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[LF.Anastasia]

CHF: Swiss Franc tends to continue growth

At the Forex currency market Swiss Franc rate stands still on Monday; it is prepared to continue growing in case of favourable situation in the market.

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; however it is moving along the signal line, while volume are very low, and is not giving a clear signal. Stochastic Oscillator is moving towards oversold zone, maintaining a sell signal.

Forex recommendations: in case of break down at the level of 0.9110, the pair USD/CHF will go to 0.9100 and 0.9080. Consolidation at the current levels is possible.

Macro-economic situation in Switzerland has not changed by this morning.

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 maintain the level at 1.20, assumption about probability, that pegging level of Franc to Euro will go to 1.25, is getting more persistent in the market.

So, after three -month break Swiss National Bank has a new governor now- this is Mr. Jordan who has performed the duties since January when Mr. Hildebrand left his post. Jordan has already said that he would continue to adhere to the old monetary policy and is going to preserve the level of 1.20 in the pair EUR/ CHF. According to him, Franc is still overvalued.

In general, views of the new governor found support in SNB. The Bank believes that considering problems in the Eurozone, it is still required to maintain a peg of Franc with the Euro.

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.

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.

 

[LF.Anastasia]

JPY: Japanese Yen is coming back to ascending trend

At the Forex currency market the Japanese Yen rate traded upward at the beginning of the week, which reflects renewed interest to “quiet harbor” among investors, while external background is ambiguous.

Forex forecast: MACD indicator for the pair USD/JPY has broken through the signal line from top to bottom and continues to go down, maintaining a signal for moderate sales. Stochastic Oscillator has come into overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 81.20 the pair USD/JPY will go to 81.10 and 80.90. Consolidation near the current levels is possible.

Earlier, the JPY has had “corrected” sufficiently, moving away from local highs, in order to stop sales. Now, as long as external background remains ambiguous, demand for “ safe currency” will increase.

Retail sales rose by 3.5% in February against expectations of growth of 1.3%. Real revised GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. In addition, 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.

Trade deficit in Japan amounted to Y82.6 billion in March against the level of Y226.3 billion in February. This data is positive; other sections of the report also demonstrated that exports rose by 5.9% y/y last month, imports increased by 10.5% y/y.

Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%. 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 grounds to expect “new shoots” in the economy of the country.

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 disagreed with the opinion of Japanese government, who would like to see more dynamic stimulation of the economy.

According to representative of the Bank of Japan Mr. Nasimury, measures taken by the Bank of Japan in February helped to stabilize exchange rate of the Yen and stimulate stock market; therefore, the regulator is ready to take more actions if required. Monetary politician stressed yesterday that Central Bank is going to make vigorous efforts in the sphere of monetary policy in order to achieve planned inflation target at 1%, the major risk factor is - overall slowdown in the world economy.

 

[LF.Anastasia]

AUD: Australian Dollar does not see a motive to grow

At the Forex currency market the Australian dollar rate goes down at the beginning of the week in the range which has been oversold earlier. The pair is still in the channel of 1.0225-1.0440.

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 is sliding down in the neutral zone and is giving a signal for moderate selling.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0310 the pair will go back to 1.0300 and 1.0290.

The data released in the morning showed that final PPI in Australia rose by 0.3% q/q (+1.4% y/y) in Q1 against the forecast of growth of 0.4% on quarterly basis.

It became known earlier that import price index in Australia fell by 1.2% q/q in Q1 against the forecast of -0.6% q/q. At the same time, export prices fell to the lowest level since Q4 2010. Theoretically, decline in export prices was caused by reduction in price for crude ore in Australia and fall in the price for metal scrap. At the same time, slump in imports was caused by expensive AUD. Prime Minister of Australia Julia Gillard said last Thursday that government is still determined to preserve budget surplus. It is very important for Australia, especially taking into account that binds with China are very strong. Employment rate in Australia increased by 44 thousand in February versus expectations of growth of 6.5 thousand. The rate of unemployment amounted to 5.2% against previous level of 5.3%.

