Analytics By Fibo Group

Trading Discussion
17

:bar_chart: Inflation: The US Consumer Price Index was 2.3% in January :bar_chart:

Inflation in the United States, measured by the Core Consumer Price Index (CPI), rose 2.3% year-on-year in January to match December readings, monthly data released by the US Bureau of Labor Statistics. This value was higher than market expectations of 2.2%.

The dollar ignored these values, slightly changing by symbolic 0.03%

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18

:part_alternation_mark:️ The industrial crisis in Germany brought the euro to the bottom of 2017 :part_alternation_mark:️

The euro is rapidly getting cheaper in the #forex market to the accompaniment of the ECB’s “printing press” and depressing macro-statistics, which showed a record decline in industry in the EU for 10 years.

The ECB’s money issue, which since September last year has been buying assets from the market in the amount of 20 billion euros per month, continues to press on the foreign exchange market.

Until January, this inflow of liquidity was offset by the operations of the Fed, which in the fall - simultaneously with Europe - resumed pumping, but the Fed’s balance has not been growing for six weeks now.

In other words, the euro is becoming more and more on the market, while the dollar mass remains the same. This is what creates the imbalance of foreign exchange flows.

The EU has stalled the main export and industrial engine: in Germany, production volumes have fallen by 7.1%.

The coronavirus epidemic in China, breaking global production chains, will push the euro area’s largest economy into recession. There can be no question of any growth in the euro with such macro statistics.

To understand what will happen to the Euro, just remember 2014-2015. Then the launch of the “printing press” of the ECB collapsed the course of the single European currency from 1.4 to 1.03 dollars.

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19

:exclamation:️Relevant news and events for the week :exclamation:️

Weekly Calendar:

02/17/2020, Monday
:us: Day off - President’s Day.

02/18/2020, Tuesday
:uk: Labor market data block from the UK.

02/19/2020, Wednesday
:uk: January inflation in the UK.
:us: January #PPI inflation in the US.
:canada: January inflation in Canada.
:us: Publication of Fed protocols.

02/20/2020, Thursday
:australia: Labor market data block from Australia.
:cn: #China interest rate.
:eu: Publication of ECB protocols.
:oil_drum: US crude oil reserves.

02/21/2020, Friday
:us: #PMI preliminary data for February USA.
:de: #PMI preliminary data for February Germany.
:eu: January #inflation in the Eurozone.

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20

Japan falls into recession

The Japanese economy collapsed by more than 6%, and because of the coronavirus it could even be in a recession.
Japan experienced a landslide drop in GDP in the fourth quarter of 2019. According to the government on Monday, in October-December, the size of the economy shrank 6.3% in annual terms and 1.6% from the previous quarter.
The recession was a record since 2014 and almost doubled the average forecast of analysts

The fact that the Japanese economy will fall was predictable: this is the result of an increase in the “consumption tax” from 8% to 10% (an analogue of the sales tax). As a result, the volume of private consumption, which forms about 60% of GDP in Japan, fell in the last quarter of last year.
Also negatively affects the Japanese economy:
Last October, typhoon Hagibis severely disrupted traffic and production chains in central Japan.
Coronavirus (66 patients in Japan), this affects primarily trade with China.
As a result, a combination of factors can lead to the fact that in the current quarter the economy will again be in the red. A recession for two consecutive quarters is a recession.

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21

:chart_with_upwards_trend: Labor market: Pound grows on positive news :chart_with_upwards_trend:

#GBPUSD is growing as UK employment hits a record high and wages hit the peak of 2008.
According to the Office of National Statistics, the UK employment rate was estimated at a record high:

:triangular_flag_on_post:76.5%, which is 0.6% higher than a year earlier, and 0.4% more than in the previous quarter;

:triangular_flag_on_post: The UK economy adds 180 thousand jobs in December.

This adds to the positive and strength of the national currency, which is growing steadily no matter what.

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22

Japanese yen flies into the abyss

Macro data published this week of the Japanese economy finally hit the Japanese yen:
at the beginning of the week it was a report on GDP, today in terms of imports / exports. The whole European trading session in the Japanese yen is a large-scale rally. Investors sell everything and go in dollars.

#USDJPY updates annual highs. Together with the Japanese yen, a rally is also taking place in gold quotes, which has reached a seven-year high.
We recommend that you double your vigilance and comply with risk management in the current difficult situation.

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23

Australian dollar drowns amid unemployment data

Forest fires and coronavirus have had a major impact on the Australian economy, and this is reflected in the data released today on unemployment and the number of employees for January.

Based on these data, we can say that the economy has serious structural problems (in particular, low wage growth).

Economists predict a further increase in unemployment and a subsequent reduction in interest rates in the coming months.

#AUDUSD on the published data broke through the minimum price of the DECADE and continues to fall. We believe that the downtrend will continue throughout the current month.

