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Overview of the main economical events of the current day - 23/12/2013

The Main Events of the Week

Last Friday the US dollar fell Vs most major currencies after two days of growth. The euro strengthened amid Consumer Confidence Index growth in Germany and the eurozone. The Canadian dollar fell after the publication of weak inflation and retail sales data, but then gained all the losses. The yen updated its annual low after the two-day meeting of the Bank of Japan.

During the American session the US dollar fell after the publication of the US GDP data. The final US GDP estimate of the third quarter was increased from 3.6% to 4.1% on annual bases. These are the fastest growth rates from the fourth quarter of 2011. However, the storage growth rates were increased – it had the positive contribution to the GDP growth – 1.67% comparing to +0.85% predicted earlier. At the same time the consumer spending were revised up while there were no changes expected.

The Canadian dollar fell after the publication of weak inflation and retail sales data, but then gained all the losses. The inflation in Canada this November increased by 0.9% y-o-y, which appeared 0.1% less than expected. The core inflation slipped to 1.1% from 1.2% in October despite expected growth to 1.3%. In October retail sales decreased by 0.1% m/m, whereas the growth by 0.2% was expected. The euro was supported by the German GfK Consumer Confidence growth data, which reached its maximum from August 2007.

According to the results of the week the US dollar increased by 0.6% according to the dollar index receiving support after Fed announced QE3 reduction start from January 2014. The dollar increased Vs the Japanese yen (+0.81%), the New Zealand dollar (+0.71%), the Swiss franc (+0.66%), the Canadian dollar (+0.64%), the euro (+0.44%), and the Australian dollar (+0.40%), but fell Vs the British pound (-0.28%).

Fed improved the US economic state estimate and increased the forecast for the next year. However the Fed highlighted that the key interest rate will be at the same low level for quite a long period of time – even after the unemployment rate will become lower than 6.5% especially in case of the same low inflation rates. In future it may put pressure upon the dollar.

In the coming holiday week rather little significant macro statistics data is going to be published, and due to the holidays reduced market activity will be felt. On the 25th of December on Wednesday all the markets will be closed due to Christmas. On Thursday it will be a bank holiday in Europe, Australia, New Zealand and Canada.

On Monday Chicago Federal National Activity Index, Personal Income & Personal Spending reports, Revised U. of Michigan Consumer Sentiment are going to be published in the USA; on Tuesday – Durable Goods Orders and New Home Sales; and on Thursday – the unemployment claims data.

In eurozone on Monday the Consumer Confidence Index in Italy is going to be published; on Tuesday – Final GDP in France for the 3rd quarter and French Consumer Spending for November will be published; and in the UK the BBA Mortgage Approvals.

There is a bank day-off in Japan. The monthly Bank Report will be published in Japan on Tuesday; on Thursday – BoJ meeting minutes of 20-21 November; and on Friday – a big data block on inflation, unemployment rate, industrial output and retail sales. The October Canadian GDP data will be released on Monday.

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Overview of the main economical events of the current day - 24/12/2013

Canadian Economic Growth Rate Exceeded the Expectations

This Monday the US dollar was traded with slight decrease Vs most major currencies amid weak US macro statistic data. The data of consumer confidence and personal income appeared to be worse than expected. The Canadian dollar has continued to grow for three days at a row amid the Canadian GDP data, which exceeded the expectations. The Swiss franc strengthened amid the growth of UBS Consumption Indicator.

Personal income of the Americans increased in November by 0.2% in comparison with the previous month, which appeared to be significantly worse than expected growth by 0.4%. Personal income increased by 0.5% m/m, which appeared to be in line with the expectations. Modest income growth can bound future consumer spending, which is the major GDP component. The inflation is moderate – PCE Deflator had been the same in November for already two months comparing to the previous month – increase only by 0.1% was forecasted before.

