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[LF.Anastasia]

CHF: Swiss Franc weakened at the end of the week

Swiss Franc rate weakened at the Forex currency market on Friday. However, the pair USD/CHF is still within the range of the week.

Forex forecast: MACD indicator for the pair USD/CHF is going up in the positive area and is shaping a buy signal. Stochastic Oscillator goes up in the neutral zone, tending towards overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.9230, the pair USD/CHF will go to 0.9240 and 0.9250.

Swiss Franc remains in the focus of the local regulator.

It became known yesterday that trade balance in Switzerland amounted to 2.15 billion francs in October against the forecast of 2.06 billion francs. The data is good, considering global slump in demand and expensive Franc.

According to Swiss National Bank estimates, GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be attributed to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August. Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. The data which is going to be released this week will show dynamics in the index.

Representative of SNB Mr. Jordan reported earlier that Swiss regulator does not need external guidance on monetary policy, as it is an independent institution and does not intend to receive instructions from business groups and politicians. SNB will continue to take appropriate measures if it is required considering the state of economic forecasts and deflation. According to him slowdown in economic growth in Switzerland, which took place earlier, was caused by high exchange rate of Swiss Franc.

 

[LF.Anastasia]

JPY: Japanese Yen has not determined movement direction

At the Forex currency market the Japanese Yen rate is traded downward on Friday, the pair USD/JPY is definitely under pressure from two different forces, which is why general trend has not been identified so far.

Forex forecast: MACD indicator for the pair USD/JPY is ready to break through the signal line from top to bottom and is giving a sell signal, while volume are minimal. Oscillator has intensified its growth in the neutral zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 77.50, the pair will go to 77.65 and 77.70.

The data released this morning showed that net national CPI in Japan declined by 0.1% y/y in October which agreed with the forecast.

The head of the Bank of Japan Mr. Shirakawa said at the end of the week that Japanese financial system remains stable and financial sector is not too vulnerable to the European crisis. Meanwhile, economic growth is Japan has slowed down as crisis in Eurozone affects the rate of the Yen and stock indexes.

Rating agency S&P said yesterday that Japanese rating is going to be revised soon, as financial situation in the country is deteriorating every day. According to the economists of the Agency it is hardly probable that Japan will be able to avoid debt problems.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y. Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.

It became known earlier that index of coincident indicators in Japan was revised to -1.3 points in September against previous level of -1.4 points. At a two-day meeting last week, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October. It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once. Japanese economy is still strongly dependant on the external demand, which is not very reliable at the moment. All these fosters Yen’s tendency to grow.

 

[LF.Anastasia]

AUD: Australian Dollar is on sale again after a break

At the Forex currency market the Australian Dollar rate is under pressure again in Friday after a short break on Thursday. External background remains pessimistic and does not encourage investors to take risk.

Forex forecast: Earlier MACD indicator for the pair AUD/USD has broken through the signal line from top to bottom and is still traded in the negative area, giving a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.9690, the pair will go to 0.9680 и 0.9670.

The head of the Reserve Bank of Australia Mr. Stevens stressed today that Europe and its leaders have to hurry up to resolve their problems. According to export statistics, Australia and its economy seriously suffers from slump in global demand

Unemployment rate in Australia decreased to 5.2% in October against 5.3% a month earlier. Business confidence NAB increased to 2 points in October against preliminary level of -1 points. According to NAB, the growth has been triggered by expectations that the Reserve Bank of Australia will continue to soften monetary policy in the future. It is interesting that business confidence NAB in Q3 amounted to -4 points in Q3; while the index had been at the level of +5 points in Q2. According to estimates of the observers, the level of employment, sales and corporate profit in the country has dropped considerably.

The data released earlier showed that leading indicators index CB in Australia increased by 0.1% m/m in September against previous decline of 0.2% m/m. Corporate profit and exports of agricultural products were among the main drivers of the increase in the index. New statistics does not cancel downward pressure, and the main reason for this was caused by changes in prices for securities at the stock market.

According to statistics released earlier, index of leading indicators Westpac in Australia fell by 0.3% m/m in September against 0.8% m/m a month earlier. It is not surprising if we take into to account strong influence of the situation in Eurozone and China on the Australian economy. According to statistics released earlier, consumer sentiments Westpac in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to the monetary politician Evans the level of the indicator has been at the highs since May 2011 which shall not prevent RBA from lowering the rate once again at the meeting in February.

