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[LF.Anastasia]

AUD: AUSTRALIAN DOLLAR GOES DOWN AT THE BEGINNING OF THE WEEK
At the Forex currency market the Australian Dollar rate is traded downward on Monday.
Forex forecast: MACD indicator started to go down in the positive area for the pair AUD/USD and is shaping a sell signal. Stochastic Oscillator is going up in the neutral zone and is giving a buy signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0755, the pair will go to 1.0740 and 1.0730.
Although market's interest to the risk continues to maintain, the Australian Dollar rate is rather overheat and is being corrected.
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 was positive this week: 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. 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.
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.

 

[LF.Anastasia]

JPY: JAPANESE YEN HAS SUSPENDED DECLINE
At the Forex currency market the Japanese Yen rate suspended its decline at the beginning of the week and regains from previous sales. However, it could be just a technical rebound and later the Yen would resume its fall.
Forex forecast: MACD indicator for the pair USD/JPY goes up in the positive area and maintains a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a similar signal.
Forex recommendations: in case of breakdown 79.50, the pair will go to79.60 and 79.80. Consolidation near the currentlevels is not excluded.
Such weak positions, when the JPY fell to 3.5- month lows can be explained by prior statements of the Bank of Japan.
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 astep, 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 Banks urprised market again, by stating that according to the bank it will bereasonable to set inflation target at 1%, as economic forecasts are extremelyhazy.
It was Bank's opinion on the target of CPI that forced the market to revise trading strategies for the Yen.
Earlier, trade deficit has been recorded in Japan for the first time in the last 30 years. Exports in the country fell inDecember 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).
Sharp measures of the Central Bank are just a continuation of reaction to statistics: GDP in Japan fell by 2.3% y/y inQ4 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 ofthe Rising Sun are on the surface, they are: reduction in global consumptionand after maths 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 STANDS WAITING FOR CATALYSTS
At the Forex currency market Swiss Franc rate is traded with minimal deviation at the beginning of the week after a sharp spike in the Asian session. Now investors have closed buying transactions of the morning and are waiting for mew catalysts.
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 goes down in the neutral zone and is giving a sell signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9200, the pair USD/CHF will go to 0.9210 and0.9230. If optimism rises at trades, target for sales will be 0.9150.Consolidation near current levels is possible.
Economic situation in Switzerland remains almost unchanged in Switzerland.
It became known earlier 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 to 3.4% 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.
Minister of economic affairs of Switzerland acknowledged yesterday that Franc is overvalued, however presently this fact does not alarm government, since, according to the Minister, the country has learnt to live under the conditions of some volatility. Forecasts of the government remain unchanged: it is expected that GDP in Switzerland will rise by 0.5% this year.
We would remind that 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 pace of GDP is expected in 2012.

 

[LF.Anastasia]

GBP: BRITISH POUND WENT UP AGAIN
The British Pound Sterling rate is traded upward at the Forex currency market on Monday in response to stable external background.
Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it is traded along the signal line and is not giving a clear signal. Stochastic Oscillator is going up in the neutral zone and is giving a buy signal.
Forex recommendations: in case of breakdown at 1.5860 the pair GBP/USD will go to 1.5870 and 1.5890.
The Pound gets support from stable external background and positive sentiment of investors who anticipate resolution on Greek problem that should remove from the agenda associated risks.
According to Rightmove, house price index in the UK rose by 4.1% m/m (+1.4% y/y) in February against preliminary expectations of decline of 0.8% m/m. Thus, the index demonstrates maximum increase since April 2002 on monthly basis.
The rise in price was triggered by small number of deals in the market and some easing of the lending conditions.
It became known earlier 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 has recovered on the first month of the year from the record lows; nevertheless buyers remain cautious, especially in regards to large acquisitions.
At the regular meeting in February, 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 is 2% 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. 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/y in 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.

 

[LF.Anastasia]

EUR/USD: EURO IS GROWING DUE TO ANTICIPATION OF GREEK RESOLUTIONS
The pair EUR/USD is traded slightly upward at the Forex currency market on Monday morning, due to anticipation of Greek resolutions.
By 8.25 Moscow time the Euro is at 1.3210 against closing level of 1.3156 on Friday.
Greek issue remains the most exciting for the market: Finance Ministers of Eurozone are willing to discuss and approve the grant of a new loan to Athens. At the same time position of IMF is still controversial: the Fund is ready to issue only 13 billion out of the total amount of 130 billion euro.
On Monday morning market makes use of the news that China has reduced reserve requirements for commercial banks in order to release some liquidity. However, reaction to this information is hardly tangible.
Therefore, it is unlikely that market will be able to switch to other news until Greek issue is completely finalized.
Most likely the pair EUR/USD will be in the range of 1.3110-1.3250 at the trading session on Monday.

 

[LF.Anastasia]

AUD: INTEREST TO AUSTRALIAN DOLLAR IS STILL LOW
At the Forex currency market the Australian Dollar rate has been traded downward for the third consecutive session, although appetite to risk is still preserved in the market.

Forex forecast: MACD indicator started to go down in the positive area for the pair AUD/USD , it started to go down and is shaping a sell signal. Stochastic Oscillator slides down in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0705, the pair will go to 1.0690 and 1.0670.

Minutes of the last meeting of the Reserve Bank of Australia, which were released this morning, were neutral. The document said that the threat of disorderly default in Greece represents the major downward risk. Current monetary policy is conforms to macro-economic expectations. Issue of rate level has not been considered. GDP growth seems to be close to two-year trend.