Revised U. of Michigan Consumer Sentiment did not change in December comparing to the initial evaluation of 82.5 p, whereas the growth of the index to 83 p was expected. Led by gains in employment- and production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.60 in November from –0.07 in October – a growth only to 0.30 was expected. The index’s three-month moving average, CFNAI-MA3, increased to +0.25 in November from +0.12 in October, marking its second consecutive reading above zero and highest reading since February 2012.

This Monday Jeffrey Lacker, the Chairman of the Federal Reserve Bank of Richmond, announced that interest rates may be increased in the beginning of 2015, though this forecast is not the final one. Meanwhile, the International Monetary Fund (IMF) announced their readiness to improve the forecast of the US economic growth for 2014, referring to economic growth acceleration in the USA, which will lead to further improvement of business climate. IMF will publish the new forecast in January.

This Monday the Canadian dollar has continued to increase for three days in a row amid the Canadian GDP data, which exceeded the expectations. Canadian economy in October increased by 0.3% m/m, whereas a growth by 0.2% was expected. The growth within the manufacturing industry segment appeared to be the highest for the recent two years. The GDP growth has been continuing for the fourth month in a row. Y-o-y growth accelerated to 2.7% from 2.4% a month earlier – it is the strongest growth from May 2012.

The Swiss franc strengthened its position amid the UBS Consumption Indicator, which in November increased to 1.43 p, comparing to 1.26 p in October. The rise was due to a higher estimation of business conditions in the retail segment in connection with Christmas trading period.

On Monday the euro tested the rate 1.37 Vs the dollar for the second day in a row. Meanwhile, Italian Consumer Confidence fell to a half a year minimum – 96.2 p Vs 98.2 p in November – whereas the growth of the indicator was expected. The pound strengthened after Bank of England Deputy Governor Andrew Bailey announced that the central bank may take actions to prevent the rapid growth of house prices in the UK.

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Overview of the main economical events of the current day - 06/01/2014

The Main Events of the Coming Week

The US dollar strengthened its position during the first two trading days of the New Year Vs the major currencies, and decreased Vs the raw currencies in terms of weak trading during the holidays. The pound decreased after the publication of the UK Manufacturing Index data, which appeared to be weaker than it was forecasted.

At the beginning of the year the participants of the market fixed profits on short positions of the dollar, the yen and the Australian dollar after the significant fall of the yen and AUD of the last year. The positive data of the US Manufacturing PMI, and the appearance of Charles Plosser, the president of the Federal Reserve Bank of Philadelphia, who stated that the federal funds rate should probably be advanced earlier than expected, have provided support of the US dollar. The Japanese yen took a shot at strengthening its position amid reduction of the yen short positions which have reached its high from July 2007.

According to the results of the week the US dollar increased by 0.7%, having strengthened its positions Vs the major European currencies, but having decreased Vs the raw currencies and the yen. The US dollar most of all increased Vs the Swiss franc (+1.53%) and the Euro (+1.16%), and a little bit less Vs the pound (+0.38%). The US dollar decreased Vs the NZD (-1.51%), the AUD (-0.86%), the Canadian dollar (-0.67%), and the yen (-0.29%)

[B]The Change of the Main Futures Contracts for 2013[/B]

According to the results of 2013 the Japanese Stock Market Nikkei demonstrated the strongest increase (+55.1%) – it is the best growth dynamics from 1972. A little less increase demonstrated the US Stock indices: Russell 2000, NASDAQ, S&P 500, and DIJA. The natural gas, cocoa, and orange juice prices have significantly grown. The main outsiders of the last year became trading assets, except silver (-35.9%) and gold (-28.5%); corn, coffee, wheat, soybean oil, and sugar demonstrated the most large-scale fall from 1981.

[B]The Change of the Major Currencies Vs the US dollar for 2013[/B]

According to the results of the year of the Currency Market among the major currencies which demonstrated decrease Vs the US dollar were the Japanese yen (-17.7% - the largest fall from 1979) and the Australian dollar (-14%). The Canadian dollar decreased slightly less. The NZD did not change Vs the USD according to the results of the year. Only the European currencies increased Vs the USD: the Euro (+4.5%), the Swiss franc (+2.9%), and the pound (+2%). The US dollar Index which demonstrates the relation of the USA dollar to six major currencies - increased by 0.5% during the year.

