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[LF.Anastasia]

JPY: Japanese Yen can be corrected at the beginning of the week

The Japanese Yen rate stands still at the Forex currency market and tends to technical correction.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it started to go down slowly, giving a pair sell signal. Stochastic Oscillator remains in the oversold zone today, continuing to give a pair sell signal.

Forex recommendations: considering external background, off the market

Feasible event scenario at Forex: in case of breakdown at the level of 81.90 the pair will go to 82.20 and 82.50. If the level if 81.60 is broken down, traders’ targets will become the levels of 81.40 and 81.25.

The following Japanese data was released today:

– Preliminary level of industrial production in January: +2.4% m/m (+4.7% y/y) against the forecast of +4.0% m/m.

– Retail sales in January:+4.1% m/m (+0.1% y/y) against the forecast of +2.7% м/м;

– Number of begun construction in January: +2.7% y/y against preliminary value of +7.5%

Although the level of industrial production in Japan did not meet the projections, other data have been positive, which proves that the economy has found the way out of recession.

Deflation in Japan continues to retreat – the data on CPI in January, released today, showed reduction in the rate by 0.2% y/y after the decline by 0.4% y/y in December and the forecast of -0.3%. Food and energy resources begun to rise in price in the Country of the Rising Sun – and these are the main factors of inhibition of deflationary loop.

The data released on Wednesday showed that deficit of trade balance in January amounted to Y471.4 billion against expected level of +Y37.1 billion; although it can be only a seasonal factor. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y). In addition, the deputy head of the Bank of Japan Mr. Yamaguchi stressed this morning that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of high oil prices.

It is worth noting that index of activity in all sectors of Japan continued to decline in December: by 0.2% m/m against similar reduction level in November. At the same time experts of Nomura Bank reported last week that the worst stage is over for the economy of the Country of the Rising Sun and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession.

 

[LF.Anastasia]

CHF: Swiss Franc tends to keep on growing

At the Forex currency market Swiss Franc rate started to grow again on Monday, after slight correction at the end of last week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to descend, giving a pair sell signal. Stochastic oscillator still remains in the oversold zone, however it tends to come out of it upward.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9330 the pair will go to 0.9370 and 0.9430. If the level of 0.9270 is exceeded, bears’ target will be the level of 0.9250.

The data on GDP for QIV 2010 in Switzerland will be released on Tuesday this week, according to the forecast, the index will grow by 0.5% on quarterly basis against preliminary level of +0.70%, the growth by 2.8% is expected on annual basis.

In addition, on 1 March the index of industrial sector (PMI) for February will become known which, according to preliminary estimates will grow to the level of 60.9 points versus the previous value of 60.5 points.

On Thursday, 3 March, the data on retail sales for January is going to be published.

It became known last week that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is a factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.

According to the head of the Bank, Philipp Hildebrand, currency intervention carried out by the National Bank of Switzerland last year has reached its objective. Monetary politician believes that Switzerland has achieved price stability and got rid of the signs of inflation. We would remind that SNB had been buying the Euro since March 2009 until the middle of 2010 to limit the growth of Franc. Hildebrand is confident that Switzerland is in more advantageous position now compared with Eurozone, where inflation amounts about 2%. Price stability, according to the monetary politician, does not give rise to complaints.

 

[LF.Anastasia]

GBP: British Pound determines movement direction at the beginning of the week

At the Forex currency market the british Pound Sterling rate is traded with no specific movement direction on Monday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not giving a clear signal. Stochastic oscillator continues to give a pair sell signal today, being in the neutral zone and coming close to the oversold zone.

Forex recommendations: off the market.

Feasible event scenarios at Forex: in case of breakdown at the level of 1.6125 the pair will go to 1.6150 and 1.6180/90. If upward breakdown does not take place, the pair will continue to consolidate close to the current levels.

