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[LF.Anastasia]

JPY: Japanese Yen continues to grow

At the Forex currency market the Japanese Yen rate continues to grow fast, exploiting weak economic performance in Japan.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it started reversal, going down slightly and giving a sell signal. Stochastic Oscillator has come into oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.20, the pair will go to к 76.10 and 76.80. Consolidation near the current levels is possible.

It became known today that unemployment rate in Japan rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed decreased by 100 thousand against the growth of 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country.

Now, economic stimulus programs for the total amount of 20 trillion yen, are being implemented in Japan. They were designed to increase demand and finalize work to eliminate aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

There has been some other positive data – preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

According to the data released yesterday morning, trade balance in Japan amounted to -Y916.2 billion in the first ten days of January. Volume of export was at the level of -20.7% y/y, import rose by 24.3% y/y. It became known earlier that trade deficit has been recorded in Japan for the first time in 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen). It seems that Japanese economy has been deprived of one of the main supportive tools - its exports.

It became known earlier that retail sales increased by 2.5% y/y in December against decline of 2.2% in November. These findings are extremely interesting because they demonstrate that, despite significant slump in economy, retail sales can be in favourable position. The latest data was the strongest one over the last six months; apparently, consumers’ optimism and appetite for buying is back again. At the same time, we cannot disregard the fact that, due to continuing decline of export levels and losses in the manufacturing sector, income of Japanese people will decrease as well, and this will inevitable affect retail sector.

 

[LF.Anastasia]

AUD: Australian Dollar is waiting for external signal to grow

At the Forex currency market the Australian Dollar rate is traded upward today, amid positive sentiment at the global capital markets. Meanwhile, the currency needs stronger catalyst for more efficient growth.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, while volumes are high and is giving a buy signal. Stochastic Oscillator tends to go out of the overbought zone and is ready to shape a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0640, the pair will go to 1.0650 and 1.0670.

Statistics released this morning showed that private sector lending rose by 0.3% in December, the same as in November. The AUD did not react to this statistics, as it is focused on the external background.

It became known yesterday that rating agency Fitch put rating of Australian banks CBA, NAB, Westpac ND ANZ for review with the forecast negative. This fact is still unfavourable for the AUD.

The data released earlier was mixed. Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. The report is interesting: core inflation rose to 2.6% in the previous quarter, exceeding average target of RBA by 2-3%. Market believes that probability is 50% now, that at the next meeting the Bank of Japan will reduce interest rate to 4%. At the end of last year, in November and December, the RBA reduced the rate twice.

Leading indicators index CB in Australia decreased by 0.3% in November against the fall of 0.6% earlier. Import price index increased by 2.5% q/q in Q4 against zero change in Q3.

Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. Employment rate in November fell by 7.6 thousand against initial estimate of -6.3 thousand. At the same time, unemployment rate remained at the previous level of 5.3%. We would remind that economists expected the rise of jobs by 10 thousand. The index clearly reflects the impact of the European debt crisis on Australian economy. According to government’s estimate, last 12 months were the worst for the labour market over the last 20 years, as the sector has weakened significantly since last six month of 2011.

 

[LF.Anastasia]

NZD: New Zealand Dollar is ready to continue ascent

At the Forex currency market the New Zealand rate remains in the positive area on Tuesday and is ready to continue ascent.

Forex forecast: MACD indicator for the pair NZD/USD is going up in the positive area and is giving a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8230, the pair will go to 0.8240 and 0.8250. Consolidation near the current levels is possible.

Macro-economic situation in New Zealand has not changed this morning.

Statistics released earlier this week showed that activity index in the service sector of New Zealand fell to 50.6 points (-5.6 points) in December. Trade balance amounted to +NZ$338 billion in December against the level of -NZ$307 billion in November. However, positive factor of the index has already been incorporated into the price. Consumer confidence index ANZ fell to 108.4 points in December against 109.0 points earlier.

At the meeting last week, the Reserve Bank of New Zealand decided to leave interest rate at the minimal level of 2.5% per annum. According to follow-up comments of the regulator this decision is reasonable because world economic risks are still preserved despite internal stability in New Zealand. RBNZ emphasized that inflationary pressure is being steadily contained; however NZD growth negatively affects earnings of exporters. In addition, economy of New Zealand demonstrates signs of weak recovery in the housing market and consumer spending.

Therefore, Europe and its problems have a strong impact on Australian economy, as well as on other remote counties; forecasts are too difficult to make.

GDP in New Zealand increased by 0.8% q/q in Q3 (+1.9% y/y) against the forecast of +0.6% on quarterly basis. Significant support to the economy of New Zealand was provided by Rugby Championship which attracted a lot of investment into the country. GDP 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 had almost stopped growing, however revived later. Most likely the index will be weaker in Q4.

 

[LF.Anastasia]

EUR/USD: Sales of Euro are still ongoing

The pair EUR/USD started February with sales at the Frex currency market on Wednesday morning.

By 9.30 MSK the Euro is at 1.3066 against yesterday’s closing level of 1.3078.