As usual, the forthcoming week will be saturated with important events. The USA ISM Non-Manufacturing PMI and Factory Orders will be published on Monday. On Tuesday the Trade Balance is going to be revealed, on Wednesday – ADP Employment Change and the last Fed journals. On Thursday Unemployment Claims will be published. The most important account of the US Non-Farm Payrolls will complete this week – 194 thousand of created jobs and unchanged Unemployment rate (7%) are being anticipated. On Monday the US Senate is going to take a vote at Janet Yellen approval for the Fed Chairman.

On Monday in the Euro zone Non-Manufacturing PMI is going to be published. The prior inflation data will be published on Tuesday; on Wednesday Retail Sales and Unemployment data will be revealed; and on Thursday – European Committee Confidence Index will be published. On Thursday the ECB decision about the rate will be announced. The press-conference of the ECB Chairman Mario Draghi will also take place on Thursday; policy changes are not yet expected.

The prior German inflation data will be published on Monday; on Tuesday – Retail Sales and Employment Change data; on Wednesday – Trade Balance and factory Orders; on Thursday – Industrial Output data. On Wednesday the German Constitutional Court should take a decision of OMT Program lawfulness, in the framework of which the ECB promised to purchase bonds of problem Euro zone countries.

On Monday the UK Non-Manufacturing PMI will be revealed; on Thursday – the Trade Balance data; on Friday – Industrial Output data. The Bank of England will proclaim the results of the monthly sitting on Thursday. The policy changes are not expected. On Friday the Swiss Inflation and Unemployment Rate data will be published.

On Tuesday the Australian Trade Balance will be revealed, and on Thursday – Retail Sales and Building Approvals data. The New Zealand Building Approvals data will be revealed on Thursday as well. The Canadian Trade Balance and Ivey PMI will be published on Tuesday; on Thursday – Building Approvals data and Housing Market Index; and on Friday – Employment Change account. On Wednesday the Chinese Trade Balance will be revealed, on Thursday – the Inflation data, and on Friday new loans data will be published.

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Overview of the main economical events of the current day - 07/01/2014

US Non-Manufacturing Activity Reached Semiannual Minimum

This Monday the US dollar decreased Vs most major currencies after the publication of the US Non-Manufacturing PMI, which in December decreased to the semiannual minimum. According to the results of the day the pound almost did not change after rather weak data of Non-Manufacturing PMI. The Canadian dollar fell amid the strongest monthly decrease of staple prices for the last 2.5 years.

ISM Non-Manufacturing PMI suddenly decreased in December to the semiannual minimum 53 p from 53.9 p in November, whereas growth to 54.7 p was expected. The PMI has been changing for two months in a row. Stock and order sub-indices decreased most of all, whereas employment and price sub-indices increased. The similar Markit Non-Manufacturing PMI according to the results of the final reading appeared to be worse than expected at the level of 56 p, and decreased to 55.7 p.

The euro strengthened its position on Monday after it has reached its month high Vs the dollar. The final Euro zone Non-Manufacturing PMI in December coincided with the preliminary estimations at the level of 51 p, but decreased comparing to the November level of 51.2 p. The German and Italian PMI also appeared to be worse than expected, whereas in France and Spain the situation is opposite.

The Composite PMI coincided with the preliminary estimations as well and increased in December to three-months’ high of 52.1 p comparing to 51.7 p in November. Meanwhile the Euro zone Sentix Investors’ Confidence Index increased in January to 11.9 p from 8 p of the previous month, having significantly exceeded the 9.5 p forecast.

