both directions. The Japanese currency is supported by good data from Japan on the dynamics of retail sales. In monthly terms, sales in September accelerated from +4.6% MoM to +7.1% MoM. In annual terms, the growth was even more significant: from +1.8% YoY to +9.1% YoY.

Oil

Oil prices fell on Tuesday, but managed to recover closer to the end of the afternoon session. The quotes were pressured by the comments of officials, which led to an increase in doubts about the continuation of the OPEC+ policy aimed at limiting oil production in 2020. In addition, API Weekly Crude Oil Stock report for the week as of October 25 again reflected growth in stocks by 0.592 million barrels after growth by 4.45 million barrels for the previous period. Today, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.
 

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Morning Market Review
2019-11-01 08:49 (GMT+2)
EUR/USD

EUR showed ambiguous trading against USD on Thursday. At the same time, the instrument managed to update the local highs of October 21, since the position of the American currency remains unstable. Investors were focused on the results of the Fed meeting, where the interest rate was expectedly reduced. Macroeconomic data from Europe also had a significant impact on the dynamics of the instrument. The eurozone Core Consumer Price Index rose slightly from 1% YoY to 1.1% YoY in October, which was better than the neutral forecast. Eurozone GDP in Q3 2019 increased by 0.2% QoQ and by 1.1% YoY, which roughly coincided with market expectations: +0.1% QoQ and +1.1% YoY. The Unemployment Rate in the euro area in September remained unchanged at 7.5%, while analysts had expected it to decline to 7.4%.

GBP/USD

GBP showed uncertain growth against USD on Thursday, updating local highs of October 22. The decline in purchasing activity on GBP was contributed by not the strongest macroeconomic publications from the UK, as well as by a decrease in optimistic sentiments regarding the trade deal between the US and China. Earlier the parties prepared the final version of the preliminary agreement, which was to be signed at the highest level during the APEC summit in Chile. The day before, the Chilean authorities had to cancel the summit due to ongoing civil unrest, so the new date for the possible signing of the agreement is not yet known. Today, the pound is trading with an increase. The US dollar is under pressure in anticipation of the publication of the October labor market report. In addition, investors expect speeches by representatives of the Fed (John Williams, Richard Clarida and others).

AUD/USD

AUD showed a decline against USD on Thursday, retreating from its local highs of July 26. Pressure on the Australian dollar was exerted by deteriorating prospects for a trade agreement between the US and China against the backdrop of the cancellation of the APEC summit in Chile, as well as uncertain macroeconomic statistics from Australia and China. Non-Manufacturing PMI in China fell from 53.7 to 52.8 points in October, with the forecast of 53.9 points. NBS Manufacturing PMI in October also showed a negative trend from 49.8 to 49.3 points with a neutral forecast. Today, the instrument is growing, despite the publication of weak macroeconomic statistics from Australia. AiG Manufacturing index went down from 54.7 to 51.6 points in October. Commonwealth Bank Manufacturing PMI fell from 50.1 to 50 points in October with a neutral forecast.

USD/JPY

USD fell significantly against JPY on Thursday, updating local lows of October 11. The development of correctional dynamics was facilitated by weak macroeconomic indicators from the United States, as well as by deterioration in market sentiment regarding the conclusion of a trade agreement between the United States and China. Earlier, investors were counting on signing the final document at the APEC summit in Chile, which was canceled the day before due to ongoing protests in the country. Macroeconomic statistics from Japan, as well as comments by the Bank of Japan on the interest rate, had a noticeable impact on the instrument on Thursday. As expected, the Japanese regulator left the rate at the same negative level of –0.1%. At the same time, the head of the Bank, Haruhiko Kuroda, emphasized that the regulator can continue its further reduction if the impetus to inflation does not recover. Today, the yen is relatively stable. Further growth of the Japanese currency is hindered by weak data from Japan. Unemployment Rate in Japan in September unexpectedly increased from 2.2% to 2.4% with a forecast of 2.3%. Manufacturing PMI from the Jibun Bank in October fell from 48.9 to 48.4 points against the forecast of 48.5 points.

Oil

Oil prices showed negative dynamics on Thursday, responding to the publication of weak macroeconomic statistics from China and remained under pressure from data indicating a sharp increase in US crude oil inventories. Chinese Manufacturing PMI showed a decline in October for the sixth time in a row, which casts doubt on the hope of an early recovery in demand for oil. The market also reacted negatively to the cancellation of the APEC summit in Chile, at which it was planned to sign the final agreement between the United States and China. Today, investors will be focused on the October report on the US labor market. In addition, investors are waiting for Baker Hughes US Oil Rig Count.
 