It became known earlier, leading indicators index Westpac in Australia rose by 0.2% in February, up to the level of 284.2 points against preliminary expectations of growth of 0.6%. Growth rate amounted to 2.4% against the forecast of 2.5%. Representatives of Westpac clarified in the comments that negative dynamics if the growth rate, which has been preserved for the past six months, does not help to instill enthusiasm in regards to prospects; experts do not expect that the rate will rise in the nearest future either. At the same time, economic development performance is in compliance with forecasts for Australian economy for 2012 (3%); however pace of growth in GDP remains below rend.

 

[LF.Anastasia]

CAD: Canadian Dollar remains within the range

At the Forex currency market the Canadian dollar rate remains within the oversold range of 0.9864-1.0011 on Monday. It is possible that the currency will weaken at the beginning of the week, due to mixed external background.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9950 the pair will go to 0.9960 and 0.9970. If optimists come back into the trading floors, movement will probably go to 0.9905.

Statistics released on Friday showed that inflation in Canada rose by 0.4% m/m (+1.9% y/y) in March. At the same time, base CPI rose by 0.3% m/m (+1.9% y/y) last month.

Unemployment rate fell to 7.2% (-0.2%) in March. Employment rate increased by 82 thousand. Note, that it is a positive trend, as the rate fell by 0.2% in February; number of jobs has not increased significantly in the last month of winter. In addition, permit 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.

It became known earlier that the Bank of Canada is going to gradually raise interest rate throughout the year 2014; in general, it is consistent with the policy that the regulator has outlined earlier. Meeting of the Bank of Canada was very brisk, despite the fact that the Regulator had left interest rate at the level of 1% per annum, as expected. However, comments which were made by the Governor of the Bank of Canada Mr. Carney were unexpected for the market. Thus, monetary politician noted that the rise in the interest rate could be a reasonable decision in the future, since both, inflation and economic growth might accelerate.

According to forecasts made by the Bank of Canada, economy of the country will regain its full capacity in the first half of 2013. 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, instruments of monetary policy will be used only as the last resort.

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 has slowed down in Q4: real GDP amounted to +0.4% m/m in December against the forecast of +0.3% m/m. All in all, economic growth in Canada went up only by 0.4% in the last quarter last year against +1.0% in Q3.This is a good result.

 

[LF.Anastasia]

EUR/USD: Euro is in weak position again

The pair EUR/USD is almost not moving at the Forex currency market on Tuesday after sales last night.

By 9.15 Moscow time, the Euro is at 1.3145 against yesterday’s closing session level of 1.3155.

There were a lot of grounds for sales yesterday: Government is being replaced in Holland, as it failed to cope with current debt problems; some changes in the government are expected in France; European statistics was weak and there were negative signals from Australia. “Bears” in the major pair took advantage of the situation.

Today, trading in the market will be in the narrow range in advance of comments from U.S. Federal Reserve

Most likely the pair EUR/USD will not go beyond the range of 1.3080-1.3180 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound tends to continue growing

Trading for the British Pound Sterling rate is mixed at the Forex currency market on Tuesday morning, as it is waiting for the catalyst to keep on growing.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it goes up, while volumes are high, and is giving a buy signal. Stochastic Oscillator has come into overbought zone and is giving a similar signal.

Forex recommendations in case of breakdown at the level of 1.6140, the pair GBP/USD will go to 1.6150 and 1.6170. Consolidation near the current levels is possible.

British currency still retains potential to grow; however mixed external background prevents from keeping on steady growth.

The data on retail sales, released on Friday, has had beneficial effect for the GBP: thus, volume of retail sales in March increased by 1.8% m/m (+3.3% y/y) against the forecast of growth of 0.4%. This was much above expectations.

