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[LF.Anastasia]

CHF: SWISS FRANC TENDS TO CONTINUE STRENGTHENING
At the Forex currency market Swiss Franc rate is traded upward in the middle of the week, As long as market is full of optimism, CHF makes use of it.
Forex forecast: MACD indicator for the pair USD/CHF is in the negative area, it started to go up and is giving a moderate buy signal. Stochastic Oscillator has slightly slowed down pace in the neutral zone and is prepared to shift into sideways.
Forex recommendations: in case of breakdown at 0.9170, the pair USD/CHF will go to 0.9180 and 0.9200. Consolidation near current levels is possible.
Macro-economic situation in Switzerland is stable.
Unemployment rate in the country amounted to3.4% in January against the forecast of 3.5% and the previous value of 3.3%.This is the highest level of the index since last spring indicating unfavourable situation in the national economy.
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 not clear either if a new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted earlier 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. According to the previous data, inflation in Switzerland fell by 0.4% m/m (_0.8% y/y) in January against expectations of decline of 0.2% m/m. This is the fourth consecutive drop in the index and at the same time it is maximal fall since October 2009. Expensive Yen seriously hampers the progress of economy: at the beginning of the year import of consumer goods fell by 1.8% m/m (-3.2% y/y), however the goods of Swiss production rose in price by 0.1% m/m. Therefore, inflation threat is becoming more tangible in Switzerland.
Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in the pair Euro/Franc. The bank will be also prepared to adopt additional measures if economic situation requires. Jordan confirmed that this year economic growth rate has slowed down in Switzerland, although there is no risk of inflation. He believes that Franc is still too strong and reduction in its price is urgently required. Swiss economists said earlier that second half- year is going to be better than the first one, Swiss economy is stable enough to overcome mild recession. Naturally, it will affect economic growth rate in the country: slow growth rate of GDP is expected in 2012.

 

[LF.Anastasia]

JPY: JAPANESE YEN CONTINUES TO WEAKEN
At the Forex currency market on Wednesday the Japanese Yen rate remains under pressure from monetary authorities of the country and from the market which is not interested in safe currency.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it is going up and continues to give a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a buy signal.
Forex recommendations: in case of breakdown at the level of 78.50, the pair will go to 78.60 and 78.80. Consolidation near the current levels is not excluded.
Japanese Macro-economic background is quiet today; however the Yen continues to regain from information released this week.
At the meeting this week, the Bank of Japan left interest rate at the level of 0.1% per annum; however the Bank has made as tep, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as the other one: program of purchases of long-term bonds was expanded to Y19 trillion from Y9 trillion. In addition, Central Bank surprised market again, by stating that according to the bank it will be reasonable to set inflation target at 1%, as economic forecasts are extremely hazy.
It became continuation of reaction to statistics: GDP in Japan fell by 2.3% y/y in Q4 2011, since European crisis and slowdown in the world economic rate prevented from recovery after natural disaster. Therefore, pressure on the Bank of Japan, which is planning to hold a meeting on Tuesday, is growing. New measures to support economy are expected from the regulator. Reasons for decline in GDP in the Country of the Rising Sun are obvious: reduction in global consumption and aftermaths of earthquake and tsunami, as well as the flood in Thailand. It is quite possible that Japanese economy will rise by 1.4-1.6% this quarter and will be able to demonstrate growth of 1.7% at the end of the year. IMF gave similar estimates.
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). The head of the Bank of Japan Mr. Shirakawa said earlier that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy.

 

[LF.Anastasia]

CAD: DEMAND FOR CANADIAN DOLLAR IS PROMINENT
At the Forex currency market the Canadian Dollar rate continues ascending trend which started yesterday, amid market's interest to risky assets.
Forex forecast: MACD indicator for the pair USD/CAD is in the negative area, it is moving along the signal line, while volumes are average, and is not giving a clear signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.
Forex recommendations: case of breakdown at 0.9930, the pair will go to 0.9920 and 0.9900.
Situation in the market is favourable for the CAD: on the one hand oil prices have been regaining after the slight decline; on the other hand, market demonstrates interest in risky assets after declaration of China about willingness to help Europe resolve crisis problem.
In addition, the CAD receives support outside from the market: this winter was really cold in Europe which increased demand for energy supply.
The data released earlier showed that real GDP in Canada fell by0.1% m/m (+2.0% y/y) in November against expectations of growth of 0.2% m/m.
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. 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.
Statistics 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.

 

[LF.Anastasia]

USD IS GROWING IN PAIRING WITH ROUBLE
With the start of the trading session in the currency section of the MICEX, the Russian Rouble rate gives way to the USD, amid increasing sale of EUR/USD at Forex and decline in investors' sentiments at the global capital markets.
The trading session for the USD started at the level of 30.17 roubles, which is 21 kopeks more than yesterday's closing level , the EUR started trades at the level of 39.35 roubles (+5kopeks).
Dual currency basket value amounted to 34.3 roubles (+10 kopeks).
Therefore, strengthening in the pair is associated with significant sales of the major currency pair at Forex.
Presumably the pair USD/Rouble will be in the channel of 30.10-30.30 Roubles for USD at the trading session on Thursday.

