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[LF.Anastasia]

CHF: Swiss Franc came to a standstill

At the Forex currency market Swiss Franc rate is almost motionless on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; it has slowed down its decline and started to reverse, giving a pair buy signal. Stochastic Oscillator has reached overbought zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8890 the pair USD/CHF will go to 0.8915 and 0.8930. If a breakdown does not take place, the pair will consolidate close to the current levels.

It became known earlier that unemployment rate in Switzerland fell to 3.1% in April against the previous level of 3.3%. It is a positive indication for the economy. The data released earlier showed, that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points. In addition statistics released earlier showed that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected. Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sectors is worthy of being noted.

It became known earlier that consumer confidence index in Switzerland amounted to 1 point in QI, as per SECO estimates, against the growth by 10 points in QIV. Franc has ignored this statistics.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

 

[LF.Anastasia]

JPY: Japanese Yen gives way to the USD

The Japanese Yen rate continues to move away from the local highs at the Forex currency market on Thursday under the pressure from American Dollar.

Forex forecast: MACD indicator for the pair USD/JPY has crossed the signal line from top to bottom, giving a pair sell signal. Stochastic Oscillator goes up in the neutral zone, giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.20 the pair will go to 81.40 and 81.55. If the level of 80.75 is exceeded, trader’s target will be the level of 80.10.

As it became known today, balance of current account in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released yesterday showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

Japan considers the possibility of raising taxes up to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Note that according to the Bank of Japan real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

The minutes of the Bank of Japan meeting of 6-7 April was released earlier; it says that some members of the CB believe that the policy of quantitative easing in March had a positive impact on the state of the financial market and business confidence; however it is still required to monitor carefully the effect of the high prices for commodity.

In addition, the Bank of Japan is concerned about the effects of the interest rates rise by the European Central Bank.

In regards to the YPY rate, the document indicates that weak Yen positively affects the state of the capital expenditures. It should be taken into consideration that the meeting took place at the beginning of April when the YPY was really weak.

 

[LF.Anastasia]

AUD: Australian Dollar is on sale under the pressure of weak statistics

The Australian Dollar rate continues to decline at the Forex currency market on Thursday; sales were triggered by weak employment statistics.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to decline, giving a pair sell signal, while the trading volumes are slightly above the average. Stochastic Oscillator goes down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at 1.0600 the pair will go to 1.0585 and 1.0570.

The following Australian data was released today:

– Change in the employment rate in April amounted to -22.1 thousand compared to +37.8 thousand in March;

– Unemployment rate remained unchanged, at the level of 4.9%

Market did not expect such an unpleasant surprise from employment sector, which along with the investors’ risk aversion in the market encouraged ongoing sales of the AUD.

Statistics released earlier showed that trade balance in Australia rose to A$1.74 billion in March against the level of -A$0.08 billion in February and Moody's Investors Service agency gave positive assessment to the data; according to observers of the agency, resolution of the authorities to revert the balance of the state budget to the zone of surplus is well-founded and such attitude supports credit rating of the country, which is at Aaa.

Note that the rise in the indicator was caused by the growth of exports in iron ore and coal and also reduction of gasoline imports.

As it was made public last week, CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate. RBA expects that net CPI will reach 3% against predicted 2.75% by the end of this year.

Exports increased by 9%, to A$25 billion in March; import rose by 1%. It became known earlier that index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia has been keeping interest rate unchanged for a long time.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to retreat

At the Forex currency market the Canadian Dollar rate continues to retreat in pairing with the USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going upward, giving a pair buy signal. Stochastic Oscillator declines in the neutral zone today, giving an antipodal signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9635 the pair will go to 0.9650 and 0.9670.If the level of 0.9600 is exceeded, the level of 0.9580 will become the target for sale..

It became known yesterday that trade balance surplus in Canada rose to $627 billion in March against the level of $356 billion in February. In addition, exports increased by 3.5% in March; imports by 2.8%. Canadian economy declined unexpectedly in February: GDP fell by 0.2% in February against the growth by 0.5% in January. It was largely caused by the reduction in the industrial output.

As it became public earlier retail sales in Canada increased by 0.4% in February against the fall by 0.4% in January. In addition, index of leading indicators in Canada increased by 0.8% in March against 0.8% m/m earlier and wholesales sale fell by 0.6% in February against 1.5% m/m in January.

In regards to the Canadian Dollar rate, IMF believes that if average oil price will remain at about $90 barrels (in October- $79 barrels) CAD will increase, with the help of support from the commodity sector of the country’s economy.