 

[LF.Anastasia]

NZD: New Zealand Dollar has no trading volumes at the end of the week

At the Forex currency market the New Zealand Dollar rate remains almost unchanged at the end of the week, trading volumes are low. Investors do not rush to buy or continue sales before the weekend.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal; volumes are increasing. Stochastic Oscillator remains in the oversold zone maintaining a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7410, the pair will go to 0.7400 and 0.7390.

It became known yesterday that trade balance in New Zealand was at the level of –NZ$*** million in October against the level of NZ$784 million in September. The index remained in deficit last month although higher than the forecasts of economists.

Volumes of export increased by 5.3% (NZ$3.9 billion on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production.

As it became known this week volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points. The data released earlier showed that annual inflationary expectations in New Zealand declined to 2.72% in Q4 against the level of 2.94% a quarter earlier. This became another indication that economy of the country decelerates rates of growth.

According to previous data, GDP in New Zealand rose by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

It will be difficult for the RBNZ to decrease the rate in the current economic situation, as the regulator keeps on pursuing quite aggressive monetary policy.

 

[LF.Anastasia]

EUR/USD: Monday started with a slight recovery for Euro

The pair EUR/USD is going up moderately at the Forex currency market on Monday morning.

By 9.15 the Euro is at 1.3289 against closing level of 1.3232 on Friday.

The main source for optimism at the beginning of the week was preliminary data on the U.S. retail sales on the “Black Friday” when retailers begun sales: on the first day of Christmas sales volume of retailers’ sales in the U.S. increased by 6.8% against last year level. On-line sales rose by almost 25%.

Growing prices for raw products will provide additional support this morning.

US- EU summit will launch in Washington today, state of the global financial system is going to be discussed there.

Most likely the pair EUR/USD will not go beyond the range of 1.3210-1.3340 at the trading session of Monday.

 

[LF.Anastasia]

GBP: Growth of British Pound on Monday is not more than correction

At the Forex currency market the British Pound Sterling rate is traded upward on Monday as part of correction after sales last week.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic Oscillator remains in the oversold zone, maintaining a similar signal.

Forex recommendations: in case of break down at the level of 1.5490, target for buying will be the levels of 1.5500 and 1.5520 as part of correction. If favourable environment does not last long, the Pound will revert to the sales at around 1.5450.

According to representative of the Bank of England Mr. Weale, economy of the country will not achieve pre-crisis levels until Q3 2013, and growth of capital will support consumption. He believes that monetary policy alone cannot fix up economy and there is a high possibility that QE will be launched if the state of economy will not improve after the first round of stimulation.

Weale also emphasized that there are signs of new recession.

Representative of the Bank of England, a former “Hawk” noted that inflation rate will drop sharply next year; however the Bank of England will continue to stimulate economy. It is interesting that all monetary politicians are confident that CPI will fall sharply, however no one specified what factors would trigger these radical changes in the situation. “Independent” informed last Friday that British Budget Committee intends to lower the forecast on labour market because a number of jobs in the private sector is going to be less than expected.

Earlier this week, British Prime Minister Cameron noted that European panic was the reason for paralyses in the market. In the current situation recovery pace in Great Britain is too slow. The country has to resolve the issue of its own debts and not to look around at others. Presently, additional stimulation could be dangerous; therefore it has not been seriously considered. However, if Eurozone resolved its urgent problems, it would become a powerful catalyst for the British economy.

According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.

 

[LF.Anastasia]

CHF: Swiss Franc quickly weakens

At the Forex currency market Swiss Franc rate weakens on Monday, continuing Friday’s trend. There were rumors in the market on Friday that Swiss National Bank was planning to hold a press-conference to clarify its monetary stance; however it did not happen and it became a negative factor for Franc.

Forex forecast: MACD indicator for the pair GBP/USD is going up in the positive area and is shaping a buy signal. Stochastic Oscillator goes up in the neutral zone shifting towards oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 0.9290, the pair USD/CHF will go to 0.9300 and 0.9320.

It is obvious that the inflow of speculative positions in Franc is still closely regulated by CHB.

It became known last week that trade balance in Switzerland amounted to 2.15 billion francs in October against the forecast of 2.06 billion francs. The data is good, considering global slump in demand and expensive Franc.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August. Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. The data which is going to be released this week will show index in dynamics.

Representative of SNB Mr. Jordan reported earlier that Swiss regulator does not need external guidance on monetary policy, as it is an independent institution and does not intend to receive instructions from business groups and politicians. SNB will continue to take appropriate measures if it is required considering the state of economic forecasts and deflation. According to him slowdown in economic growth in Switzerland, which took place earlier, was caused by high exchange rate of Swiss Franc.