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Morning Market Review
2019-11-05 08:39 (GMT+2)
EUR/USD

EUR showed a steady decline against USD on Monday, retreating from local highs, updated at the end of last week. Pressure on the euro was exerted by moderate growth in the US currency amid improved prospects for a trade agreement between the US and China. In addition, support to the dollar is still provided by strong data from the October labor market report published last Friday. Macroeconomic statistics released on Monday provided little support to the euro. Markit Manufacturing PMI in October rose from 45.7 to 45.9 points with a neutral forecast. German Manufacturing PMI for the same period strengthened from 41.9 to 42.1 points, which, however, is still far from the 50-point mark. Sentix Investor Confidence indicator rose from –16.8 to –4.5 points in November against a forecast of –13.8 points.

GBP/USD

GBP showed a slight decline against USD on Monday, falling after an increase of last week. The development of negative dynamics in the instrument was facilitated by the strengthening of the American currency across the entire spectrum of the market after the publication of strong statistics on business conditions from ISM and the growth of investor expectations regarding the successful conclusion of a trade agreement between the United States and China. The British currency, in turn, remains under pressure from the development of the political crisis in the country preparing for the early elections on December 12. There is still no unity of opinion among the political forces, and therefore there is no reason to count on a favorable outcome for Boris Johnson. UK macroeconomic statistics released today are worse than market expectations. BRC Retail Sales Monitor in October showed an increase of 0.1% YoY after declining by 1.7% YoY in the previous month. Analysts had expected growth rate at 0.5% MoM.

AUD/USD

AUD showed a steady decline against USD on Monday, retreating from local highs, updated at the end of last week. Today, the instrument is growing moderately, responding to improved prospects for a US trade partnership with China and Europe. The focus of investors is also on the RBA decision on the interest rate. As expected, the regulator left it at the level of 0.75%. Australian statistics published today is contradictory. Commonwealth Bank's Composite PMI in October fell from 50.7 to 50 points. Services PMI fell from 50.8 to 50.1 points. AiG Services index went up from 51.5 to 54.2 points in October.

USD/JPY

USD rose against JPY on Monday, continuing to develop a weak "bullish" impulse formed at the end of last week. Japanese markets were closed on Monday to celebrate Culture Day, so investors focused on official statements of last week and the publication of recent macroeconomic statistics. Declining demand for a safe yen was facilitated by statements by US Secretary of Commerce Wilbur Ross, who noted that US companies would soon be able to resume cooperation with the Chinese Huawei. In addition, Washington said it was considering freezing the growth of import duties on European and Japanese cars. Today the pair is also growing. Investors expect macroeconomic statistics from the United States on business activity and economic optimism in October-November.

Oil

Oil prices showed moderate growth on Monday, responding to positive statements about the process of working out a trade agreement between the US and China. It is expected that a preliminary version of the deal will be signed in mid-November. In addition, the market is optimistic about the statements of US officials about the possibility of an early resumption of cooperation between US enterprises and the Chinese Huawei. An additional factor in the growth of oil quotes was Iran’s statements about its intention to support the idea of further reducing oil production at the OPEC+ meeting in December. Today, investors are awaiting the publication of API Weekly Crude Oil Stock report for the week as of November 1. The previous report reflected an insignificant increase in volumes of 0.592M barrels.
 

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Morning Market Review
2019-11-06 08:56 (GMT+2)
EUR/USD

EUR showed a steady decline against USD on Tuesday, updating local lows of October 16. The development of negative dynamics in the instrument was facilitated by the publication of ambiguous macroeconomic statistics, as well as the general growth of the American currency across the entire spectrum of the market. The strongest support for the dollar was provided by data on ISM Services PMI. In October, the indicator rose from 52.6 to 54.7 points, exceeding its forecast of 53.5 points. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. Investors are focused on business activity indices in Europe for October. Separately, traders expect publication of the dynamics of Factory Orders in Germany for September.

GBP/USD

GBP showed flat dynamics on Tuesday, ending the session with almost zero result. Moderate support for the pound was provided by Markit Services PMI in the UK. In October, the indicator rose from 49.5 to 50.0 points, which was slightly better than the forecasts of 49.7 points. In turn, BRC Retail Sales Monitor data came out worse than expected. In October, retail sales rose by 0.1% YoY after a 1.7% YoY decline in September and a forecast of 0.5% YoY growth.