There was a lot of UK statistics releases last week:i It became known on Friday that level of consumer confidence in Great Britain rose to -28 points in February, as per GfK/NOP estimates, against the previous value of -29 points. The news was moderately optimistic for the Pound; however it did not save the Pound from sales.

According to CBI which was released earlier, decline in sales volume from 37 points to 6 points is quite logical, as the program of reduction in public expenditure gave its first results. At the same time in the retail sector of the country the sentiments remains the most pessimistic since 2009.

In addition, the level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of growth by 0.2% m/m; net mortgage lending in the UK remained invariable in January, at the level of STG 1.2 billion.

We would remind that a representative of the Bank of England Miles noted that according to regulator’s estimates, the process of scrapping of the program of stimulation is quite slow. Miles believes that there is no need in monetary policy tightening as suggested by the supporters of the rate increase who keep eye on inflation levels. According to him, sharp tightening of the monetary policy will harm British economy, while inflation will revert to its key level of 2% by the year 2012.

The data on the borrowing of the public sector released last week inspired players, which made it possible for the Pound to add about 20 pips, however failed to reverse general trend: the volume of net borrowing in Great Britain reduced to STG5.252 billion in January against the level of -STG0.095 billion a year earlier. Statistics released earlier showed that index of houses prices Rightmove increased by 3.1% m/m (+0.3% y/y) in Great Britain. It is worth noting that different agencies, which monitor real estate market in the UK, use different indicators and as a result published data from time to time differs diametrically.

 

[LF.Anastasia]

EUR/USD: Euro goes up, ignoring external signals

The pair EUR/USD is traded upward at the Forex currency market on Monday, since the conflict in the Middle East has already been incorporated in the current prices and new details do not provoke significant transition of the players to safe assets as it was last week.

By 10.30 Moscow time the Euro is at 1.3781 against closing session level of 1.3753 on Friday.

Meanwhile, traders’ concern about the affect of the Middle East conflict on the recovery of the world economy also began to subside–investors continue to believe in stable growth rate, despite the inflated oil prices

Investors’ attention today will be focused on the publication of the consumer prices index in Eurozone in January (forecast: 2.4% y/y); in the afternoon traders will await the release of the U.S. statistics.

The situation in Ireland where the change of government can take place still represents risk to the Euro

Most likely the pair EUR/USD will not go beyond the range of 1.3700-1.3820
at the trading session on Monday.

 

[LF.Anastasia]

AUD: Australian Dollar determines movement direction, following RBA decision

At the Forex currency market the Australian Dollar rate does not move much on Tuesday, analyzing morning’s statistics and the decision of the Reserve Bank of Australia to keep interest rate unchanged at the level of 4.75%.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go up, giving a pair buy signal. Stochastic oscillator remains in the overbought zone today, maintaining a pair buy signal.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 1.0190, buyers’ targets today will be the levels of 1.0200 and 1.0230.

Thus, at the meeting today, the Reserve Bank of Australia decided to keep interest rate unchanged, at the level of 4.75% per annum, which was not a surprise to the market. In the follow-up comments the RBA mentioned that production is still decreasing in the country due to the elimination of the consequences of the disaster, which befell on Australia at the beginning of the year. The rise in lending is also insignificant.

Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady.

In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.

It was made public yesterday that level of total lending in Australia increased in January by 3.3% per annum, as per estimates of the Reserve bank of Australia, against expectations of the rise by 3.2%.

It became known earlier that lending in the private sector increased by 0.3% m/m last month (preliminary level was +0.2%). Level of capital expenditure in private sector of Australia increased by 1.3% on quarterly basis in QIV last year, reaching the level of A$29.691 billion. Thus, in accordance with the forecast, total index of capital expenditures will be at the level of A$128.93 billion in 2010-2011.

Earlier the head of the Reserve Bank of Australia Glenn Stevens noted that he expected stabilization of national economy, and consequently, interest rate would remain unchanged for some time. He also said that economic growth of Australian economy could be better, than the forecast despite negative impact of the natural disaster that befell the country at the beginning of the year. At the same time Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.