The pound have been decreasing for three days in a row and fell to almost two-week minimum Vs the dollar, but till the end of the day it has regained all the losses. The UK Non-Manufacturing PMI decreased in December to 58.8 p from 60 p in November – against the growth expectations of 60.6 p. The PMI has been decreasing for the second month and still stays at the level of the semiannual minimum. All three PMIs fell in December.

On Monday George Osborne, the minister of finance, announced that after the UK Parliamentary elections of 2015 it will be necessary to cut down the budget expenses by £25 billion. The economic situation is improving, but the borrowing rate is still high, and it is necessary to come to noticeable budget cutting down – George Osborne noticed.

The Canadian dollar fell amid the decrease of the oil prices to the month minimum. The staple prices index also demonstrated dramatic month fall for the last 2.5 years, and decreased by 4.1% m/m – whereas 1.8% decrease was expected. The index has been decreasing three months in a row.

The yen increased amid the continued fixation of short positions of the Japanese currency and the decrease of the Japanese Stock market – on Monday Nikkei 225 lost 2.4% during the first trading of the year, which appeared to be the most sharp fall from the 25th of October 2013.

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Overview of the main economical events of the current day - 08/01/2014

The Canadian Dollar Sharply Fell On Tuesday

The US dollar strengthened its position on Tuesday Vs most major currencies before the publication of the Fed last minutes meeting and ADP Non-Farm Payrolls. The USA Trade Balance data demonstrated significant decrease of its deficit due to the growth of the export. The Canadian dollar fell most of all on Tuesday after the publication of the negative Canadian Trade Balance statistics and Ivey PMI.

The USA Trade Balance data appeared to be better than expected. In November the deficit of the US trade balance shortened to $34.3 b which has significantly exceeded the expectations of decrease by 49 billion. It is the lowest deficit rate from October 2009. The October data was also revised downwards. The export rate increased by 0.9% comparing to the previous month’s rate, having reached the highest rate in its history – meanwhile the import rate reduced by 1.4%.

The data may be favorable for the US GDP of the 4th quarter. Baclays improved the US 4th quarter GDP estimation to 3% from 1.5%; Morgan Stanley – to 3.3% from 2.4%; Goldman Sachs – to 2.8% from 2.3%. Fed representative Williams announced on Tuesday that Fed will probably continue the reduction of bond purchase and finish the program in 2014.

On the contrary, the Canadian Trade Balance deficit appeared to be significantly worse than expected, which helped the Canadian dollar to refresh the last year minimum and to approach to 2010 minimum. The Canadian Trade Balance deficit increased in November to 0.94 billion of Canadian dollars, whereas the reduction to 0.14 billion was expected. The import rate increased by 0.1 % m/m, and export stayed at the same level. The Canadian Ivey Manufacturing PMI has also essentially decreased in December to 3-years minimum of 46.3 p comparing to 53.7 p in November, whereas the increase of the PMI was expected.

The pound almost did not change on Tuesday – whereas the Euro slightly decreased Vs the dollar amid the lowering inflation rate in the Euro zone in December to 0.8% from 0.9% of the previous month – unchangeable value of indicator at the level of 0.9% was expected. In October the inflation rate fell to 0.7%. This fact induced the ECB to reduce the base interest rate to its historical minimum of 0.25%.

The positive German data slightly supported the Euro. Retail Sales in November increased after two-month decrease by 1.5% m/m, having exceeded the expectations by 0.5%. The Unemployment rate in German has decreased by 15 thousand in December for the first time during 5 months, whereas the decrease only by 1 thousand was forecasted. The French Consumer Confidence has increased in December to 85 p comparing to 84 p in November – whereas increase was not expected.

The Australian dollar decreased on Tuesday after the publication of the country Trade Balance data – even in spite of reduction of the Australian Trade Balance deficit to 118 million of Australian dollars instead of 300 million forecasted earlier. However the decrease was achieved by means of import reduction by 1% m/m, but not due to the export rate rise which remained unchangeable in comparison with the previous month.

