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[LF.Anastasia]

CHF: Swiss Franc is ready to keep on growing

At the Forex currency market Swiss Franc is still in the positive area, it is traded upward in response to positive external background.

Forex forecast: MACD indicator for the pair GBP/USD goes down in the positive area; it is prepared to break through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations in case of breakdown at the level of 0.9060, the pair GBP/USD will go to 0.9050 and 0.9030. Consolidation at the achieved levels is possible.

New head of SNB Mr. Jordan said last Friday that the regulator is not going to shift into negative interest rate and will continue to protect the level of 1.20 in the pair EUR/Franc.

We would remind that 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 views on monetary policy have remained unchanged. Despite strong determination of SNB to maintain the level of 1.20, assumption about probability, that pegging level of Franc to Euro will go up to 1.25, is getting more persistent in the market.

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 stated 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 Eurozone, it is still required to maintain a peg of Franc with the Euro.

Manufacturing sector is still weak in Switzerland; however it shows signs of recovery. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales rose 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 be in the range of: -0.6% to +0.6% in 2012-2014, GDP growth will be at the level of 1.0% this year.

It became known earlier that consumption indicator UBS in Switzerland rose to 1.22 points in March against provisional estimate of 0.9 points. 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.

 

[LF.Anastasia]

JPY: Japanese Yen traded at annual highs

At the Forex currency market the Japanese Yen rate traded upward on Monday, testing highs of the year.

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

Forex recommendations: in case of breakdown at the level of 80.15 the pair USD/JPY will go to 80.00 and 79.80. Consolidation near the current levels is possible.

Macro-economic situation in Japan has not changed fundamentally at the beginning of the week.

A lot of data on Japanese economy which was released last week showed that unemployment rate remained at the level of 4.5% in March; preliminary retail sales fell by 1.2% m/m (+10.3% y/y) last month against the forecast of decline of 0.5% m/m. In addition, preliminary industrial production rose by 1.0% m/m (+13.9% y/y) in March against expectations of growth of 2.3% m/m.

Activity index in all sectors fell by 0.1% in February versus expectations of decline of 0.2%. Trade deficit amounted to Y82.6 billion in March against the level of Y226.3 billion in February. The data is positive and plus to this, other sections of the report showed that exports rose by 5.9%y/y last month and imports grew by 10.5% y/y.

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. 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.

A meeting of the Bank of Japan last week was neutral: interest rate was left in the narrow range of 0-0.1% per annum, however the regulator decided to expand economic stimulus program up to 40 trillion yen (+10 trillion yens). The bank plans to buy bonds with maturities of 3 years, whereas earlier the regulator bought only securities with two year maturity.

 

[LF.Anastasia]

AUD: Australian Dollar is waiting for news

At the Forex currency market the Australian dollar traded neutrally at the beginning of the week, as the AUD has already made use of the Asian session and is now waiting for the reaction from RBA.

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 come into overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of1.0455, the pair will go back to 1.0460 and 1.0480. If aggressive buyers will be back into the pair, sales around 1.0310 will be possible.

Regular meeting of the Bank of Australia will be held on Tuesday; so traders are doing projections now: whether the regulator is going to reduce interest rate by 25 basis points or by 50 basis points at once.

Statistics released this morning showed that lending to the private sector of Australia rose by 0.4% m/m in January against the forecast of growth of 0.3% m/m.

Leading indicators index Westpac in Australia rose by 0.2% in February, up to the level of 284.2 points against provisional 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 in the growth rate, which has been preserved for the past six months, does not help to instill enthusiasm about prospects; experts do not expect that the rate will rise in the nearest future either. At the same time, economic development performance complies with forecasts for Australian economy for 2012 (3%); nevertheless, pace of growth in GDP remains below trend.

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. 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%.

Statistics, released last week, was very weak: 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 increases 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.

 

[LF.Anastasia]

NZD: New Zealand Dollar is ready to start correction

At the Forex currency market New Zealand dollar has slowed down growth at the beginning of the week and is ready for correction.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area, and is maintaining a sell signal. Stochastic Oscillator is in the neutral zone now, however it tends to go to overbought zone and keeps on giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8230, the pair will go to 0.8240 and 0.8250. In case of deterioration in the external background the pair will aim at 0.8135.

Statistics released today showed that business confidence NBNZ in New Zealand rose to 35.8 points in April against preliminary expectations of 33.8 points. In addition, trade balance dropped to +NZ$134million against the level of +NZ$202 million in February.

