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[LF.Anastasia]

CHF: Positions of Swiss Franc are weakening

Swiss Franc rate continues to step back at the Forex currency market on Monday.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and is now in the positive area, giving a buy signal. Stochastic Oscillator goes up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 0.9240 the pair USD/CHF will go to 0.9250 and 0.9270. Consolidation at the current levels is possible.

Investors will await the data on producer price and imports in Switzerland which is scheduled for the release today.

It became known earlier that unemployment rate was at the level of 3.1% in March, as expected.

Consumption indicator UBS in Switzerland fell to 0.87 points in February against preliminary level of 0.93 points. CPI rose by 0.6% m/m (-1.0% y/y) in March against the forecast of growth of 0.4% m/m. However, Franc was more focused on the external background and ignored this statistics.

Currency reserves rose to 237.5 billion in March against previous level of 224.9 billion francs. PMI SVME in Switzerland increased to 51.1 points in March against the forecast of 49.5 points. However other data was weak: retails sales rose only by 0.8% y/y in February against previous value of +4.7% y/y and the forecast of growth of 2.0% y/y.

Despite strong determination of SNB to protect the level of 1.20, a talk about chances of shifting pegging level of Franc to Euro at 1.25, is getting louder in the market.

Last week Mr. Jordan from Swiss National Bank clarified that Central Bank is ready to make greater efforts to maintain monetary stability after markets’ attacks against the level of 1.20 in the pair EUR/CHF. He also emphasized that opinions about lack of determination in SNB are incorrect. According to him, CB is still prepared to buy currency in unlimited quantities.

Manufacturing sector is still weak in Switzerland, however it shows recovering trend. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales increased by 4.4% y/y in January versus growth of 1.7% in December. GDP in the country rose by 0.1% q/q (+1.3% y/y) in Q4 against the forecast of zero change (+1.1% y/y). The data is quite good and indicates that Swiss economy is getting used to expensive Franc. Thus, the regulator expects that inflation will amount from -0.6% to +0.6% in 2012-2014, GDP growth will be at the level of 1.0% this year.

At the last meeting of Swiss National Bank a three-month Libor rate was left unchanged at the level of )%. In general, SNB’s view on monetary policy remains unchanged.

 

[LF.Anastasia]

JPY: Japanese Yen is not going to give up growing trend

At the Forex currency market the Japanese Yen rate resumed its growing trend at the beginning of the week; investors are interested in “safe” currency, as external background is still unfavourable.

Forex forecast: MACD indicator for the pair USD/JPY goes down in the positive area, while volumes are low and is giving a sell signal. Stochastic Oscillator remains in the oversold zone and maintains a similar signal.

Forex recommendations: in case of breakdown at the level of 80.50 the pair USD/JPY will go to 80.40 and 80.20.

Statistics released on Monday showed that sales in Japanese supermarkets rose by 14.1% y/y in March against the fall of 0.4% in February. Market has ignored this data as speculative influence on the Yen is very strong at the moment.

Levels of bank lending continue to increase in Japan, which is a positive factor, and this has been proved by statistics. In addition, number of orders for industrial goods unexpectedly rose in February which is also a good indication.

Statistics released earlier showed that current account balance in Japan amounted to Y1.178 billion in February. In addition, index of economic observers rose to 51.8 points in March against the level of 45.9 points in February. The data indicates that positive trend in the Japanese economy is still preserved.

This data is perfectly consistent with the previous indexes: Retail sales increased by 3.5% in February against expectations of growth of 1.3%. Real GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. Current account balance amounted to -Y437.3 billion in Q4 against the forecast of +Y322.3 billion. Personal consumption rose by 0.4% q/q last quarter against the forecast of growth of 0.3% q/q.

Regular meeting of the Bank of Japan last week have not been revised either. In the follow-up comments the regulator noted that European negative influence on the economy is still there, although to a lesser extent; however there is still no progress in the economic system. In general, the views of the Bank contradicted the opinion of Japanese government, who would like to see more dynamic stimulation of the economy.

Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%.

 

[LF.Anastasia]

AUD: Australian Dollar is on sale again

Positions of the Australian Dollar continue to weaken at the Forex currency market on Monday: demand in the pair AUD/USSD has declined due to Chinese news.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area; it has shifted into sideways movement and is not giving a clear signal. Stochastic Oscillator has reversed in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0315 the pair will go back to 1.0300 and 1.0280.

If on Friday, positions of the AUD were knocked down by the data on Chinese GDP for Q1, which fell below expectations; today, information on expansion of the exchange rate band in China will impact the pair AUD/USD.

Consumer lending WESTPAC-MI in Australia fell by 1.6% m/m in April to the level of 94.5 points. At the same time mortgage lending declined by 2.5% m/m against expectations of fall of 4.2% in February. Activity index AiG in the service sector rose to 47.0 points in March against the fall of 5.3 points in February. Trade balance amounted to -А$0.48 billion in February against the level of +A$1.3 billion in January.

The Reserve Bank of Australia stated earlier that funding problems can be preserved in the country this year, although access to funding has become easier for many banks. The RBA emphasized that uncertainty in Europe and slow down in the global economy can have a significant impact on Australian economic system.

Meeting of the Reserve Bank of Australia had mixed outcome: interest rate was left at the previous level of 4.25% per annum; however it was follow-up comments that made investors feel anxious. Thus, the regulator stressed that the RBA is able to lower the rate if macro-economic data will show slowdown in domestic demand. The RBA also emphasized that European negative impact is very significant.

It became known earlier that employment rate in Australia increased by 44 thousand in February against expectations of growth of 6.5 thousand. Unemployment rate amounted to 5.2% against previous level of 5.3%. This statistics has become a trial of stability for the market: it is interesting to know whether expectations of decline in the interest rate will be revised in the next meeting of the RBA or not.

We would remind that head of RBA Mr. Stevens did not exclude that some actions in monetary policy will be taken in case if slump in economic growth will cause slowdown in inflation and will spur unemployment.

 

[LF.Anastasia]

NZD: New Zealand Dollar is still of interest to sellers

The New Zealand rate traded downward at the Forex currency market on Monday; it is still under pressure from sellers, caused by aversion of external risk by investors.

Forex forecast: MACD indicator for the pair NZD/USD is moving along the signal line in the negative area and is not giving a clear signal. Stochastic Oscillator started to go down in the neutral zone, indicating beginning of sales.

Forex recommendations: in case of breakdown at the level of 0.8200 the pair will go to 0.8190 and 0.8170.

The NZD rate is a target of bears due to mass risk aversion at the beginning of the week. Investors are analyzing developments in China and Europe and come to unfavorable conclusions

The Reserve Bank of New Zealand kept interest rate unchanged at the level of 2.5% in March, as expected. Representatives of RBNZ noted in comments that there was no reason to revise interest rate at the moment.

House price index REINZ fell by 1.4% m/m (+25.2% y/y) in January against preliminary expectations of decline of 0.1% m/m. Unemployment rate in the country dropped to 6.3% in Q4 this year against the level of 6.6% a quarter earlier.

Business sentiment index NZIER was at the level of 13.0 points in Q1 against the level of 0 points in Q4 2011.

GDP in New Zealand increased by 0.8% q/q (+1.9% y/y) in Q3 against the forecast of +0.6% on quarterly basis. GDP in Q2 rose by 0.1% q/q (+1.5% y/y) versus the level of +0.9% q/q (+1.6% y/y) in Q1. Actually there is stagnation in the economy of New Zealand. GDP had almost stopped its growth, however started to revive later. Most likely, the index will be weaker in Q4.