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Overview of the main economical events of the current day - 09/01/2014

The USA Employment Growth Reached 13-months maximum

This Wednesday for the second day in a row the USD continued its increase Vs the most major currencies amid the positive ADP labor-market data, which demonstrated the growth of new positions in the USA in December to the 13-months maximum. The Euro had been decreasing for the second day in a row this Wednesday before the announcement of the results of the ECB meeting which will take place on Thursday. The pound has increased amid the positive Mortgage Approvals.

According to the data of Automatic Data Processing (ADP), the US Employment change in December grew by 238 000 above the forecast of growth by 200 000, and the November surplus by 215 000 was revised upwards to 229 000. The US Employment Change increased at a swift rate from November 2012. The published ADP data, which is often considered as preliminary – forecast a strong Non-Farm Payrolls, which is to be published this week.

[B]The US ADP Employment Change and Non-Farm Payrolls[/B]

The USD almost did not react the last Fed minutes meeting. The majority of Fed chiefs supported the decision of bond purchase reduction in terms of market situation improvement, which will continue to improve further. Fed chiefs discussed the financial health risks and considered them to be moderate. Some of the chiefs put the use of the reduction of bond purchase in terms of slowing inflation into question, whereas other insisted on more significant bond purchase reduction.

The Euro was traded this Wednesday with decrease before the announcement of the ECB meeting, which will take place on Thursday. The Euro zone Unemployment Rate in November stayed at record high of 12.1% for the 8th month in a row – at the same time in Italy the rate increased to 12.7% comparing to 12.5% in October having exceeded the expectations. The Euro zone Retail Sales shot up in November by 1.4% m/m after 2-months decrease, having fixed the fastest monthly growth from November 2001 – however the data is rather volatile from month to month. The German Factory Orders increased in November by 2.1% m/m having exceeded the expectations of growth by 1.5% and fully compensating the same 2.1% decrease in October.

Only the pound has increased this Wednesday Vs the dollar amid the BOE Credit Conditions Survey in the 4th quarter of 2013. According to the Survey the mortgaging demand in the 4th quarter from the survey start in 2007 has increased at the highest rate for the last 6 months at least. The loan offices plan to increase mortgaging in the first quarter of 2014 which is the sigh of the speeding UK Housing Market recuperation. At the same time according to Halifax House Prices suddenly decreased in December having fixed the first recession since the beginning of 2013 and released some pressure over the Housing Market.

The CND continued to decrease and the currency pair USDCAD increased over 1.08 for the first time since 25 May 2010. The chances of the rate reduction by the Bank of Canada increase. Stephen Poloz, the Head of the Bank of Canada confirmed, that the interest rates will be held at the same level till the economic circumstances are not improved. He also announced the possibility of interest rate decrease. On Wednesday the yen lost its position after several days strengthening aid the Japanese Stock Market growth – Nikkei 225 increased by 1.94% following the American Stock indices which increased the day before.

This Wednesday the NZD fell after Danone announced the breach of active contract with Fonterra which is the largest company of New Zealand and the most significant dairy products exporter in the world. The dairy product composes 20% of the general export of New Zealand.

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Overview of the main economical events of the current day - 10/01/2014

The Euro Restored its Position after a Sharp Decrease

The USD was traded mingled on Thursday before Non-Farm Payrolls publication on Friday. The USD decreased Vs the major European currencies, increased Vs the CND and NZD, and almost did not change Vs the yen and the AUD. The Euro increased amid the positive European Economic Sentiment Indicator (ESI) and the German Industrial Production data. The CND continued to decrease amid the negative Canadian Housing Market data.

The US Unemployment Claims data was published on Thursday. The Unemployment Claims in the USA decreased by 15 000 to 5 weeks’ minimum of 330 000 last week having exceeded the expectations to 335 000. Meanwhile the last week data was revised downwards by 6 000 to 345 000. The average Unemployment Claims for the last 4 weeks decreased by 9 750 to 349 000, comparing to 358 750 of the previous week. However the representative of the US Labor Department pointed that the data may be volatile due to the New Year holidays.