Imperial Bank of Commerce reported earlier on the revision of its GDP forecast for QIV 2010 to 2.6% versus the previous level of 2.3%; the Bank expects that this year economic growth will be by 2.6% (2.4 % previously).

The Bank of Canada stated earlier that CPI in the country will begin to rise, as soon as it exceeds expected level. At the same time value of key index of net CPI is also growing, remaining close to the target level of 2%.

The regulator expects that average growth of GDP in Canada will be at the level of 2.9% per annum this year. According to the experts from International Monetary Fund, Canadian economy will grow by 2.3% y/y this year, which is less than the forecast of +2.7% y/y in October.

 

[LF.Anastasia]

Euro/USD: Euro remains weak at the end of the week

The pair EUR/USD continues to be traded downward At the Forex currency market on Friday morning, remaining at the lows of March.

By 9.25 Moscow time the Euro is at 1.4220 against closing level of 1.4245 yesterday.

Investors are still apprehensive to revert to risk due to the instability at the global capital markets. The data on GDP in Eurozone will be made public today and investors expect the rise by 2.2% y/y against the level of 2.0% in QIV, 2010. If the released data will be strong, the Euro will receive a powerful support.

Meanwhile the Euro looks weak; however it still has potential for growth.

Most likely the pair EUR/USD will not go beyond the range of 1.4170-1.4290 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound sales continues for four days

At the Forex currency market the British Pound Sterling rate continues to be under selling pressure on Friday, due to the ongoing negative factors of the external background.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it goes down, trading volume is also reducing, which indicates sell signal. Stochastic Oscillator is coming back to the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6240 the pair will go to 1.6210 and 1.6180. If downward breakdown does not take place the pair will consolidate close to the current levels.

General Director of the Confederation of British Industry (CBI) Mr. Cridland believes that Finance Minister of the UK Mr. Osborne does not need to glance back at the lack of growth of the British economy during implementation of measures to reduce government spending. “We continue to expect that recovery will proceed this year as well as the next year, however recovery pace will be slow, - thinks CBI. CBI expects that the British economy will grow by 1.7% this year; and by 2.2% in 2012. Reduction in the government spending will help decrease GDP by another 0.75% on average

We would remind that at the regular meeting the Bank of England left interest rate unchanged at the level of 0.50% per annum, volume of assets purchase was also kept unchanged- at the level of stg200 billion. Comments of the regulator did not incorporate new developments, and it seems natural; the situation in the British economy is far from being stable

Deloitte & Touche LLP believes that the Bank of England will not raise rates until 2013 – according to observers, economic growth in the country is still poor, basic economic trend in the UK is also not too good, which encourages to leave rates at the current level at least until the end of this year and throughout the next year as well. Inflation in the country is twice as high as 2% projected by MPC. Deloitte & Touche LLP indicates that British GDP will amount to 1.5% in 2011, the same as next year; while inflation will reach 4.5% in 2011 and 1.8% in 2012.

The Bank of England believes that by the end of this year interest rate will reach the level of 0.75%, while in QIV, 2012 it will be 1.75%, i.e. the Bank has made provisions for one fact of the rise in the indicator in 2011 and four in 2012. Inflationary prospects were described as “uncertain” and Central Bank admits that CPI will reach the level of 5% this year. Although the Bank of England expects that CPI will grow slightly above 1.9% in two years time.

 

[LF.Anastasia]

CHF: Swiss Franc still fails to work out general trading idea

At the Forex currency market Swiss Franc rate is traded downward on Friday, which, however does not exclude the possibility of growth in the nearest future. Thus, the pair USD/CHF is missing general and integrated trading idea.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; it slowed down its decline and started upward reversal, giving a pair buy signal. Stochastic Oscillator has reached overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8890 the pair USD/CHF will go to 0.8915 and 0.8930. If upward breakdown does not take place the pair will consolidate close to the current levels.

It became known earlier that consumer confidence index in Switzerland amounted to 1 point in QI, as per SECO estimates, against the growth by 10 points in QIV. Franc has ignored this statistics.

Earlier it was made public that unemployment rate in Switzerland fell to 3.1% in April against the previous level of 3.3%. It is a positive indication for the economy. The data released earlier showed, that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points. In addition statistics released earlier showed that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected. Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sectors is worthy of being noted.

 

[LF.Anastasia]

JPY: Japanese Yen reverted to growth

The Japanese Yen rate is strengthening again reverted to growth at the Forex currency market on Friday. However the situation at the global capital markets remains volatile this morning which prevents from making far-reaching conclusions.