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 opened less than one year ago, rose by 1.3% y/y in March, while the index went down in January and February. 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.

According to representative of the Bank of England Mr. Posen, there is evidence, indicating positive momentum of growth. Monetary politician believes that inflation will not exceed target level of 2% until the end of this year. At the same time, levels of consumer confidence, affected by weak data on GDP, is a cause for concern. It became known earlier that unemployment rate in the UK amounted to 4.9% in March. Level of unemployed people rose by 3.6 thousand.

Information, that rating agency A&P has confirmed rating of Great Britain at the top level of AAA, has become a new catalyst for growth last week. Prime-Minister Cameron commented that the rates should be kept low in order to be able to stimulate economic growth.

Representative of the Bank of England Mr. Tucker said earlier that inflation in the UK is still above the target level; it is also highly possible that CPI will remain above 3% in throughout Q2 or probably through the whole period of the second half of 2012. At the same time, Tucker did not rule out that due to construction sector, economic growth in Q1 can be zero.

Consumer confidence GFK/NOP declined to -31 points in March against the level of -29 points. The data indicates strong destabilization in the British economy.

 

[LF.Anastasia]

CHF: Swiss Franc is waiting for external signals

At the Forex currency market Swiss Franc rate traded slightly upward at the Forex currency market on Tuesday, anticipating that some stability in the external background as well as new catalysts.

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; however it is moving along the signal line, while volume are very low, and is not giving a clear signal. Stochastic Oscillator has come into oversold zone, maintaining a sell signal.

Forex recommendations: in case of break down at the level of 0.9110, the pair USD/CHF will go to 0.9100 and 0.9080. Consolidation at the current levels is possible.

It became known today that consumption indicator UBS in Switzerland rose to 1.22 points in March against provisional estimate of 0.9 points. Franc has ignored this information, as investors are focused on changes in the external environment.

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.

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 maintain the level at 1.20, assumption about probability, that pegging level of Franc to Euro will go to 1.25, is getting more persistent in the market.

So, after three -month break Swiss National Bank has a new governor now- this is Mr. Jordan who has performed the duties since January when Mr. Hildebrand left his post. Jordan has already said that he would continue to adhere to the old monetary policy and is going to preserve the level of 1.20 in the pair EUR/ CHF. According to him, Franc is still overvalued.

In general, views of the new governor found support in SNB. The Bank believes that considering problems in the Eurozone, it is still required to maintain a peg of Franc with the Euro.

 

[LF.Anastasia]

JPY: Japanese Yen is in demand in the market again

At the Forex currency market the Japanese Yen rate traded upward on Tuesday in response to growing demand for “safe” currency among investors.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area and continues to go down, maintaining moderate sell signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 80.95 the pair USD/JPY will go to 80.80 and 80.70. Consolidation near the current levels is possible.

Macro-economic situation is stable in Japan on Tuesday morning.

Earlier, the JPY has been corrected, as it moved away from local highs sufficiently enough to stop sales. Now, demand for “safe” currency will be increasing, as long as external background remains ambiguous.

Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%. 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 grounds to expect “new shoots” in the economy of the country.

Retail sales rose by 3.5% in February against expectations of growth of 1.3%. Real revised GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. In addition, 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.

Trade deficit in Japan amounted to Y82.6 billion in March against the level of Y226.3 billion in February. This data is positive; other sections of the report also demonstrated that exports rose by 5.9% y/y last month, imports increased by 10.5% y/y.

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 disagreed with the opinion of Japanese government, who would like to see more dynamic stimulation of the economy.

According to representative of the Bank of Japan Mr. Nasimury, measures taken by the Bank of Japan in February helped to stabilize exchange rate of the Yen and stimulate stock market; therefore, the regulator is ready to take more actions if required. Monetary politician stressed yesterday that Central Bank is going to make vigorous efforts in the sphere of monetary policy in order to achieve planned inflation target at 1%, the major risk factor is - overall slowdown in the world economy.