AUD/USD

AUD showed strong growth on Tuesday, updating local highs of October 31. However, the instrument failed to consolidate at new highs, and by the time the US trading session opened, it had lost most of its gains. Australian currency was supported by the results of the RBA meeting and the comments of the head of the regulator. As expected, the Reserve Bank of Australia kept its key interest rate at 0.75%. At the same time, investors hope that in the near future the regulator will not change the parameters of monetary policy significantly. RBA head Philip Lowe supported such sentiments, noting that the period of low interest rates will be quite long. Correction of the instrument was facilitated by the publication of ISM Services PMI with the opening of the American trading session. In October, the index showed growth from 52.6 to 54.7 points, which turned out to be better than market expectations of 53.5 points.

USD/JPY

USD strengthened against JPY on Tuesday, rising to local highs of October 30. The growth of the US currency was due to the publication of a number of positive macroeconomic indicators from the United States, as well as a decrease in market demand for safe-haven currencies, as investors are still optimistic about the process of trade negotiations between the US and China. Today, the pair is trading in both directions, despite the publication of weak macroeconomic statistics from Japan. Jibun Bank Services PMI in October showed a decrease from 52.8 to 49.7 points against the forecast of 50.3 points.

Oil

Oil prices showed moderate growth on Tuesday, receiving support from increased optimism regarding a preliminary trade agreement between the US and China. In addition, since China continues to insist on the abolition of the planned increase in import duties on December 15 as well as the tariffs introduced in September, investors expect Washington to make concessions in this issue, which will significantly reduce the degree of trade tension in the market. OPEC's updated forecasts for production volumes over the next few years also provided moderate support for quotes on Tuesday: by 2024, oil production should be reduced to 32.8M barrels per day. In addition, API Weekly Crude Oil Stock report for the week ending November 1 reflected sharp growth in stocks by 4.26M barrels after a decline of 0.708M barrels for the previous period. Today, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.
 

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Morning Market Review
2019-11-07 08:50 (GMT+2)
EUR/USD

EUR showed an insignificant decline against USD on Wednesday, continuing the development of the "bearish" impulse formed at the beginning of the week. The euro returned to decline closer to the opening of the American trading session, while the morning was characterized by growth, which was supported by good macroeconomic statistics from Europe. German Factory Orders rose by 1.3% MoM in September, after falling by 0.4% MoM in the previous month. Experts expected a growth of 0.1% MoM. Markit Composite PMI in Germany in October rose from 48.6 to 48.9 points, which also exceeded neutral market forecasts. The EU Services PMI in October increased from 51.6 to 52.2 points with the forecast of 51.8 points. Retail sales in September showed an increase of 3.1% YoY, accelerating from the previous +2.7% YoY and with a forecast of +2.5% YoY.

GBP/USD

GBP keeps downward direction, updating local lows of October 29. The development of negative trend is facilitated by the newly arisen uncertainty regarding the process of trade negotiations between the USA and China. The parties still have not agreed on the time and place for signing the preliminary agreement, while China continues to insist on the abolition of both previously introduced import duties and the planned tariff increase in December. The US are in no hurry to make concessions to the PRC on this issue, considering the December increase in duties as a guarantee that China will be forced to make a deal. Brexit and the upcoming early parliamentary elections in December remain as negative factors for the pound. Today, investors expect the Bank of England meeting on the interest rate. It is expected that the regulator will not change the parameters of monetary policy in the face of significant uncertainty. Nevertheless, investors will be interested in updated forecasts of the BoE, as well as in a quarterly report on inflation.

AUD/USD

AUD declines against USD, updating close local lows of October 30. The development of negative trend is facilitated by a moderate growth of the US dollar across the entire spectrum of the market, while investors expect new drivers to appear. Today, the Australian currency is declining, despite the publication of positive macroeconomic statistics from Australia. AiG Construction Index went up from 42.6 to 43.9 points in October. Exports from Australia increased by 3% in September after falling by 3% in the previous month. Imports also increased by 3% after zero dynamics in August. Due to strong export growth, Australia's Trade Surplus in September rose significantly from AUD 5.926B to 7.180B. Analysts had expected a decline to AUD 5B.