According to the data released this morning, activity index in the manufacturing sector of New Zealand fell to 54.5 points in March against the level of 57.7 points in February. In addition, representative of the Bank of New Zealand Mr. Inglish noted last Thursday that positions of the NZD look quite strong.

Permits to construct fell by 6.7% m/m in February against revised level of +8.3% m/m in January. Statistics released earlier showed that business confidence rose to 33.8 points in March, as per NBNZ estimates, against the level of 28.0 points in February. The data helped to hold NZD from significant sales. The boom in the construction sector of the country remains the main catalyst for the rise in the business confidence.

 

[LF.Anastasia]

EUR/USD: Euro is waiting for outcome of Spanish auction

The pair EUR/USD is under moderate pressure at the Forex currency market on Tuesday morning.

By 9.00 Moscow time the Euro was at 1.3114 against yesterday’s closing level of 1.3141.

The pair EUR/USD had been actively sold out in the trading session in the early afternoon yesterday. The pair even reached monthly lows, however in the late afternoon, due to good American statistics on retail sales, the pair regained from sales.

This morning the Euro is in the difficult situation again because of the auction, which will be held in Spain on Tuesday. This country of Eurozone is under scrutiny of the market lately.

German statistics will be released this afternoon and American statistics will draw attention of players tonight.

Most likely, the pair EUR/USD will not go beyond the range of 1.3050-1.3150 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound is hesitant again

At the Forex currency market the British Pound Sterling traded downward on Tuesday in response to ambiguous external background.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it resumed moderate decline and is giving a sell signal. Stochastic Oscillator goes down in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.5860, the pair GBP/USD will go to 1.5840 and 1.5790. Consolidation at the current levels is possible.

Attention of traders will be focused on developments in Europe.

However, the GBP will receive momentum to start movement from its own country: minutes of the last meeting of the Bank of England are scheduled for the releases this week, as well as the data on labour market, CPI and retail sales index.

In addition to this, it is expected that the UK GDP for Q1 will be made public on 25 April. The UK GDP fell by 0.3% on quarterly basis (+0.5% y/y) in Q4, while economists had predicted less significant decline of 0.2% q/q.

House price index Rightmove in the UK rose by 2.9% m/m (+3.4% y/y) in April. The Pound has not responded to this statistics and continues to watch over external background where risk aversion is still preserved due to unfavourable environment. House price index RICS in the UK rose to -10 points in March against the level of -13 points in February. This is the highest level of the index since June 2010.

The data released earlier showed that level of retail sales in the UK increased due to warm weather and demand for clothing in March. Thus, index in the shops which were open less than one year ago rose by 1.3% y/y in March, while the index in February went down. However, it is worth noting that reaction of the Bank of England to this statistics was not very enthusiastic. The rise in unemployment and high oil prices can impede growth in demand.

It is interesting that against this background, consumer confidence in the UK GFK/NOP declined to -31 points in March against the level of -29 points. The data indicates strong destabilization in the British economy.

Unemployment rate amounted to 5.0% in February; number of unemployed increased by 7.2 thousand. Weakness in the sector prevents economic recovery of the country. PMI Markit/CIPS in the manufacturing sector rose to 52.1 points in March against revised value of 51.5 points. This data gave good support to the currency. The index was at highs since May 2011 and the main driver of growth was the volume of new orders: 52.7 points against the level of 50.5 points earlier. This index is also maximal-at the peaks since March last year.

 

[LF.Anastasia]

CHF: Swiss Franc remains in the oversold range

At the Forex currency market Swiss Franc rate remains in the oversold range of 0.9090-0.9251 on Tuesday.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and is now in the positive area, giving a buy signal. Stochastic Oscillator goes up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 0.9180 the pair USD/CHF will go to 0.9200 and 0.9240. Consolidation at the current levels is possible.