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24

The price of gold reached a seven-year high

As concerns over the effects of coronavirus on the market grow, institutional investors have no choice but to remain in the market as they grow, and they need something to insure this from coronavirus and all other problems.

Gold easily satisfies this problem of investors, trading above its maximum of $ 1,613.30 - the highest level since March 2013.

We are currently in a situation where stocks are too expensive and bond yields are too small. Therefore, gold is a profitable tool not only for traders, but also for investors.

According to analysts at the international bank Citigroup, the idea of investing in gold is pretty good, and they forecast growth of #XAUUSD to $ 2000 this year.

*broker note: gold trading is available on all types of accounts.

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25

The dollar is the strongest currency

The flight of investors to a safe place leaves behind all currencies except the US dollar and Gold. The funds were simply forced to leave Asia and in search of security in the US dollar, gold and bonds.

#AUDUSD was trading at an 11-year low of $ 0.6603.
#NZDUSD - at a four-month low of $ 0.6310.
#USDJPY has grown 2% in the past two days due to weak Japanese economic data and concerns about the coronavirus.
#EURUSD this week dropped to a 3-year low and is trading at $ 1.0794.
#XAUUSD is trading at 7-year highs.
#UST yield on 10-year treasury bonds below 1.5%.

In the current situation, the US economy is simply less prone to any slowdown in world trade, and for the foreign exchange market it is the US dollar that is an obvious candidate. This will be the main reason for the new purchase of the dollar against the euro in the near future.

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26

:exclamation:️The catastrophe during the bidding in America did not happen - this morning almost a third of the losses were recovered. The increase in the number of people infected outside of China has slowed somewhat. And in China, there are more and more signs of a return to normal.:exclamation:️

Weekly Calendar:

02.24.2020, Monday
:jp: #dayoff in Japan - the Emperor’s birthday.
:ru: Day off in Russia on the occasion of the Defender of the Fatherland Day.

02.25.2020, Tuesday
:de: German #GDP for 4Q 2019

02.26.2020, Wednesday
:eu: Speech by ECB President Christine Lagarde.
:us: US New Home Sales for January
:oil_drum: US crude oil inventories.

02.27.2020, Thursday
:us: #US GDP 4Q 2019

02.28.2020, Friday
:de: February #unemployment Germany.
:canada: Canada GDP for December

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27

yawn all bureaucracy

28

GDP: Germany stagnates due to reduced exports

The total production in Germany in the fourth quarter of 2019 did not change, as exports fell. The German economy has always been export oriented. Fighting for trade concessions, in every possible way trying to slow down stagnation, the only thing that turned out for them was to play on numbers.

Nevertheless, behind the zero quarterly change are more obvious figures:

  • investments in machinery and equipment decreased by 2% in the 4th quarter, this is even more than in the third (then there was also a decrease of 1.4%)

  • consumer spending has not changed compared to the third quarter (an increase of 0.5%).
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    We believe that German production is unlikely to recover in the first half of 2020. Failures due to a slowdown in the global economy and coronavirus will force the euro to sink to two-year lows (1.0350). The current growth must be used as an opportunity to complete transactions for sale.

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29

Stagnation in construction - another blow to AUD/USD

Stagnation in construction - another blow to AUD/USD

According to data released today by the Australian Bureau of Statistics, the volume of completed construction projects, seasonally adjusted, in the fourth quarter fell by 3.0%. This value turned out to be worse than forecasts of economists, who expected a decrease of only 1.0%.

How to understand this and what to expect:

  • The construction boom in Australia has been around for 5 years. In fact, work done in both New South Wales and Victoria has increased by more than 40% from 2014 to 2019, peaking about 18 months ago, and is now falling by 15% from its highs. It is precisely this dynamics that we are observing - a cyclical weakening in the construction sector.

There will be no improvement in the near future, moreover, the current phase of the recession is also facing problems with the infrastructure destroyed by the fires and the effects of the coronavirus.

  • The fall in housing in the December quarter means that housing investment will hinder economic growth. Tomorrow we will get another “GDP riddle” with data on business investment. With a probability of 90%, the data will show a weakening of investment in construction, which in theory should provoke another wave of sales on the #AUDUSD currency pair

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30

A good analyst can never be considered redundant, because the better you navigate the situation, the more competent and accurate you will be in the market. This is the best tool for each of us, and therefore it is worth paying attention to every detail and moment.

1 Like
31

Bitcoin erases 38% of its growth in 2020

The first cryptocurrency falls on the third day, losses amounted to almost 9% per week. On Wednesday, a wave of sales covered other cryptocurrencies, including Bitcoin Cash, Dash, EOS and Ether, each of which fell by more than 10%. The Bloomberg Galaxy Crypto Index has lost nearly 10%, the biggest drop since September.