 

[LF.Anastasia]

JPY: Japanese Yen continues to give way to USD

The Japanese Yen rate continues to retreat from the local highs at the Forex currency market on Tuesday, amid decline in investors’ positions in safe assets, since world economy actively indicate steady recovery process.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it is still going down, confirming a previous sell signal for the pair. Stochastic Oscillator tends to come out of the oversold zone today, and it started to create a buy signal for the pair.

Forex recommendations: if bullish sentiments in the pair continue to dominate in the currency sector and in case of breakdown at the level of 82.25, buyers’ targets today will be the levels of 82.50 and 82.80.

The following Japanese news was released today:

– Unemployment rate in January: 4.9% against 4.9% in December;

– Aggregate employment rate in January: +170 000 m/m against the revised level of +110 000 in December;

– Actual spending of households in January: -1.0% y/y against -3.3% in December;

– Sales of new vehicles in February: -14.3% y/y.

As a representative of Japanese government noted today, employment sector in the country continues to recover, however unemployment rate remains static. The head of the Bank of Japan Mr. Shirakawa said in his speech on Tuesday morning that in his opinion current exchange rate of the Yen does not produce additional risks for the economy and business sentiment in the country is stable despite expensive national currency.

Although the level of industrial production in Japan fell short of expectations (in January: +2.4% m/m (+4.7% y/y) against the forecast of +4.0% m/m), other data have been positive, which proves that the economy has found the way out of recession.

Deflation in Japan continues to retreat – the data on CPI in January, released on Friday, showed reduction in the rate by 0.2% y/y after the decline by 0.4% y/y in December and the forecast of -0.3%. Food and energy resources begun to rise in price in the Country of the Rising Sun – and these are the main factors of inhibition of deflationary loop.

The data released on Wednesday showed deficit of trade balance, which amounted to Y471.4 billion in January against expected level of +Y37.1 billion; although seasonal factor could have been the reason. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y). In addition, the deputy head of the Bank of Japan Mr. Yamaguchi stressed that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of high oil prices.

 

[LF.Anastasia]

CHF: Interest in Swiss Franc wanes amid market’s optimism

At the Forex currency market Swiss Franc rate continues to retreat from its historic highs on Tuesday as part of technical correction and due to the pressure caused by the lack of investors’ interest in safe assets

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, confirming a previous sell signal for the pair. Stochastic Oscillator is coming out of the oversold zone and is forming a pair buy signal.

Forex recommendations: taking into account external background and in case of breakdown at the level of 0.9330, the pair will go to 0.9370 and 0.9400.

The following Swiss statistics was released today:

– Real GDP in QIV: +0.9% q/q (+3.1% y/y) against the forecast of growth by 0.5% q/q (+2.8% y/y)

– PMI SVME rose to 63.5 points in February against the forecast of 60.5 points.

Therefore, Swiss economy is strong and continues to progress along the recovery path.

It became known last week that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is the factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.

On Thursday, 3 March, the data on retail sales for January is going to be published.

 

[LF.Anastasia]

GBP: British Pound continues its spring upsurge

At the Forex currency market the British Pound Sterling rate continues to rise more steadily on Tuesday, supported by the external background.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator continues to give a pair buy signal, approaching overbought zone.

Forex recommendations: if current investments’ sentiments are maintained in the market and in case of breakdown at the level of 1.6300, the pair will go to 1.6320 and 1.6360/70.

The UK statistics released on Tuesday showed that prices for houses continued to rise in February, by 0.3% m/m, as per Nationwide estimates. At the same time the index declined by 0.1% on annual basis. According to the experts of the agency, recovery remains weak and real estate sector is in no hurry to grow up.

