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[LF.Anastasia]

JPY: the Japanese Yen rate sets for a new consolidation

At the Forex currency market the Japanese Yen rate is traded upward on Thursday – still the government doesn’t hurry to wrestle with the expensive Japanese currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, but is moving along the signal line, not giving any clear signal. Stochastic Oscillator continues growing in the neutral zone giving a weak buy signal.

Forex recommendations: in case of breakup at the level of 76.60, the pair will go to 76.80 and 77.30. If breakup does not take place, the pair will consolidate at the current levels. Sellers’ target is 76.00.

As it became known today, retail sales in Japan fell by 2.6% y/y in August against growth by 0.6% in July. So the consumer still avoid spending waiting for the tax rise.

As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments.

It should be noted that the Japanese Finance minister said that the third money tranche to restore injured by an earthquake objects will amount to JPY11 trln. He also noted that all measures influencing the national currency will ne taken “if needed”.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July. In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July.

It’s interesting to note that Japan doesn’t rule out taking part in Greece aid – in case the Athens provide an adequate plan. It became known earlier that revised industrial output in July rose by 0.4% m/m against preliminary value of +0.6% m/m, which is logical since the decline that is being observed in all sections was caused by the slowdown of the world economy.

 

[LF.Anastasia]

AUD: the Australian Dollar tries to resume growth

At the Forex currency market the Australian Dollar rate tries to resume growth on Thursday is spite of the rate forecasts.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area and is giving a sell signal; volumes are high. Stochastic Oscillator left the oversold zone and is rising in the neutral zone, giving a buy signal.

Forex recommendations: out of market.

Feasible scenario at Forex: in case of breakup at the level of 0.9860, the pair will go to 0.9870 and 0.9895. If the breakup does not take place, the pair will consolidate at the current levels.

JP Morgan economists revised its opinion on the Australian rate – now they do not await its 25 bps rise in 2012, forecasting the rate to remain at the current levels till the end of the next year. In accompanying comments the economists note that financial markets are too volatile and the risks of economy’s cooling are too big to speak of the rate increase. A fall is commodities prices also plays against Australia.

Minutes of the last meeting of the Reserve Bank of Australia which were made public last week show, that current levels of the rates correspond to the existing situation, while medium- term outlooks for economic growth continue to be optimistic. Companies are ready to hire employees, which is a positive factor, however the expensive AUD has forced to review business strategies and plans. The minutes look weird, considering that Australian economy suffers huge losses now, due to the decrease in exports levels and particularly for coal.

Leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%. The AUD neglected this information: there are more influential players on the scene of the currency market. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%. This data is of general nature and the AUD did not respond to it; however it is obvious that inflationary pressure will continue to grow.

The macroeconomic situation remains the same by today. No data will be published in Australia till the end of the week, so traders should only hope for some rebound on the back of the external background.

 

[LF.Anastasia]

NZD: the New Zealand Dollar searches for a catalyst to increase

The New Zealand Dollar rate shows weak signs of increase at the Forex currency market on

Thursday, still there are no catalysts for traders to start buying after yesterday’s selloff.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal; volumes are rising. Stochastic Oscillator is rising in the neutral zone, giving a weak buy signal.

Forex recommendations: in case of breakup at the level of 0.7790, the pair will show a correctional movement to 0.7820 and 0.7850.

The RBNZ head said this morning that the financing of the country’s banking sector may become a problem in 2012. According to Mr. Bollard, the New Zealand banking system now feels a great deal better than in 2008, but risks from Europe and USA are increasing. Still the NZD is too expensive, in his opinion.

The statistics released the day before turned out to be mixed. Consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

It became known last week that GDP in New Zealand increased 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.

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has 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.

Levels of exports do not support economy of New Zealand: the index decreased by 0.5% last quarter, while the share of imports increased by 1.7%.

CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is worth noting that number of permits to construct in New Zealand decreased by 1.4% m/m in July against the forecast of +3.0%. Activity in the construction sector of Australia was at the level of - 6.6 q/q in Q2; which agreed with the revised data in Q1.

In whole the main market driver is the external background and world financial markets’ investors’ sentiment.

 

[LF.Anastasia]

EUR/USD: Euro “fans” need solid proofs of stability

The pair EUR/USD is traded slightly downward at the Forex currency market on Friday – investors are waiting for stronger signals of world economy’s stabilization.

By 9.30 MSK the Euro is at 1.3553 against yesterday’s closing level of 1.3597.

Thus, in spite of yesterday’s EFSF program enlarging approval and positive statistics from the USA, investors are waiting for more serious signs of improving of the world economy and loss of market risks.

Such news may come from positive Greece decision, but it will hardly be taken today.

Most likely the pair EUR/USD will not go beyond the range of 1.3510-1.3620 at the trading session on Friday.

 

[LF.Anastasia]

GBP: the British Pound growth was prevented by external background

At the Forex currency market the British Pound Sterling rate continues moving downward on Friday staying however in the last 4 trading sessions’ range, 1.5541-1.5715.

Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, but starts moving along the signal line, not giving any signal. Stochastic Oscillator is turning around in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.5550, buyers’ target will be the levels of 1.5530 and 1.5510. If breakdown does not take place, the pair will consolidate close to the current levels.

As it became known today, Gfk Consumer Sentiment in Great Britain increased to the level of -30 points in September against the level of -31 points in August. However in spite of some positive dynamics, index is still near its historic lows and doesn’t drag to historical average. The indicator has moved away from its lows this year, but strong stabilization is still a long way off.

It is worth noting that the indicator of the economic situation fell to -58 points for the last 12 months.

According to the data released yesterday, Nationwide house price index in Great Britain increased by 0.1% m/m (-0.3% y/y) in September. The statistics released earlier showed that house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects.

As noted by the regulator the day before, banks shouln’t reinforce market volatility. Besides banks’ capital saving shouldn’t limit lending.

According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before.

In spite of the fact that it’s too early to talk of the about-turn, the British Pound’s year lows did good to the currency – amid rather stable external background investors gained interest in GBP. However this fact will not become an obstacle for “Bears” to resume selling in case the external background worsens.

 

[LF.Anastasia]

CHF: Swiss Franc is stable

Swiss Franc rate is stable the Forex currency market on Friday still staying trading in its mid-term range

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator continues moving downward forming a sell signal.

Forex recommendations: in case of breadown at the level of 0.8990, the pair USD/CHF will go to 0.8975 and 0.8960. If breakdown does not take place, the pair will possibly stay near the current levels.

By today’s morning macroeconomic situation in Switzerland stays unchanged. It is worth noting that last week SNB made some signs that may indicate that the regulator looses power to keep Swiss Franc stable.

According to SNB representative Mr. Dallas, that spoke the day before, Swiss Franc’s reserves should be grown to prevent CHF from excessive strengthening, and SNB used all measures to protect the target level of the currency. He also added, that if no actions were to be taken, the Swiss Franc would grow to above the parity in pairing with Euro. Mr. Dallas didn’t comment on the possible rise of the target level. Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.

According to the research published this week, the economic forecast of KOF Institution in Switzerland this year totaled +2,3% in September. As it became known the day before, UBS Consumption indicator in Switzerland fell to 0.79 points in August against the level of 1.29 points a month before. This is another sign of Swiss economy cooling.

Index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious. The data released also showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July. It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.

Released last week SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.

 

[LF.Anastasia]

JPY: the Japanese Yen rate is not afraid of the potential intervention

At the Forex currency market the Japanese Yen rate is traded upward again on Friday – in spite of the government being ready for the intervention.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, but starts rising, ready to form a buy signal. Stochastic Oscillator starts growing in the neutral zone giving a weak buy signal.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to 76.50 and 76.30. If breakup does not take place, the pair will consolidate at the current levels.

A solid set of macroeconomic data was released this morning:

– overall nationwide CPI in Japan totaled +0.2% y/y in August against the forecast of +0.1% y/y;

– Household spending in Japan totaled -4.1% y/y in August against the forecast of -2.8% y/y;

– Unemployment Rate in Japan decreased to 4.3% in August against both the forecast and previous level of 4.7%.

Besides it became known that currency intervention fund will be increased by JPY15 k, and the Finance Ministry noted that it would continue to monitor all possible speculative movements at the Forex currency market and couldn’t exclude actions to be taken.

As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments.

It should be noted that the Japanese Finance minister said that the third money tranche to restore injured by an earthquake objects will amount to JPY11 trln. He also noted that all measures influencing the national currency will ne taken “if needed”.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July. In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July. Retail sales in Japan fell by 2.6% y/y in August against growth by 0.6% in July. So the consumer still avoid spending waiting for the tax rise.

 

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[LF.Anastasia]

AUD: the Australian Dollar continues sliding

At the Forex currency market the Australian Dollar rate continues to be sold on Friday amid risk aversion.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area and is giving a sell signal; volumes are high. Stochastic Oscillator goes down in the neutral zone, giving the same signal.

Forex recommendations: in case of breakdown at the level of 0.9730, the pair will go to 0.9710 and 0.9695. If the breakdown does not take place, the pair will consolidate at the current levels.

According to the statistics released today, Private sector credit in Australia totaled +0.2% m/m in August against +0.3% m/m in July. This became another reason for the Aussie selloff.

Leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%.

Minutes of the last meeting of the Reserve Bank of Australia which were made public last week show, that current levels of the rates correspond to the existing situation, while medium- term outlooks for economic growth continue to be optimistic. Companies are ready to hire employees, which is a positive factor, however the expensive AUD has forced to review business strategies and plans. The minutes look weird, considering that Australian economy suffers huge losses now, due to the decrease in exports levels and particularly for coal.

JP Morgan economists revised its opinion on the Australian rate – now they do not await its 25 bps rise in 2012, forecasting the rate to remain at the current levels till the end of the next year. In accompanying comments the economists note that financial markets are too volatile and the risks of economy’s cooling are too big to speak of the rate increase. A fall is commodities prices also plays against Australia.

 

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