Weak American statistics released yesterday has caused deterioration of players’ sentiments, as well as prolonged negotiations between Greece and private capital, which logically, should have been completed on 31 January, at the latest. There is no actual output of the meeting yet, and it upsets investors.

In this connection, there is an increasing chance of new surge of sales of the major pair with the first stop at 1.30.

Most likely, the pair EUR/USD will not go beyond the range of 1.2990-1.3090 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound is encompassed with doubts at the beginning of new month

At the Forex currency market the British Pound Sterling rate is traded slightly downward on Wednesday in response to mixed investors’ sentiments at the global capital markets.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from bottom to top and has come to the positive area; however trades are sluggish and along the line, there is no clear signal. Stochastic Oscillator tends to come out of the overbought zone and is ready to shape a sell signal.

Forex recommendations: in case of breakdown at 1.5730, the pair will go to 1.5720 and 1.5690. A chance is high that the pair will consolidate at the current levels.

Presently, mixed sentiments in the market prevents the Pound to go upward, as investors questioned vital capacity of Greece, as well as lack of reasons for recessions in Eurozone. According to British Prime Minister Cameron, as long as EU authorities do not take energetic measures to implement anti-crisis program, there is no point to raise the issue of increasing IMF reserves. Therefore, Britain maintains tough stance in regards to the debt situation in Eurozone. Cameron thinks that Germany shall act faster and with more confidence.

Macro-economic situation is stable at the beginning of February. Labour sector remains in the difficult position: unemployment rate rose to 8.4% in November against the forecast of 8.3%, level of unemployed increased by 118 thousand over three months against +128 thousand in the previous three months. Similar situation is in the retail sector as well. Buyers failed to keep retailers happy in January: following the rise in volumes of sales in December, retail sale fell by 22% in January against +9 in December. This has been the lowest value since March 2009. Outlook in the retail sector is not too optimistic. Thus, companies in this sector can go to three-year lows again in February, as volumes of orders have declined once again.

It became known today that consumer confidence index GfK rose to -29 points in January against the level of -33 points in December. This is the record index since summer 2011 and is definitely very positive. According to the head of the Bank of England Mr. King, decline in inflation assumes possibility of additional QE; however, rates will likely remain at the current levels. King emphasized that recovery of the British economy will be slow and jerky. He also said that terms of lending are detrimental to economic recovery. At the same time the Bank of England is ready to provide liquidity to banks if a need will be.

 

[LF.Anastasia]

CHF: Swiss Franc is retreating

At the Forex currency in the middle of the week Swiss Franc rate continues to slide away from local highs achieved at the end of January

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from top to bottom and is in the negative area now, giving a sell signal. Stochastic Oscillator has come out of the oversold zone and is giving a buy signal, increasing in the neutral zone.

Forex recommendations: in case of breakdown at 0.9235, USD/CHF will go to к 0.9240 and 0.9260.

It became known yesterday that Swiss consumption indicator UBS rose to 0.92 points in December against preliminary expectations of 0.78 points.

Theoretically, the fact that the index is successfully recovering can be an indication that previously it has reached its bottom and now there is no threat of serious slump. In the nearest future a moderate increase in consumer sentiments can be predicted.

Domestic consumption shall receive energetic support, as inflow of labour power can become a positive outcome of this. Note that this time SNB has ignored rapid growth of SHF.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned at the beginning of January. The name of successor is still unknown and it is also not clear if a new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted that search for the candidate for SNB governor will take several months. Earlier, Swiss government indicated intention to revise policy of supervision over SNB activity. A week ago Swiss authorities said that government does not have instruments for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to cast doubts on Bank’s strategies; however the issue with Hildebrand requires special consideration.

Swiss Minister of Economic affairs noted on Friday, that second half of this year is going to be better than the first one, Swiss economy is stable enough to survive mild recession. Naturally, it will affect the economic growth rate in the country: slow growth rate of GDP is expected in 2012. The politician also stressed that SNB has high creditworthiness.

Last week, representative of SNB Mr. Dantin said that, in perspective lowering of Franc rate is possible because measures to restrict its growth are going to be introduced. He once again outlined well-known positions of SNB about possibility of unlimited purchases of foreign currency in order to keep Franc in permissible price limits.

 

[LF.Anastasia]

JPY: Japanese Yen stands still in anticipation

At the Forex currency market the Japanese Yen rate stands still in the middle of the week after four days of steady growth.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it is moving sideways again and is not giving a clear signals. Stochastic Oscillator has come into oversold zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.15, the pair will go to к 76.10 and 76.80. Consolidation near the current levels is possible.

Most likely another round of strengthening in JPY will cause a flow of comments from monetary authorities of the country.

Meanwhile, morning news showed that average wages in Japan continues to decline: the data in December showed decline of 0.2% y/y, the same as in November. Therefore, Japanese wages have been declining for 8 months out of 12. It became known today that unemployment rate in Japan rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed decreased by 100 thousand against the growth of 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country.