 

[LF.Anastasia]

AUD: AUSTRALIAN DOLLAR HAS NOT GIVEN WAY TO SELLERS YET
At the Forex currency market the Australian Dollar rate is traded slightly downward on Thursday, as market interest to risky assets is low today. On the other hand, strong statistics prevents the AUD from the surge of sales.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, while volumes are high; however the indicator started to go down and is shaping a sell signal. Stochastic Oscillator has reversed in the neutral zone and is going down again, giving a sell signal.
Forex recommendations: in case if breakdown at the level of 1.0670, the pair will go to 1.0660 and 1.0630.
Statistics released today was positive: unemployment rate in Australia fell to 5.1% in January against 5.2% in December and the forecast of 5.3%. However, according to RBA deputy head, the rise in unemployment rate is not excluded in the coming months due to external influence. He also noted that the rise in investments and high rate of the national currency have beneficial effect on the economy.
Yesterday's statistics was also positive for the AUD: consumer confidence index Westpac increased to 101.1 points in February against the level of 97.1 points in January, which is a good signal.
Retail sales fell by 0.1% m/m in December against the forecast of growth by 0.2%. According to statistics released earlier, activity index in the manufacturing sector rose by 1.4% in January, up to 51.6 points, as per AI GROUP estimates. Aggregate activity index Aig in the service sector increased to 51.9 points in January (+2.9 points) against growth of 1.3 points a month earlier. The index has been growing for the third month in a row, while major growth in activity is associated with households. Nevertheless, AiG noted in the comments, that revival in the index is evident only in three out of nine components.
Statistics released earlier showed that lending in the housing sector of Australia rose by 2.4% in December against the forecast of growth of 1.8%. Statistics supported the currency.
Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. 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.

 

[LF.Anastasia]

JPY: INTEREST TO JAPANESE YEN HAS NOT ARISEN YET
At the Forex currency market on Wednesday the Japanese Yen rate remains un derpressure on Thursday.
Forex forecast: MACD indicator for the pair USD/JPY is ready to break through the signal line from bottom to top and maintains a buy signal. Stochastic Oscillator is still in the overbought zone and keeps giving a similar signal.
Forex recommendations: in case of breakdown at the level of 78.55, the pair will go to 78.60 and 78.80. Consolidation near the current levels is not excluded.
It has been the first time when trade deficit has been recorded in Japan for over 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).
At the meeting this week, the Bank of Japan left interest rate at the level of 0.1% per annum; however the Bank has made a step, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as the other one: program of purchases of long-term bonds was expanded to Y19 trillion from Y9 trillion. In addition, Central Bank surprised market again, by stating that according to the bank it will be reasonable to set inflation target at 1%, as economic forecasts are extremely hazy. It became continuation of reaction to statistics: GDP in Japan fell by2.3% y/y in Q4 2011, since European crisis and slowdown in the world economic rate prevented from recovery after natural disaster. Therefore, pressure on the Bank of Japan, which is planning to hold a meeting on Tuesday, is growing. New measures to support economy are expected from the regulator.
Reasons for decline in GDP in the Country of the Rising Sun are on the surface, they are: reduction in global consumption and aftermaths of earthquake and tsunami, as well as the flood in Thailand.
However, it is quite possible that Japanese economy will rise by 1.4-1.6% this quarter and will be able to demonstrate growth of 1.7% at the end of this year. IMF gave similar estimates. The head of the Bank of Japan Mr. Shirakawa said earlier that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy.

 

[LF.Anastasia]

CHF: SWISS FRANC EASILY RETREATS
At the Forex currency market Swiss Franc rate remains under pressure today and is going down for the fifth consecutive session.
Forex forecast: MACD indicator is in the negative area for the pair USD/CH; it started to go up and is giving signal of moderate buying. Stochastic Oscillator continues to grow in the neutral zone and is giving a buy signal.
Forex recommendations: in case of breakdown at the level of 0.9270, the pair will go to 0.9280 and 0.9310. Consolidation near current levels is possible.
It became known yesterday that index of economic expectations ZEW rose to -21.2 points in February against the level of-50.1 points in January. Most likely it is the reflection of monetary efforts of SNB.
Unemployment rate in the country amounted to3.4% in January against the forecast of 3.5% and previous value of 3.3%. This is the highest level of the index since last spring indicating unfavourable situation in the national economy.
According to the previous data, inflation in Switzerland fell by 0.4% m/m (_0.8% y/y) in January against expectations of decline of 0.2% m/m. This is the fourth consecutive drop in the index and at the same time it is maximal fall since October 2009. Expensive Yen seriously hampers the progress of economy: at the beginning of the year import of consumer goods fell by 1.8% m/m (-3.2% y/y), however the goods of Swiss production rose in price by 0.1% m/m. Therefore, inflation threat is becoming more tangible in Switzerland.
Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in the pair Euro/Franc. The bank will be also prepared to adopt additional measures if economic situation requires. Jordan confirmed that this year economic growth rate has slowed down in Switzerland, although there is no risk of inflation. He believes that Franc is still too strong and reduction in its price is urgently required. Swiss economists said earlier that second half- year is going to be better than the first one, Swiss economy is stable enough to overcome mild recession. Naturally, it will affect economic growth rate in the country: slow growth rate of GDP is expected in 2012.
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 not clear either if a new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted earlier 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.