Currency reserves rose to 237.5 billion in March against previous level of 224.9 billion francs. PMI SVME in Switzerland increased to 51.1 points in March against the forecast of 49.5 points. However other data was weak: retails sales rose only by 0.8% y/y in February against previous value of +4.7% y/y and the forecast of growth of 2.0% y/y. It became known earlier that unemployment rate was at the level of 3.1% in March, as expected. Consumption indicator UBS in Switzerland fell to 0.87 points in February against preliminary level of 0.93 points. CPI rose by 0.6% m/m (-1.0% y/y) in March against the forecast of growth of 0.4% m/m. However, Franc was more focused on the external background and ignored this statistics.

Last week Mr. Jordan from Swiss National Bank explained that Central Bank is ready to make greater efforts to maintain monetary stability after markets’ attacks against the level of 1.20 in the pair EUR/CHF. He also emphasized that opinions about lack of determination in SNB are incorrect. According to him, CB is still prepared to buy currency in unlimited quantities.

Manufacturing sector is still weak in Switzerland, however it shows recovering trend. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales increased by 4.4% y/y in January versus growth of 1.7% in December. GDP in the country rose by 0.1% q/q (+1.3% y/y) in Q4 against the forecast of zero change (+1.1% y/y). The data is quite good and indicates that Swiss economy is getting used to expensive Franc. Thus, the regulator expects that inflation will amount from -0.6% to +0.6% in 2012-2014, GDP growth will be at the level of 1.0% this year.

At the last meeting of Swiss National Bank a three-month Libor rate was left unchanged at the level of 0%. In general, SNB’s view on monetary policy remains unchanged. Despite strong determination of SNB to protect the level of 1.20, supposition about probability of shifting pegging level of Franc to Euro at 1.25, is getting more persistent in the market.

At the last meeting of Swiss National Bank a three-month Libor rate was left unchanged at the level of 0%. In general, SNB’s view on monetary policy remains unchanged. Despite strong determination of SNB to protect the level of 1.20, a talk about chances of shifting pegging level of Franc to Euro at 1.25, is getting louder in the market.

 

[LF.Anastasia]

JPY: Japanese Yen is still strong

The Japanese Yen traded upward at the Forex currency market on Tuesday preserving tendency to rise while the world demonstrates interest in currencies -”safe harbours”

Forex forecast: MACD indicator for the pair USD/JPY goes down in the positive area, while volumes are low and is giving a sell signal. Stochastic Oscillator remains in the oversold zone and maintains a similar signal.

Forex recommendations: in case of breakdown at the level of 80.40 the pair USD/JPY will go to 80.30 and 80.10.

The data released this morning showed that consumer confidence index in Japan rose to 40.3 points in March against the level of 39.9 points in February. It is a good indicator which gives another ground for expectations of “new shoots” in the economy of the country.

Sales in Japanese supermarkets rose by 14.1% y/y in March against the fall of 0.4% in February.

Regular meeting of the Bank of Japan last week was rather quiet. Interest rate was left at the level of 0.1% per annum; volumes of assets repurchase program have not been revised either. In the follow-up comments the regulator noted that European negative influence on the economy is still there, although to a lesser extent; however there is still no progress in the economic system. In general, the views of the Bank contradicted the opinion of Japanese government, who would like to see more dynamic stimulation of the economy.

Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%. Levels of bank lending continue to increase in Japan, which is a positive factor, and this has been proved by statistics. In addition, number of orders for industrial goods unexpectedly rose in February which is also a good indication.

Statistics released earlier showed that current account balance in Japan amounted to Y1.178 billion in February. In addition, index of economic observers rose to 51.8 points in March against the level of 45.9 points in February. The data indicates that positive trend in the Japanese economy is still preserved.

This data is perfectly consistent with the previous indexes: Retail sales increased by 3.5% in February against expectations of growth of 1.3%. Real GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. Current account balance amounted to -Y437.3 billion in Q4 against the forecast of +Y322.3 billion. Personal consumption rose by 0.4% q/q last quarter against the forecast of growth of 0.3% q/q.