Forex forecast: MACD indicator for the pair USD/JPY crossed the signal line from top to bottom, giving a pair sell signal. Stochastic oscillator started to decline in the neutral zone, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 80.50 the pair will go to 80.30 and 80.10.

As it became known today, current account balance in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released earlier showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

The minutes of the Bank of Japan meeting of 6-7 April has been released earlier; it states that some members of the CB believe that the policy of quantitative easing in March had a positive impact on the state of the financial market and business confidence; however it is still required to monitor carefully the effect of the high prices for commodity.

In addition, the Bank of Japan is concerned about the effects of the interest rates rise by the European Central Bank.

In regards to the YPY rate, the document indicates that weak Yen positively affects the state of the capital expenditures. It should be taken into consideration that the meeting took place at the beginning of April when the YPY was really weak.

Japan considers the possibility of raising taxes up to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Note that according to the Bank of Japan real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

 

[LF.Anastasia]

AUD: Australian Dollar remains under pressure

At the Forex currency market the Australian Dollar rate continues to be the target of bears’ attention

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and keeps on declining, giving a pair sell signal with the volumes slightly above average. Stochastic Oscillator falls in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0600 the pair will go to 1.0585 and 1.0570. If downward breakdown does not take place, the pair will consolidate at the current levels.

It became known yesterday that unemployment rate remained unchanged, at the level of 4.9% in April, and the change in the employment rate in April amounted to -22.1 thousand compared to +37.8 thousand in March. Market did not expect such an unpleasant surprise from the employment sector which, along with investors’ risk aversion in the market, has encouraged ongoing sales of the AUD.

According to the information received today, ABS, Australian Bureau of Statistics has not received authorization for additional funding to assess inflation indicators in the country on a monthly basis instead of existing quarterly basis. Therefore, from all OECD countries only Australia and New Zealand do not release inflationary data on monthly basis.

Take not of CPI level in Australia that increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate. RBA expects that net CPI will reach 3% against predicted 2.75% by the end of this year.

Exports increased by 9%, to A$25 billion in March; import rose by 1%. It became known earlier that index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia has been keeping interest rate unchanged for a long time. Statistics released earlier showed that trade balance in Australia rose to A$1.74 billion in March against the level of -A$0.08 billion in February and Moody's Investors Service agency gave positive assessment to the data; according to observers of the agency, resolution of the authorities to revert the balance of the state budget to the zone of surplus is well-founded and such attitude supports credit rating of the country, which is at Aaa.

Note that the rise in the indicator was caused by the growth of exports of iron ore and coal and also by the reduction of gasoline imports.

 

[LF.Anastasia]

NZD: New Zealand Dollar determines movement direction

The New Zealand Dollar rate is at the standstill at the Forex currency market this morning trying to determine trading directions after yesterday’s steady growth.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, however it goes down, giving a pair sell signal. Stochastic Oscillator is moving along the signal line in the neutral zone, not giving a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7970 the pair will go to 0.7990 and 0.8020. If the level of 0.7920 is exceeded, the level of 0.7880 will be the target for decline..

Economic situation in New Zealand has not changed fundamentally this morning.

Macro- economic data showed this week that house prices fell by 1.9% m/m in April against the decline by 2.0% in March and credit cards expenses rose by 1.7% м/м in April against the increase by 0.5% in March. Therefore, real estate sector of New Zealand started to recover and it is a strong supportive factor for the economy.

Recall that the Reserve Bank of Zealand has left interest rate unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not going to be changed yet. The regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.

According to the official data, the outflow of population was the highest in March over the past 10 years; migration factor will cause slowdown in the NZD recovery process.

At the same time unemployment rate New Zealand fell to 6.6% in QI against the level of 6.8% in QIV, 2010. The forecast had been 6.7%. In addition the proportion of labor force increased to 68.7% against the previous level of 67.9%. Although indicators are favourable, ASB still believes that report is ambiguous: it is possible that the earthquake of February will have more serious impact on the economy than expected and it will have additional pressure on the labor market of New Zealand and will have an adverse affect on the prospects for the sector as a whole.

It is also worth noting that budget deficit in New Zealand amounted to NZ$10.17 billion for the 9 months by 31 March which was in average 15% higher than expected by economists. This fact provoked previous sales of the NZD.

It became known earlier that house price index in New Zealand increased by 1.1% m/m in April, as per REINZ estimates against the forecast of growth by 0.5% m/m. In addition the agency reported that the level of house sales last month was -4.2% y/y against the level of -5.1% y/y in March.