Arguments that the best-known digital token serves as a refuge during market shocks subsided this week as bitcoin fell amid intense interest in stock market sales. The negative sentiment was added by the comments of the famous investor Warren Buffett, who said this week that cryptocurrencies “basically have no value.”

We remind you that cryptocurrency trading is available on certain types of accounts at Fibo Group. Use the current rally and earn both growth and fall of #crypto

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32

Brexit: “If there is no progress, we will stop cooperating”

On Thursday, the UK government published a 46 page document explaining its position on a future trade agreement with the EU after Brexit.

In fact, the document once again emphasized the tough stance of Britain, which the European side simply could not support (too long list of preferences). As a result, we have a continuation of the confrontation between Europe and Britain. When trading two currencies of these countries, we still look in favor of a strong euro (purchases #EURGBP) in anticipation of the start of negotiations that will start next Monday.

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33

Crisis: Coronavirus made the world shudder

The spread of the epidemic outside of China continues to accelerate, spanning new countries. In most European countries where coronavirus cases were first reported, diseased patients returned from Italy.

Financial markets, which have fallen since the beginning of the week, finally capitulated yesterday. Extremely negative sentiment prevails in the markets this morning. Between Monday and Thursday, the capitalization of global stock markets hit $ 3 trillion.

  • S&P500 increased weekly losses to 12%.

  • #Interest rate now the probability of reducing the key rate at the next meeting is close to 100%

  • #VIX Volatility Index (also called the fear index) indicates the most severe destabilization in world markets since August 2015.

  • The price of #Brent dropped below $ 51 per barrel for the first time since December 2018.
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    The scale of the panic is absolutely incredible.
    Everything happens very quickly, and the observed collapse of the markets already looks much more serious than it was at the end of 2018. And this is only the beginning, the markets have not yet understood what is happening now in Syria …

We look forward to opening markets on Monday with a huge gap.

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34

China’s manufacturing PMI drops in February amid epidemic

PMI in China’s industrial sector in February, amid an outbreak of coronavirus, sharply slowed to a record 35.7 points, which was significantly lower than analysts’ expectations, according to data released on Saturday by the state statistical office of the PRC.

Compared to January of this year, when the PMI stopped at around 50 points, the figure fell by 14.3 percentage points. Due to the coronavirus epidemic, experts predicted a further slowdown, but only to 46 points.

A PMI value above 50 points indicates an increase in activity, lower - about its decline. Prior to this, February 2019 was the worst for industrial PMI in the last three years, when the figure slowed to 49.2 points.

On December 31, 2019, the Chinese authorities informed the World Health Organization (WHO) about an outbreak of unknown pneumonia in the city of Wuhan in the central part of the country (Hubei Province). Experts have identified the causative agent of the disease - this is a new coronavirus. WHO recognized the outbreak as an emergency of international importance and gave the disease its official name - COVID-19.

The number of infected in mainland China reached 79.2 thousand people, 2835 died, over 39 thousand were cured. Cases of infection outside the PRC were recorded, according to WHO on Friday, in 51 countries, the number of infected reached 4691, 67 people died.

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/Bloomberg

35

Financial markets began the week calmly and without sharp failures. However, there are no reasons for optimism. Unless the expectation of emergency support measures from governments and central banks. Markets lay a 100% probability of a cut in the US Federal Reserve rate immediately by 0.5% at a meeting on March 18

Weekly Calendar:

03/02/2020, Monday

#Brexit start of the negotiations.

03/03/2020, Tuesday

#interestrate of the Reserve Bank of Australia;
#EU unemployment in January;
#inflation in the EU (preliminary data for February);
Super Tuesday Primaries in the United States (American primary).

03/04/2020, Wednesday

Australian #GDP (4Q 2019);
#PMI UK for February;
Interest rate of the Bank of Canada;
#NonFarmPayroll preliminary data from the US labor market.

03/05/2020, Thursday

#OPEC start of the first day of the summit of oil workers.

03/06/2020, Friday

#OPEC second day of the summit of oil workers;
#NonFarmPayroll US Labor Market Data;
#NonFarmPayroll Canada Labor Market Data.

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36

The crisis is canceled?
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Despite the apocalyptic statements from the world media, global markets were inspired by the statements of the Regulators on their readiness to support the global economy (100% probability of a Fed rate cut on March 18) and the organization of OPEC on the readiness of an unprecedented reduction in production by 1 million barrels per day.
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#Brent oil grows by 7.1%, #WTI (traded with us) grows by 7.5%.
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Stock indices of America, China, Japan, Europe and Britain closed the first day of trading in positive territory. Apple is growing at 7%. #EURUSD pushing off the bottom is growing by more than 200 basis points.
The crisis is canceled)))

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