Technical and Market Analysis by Vistabrokers - page 13
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Market Pulse 16.02
On Monday, the economic calendar is almost empty - all investors' attention will be drawn to Eurogroup meetings, where a decision on Greece can be taken. Recall that during the previous meeting last week, Greek authorities have failed to reach a compromise with international lenders. In the United States today Presidents' Day is celebrated.
10:00 **TradeBalance - December (euro zone)
Moderate impact on the market (EUR). Trade balance is a difference between the value of exported and imported goods for the month. Growth or exceeded the forecast are favorable for the currency.
14:45 **ECB Announces Covered Bond Purchase- February (euro zone)
Moderate impact on the market (EUR). Based on this index, investors and market observers conclude on the extent of securities which the European Central Bank buy on its balance sheet.
19:00** Eurogroup Press Conference- February (euro zone)
Moderate impact on the market (EUR). Press conference may disclose any details of the talks, though their results, market participants are likely to be known before.
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Vista Brokers: EuroIgnoredPositiveStatistics
On Friday, the EUR/USD has traded in a narrow price range of 20 points, and even the positive statistics could not get it out of balance. Vista Brokers analysts note that the data on GDP changes for the 4th quarter in European countries, mainly, were stronger than expected. The euro zone economy grew by 0.3% mom and by 0.9% yoy vs. 0.2% and 0.8%, respectively. The German GDP showed an increase by 0.7% mom and 1.6% yoy, which also exceeded forecasts. More than expected data were released in Italy and Portugal.
Recall that Spain has released its GDP report two weeks ago, showing quarterly growth of 0.7%, which is the best value for the last seven years. The Dutch economy grew by 0.5% qoq.
In contrast to the EUR/USD, European stock markets have reacted to the positive statistics. The German DAX index for the first time exceeded the level of 11, the Stoxx Europe 600 index rose by 0.60%. Local indexes in France and Greece have also increased, although in Q4 GDP of these countries has slowed.
Analysts note that the single currency on Friday was under pressure ahead of the meeting of the Eurogroup, which will be held today. Market participants are worried about Greece, where on February 28 the program of financial aid will complete and the government of Alexis Tsipras refuses to renew it. The new terms of cooperation for international creditors and Greece can be taken at today's meeting of eurozone finance ministers.
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Vista Brokers: Weak Japanese GDPWeighed onOil
On Monday, oil drops again after a short growth the day before. Analysts Vista Brokers note that the April futures price today fell by 0.31% to $ 61.33 per barrel. March futures price for WTI fell by 0.21% to $ 52.67 per barrel.
Experts point out that weak preliminary data on the GDP of Japan, which came in the night from Sunday to Monday put a pressure on the oil. Thus, in the fourth quarter, Japan's economy grew by 0.6% qoq vs. 0.9%. GDP annualized grew by 2.2%, but the market was expecting a more significant growth - by 3.7%. Nominal gross domestic product also showed growth below the forecast. Slowdown in the Japanese economy, which is a major exporter of petroleum products, brought pessimism to the oil market.
Recall that last week the "black gold" suddenly rose above $ 60 a barrel after signs of a possible slowdown in production volumes, including the reduction of oil supplies from Libya. In addition, the American company Baker Hughes announced the reduction of the number of rigs in the USA to a minimum since 2011.
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Vista Brokers: Talks on GreeceDeadlocked
On Monday, EUR/USD went back above 1.14 amid positive expectations about a Eurogroup meeting and a possibility of a "Greek problem" decision. Vista Brokers analysts note that the single currency was also supported by the Bundesbank monthly report, which was full of positive regarding the German economy. In particular, the Bank pointed out that it "understands" the reasons for the revision of forecasts for economic growth in Germany upward, because at the end of 2014 it has "dramatically increased."
On the eve of the meeting of eurozone finance ministers stock markets rose. World stock index MSCI has increased to a maximum of 22 September amid talks on Greece and peace deal in Ukraine. Japan's Nikkei was close to the mark in July 2007, S & P 500 has reached a record level on Friday. Recall that US markets yesterday did not work due to the celebration of President's Day.
After the Eurogroup meetings market sentiment changed in the opposite. Agreement on Greece has not been reached, and therefore after 10 days the country will be left without assistance from international lenders. Head of the Eurogroup Jeroen Deysselblum said that euro zone finance ministers were disappointed with the position of Greece, for which the best option now would be an extension of aid programs, as well as structural reforms that it provides. Deysselblum said that Athens must submit a request for an extension no later than Friday. Probably, this day another meeting of the Eurogroup will be held.
Amid investors' disappointing EUR/USD has dropped from 1.1390 to 1.1330, where the pair received support.
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Market Pulse 17.02
On Tuesday, the German ZEW institute will publish several important indices in Germany and the euro area as a whole. A portion of interesting statistics will be released in the UK. The whole day is rather saturated with news. Today the meeting of European finance ministers is also held.