It is obvious that rapid growth on Friday will require some correction in the pair.

At the meeting last week, the Reserve Bank of New Zealand left interest rate unchanged at the level of 2.5% per annum, which agreed with market expectations. The head of RBNZ Mr. Bollard said in the comments that inflationary pressure is limited and CPI is not going to exceed specified framework. He believes that New Zealand economy demonstrates recovery, and at the same time activity in the real estate sector is increasing.

Business sentiment index NZIER was at the level of 13.0 points in Q1 this year against the level of 0 points in Q4 2011. 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 2011 against the level of 6.6% a quarter earlier.

GDP in New Zealand increased by 0.8% q/q (+1.9% y/y) in Q3 2011 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 data for Q4 will be weaker.

Statistics released earlier showed that, as per estimates of NBNZ, business confidence rose to 33.8 points in March versus the level of 28.0 points in February. Boom in the construction sector of the country remains the main catalyst for the rise in the business confidence. According to the data released earlier activity in production sector NZ fell to 54.5 points in March against the level of 57.7 points in February.

 

[LF.Anastasia]

EUR/USD: Euro traded in the narrow range

The pair EUR/USD traded slightly upward at the Forex currency market on Tuesday morning, remaining in the narrow range.

By 9.15 Moscow time the Euro is at 1.3247 against yesterday’s closing session level of 1.3238.

European countries celebrate Labour Day today therefore flow of macro-statistics will be minimal. Some revival is expected only late afternoon when the U.S. statistics on weekly index of LFL sales in the retail sector and Redbook indices will be released.

Publication of the U.S. index of economic conditions ISM in the manufacturing sector for April will be of interest.

Most likely the pair EUR/USD will not go beyond the range of 1.3190-1.3280 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound is being moderately corrected

The British Pound Sterling traded slightly downward at the Forex currency market on Tuesday

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it goes up, while volumes are high, and is maintaining a buy signal. Stochastic Oscillator tends to go out of the overbought zone and started to shape a sell signal.

Forex recommendations in case of breakdown at the level of 1.6215, the pair GBP/USD will go to 1.6205 и 1.6180. Consolidation at the reached levels is possible.

The pair still looks overbought which creates sound basis for good correction.

Macro-economic situation in the UK is stable.

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. Volume of retail sales rose by 1.8% m/m (+3.3% y/y) in March against the forecast of growth of 0.4% m/m. This is much higher than expected.

British economic statistics released earlier was weak: GDP in Q1 fell by 0.2% in the first reading against decline of 0.3% on quarterly basis (+0.5% y/y) a quarter earlier. It proves that country’s economy has been in recession for the second quarter. Favourable external background was able to brighten this pessimism; however in general this factor is negative.

It became known at the end of the week that consumer confidence index GfK in the UK amounted to -31 points in April against the forecast of -30 points. Consumer confidence Nationwide rose to 53 points in March against the level of 44 points in February. This indicator is positive, since it is at the highs of nine months.

Representative of the Bank of England Mr. Miles noted in the middle of the week that his view in favour of expansion of the stimulus measures has found support, although GDP statistics for Q1 is weak, as expected. British monetary politicians emphasized earlier that economic growth in the UK is still rather slow. 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.

 

[LF.Anastasia]

CHF: Swiss Franc continues to strengthen

At the Forex currency market Swiss Franc continues to strengthen moderately on Tuesday; however trading volume for the pair is low

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations in case of breakdown at the level of 0.9050, the pair GBP/USD will go to 0.9040 and 0.9020. Consolidation at the current levels is possible.

Swiss market is closed today due to celebration of the Labour Day.

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 views on monetary policy have remained unchanged. Despite strong determination of SNB to maintain the level of 1.20, assumption about probability, that pegging level of Franc to Euro will go up to 1.25, is getting more persistent in the market.

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 stated 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 Eurozone, it is still required to maintain a peg of Franc with the Euro.

Jordan said last Friday that the regulator is not going to shift into negative interest rate and will make all efforts to maintain the level at 1.20 in the pair EUR/Franc.

It became known earlier that consumption indicator UBS in Switzerland rose to 1.22 points in March against provisional estimate of 0.9 points. 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 signs of recovery. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales rose 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 be in the range of: -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 aiming to test highs of the year

The Japanese Yen rate at the Forex currency market continues to grow today and has come close to the highs of the year.

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

Forex recommendations: in case of breakdown at the level of 7970 the pair USD/JPY will go to 79.60 and 79.50. Consolidation near the current levels is possible.