There has been some other positive data – preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

At the same time, we cannot disregard the fact that, trade deficit has been recorded in Japan for the first time in 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen). It seems that Japanese economy has been deprived of one of the main supportive tools - its exports.

It became known earlier that retail sales increased by 2.5% y/y in December against decline of 2.2% in November. These findings are extremely interesting because they demonstrate that, despite significant slump in economy, retail sales can be in favourable position. The latest data was the strongest one over the last six months; apparently, consumers’ optimism and appetite for buying is back again. Now, economic stimulus programs for the total amount of 20 trillion yen, are being implemented in Japan. They were designed to increase demand and finalize work to eliminate aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

 

[LF.Anastasia]

AUD: Australian Dollar continues trades in the narrow range

At the Forex currency market the Australian Dollar rate is traded within the narrow range of 1.0520-1.0884 on Wednesday, and is not leaving it for the fifth consecutive day.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, while volumes are high, and is giving a buy signal. Stochastic Oscillator has come out of the overbought zone and is shaping a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0590, the pair will go to 1.0580 and 1.0550.

Statistics released today showed that activity index in the manufacturing sector of Australia rose by 1.4% in January, to 51.6 points, as per AI GROUP estimates. However, the AUD keeps ignoring internal indexes, as it is focused on investors’ attitude to risk taking at the global capital markets.

Meanwhile, private sector lending rose by 0.3% in December, the same as in November. Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. Parts of report are interesting: core inflation rose to 2.6% in the previous quarter, exceeding average target of RBA by 2-3%. Market believes that probability is 50% now, that at the next meeting the Bank of Japan will reduce interest rate to 4%. At the end of last year, in November and December, the RBA reduced the rate twice.

Leading indicators index CB in Australia decreased by 0.3% in November against the fall of 0.6% earlier. Import price index increased by 2.5% q/q in Q4 against zero change in Q3.

Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. Employment rate in November fell by 7.6 thousand against initial estimate of -6.3 thousand. At the same time, unemployment rate remained at the previous level of 5.3%. We would remind that economists expected the rise of jobs by 10 thousand. The index clearly reflects the impact of the European debt crisis on Australian economy. According to government’s estimate, last 12 months were the worst for the labour market over the last 20 years, as the sector has weakened significantly since last six month of 2011. It became known earlier that rating agency Fitch put rating of Australian banks CBA, NAB, Westpac ND ANZ for review with the forecast negative. This fact is still unfavourable for the AUD.

 

[LF.Anastasia]

CAD: Canadian Dollar retreats due to decline in appetite to risk

At the Forex currency market the Canadian Dollar rate is traded downward in the middle of the week, due to decline in interest to risk among players. Statistics released yesterday has put additional pressure on the CAD.

Forex forecast: MACD indicator for the pair USD/CAD is sliding down in the negative area and is giving a sell signal. Stochastic Oscillator is growing in the neutral zone and is giving a buy signal.

Forex recommendations: case of breakdown at 1.0030, the pair will go to 1.0050 and 1.0070.

According to the data released yesterday, real GDP in Canada fell by 0.1% m/m (+2.0% y/y) in November against expectations of growth of 0.2% m/m.

Prices for industrial goods fell by 0.7% m/m in December versus preliminary forecast of growth of 0.3%, which has become the biggest decline since summer 2010. Prices for raw materials reduced by 2.4% m/m against preliminary target of +3.8% and zero forecast.

The data released earlier showed that leading indicators index in Canada rose by 0.8% m/m in December against the forecast of +0.6% m/m. Latest statistics showed that CPI in Canada fell by 0.6% m/m (+2.3% y/y) in December against the forecast of -0.1% m/m. Despite this obvious fact, the data requires some clarification. Annual growth of CPI has been minimal since February 2011, and inflation reduced due to decline in prices for gasoline and other fuel.

Therefore, basing on the current inflationary situation, the Bank of Canada can keep inflation at the existing level for some more time with no damage for its monetary policy.

At the same time, according to the forecast of the Bank of Canada, inflation will slow down to +1.5% on annual basis in April-June.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up in the moderate pace during all the year of 2013, while decline in mortgage rates will encourage boost in the volumes of lending to households.

GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%. The data showed that sales increased by 0.2% in the manufacturing sector of Canada against expectations of 1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7% in November, stocks in the warehouses: by 0.4%.

We would remind that, in the middle of January, the Bank of Canada left interest rate at the level of 1.0% per annum, which did not become a surprise for the market.

 

[LF.Anastasia]

EUR/USD: Euro tends to go upward again

The pair EUR/USD is traded slightly upward at the Forex currency market on Thursday morning.

By 8.30 MSK the Euro is at 1.3176 against yesterday’s closing level of 1.3150.

Market derives positive sentiment from macro-statistics, in particular from the data on industrial output in the U.S. and China. In addition, investors expect positive solutions of talks between Greece and private capital- the issue of the coupon rate has not been settled yet, although time is running out.

Today in the afternoon investors’ attention will be drawn to the U.S. labour market.

Most likely, the pair EUR/USD will not go beyond the range of 1.3090-1.3210 at the trading session on Thursday.