9:30 *** Consumer Price Index - January (UK)
9:30 ** Core CPI - January (UK)
9:30 ** Retail Price Index - January (UK)
9:30 ** Producer Price Index Input - January (UK)
9:30 ** Producer Price IndexOutput- January (UK)
9:30 ** Producer Price Index Output Core - January (UK)
Strong impact on the market (GPB). The most important indicator in this list is the consumer price index, and its value can have a strong impact on the pound. Analysts expect that inflation in the UK in January has slowed by 0.9%.
10:00 *** ZEW Economic Sentiment - February (Germany)
10:00 ** ZEW Survey (Current Situation) - February (Germany)
10:00 ** ZEW Economic Sentiment - February (euro zone)
Strong impact on the market (EUR). Analysts' expectations regarding to ZEW indices is very optimistic. After the eurozone and some individual member states in the 4th quarter of 2014 showed GDP growth exceeded forecasts, strong ZEW index may favorably affect the single currency. However, it is worth noting that the situation in Greece is now much more likely to affect the euro.
13:30 ** Empire State Manufacturing Index - February (USA)
Moderate impact on the market (USD). The indicator is based on a survey of manufacturers from the district of the Federal Reserve Bank in New York. Values above 0 reflects the increase in activity. In January, the index was at 9.95.
15:00 ** NAHB Housing Market Index - February (USA)
Moderate impact on the market (USD). Index, measured by the National Association of Home Builders (NAHB), reflecting the confidence of developers in the housing market. In February, the growth of the rate is expected.
17:15 *** SNB Chairman Thomas Jordan Speaks - February (Switzerland)
Strong impact on the market (CHF). Jordan's statements in which investors will be looking for hints on the future strategy of the central bank of Switzerland, can have a significant impact on the Swiss franc.
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Vista Brokers: Hope for GreeceGaveWay toDisappointment
Tuesday morning stock markets fall amid unsuccessful negotiations on Greece at yesterday's Eurogroup's meetings. Market participants hoped that as a result of these talks at least some preliminary agreements will be achieved, but it has not happened. So, again, we have uncertainty and fear that Greece will refuse to pay debts and come out of the eurozone.
Vista Brokers analysts note that Asian stock indexes Nikkei and MSCI's broadest index of Asia-Pacific shares outside Japan today have lost by 0.1%. European indices are expect to show a significant reduction. The euro fell against the dollar to $ 1.1322, compared with Monday's $ 1.14295.
At the Eurogroup meeting Greece provided a "rough" version of solving the debt problem, which ministers of finance rejected and called unacceptable. This option involves the creation of a temporary assistance program for 4-6 months in order to (as Greek Finance Minister Janis Varufakis said) achieve "meaningful, sustainable and long-term agreement between Greece, Europe and the IMF."
In turn, the Eurogroup tried to convince Athens that the most appropriate option in the current situation will be the program of financial assistance continuation and providing structural reforms that it implies. These reforms are a stumbling block, as one of the "Syriza" and Alexis Tsipras campaign promises was the Greek refusal of austerity measures prescribed by the "troika" of creditors (ECB, EU and IMF).
By the way, the head of the International Monetary Fund, Christine Lagarde, during a press conference said that the provision of funds to Greece is only possible if the country complies with all prescriptions. That is, if Athens refuse to carry out unpleasant reforms, it will get no more money from the IMF.
Head of the Eurogroup Jeroen Deysselblum said that euro zone finance ministers were disappointed with the position of Greece. He said that Athens must submit a request for an extension no later than Friday. Probably, this day will be held another meeting of the Eurogroup.
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Vista Brokers: AussieRoseSlightlyvsUSDollar
On Tuesday, AUD/USD broke the mark of 0.7800 for the first time in the last five days. As Vista Brokers analysts say, factors of support for the Australian dollar have become quite neutral protocols of RBA meetings, as well as the overall US dollar decline.
Recall that at the last meeting the RBA has unexpectedly lowered interest rates, so that market participants expect that the protocols will be very "soft" and searched there for hints on further measures to stimulate the economy. However, the minutes showed neutral mood. It was noted that the recent decline in the Australian dollar is favorable for economic growth of Australia, and that an even lower rate may even lead to a temporary increase in inflation.
With regard to the reduction of the dollar, the DXY index has fallen on Tuesday from 94.34 to 94.29, supporting greenback's competitors. Resistance for AUD / USD can be 0.7800 or 0.7830 levels and support - 0.7720 or 0.7690.
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Market Pulse 18.02
Wednesday is extremely rich in important information. In Japan, the central bank will announce an interest rate decision and hold a traditional press conference. In the UK the data on the labor market and the minutes of the last Bank of England meeting will be published. Also interesting statistics will be released in the United States. The day will end with a FOMCmeetingminutes publication.
6:30 *** BOJ Press Conference - February (Japan)
*** Overnight Call Rate - February (Japan)
*** Annual Rise in Monetary Base - February (Japan)
*** Monetary Policy Statement - February (Japan)
Strong impact on the market (JPY). The Bank of Japan does not tell the time of decisions on overnightcallrate, rise inmonetarybase and monetarypolicystatementpublication. This information can greatly affect the yen, as will give an idea about the future strategy of the Japanese regulator.
