Picture of the day
Dollar generally weaker. The dollar looked weaker than at the opening Evroppy and no real news that could give the movement. Expectations for the Fed's federal funds rate fell modestly, this is the first drop in a week, although the president of San Francisco Fed Williams said he saw little risk of possible confluence of the US economy into recession due to rising interest rates. Among currencies G10, the dollar strengthened against the euro only, while the JPY showed strong growth
FT says that Greece is preparing to default. Today, Financial Times says that Greece is preparing to declare a default if it can not reach an agreement with international lenders by the end of April. The government has decided to refrain from € 2,5 млрд payments if no agreement is reached. The newspaper says that it may simply be a negotiating tactic, but still emphasizes the fact that the country is rapidly running out of money. "We have come to the end of the road. If the Europeans do not continue to print money, there is no alternative [default]," the newspaper quoted one government official. However, another Greek official denied this information. Default will almost certainly result in the suspension of assistance to the ECB for the Greek financial sector, the closure of Greek banks, capital controls and the wider economic instability. German newspaper Frankfurter Allgemeine Sonntagszeitung (FAS) said that the Working Group with EU Finance Ministers' Deputies last Thursday gave Athens a period of six working days (apparently, until Monday, April 20) to submit a revised plan of economic reforms to be present before a meeting of ministers Eurozone finance scheduled for April 24, designed to decide whether to unlock the emergency funding to keep Greece afloat. If a country is unable to present an acceptable plan to the next Monday, it seems that the game can continue. Of course, the "acceptable" is a flexible term. The likely course of events, I believe that the Greeks come up with something that will appeal to the EU and the EU considers that this will be enough to avert a crisis. However, it is not precise and definite in human history.
JPY jumped on comments Koichi Hamada, Japanese Prime advisor Abe, who yesterday said that "the sale of the yen is approaching its limit bit by bit." He said that on the basis of purchasing power parity ((PPP) 105 may be a more appropriate level for the pair USD / JPY. It is largely agreed that the OECD expects Japan. There seems to be some political resistance in the present in Japan to further weakening of the yen. However, the fact that the Bank of Japan failed in their attempt to reach the target by 2% inflation, and the need for Japanese exports to remain competitive, leads me to believe that they are likely to not only will help the growth of the national currency, but also to encourage its further decline. I still bear on the yen.
Today's highlights: During the European Day, PES unemployment rate in Sweden in March, is expected to drop to 4.1% from 4.2%. This may be an allusion to a possible reduction in the official unemployment rate coming out 21 numbers. (Note: the leaves at 9 am, so that the text will be changed in the final version).
The consumer price index in Sweden in March, according to forecasts, accelerated to 0.3% yoy from 0.1% year on year earlier. On March 18, the Bank of Sweden took further steps to deal with the slow pace of growth in consumer prices. Bank cut interest rates to 0.25% and expanded its government bond purchase plan beyond its schedule for the political decision-making. Inflation is moving in the right direction, and I would expect that the bank will remain on hold at its next meeting policy for April 29, and wait to see if the positive effect of the above mitigation measures. Although the Bank does not like strong Crohn's CPI figures are likely to support the national currency, at least temporarily. Bearing in mind that the Bank's SEK and that the US dollar is the most attractive currency among its major competitors, I would expect a possible reduction in USD / SEK after CPI figures that will give a new buying opportunity.
ECB publishes its review of bank lending in the 1st quarter of 2015 and this is the first survey after the Bank initiated a program QE, so that it can show whether the ECB's successful efforts to increase banks' willingness to lend. Lending in January fell by only 0.1% year on year and seems ready to go into a plus. It fell at an annual rate on a monthly basis from May 2012.
In the UK, we get the consumer price index for March. And the headline and core inflation is projected to remain unchanged at 0.0% yoy and 1.2% yoy respectively. Taking into account the prevention of the Bank of England inflation report that the consumer price index is likely to be negative, dive into deflation will not be a big surprise. This could further alienate expectations of rising interest rates and increased selling pressure on sterling. As can be seen from the graph, the prices in the shops are falling much faster than the general rate of inflation, that is, downward pressure on prices persists. I still expect the GBP / USD will continue to decline and will challenge the psychological 1.4500 area in the short term. UK PPI for March and beyond.
In the US, retail sales should come out in March. Retail sales are projected to grow by 1.0% m / m in March, compared with -0.6% m / m in February. A positive value will support the theory that the weakness in the previous two months, was mainly due to the harsh weather conditions, and it can strengthen the dollar. PPI data for the United States in the same month also have to get out.
Governor of the Bank of Sweden Stefan Ingves Governor of the Bank of Norway Øystein Olsen will be broadcast today.
Tomorrow morning before the start of the European Day will come a lot of data for March from China: retail sales, industrial production, fixed asset investment and GDP for Q1. This is important because the data for January and February were distorted by the Chinese New Year, so March is really the first month for which we see a clear picture. Retail sales, IP and FIA, is expected to grow by about the same rate as they grew in the first three months of last year, showing no no acceleration or deceleration. GDP, on the other hand, is expected to slow to 7.0% yoy from 7.3%. It is the goal of the government, so it is not always worth worrying about it. However, there may be some doubt as to whether they can keep this pace of growth in the future. Bloomberg calculates the check digit GDP based on published data often and this estimate has dropped to 6.3%. Thus we can expect a downward movement on the Australian.
MARKET
EUR / USD continued to trade lower on Monday, but faced with the support just above 1.0500 (S1) and a slight increase. Looking at our oscillators, I would stay vigilant, as kickbacks may continue for some time until the next step down. RSI went out with his oversold zone, while the MACD has bottomed out and strayed from the start line. Today is forecast US retail sales rise in March. It can be the beginning of the next stage down and perhaps psychological testing zones 1.0500 (S1). Keeping in mind that a break below 1,0715 (R3) will signal the completion of the double top, I consider short-term movement as negative. In the overall picture, EUR / USD is still trading below both 50- and 200-day moving averages. Closing the candle below 1.0460 (S2) to confirm the upcoming lower low and cause the resumption of large downtrend.
• Support: 1,0500 (S1), 1.0460 (S2), 1.0360 (S3).
• Resistance: 1,0600 (R1), 1.0650 (R2), 1,0715 (R3).