 

[LF.Anastasia]

AUD: Australian Dollar is still on sale

At the Forex currency market balance of power in the AUD remains unchanged: currency is sold immediately if negative factors begin to intensify in the external background.

Forex forecast: MACD indicator for the pair AUD/USD goes up moderately in the negative area and is giving a buy signal while volumes are average. Stochastic Oscillator has reversed in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0310 the pair will go back to 1.0300 and 1.0280.

According to the released minutes of the meeting of the Reserve Bank of Australia in April, it is more probable that interest rate may be decreased this year. The document stated that monetary politicians had lowered their forecasts for economic growth in the country. It also specified that if decline in inflation will be more evident, the RBA will have to commence further softening of the monetary policy.

Next report on inflation will be released on 24 April; it will show CPI for Q1.

The Reserve Bank of Australia stated earlier that funding problems can be preserved in the country this year, although access to funding has become easier for many banks. The RBA emphasized that uncertainty in Europe and slowdown in the global economy can affect Australian economic system adversely.

Meeting of the Reserve Bank of Australia had mixed outcome: interest rate was left at the previous level of 4.25% per annum; however it was follow-up comments that made investors feel anxious. Thus, the regulator has stressed that the RBA is able to lower the rate if macro-economic data will show slowdown in domestic demand. The RBA also emphasized that European negative impact is very significant.

It became known earlier that employment rate in Australia increased by 44 thousand in February against expectations of growth of 6.5 thousand. Unemployment rate amounted to 5.2% against previous level of 5.3%.

Consumer lending WESTPAC-MI in Australia fell by 1.6% m/m in April to the level of 94.5 points. At the same time, mortgage lending declined by 2.5% m/m against expectations of fall of 4.2% in February. Activity index AiG in the service sector rose to 47.0 points in March against the fall of 5.3 points in February. Trade balance amounted to -А$0.48 billion in February against the level of +A$1.3 billion in January.

 

[LF.Anastasia]

CAD: Canadian Dollar can grow if external background is favourable

At the Forex currency market the Canadian dollar rate goes up in moderate pace on Tuesday despite weakness in the oil sector.

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

Forex recommendations: in case of breakdown at the level of 0.9985 the pair will go to 0.9995 and 1.0020. Consolidation near current levels is possible.

The pair actively reacts to the changes in the external background. Sentiments of the participants vary very rapidly today.

It became known earlier that sales in the secondary housing market of the country increased by 2.5% m/m (+1.6% y/y) in March, which is a good indicator.

According to the data released earlier, GDP in Canada rose by 0.1% m/m (+1.75% y/y) in January versus revised value of +0.5% m/m (+1.9% y/y) which in general agreed with the forecast. Previous statistics demonstrated that economic growth in Canada slowed down: real GDP amounted to +0.4% m/m in December against the forecast of +0.3% m/m. All in all Canadian economy grew only by 0.4% in the last quarter last year against +1.0% in Q3.

Unemployment rate in Canada fell to 7.2% (-0.2%) in March. Level of employed increased by 82 thousand. Note, that it is a positive trend, as unemployment rate in February fell by 0.2%, although number of jobs did not rise significantly in the last month of winter. In addition, permits to construct in Canada rose by 7.5% m/m in February to C$6.51 billion against the fall of 11.4% in January.

The head of the bank of Canada Mr. Carney noted earlier that economy of the country is growing slightly above the forecast and government has number of tools in order to protect housing market from overheating. However, monetary policy tools will be used only as the last resort. Earlier, Mr. Carney stressed that current interest rate is consistent with monetary situation. Recall that in the middle of January the Bank of Canada left interest rate at the level of 1.0% per annum, which was not a surprise to the market. The bank of Canada expressed concern about the condition of the housing sector, according to the regulator, 10% decline in this sector can lead to decrease in consumption of 1%, as the major volume of mortgage loans was used to finance consumption.