9:30 *** Claimant Count Change - January (UK)
9:30 ** Claimant Count Rate - January (UK)
9:30 ** UnemploymentRate - January (UK)
9:30 ** Average Earnings Index - January (UK)
9:30 ** Employment Change - January (UK)
Strong impact on the market (GPB). Labor market is one of the main landmarks for the central bank, so these indicators are influential. The most important indicator of this series is claimantcountchange, and forecasts for it are rather optimistic.
9:30 *** MPC Meeting Minutes - February (UK)
9:30 *** MPC Official Bank Rate Votes - February (UK)
9:30 *** MPC Asset Purchase Facility Votes - February (UK)
Strong impact on the market (GPB). At the previous meeting the Bank of England has left interest rates and the amount of the asset repurchase the same, confirming its attitude to the tightening of monetary policy over time. Market participants can learn from the minutes more about the mood of the Committee.
13:30 *** Building Permits - January (USA)
13:30 ** Housing Starts - January (USA)
13:30 *** Producer Price Index - January (USA)
13:30 ** Core PPI - January (USA)
Strong impact on the market (USD). The number of permits and housing starts reflect the health of the housing market and the economy as a whole. Analysts expect growth in permits, but reducing of new foundations. As for the producer price index, expectations are not too optimistic.
14:15 ** CapacityUtilizationRate- January (USA)
14:15 ** Industrial Production - January(USA)
Moderate impact on the market (USD). The level of capacity utilization allows us to estimate how much free capacity is in the economy, or whether it is "overheated". Note that the index came close to the mark of 80%, which is considered dangerous for the development of inflationary pressures.
19:00 *** FOMC Meeting Minutes - January (USA)
Strong impact on the market (USD). Minutes of the Federal Reserve meeting allows to more fully understand the reasoning of the committee during the meeting, as well as help market players to understand the next steps the Fed.
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Vista Brokers:Fate of GreeceCan beDecided on Friday
On Tuesday, the euro was able to regain ground lost after yesterday's Eurogroup meeting, where no decision on Greece was made. Reaching a daily low at 1.1336, EUR / USD turned and moved up. Among supporting factors Vista Brokers analysts call investors' hopes that the "Greek problem" will be solved on Friday, as well as positive data on ZEW indices.
In Germany, the ZEWeconomicsentiment index grew weaker than forecast, but strong enough compared with January, and the ZEWsurvey index (current situation) showed an increase to 45.5 vs. 30.0. In the euro zone economic sentiment index rose to 52.7, while analysts were expecting the growth to 51.3.
As for Greece, the new round of talks will be held on Friday, February 20th, and this day is also the deadline, in which Athens can apply for an extension of the bailout program. Greek Prime Minister Alexis Tsipras called the conditions under which international lenders have put his country, a blackmail, since financial aid is impossible without reforms, including austerity measures. Yesterday at a press conference after the Eurogroup meeting the IMF chief Christine Lagarde has once again reminded: without reforms Greece will not get the money.
Despite the tense rhetoric of parties, market participants remain optimistic and believe that on Friday Athens will possibly come to some agreement with the creditors. In any case, all the negotiators insist that Greece will remain in the eurozone.
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Vista Brokers:BoJ Leftits MonetaryPolicyUnchanged
On Tuesday, USD/JPY has returned to the level of 119 amid the US Treasury yields growth and weak statistics on Japan. The pair showed growth for the first time in the last four trading sessions. Vista Brokers analysts note that the dollar rally against the yen was also caused by investors' confidence that the Fed will raise interest rates much sooner than the Bank of Japan.
Today, market participants were expected the results of the Bank of Japan meeting, where the regulator announced the decision on interest rates and the increase in the monetary base, as well as they were expected for BoJ comments on monetary policy and a press conference. Predictably there was no any surprises - the Japanese regulator has left its monetary policy unchanged. The Bank of Japan has confirmed its continued focus on economy stimulating, keeping rates at a minimum level of 0.10% and the asset purchase program at a record - 80 trillion yen.
Recall that on the night of Sunday to Monday were published data on the GDP of Japan, showed growth in the 4th quarter. Actual data were worse than expected, and it has put pressure on the yen, but on the second thought, the annual GDP growth of 2.2% is a good result, considering that in the previous quarter, the economy has slowed down by 2.3%. However, analysts were expecting an even more impressive performance – 3.7% growth.
Preliminary data on changes in GDP (quarterly) and nominal gross domestic product were also worse than expected. Judging by the latest macroeconomic data, Japan will have to overcome many more obstacles to return to sustained economic growth and indicators of previous years. So that tightening of monetary policy in the near future just is not expected.
Related comment BOJ was quite neutral, but analysts see improved mood compared to the previous month. Thus, the regulator said that the economy is recovering at a moderate pace and recalled the inflation target of 2%, which the country plans to achieve in the next financial year. "Industrial output is picking up," the BOJ said. That was a brighter view than last month, when it said output was "bottoming out."
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