 

[LF.Anastasia]

GBP: BRITISH POUND REMAINS UNDER PRESSURE
The British Pound Sterling is traded downward at the Forex currency market on Thursday, reflecting negative sentiments of players at the world capital market.
Forex forecast: MACD indicator remains in the positive area for the pair GBP/USD, although it started to go down and is ready to give a sell signal, volumes are decreasing. Stochastic Oscillator came back to the oversold zone and is giving a sell signal.
Forex recommendations: in case of breakdown at 1.5670 the pair GBP/USD will go to 1.5650 and 1.5630. Consolidation of the pair at the current levels is possible.
It became known today that consumer confidence Nationwide increased to 47 points in January against the level of 38points in December. The report provides the following information: index of expenditure amounted to 78 points against previous 77 points; index of business expectations rose to 64 points versus 50 points earlier.
Therefore, confidence of British consumers have recovered on the first month of the year from the record lows; nevertheless buyers are remain cautious, especially in regards to large acquisitions
The data released on Tuesday was quite good: CPI decreased by 0.5% m/m (+3.6% y/y) in January against the level of +4.2% y/yin December. According to the data released at the end of last week, volume of production in the construction sector declined by 0.5% on quarterly basis(+0.9% y/y) in December against preliminary expectations of growth of 0.2%.Authorities have already reacted to this statistics, stating that the index cannot be the basis for revising country's GDP.
At the regular meeting last week the bank of England increased asset repurchase program by 50 billion pounds, to the level of 325 billion pounds, as expected. Mr. Osborn stated commenting this decision that the increase of QE will help achieve inflation target (official target is2% and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE.
Earlier, rating agency Moody's announced that forecast for the UK rating was downgraded to "negative", however existing rating was left at the previous highest level of AAA. The Pound became agitated by this news: rating agencies used to stay away from Great Britain. However, it is becoming more evident now that even tough opposition to European problems will not be able to protect Britain from negative impact.

 

[LF.Anastasia]

EUR/USD: EURO IS SOLD OUT DUE TO GREEK UNCERTAINTY
The pair EUR/USD continues to decline at the Forex currency market on Thursday morning.
By 8.10 Moscow time the Euro is at 1.3029 against yesterday's closing level of 1.3066.
Despite some visible progress in Greek issue: Greece has fulfilled basic terms and conditions of Eurozone on Wednesday so that Finance Ministers of EU will be able to resume discussions of the second aid package to the country, market still have doubts about efficiency of such support.
Investors made use of Chinese factor very quickly as could be expected, as such hearsay has never come true yet.
Market will continue to keep watch on developments in Greece.
Most likely, the pair EUR/USD will not go beyond in the range of 1.2990-1.3090 at the trading session on Thursday.

 

[LF.Anastasia]

NZD: STATISTICS INVIGORATED NEW ZEALAND DOLLAR
At the Forex currency market the New Zealand Dollar rate is trade dupward on Monday.
Forex forecast: MACD indicator goes down in the positive area for the pair NZD/USD and is giving a sell signal. Stochastic Oscillator is going upward in the neutral zone and isgiving a buy signal.
Forex recommendations: in case of breakdown at the level of 0.8400, the pair will go to 0.8410 and 0.8430.
Statistics was positive for the New Zealand currency on Monday: business activity index in the service sector BNZ rose to 53.6 points in January against preliminary expectations of 50.9points.
The report showed that growth has been recorded in 4 out of 5 components; however the main catalyst for the growth were the orders of new companies. Employment in the sector increased to 54.2 points which is the maximum since November 2007.
Statistics released earliershowed that house price index REINZ fell by 1.4% m/m (+25.2% y/y) in Januaryagainst preliminary expectations of decline of 0.1% m/m. Unemployment rate fellto 6.3% in Q4 2011 against the level of 6.6% a quarter earlier. This ispositive information indicating that, employment sector, being one of thesupportive factors for the economy, will be able to guarantee stability even incase of pessimistic external influence.
At the meeting in the end of January, 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 negative lyaffects earnings of exporters.
According to the report of theReserve Bank of New Zealand, the regulator is ready to act if conditions, appropriate for his intervention will be created. In case if the slump of 2008 will be repeated, the RBNZ has a number of measures to avoid the slump ofeconomy in the global scale. It is all about the level of liquidity in the banks. The document was submitted to authorities in December; however the contents of it have been made public only last week.
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. GDPin 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 wasprovided 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, but revived later. Most likely the index will beweaker in Q4.