In other respect, situation has not changed fundamentally for the AUD; currency, which had been overbought earlier, is soldsluggishly.

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, upto 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 monthin 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% onquarterly basis. Statistics released last week 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 rateis 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. 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.

 

[LF.Anastasia]

JPY: INTERRUPTION IN SALES DID NOT LAST LONG FOR JAPANESE YEN
At the Forex currency market the Japanese Yen rate began toweaken again on Tuesday; interruption in sales did not last long for the JPY atthe beginning of the week, as expected.

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

Forex recommendations: in case of breakdown 79.80, the pair will go to 79.90 and 80.10. Consolidation near the currentlevels is not excluded.

Japan will come out of a recession with thehelp of support from China. Representatives of Japanese Ministry of Economic Affairs said on Tuesday that Beijing and Tokyo are going to work in cooperation and pursue efforts to fight against sovereign debt of Europe. At the same time Finance Ministry noted that Japan shall apply more efforts to cope with its own debt problems.

Such weak positions, when the JPY fell to 3.5- month lows can be explained by prior statements of the Bank of Japan. 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%, aseconomic forecasts are extremely hazy.

It was Bank's opinion on the target ofCPI that forced the market to revise trading strategies for the Yen.

Earlier, trade deficit has been recorded in Japan for the first time in the last 30 years. Exports in the country fell inDecember 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). Sharp measures of the Central Bank are just a continued reaction to statistics: GDPin Japan fell by 2.3% y/y in Q4 2011, since European crisis and slowdown in the world economic rate have prevented recovery after natural disaster.

 

[LF.Anastasia]

CHF: SWISS FRANC RESUMED ITS GROWTH
At the Forex currency market Swiss Franc rate goes up at trades in response to positive sentiments at the market.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area;it has shifted to sideways and is not giving a clear signal, while volumes areaverage. Stochastic Oscillator goes down in the neutral zone and is giving asell signal.

Forex recommendations: in case of breakdown at 0.9080, the pair USD/CHF will go to 0.9070 and 0.9060.

CHF is responsive to external background; however there are all grounds to believe that elation in the market will not belong

According to the previous data, inflation inSwitzerland 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 Swissproduction rose in price by 0.1% m/m. Therefore, inflation threat is becomingmore tangible in Switzerland. It became known earlier that index of economicexpectations ZEW rose to -21.2 points in February against the level of -50.1points in January. Most likely it is the reflection of monetary efforts of SNB.Unemployment rate in the country amounted to 3.4% in January against theforecast of 3.5% and previous value of 3.3%. This is the highest level of theindex since last spring indicating unfavourable situation in the nationaleconomy.

Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in Euro/SNF. The Bank is also prepared to adopt additional measures if economic situation requires. Jordan also confirmed that economic growth rate has slowed down in Switzerland, although there is no risks that inflation will increase in thecountry. He believes that Franc is still too expensive and reduction in itsprice is urgently required.

We would remind that Swiss economists saidearlier 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 pace of GDP is expected in2012.

Minister of Economic Affairs of Switzerland acknowledged earlier that Franc is overvalued, however presently this fact doesnot alarm government, since, according to the Minister; the country has learnt to live under the conditions of some volatility. Forecasts of the government remain unchanged: it is expected that GDP in Switzerland will rise by 0.5% this year.

 

[LF.Anastasia]

GBP: BRITISH POUND CAN CONTINUE TO GO UP
The British Pound Sterling rate is traded slightly upward at the Forex currency market on Tuesday morning.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it is traded along the signal line and is not giving a clear signal. Stochastic Oscillator has come into overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at 1.5890 the pair GBP/USD will go to 1.5900 and 1.5920.

A chance of sales is very high, as market does not have any drivers except for news about Greece.

Macro-economic background in the UK is calmon Tuesday morning.

According to Rightmove, house price index inthe UK rose by 4.1% m/m (+1.4% y/y) in February against preliminary expectations of decline of 0.8% m/m. Thus, the index demonstrates maximum increase since April 2002 on monthly basis. The rise in price was triggered bysmall number of deals in the market and some easing of the lending conditions.

It became known earlier that consumer confidence Nationwide increased to 47 points in January against the level of 38 points 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 has recovered on the first month of the year from the record lows; nevertheless buyers remain cautious, especially in regards tolarge acquisitions.

The data released earlier was quite good:CPI decreased by 0.5% m/m (+3.6% y/y) in January against the level of +4.2% y/y in 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 in February, 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 is 2% 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 provedefficiency of QE.

 

[LF.Anastasia]

EUR/USD: EURO GOES UP DUE TO DECISIONS ON GREECE
The pair EUR/USD is traded upward at the Forex currency market on Tuesday morning.

By 9.00 Moscow time the Euro is at 1.3268 against yesterday's closing level of 1.3236.

Decision of the Euro group on al location of the second financial aid package to Greece gave rise to purchases. Thus, it became known now that private creditors will remit Athens for about 107 billioneuro, while coupon rate on new bonds will be at the level at 3% in 2015-2020and then it will go up to 4.3%.

It is assumed that public debt of Greece will reduce to 120.5% of GDP by 2020.

Due to all these facts, Greek default is subsiding in March, which allows the "bulls" on Euro to go up.

This information will be the main driver in the market today.

Most likely that pair EUR/USD will not gobeyond the range of 1.3165-1.3320 at the trading session on Tuesday.