Japanese market has been closed for the second day in a row today due to holidays.

Significant growth of the Yen can force government of the Country of the Rising Sun to start a new round of intervention.

Activity index in all sectors fell by 0.1% in February versus expectations of decline of 0.2%. Trade deficit amounted to Y82.6 billion in March against the level of Y226.3 billion in February. The data is positive and plus to this, other sections of the report showed that exports rose by 5.9%y/y last month and imports grew by 10.5% y/y.

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.

The data on Japanese economy released last week showed that unemployment rate remained at the level of 4.5% in March; preliminary retail sales fell by 1.2% m/m (+10.3% y/y) last month against the forecast of decline of 0.5% m/m. In addition, preliminary industrial production rose by 1.0% m/m (+13.9% y/y) in March against expectations of growth of 2.3% m/m.

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. Meeting of the Bank of Japan last week was neutral: interest rate was left in the narrow range of 0-0.1% per annum, however the regulator decided to expand economic stimulus program up to 40 trillion yen (+10 trillion yens). The bank plans to buy bonds with maturities of 3 years, whereas earlier the regulator bought only securities with two year maturity.

 

[LF.Anastasia]

AUD: Australian Dollar has collapsed due to decisions of the Reserve Bank of Australia

The Austrian dollar rate traded significantly downward at the Forex currency market.

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 dropped 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.

Meeting of the Reserve Bank of Australia today has astonished and alarmed the market. Interest rate was reduced by 50 basis points now to the level of 3.75% per annum.

The head of RBA Mr. Stevens has referred to inflation in his comments, saying that slowdown in inflation raises concerns of the government of the country. It is logical that the rate of lending has been reduced to 3.75% from 4.25% in order to create better lending conditions. However it is obvious now that Australian economic system faces difficulties.

According to the RBA’s forecast, inflation will be lower in the next two years; however it will remain in the range of 2-3%. CPI rose by 0.1% q/q (+1.6% y/y) in Q1 against expectation of growth of 0.6% q/q (+2.2% y/y).

The AUD rate has collapsed in response to decision of the regulator.

Statistics released yesterday showed that lending to the private sector of Australia rose by 0.4% m/m in January against the forecast of growth of 0.3% m/m.

Leading indicators index Westpac in Australia rose by 0.2% in February, up to the level of 284.2 points against provisional 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 in the growth rate, which has been preserved for the past six months, does not help to instill enthusiasm about prospects; experts do not expect that the rate will rise in the nearest future either. At the same time, economic development performance complies with forecasts for Australian economy for 2012 (3%); nevertheless, pace of growth in GDP remains below trend.

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. Employment rate in Australia rose by 44 thousand against expectations of growth of 6.5 thousand. Unemployment rate was 5.2% versus the 5.3% earlier. 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 triggered by expensive AUD.

 

[LF.Anastasia]

NZD: New Zealand Dollar is being sold out today

At the Forex currency market the New Zealand rate is being sold out today.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area, and is maintaining a sell signal. Stochastic Oscillator has reversed in the neutral zone and is going down now, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8130, the pair will go to 0.8110 and 0.8090.

Macro-economic background in New Zealand is quiet today, however the NZD reacts to the negative date from the neighboring Australia.

At the meeting last week the Reserve Bank of New Zealand left interest rate unchanged at the level of 2.5% per annum, which agreed with market expectations. The head of RBNZ Mr. Bollard said in the comments that inflationary pressure is limited and CPI is not going to exceed specified framework. He believes that New Zealand economy demonstrates recovery, and at the same time activity in the real estate sector is increasing.

Business sentiment index NZIER was at the level of 13.0 points in Q1 this year against the level of 0 points in Q4 2011. 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 2011 against the level of 6.6% a quarter earlier. Business confidence NBNZ in New Zealand rose to 35.8 points in April against preliminary expectations of 33.8 points. In addition, trade balance dropped to +NZ$134million against the level of +NZ$202 million in February.

Statistics released earlier showed that, as per estimates of NBNZ, business confidence rose to 33.8 points in March versus the level of 28.0 points in February. Boom in the construction sector of the country remains the main catalyst for the rise in the business confidence. According to the data released earlier activity in production sector NZ fell to 54.5 points in March against the level of 57.7 points in February.

GDP in New Zealand increased by 0.8% q/q (+1.9% y/y) in Q3 2011 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 data for Q4 will be weaker.