According to Swiss National Bank estimates, GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be attributed to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

 

[LF.Anastasia]

JPY: Japanese Yen remains under pressure

At the Forex currency market the Japanese Yen rate continues to weaken on Monday.

Forex forecast: MACD indicator for the pair USD/JPY has slowed down its fall near the signal line and is now moving along it, not giving a clear signal. Oscillator continues to go up in the neutral zone and is maintaining a buy signal.

Forex recommendations: in case of breakdown at the level of 77.70, the pair will go to 77.75 and 77.90.

The head of the Bank of Japan Mr. Shirakawa noted this morning that the growth of the JPY continues to negatively impact on the local economy and current rise of the JPY was caused by the European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030.

Mr. Shirakawa also noted that interventions against Yen are acceptable and effective.

The last comment is most likely very unfavourable for the JPY.

The data released earlier showed that net national CPI in Japan decreased by 0.1% y/y in October, which agreed with the forecast.

Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.

It became known earlier that index of coincident indicators in Japan was revised to -1.3 points in September against previous level of -1.4 points.

Rating agency S&P said yesterday that Japanese rating is going to be revised soon, as financial situation in the country is deteriorating every day. According to the economists of the Agency it is hardly probable that Japan will be able to avoid debt problems.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y.

 

[LF.Anastasia]

AUD: Australian Dollar is moving up from local lows

At the Forex currency market the Australian Dollar rate is traded upward on Monday, external background gave a chance to the oversold currency to regain part of its losses.

Forex forecast: Earlier MACD indicator for the pair AUD/USD has broken through the signal line from top to bottom and is still traded in the negative area, giving a sell signal. Stochastic Oscillator tends to go way from the oversold zone and started to shape a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9855, the pair will go to 0.9870 and 0.9890.

Macro-economic background in Australia remains unchanged.

The head of the Reserve Bank of Australia Mr. Stevens stressed earlier that Europe and its leaders have to hurry up to resolve their problems. According to export statistics, Australia and its economy is seriously affected by the slump in global demand

The data released earlier showed that leading indicators index CB in Australia increased by 0.1% m/m in September against a previous decline of 0.2% m/m. Corporate profit and exports of agricultural products were among the main drivers of the increase in the index. New statistics does not cancel downward pressure, and the main reason for this was caused by changes in prices for securities at the stock market.

According to statistics released earlier, index of leading indicators Westpac in Australia fell by 0.3% m/m in September against 0.8% m/m a month earlier. It is not surprising if we take into to account strong influence of the situation in Eurozone and China on the Australian economy. According to statistics released earlier, consumer sentiments Westpac in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to the monetary politician Evans the level of the indicator has been at the highs since May 2011 which shall not prevent RBA from lowering the rate once again at the meeting in February.

Unemployment rate in Australia decreased to 5.2% in October against 5.3% a month earlier. Business confidence NAB increased to 2 points in October against preliminary level of -1 points. According to NAB, the growth has been triggered by expectations that the Reserve Bank of Australia will continue to soften monetary policy in the future. It is interesting that business confidence NAB in Q3 amounted to -4 points in Q3; while the index had been at the level of +5 points in Q2. According to estimates of the observers, the level of employment, sales and corporate profit in the country has dropped considerably.

 

[LF.Anastasia]

NZD: Optimism distinguishes New Zealand Dollar today

At the Forex currency market the New Zealand Dollar rate is traded upward at the beginning of the week, with a big gap compared to the levels on Friday with the help of support from quiet external background and rise in price for the raw materials.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal; volumes are maximal. Stochastic Oscillator has left oversold zone and is giving a clear buy signal.

Forex recommendations: in case of breakdown at the level of 0.7530, the pair will go to 0.7540 and 0.7580. Meanwhile the growth looks more like a rebound.

Statistics released today showed that business confidence NBNZ amounted to +18.3 points in November against the level of +13.2 points in October. According to business estimates business outlooks shall become better soon, at least as indicated by statistics.

It became known earlier that trade balance in New Zealand was at the level of –NZ$*** million in October against the level of NZ$784 million in September. The index remained in deficit last month although higher than the forecasts of economists. Volumes of export increased by 5.3% (NZ$3.9 billion on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production.

According to the previous statistics volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points. The data released earlier showed that annual inflationary expectations in New Zealand declined to 2.72% in Q4 against the level of 2.94% a quarter earlier. This became another indication that economy of the country decelerates rates of growth.

GDP in New Zealand rose by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.