USD/JPY

USD showed a slight decline against JPY on Wednesday, retreating from local highs, updated the day before. Pressure on the yen was exerted by the published minutes of the Bank of Japan meeting on monetary policy, as well as by macroeconomic statistics from Japan. As expected, the protocols reflected the regulator’s commitment to low interest rates, which stimulate weak inflation in the country. It is expected that rates will remain unchanged until Q2 2020 (while the head of regulator Haruhiko Kuroda does not deny the possibility of a new stimulation of inflation in case of urgent need). Wednesday's statistics on Manufacturing PMI from Jibun Bank reflected a decline in October from 52.8 to 49.7 points against the forecast of 50.3 points.

Oil

Oil prices showed an active decline on Wednesday, retreating from local highs. Pressure on the quotes was exerted by the results of EIA Crude Oil Inventories report, according to which, over the week ending November 1, oil reserves increased by 7.929M barrels after an increase of 5.702M barrels over the past period. Analysts had expected an increase of only 1.515M barrels. US oil production remained unchanged at 12.600M barrels per day. Additional pressure on the quotes was also exerted by the news that some OPEC+ participants are more interested in following all the regulations of the current agreement to limit production, rather than expanding the volume of restrictions in the future.
 

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Morning Market Review
2019-11-08 08:45 (GMT+2)
EUR/USD

EUR showed a decline against USD on Thursday, updating local lows of October 16. Pressure on the euro was exerted by moderate growth in the US currency amid improved prospects for a trade agreement between the US and China. There was information in the media that the parties are ready to mutually cancel part of the previously imposed higher import duties, which indicates some progress in the negotiations. However, the timing and venue of signing the agreement are still unknown. Yesterday's macroeconomic statistics from Germany had an additional negative impact on the euro. Industrial Production in September decreased by 0.6% MoM after an increase of 0.4% MoM a month earlier. Analysts had expected decline by 0.4% MoM. In annual terms, the decline has accelerated from –3.9% YoY to –4.3% YoY, with the forecast of –2.9% YoY.

GBP/USD

GBP fell against USD on Thursday, noting a new local low since October 24. The results of the Bank of England meeting, as well as the continued moderate growth of the dollar against the backdrop of improving prospects for a trade agreement between the United States and China, contributed to the decrease in the instrument. As expected, the British regulator kept the key interest rate at 0.75%, and the volume of the quantitative easing program remained at 435B pounds. At the same time, the vote to maintain the rate was not unanimous. Two representatives of the regulator spoke out for its decline due to the high level of uncertainty in the global economy and the risks that Brexit brings.

AUD/USD

AUD rose slightly against USD on Thursday, but again returned to decline during today's Asian session. The Australian currency was boosted yesterday by positive data from Australia on September export dynamics, which allowed for a stronger trade surplus. Additional support for the instrument was provided by positive news regarding the process of trade negotiations between the USA and China. Today, the instrument is again declining, despite the publication of moderately optimistic statistics on exports from China. In October, exports fell by 0.9% YoY after a decrease of 3.2% YoY in the previous month. Analysts had expected further deterioration in the dynamics of the indicator to –3.9% YoY. Imports for the same period decreased by 6.4% YoY after a decrease of 8.5% YoY in September. The trade surplus in October increased from 39.65B to 42.81B dollars, which exceeded market forecasts of 40.83B dollars.

USD/JPY

USD rose against JPY on Thursday, updating local highs of May 31. The development of the "bullish" dynamics of the instrument was facilitated by the depreciation of the Japanese currency against the background of an upbeat sentiment regarding the conclusion of a trade agreement between the United States and China. Despite the fact that currently the new terms for signing the preliminary trade agreement have not been agreed upon, the comments of the officials allow one to believe in real progress in the ongoing negotiations. Today, the pair is trading in both directions. The yen is moderately supported by the Japanese macroeconomic data. Household Spending in September grew by 9.5% YoY after growth by 1.0% YoY a month earlier. Analysts had expected growth by 7.8% YoY. Overall wage income of employees in September rose by 0.8% YoY after a decrease of 0.1% YoY in the previous month, with a forecast of +0.4% YoY.

Oil

Oil prices showed moderate growth on Thursday, responding to news that China and the US agreed on a plan to mutually reduce existing high import duties after a preliminary trade deal was concluded. However, the timing of the signing of this agreement is not yet known, although earlier information appeared in the media that the date could be postponed to early December. Today, oil quotes are relatively stable and expect new drivers to appear at the market. On Friday, investors are focused on Baker Hughes Oil Rig Count report in the United States.
 
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