 

[LF.Anastasia]

AUD: Sales have accelerated for Australian Dollar

At the Forex currency market the Australian dollar rate traded downward on Tuesday – the currency is on mass sale after the release on weak statistics this morning.

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 goes down in the neutral zone and is giving a signal a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0270 the pair will go back to 1.0260 and 1.0240.

Statistics released this morning was disappointing for the AUD: CPI rose by 0.1% q/q in Q1 (+1.6% y/y) against expectations of growth of o.6% q/q (+2.2% y/y).

These data increase the likelihood that interest rate will be revised downward at the nearest meeting of the RBA.

It became known earlier that import price index in Australia fell by 1.2% q/q in Q1 against the forecast of -0.6% q/q. At the same time, export prices fell to the lowest level since Q4 2010. Theoretically, decline in export prices was caused by reduction in price for crude ore in Australia and fall in the price for metal scrap. At the same time, slump in imports was caused by expensive AUD.

Final PPI in Australia rose by 0.3% q/q (+1.4% y/y) in Q1 against the forecast of growth of 0.4% on quarterly basis.

According to the data released earlier, employment rate in Australia rose by 44 thousand against expectations of growth of 6.5 thousand. Unemployment rate amounted to 5.2% against previous level of 5.3%.

It became known earlier, leading indicators index Westpac in Australia rose by 0.2% in February, up to the level of 284.2 points against preliminary expectations of growth of 0.6%. Growth rate amounted to 2.4% against the forecast of 2.5%. Representatives of Westpac clarified in the comments that negative dynamics if the growth rate, which has been preserved for the past six months, does not help to instill enthusiasm in regards to prospects; experts do not expect that the rate will rise in the nearest future either. At the same time, economic development performance is in compliance with forecasts for Australian economy for 2012 (3%); however pace of growth in GDP remains below rend.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to grow

The Canadian dollar continues to rise at the Forex currency market today.

Forex forecast: MACD indicator for the pair USD/CAD is in the positive area and it goes down slowly, and is giving a sell signal. Stochastic Oscillator is going down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.9900 the pair will go to 0.9890 and 0.9880.

It became known earlier that wholesale sales in Canada increased by 1.7% in February against the forecast of reduction of 0.3%. At the same time, wholesale stock rose by 1.1% versus growth of 1.0% in January.

According to the head of the Bank of Canada Mr. Carney it is highly possible that monetary policy will be toughened with acceleration of economic recovery. Meanwhile, stimulus policy will be preserved.

We would remind that, as it became known earlier, the Bank of Canada is going to gradually raise interest rate throughout the year 2014; in general, it is consistent with the policy that the regulator has outlined earlier. Meeting of the Bank of Canada was very brisk, despite the fact that the Regulator had left interest rate at the level of 1% per annum, as expected. However, comments which were made by the Governor of the Bank of Canada Mr. Carney were unexpected for the market. Thus, monetary politician noted that the rise in the interest rate could be a reasonable decision in the future, since both, inflation and economic growth might accelerate.

According to the forecasts made by the Bank of Canada, economy of the country will regain its full capacity in the first half of 2013. 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, instruments of monetary policy will be used only as the last resort.

Statistics released last Friday showed that inflation in Canada rose by 0.4% m/m (+1.9% y/y) in March. At the same time, base CPI rose by 0.3% m/m (+1.9% y/y) last month. Unemployment rate fell to 7.2% (-0.2%) in March. Employment rate rose by 82 thousand. Note, that it is a positive trend, as the rate fell only by 0.2% in February; number of jobs has not increased significantly in the last month of winter. In addition, permit 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.

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 has slowed down in Q4: real GDP amounted to +0.4% m/m in December against the forecast of +0.3% m/m. All in all, economic growth in Canada went up only by 0.4% in the last quarter last year against +1.0% in Q3.This is a good result.