Statistics which is going to be published this afternoon can change forces alignment in the pair GBP/USD. Thus, by 12.30 final level of business activity index in the manufacturing sector in February (forecast: 61.5); money supply M4 in January, data on the volume of lending in the private sector and number of approved requests for mortgage lending will be made public.

There were a lot of UK statistic releases last week: it became known on Friday that level of consumer confidence in Great Britain rose to -28 points in February, as per GfK/NOP estimates, against the previous value of -29 points. The news was moderately optimistic for the Pound; however it did not save the Pound from sales.

According to CBI which was released earlier, decline in sales volume from 37 points to 6 points is quite logical, as the program of reduction in public expenditure gave its first results. At the same time in the retail sector of the country the sentiments remains the most pessimistic since 2009. In addition, the level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of growth by 0.2% m/m; net mortgage lending in the UK remained unchanged in January, at the level of STG 1.2 billion.

We would remind that according to a representative of the Bank of England Miles, regulator’s estimates, the process of scrapping of the program of stimulation is quite slow. Miles believes that there is no need in monetary policy tightening as suggested by the supporters of the rate increase who keep eye on inflation levels. According to him, sharp tightening of the monetary policy will harm British economy, while inflation will revert to its key level of 2% by the year 2012.

 

[LF.Anastasia]

EUR/USD: Euro continues to grow amid external optimism

The pair EUR/USD continues to grow at the Forex currency market on Tuesday morning, as investors’ interest to safe currencies wanes.

By 10.20 Moscow time the Euro is at 1.3819 against closing session level of 1.3806 yesterday.

Since the USA and China continued to demonstrate positive statistics, investors’ confidence in improvement of global recovery has strengthened, diminishing traders’ wish to withdraw to safe harbors.

In particular, the U.S. macro statistics released on Monday, showed that income of Americans increased by 1% in January against expectations of growth by 0.4%, thus, spending will rise as well, which will support American economy on the recovery path.

In general, the situation is favourable for the Euro, February has become the second consecutive month which the Euro concluded with reinforcement.

Most likely the pair EUR/USD will not go beyond the range of 1.3750-1.3890 at the trading session on Tuesday.

 

[LF.Anastasia]

AUD: Downward rollback of Australian Dollar gains strength

At the Forex currency market the Australian Dollar rate continues to go down on Wednesday regaining from yesterday’s RBA decision.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it is moving along the signal line, not giving a clear signal. Stochastic Oscillator is coming out of the overbought zone today, is going to create a pair sell signal

Forex recommendations: in case of breakdown at the level of 1.0075 the pair will go to 1.0040 and 0.9980.

The following Australian data was released today:

– sales on new houses HIA increased by 2.5% m/m in January against -0.6% m/m in December;

– GDP rose by 0.7% q/q (+2.7% y/y) in QIV against the forecast of +0.6% q/q (+2.8% y/y).

Surprisingly, however the AUD did not halt its decline after the data release.

At the meeting yesterday, the Reserve Bank of Australia decided to keep interest rate unchanged, at the level of 4.75% per annum, which was not a surprise to the market. In the follow-up comments the RBA mentioned that production is still decreasing in the country due to the elimination of the consequences of the disaster, which befell on Australia at the beginning of the year. The rise in lending is also insignificant.

Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady. In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.

It became known earlier that the level of total lending in Australia increased in January by 3.3% per annum, as per estimates of the Reserve bank of Australia, against expectations of the rise by 3.2%.

Earlier the head of the Reserve Bank of Australia Glenn Stevens noted that he expected stabilization of national economy, and consequently, interest rate would remain unchanged for some time. He also said that economic growth of Australian economy could be better, than the forecast despite negative impact of the natural disaster that befell the country at the beginning of the year. At the same time Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.

Worth noting that the level of capital expenditure in private sector of Australia increased by 1.3% on quarterly basis in QIV last year, reaching the level of A$29.691 billion. Thus, in accordance with the forecast, total index of capital expenditures will be at the level of A$128.93 billion in 2010-2011.