It is forecasted that the number of work positions in the US economy in 2013 have increased at the highest speed for the last 8 years – by 2.27 million. The data is going to be published by the Labor Department on Friday. The Fed representative Williams announced quite an optimistic forecast of GDP growth of 2014, 2015 this Thursday, and he noticed the strengthening of increasing economy risks. The Fed representative Kocherlakota said that the bond purchase will be continued till the economic growth rate corresponds the forecasts.

The Euro won back its decrease which occurred during the press-conference of Mario Dragha, the head of the ECB. The ECB saved the monetary policy without changes as it was expected. However Mario Dragha noticed still low inflation rate and the retaining downward risks for the Euro zone economy – and he claimed that drastic actions will be taken if the medium-term inflation prospect will get worse or unreasonable growth of short-term credit rates will take place. We have discussed and we are ready to consider all the instruments, Dragha added.

The positive Euro zone data supported the Euro. In December the Economic Sentiment Indicator (ESI) increased by 1.6 points in the Euro area (to 100.0). Sentiment in the Euro area is thus back to its long-term average for the first time since July 2011.The growth to 99.1 p was predicted. The index returned to its average rate long-term level for the first time for 29 months – it is a mark that economy recuperation takes off after a long-time decline. The German Industrial Production increased after two-months decrease to the maximum 1.9% from June – it has exceeded the expectations by 1.5%. Factory Orders, Retail Sales and the German Labor market data also appeared to be better than forecasted this week.

The pound also strengthened its positions after the announcement of the meeting results of the Bank of England during which Base Interest rate was left without changes. BoE Asset Purchase Facility was also left at the same level of £375 billion – in fact it means that the program the avenues of which were exhausted in October, is frozen at the moment. The deficit of the Trade Balance of the UK fell due to the export growth to £9.4 billion and it is the minimum from June.

The CND continued to decrease having refreshed the 2010 minimum and reached the 2009 minimum of October. It happened amid the negative Housing Market data in Canada. Hosing starts and new housing prices data appeared to be worse than predicted. The AUD almost did not change according to the results of the day amid the controversial statistics. Retail sales appeared to be better than forecasted, Housing starts data on the contrary was worse.

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Overview of the main economical events of the current day - 13/01/2014

The Main Events of the Forthcoming Wee

The USD sharply decreased Vs the most major currencies having offset the whole week’s growth after the publication of the Labor Market official data, which has demonstrated the sudden sharp fall of the new places of work created in the US in December till the 3-year minimum. The pound decreased after the weak Industrial Production data, but then it has won back. On Friday the CND continued to decrease after the weak Canadian Labor Market data publication.

The official data of the new working places’ growth stands in contrast with the data performed two days earlier by the nongovernmental organization ADP. According to the data of the Labor Department the new working places of the US nonfarm economy in December suddenly fell to 74 000 (the minimum from January 2011), which appeared to be almost thrice less than expected at the level of 196 000. The November data was revised upwards from 203 000 to 241 000. During 2013 the average rate of the monthly increase of working places was 182 000 – a little bit less than in 2012 when it was 183 000.

The Unemployment Rate decreased again like in previous month – by 0.3% from 7% to 6.7% (the minimum rate from October 2008), whereas no changes were expected. However, the decrease was more about the result of labor power elimination – Participation Rate again decreased from 63% to 62.8% (minimum rate from 1978). The published Friday account will hardly let Fed to continue QE3 Tapering in the end of January – it may put pressure to the USD.

[B]The Change of the Major Currencies Vs the USD for the Last Week[/B]

According to the results of the week the USD lost 0.35%, though in the first half of the week the growth was demonstrated. The USD decreased Vs the yen (-0.66%), the euro (-0.60%), the AUD (-0.56%), the UK pound (-0.37%), the NZD (-0.35%), and CHF (-0.30%). the USD increased Vs only the CND (+2.37%). It is notable that the weekly growth was the highest from September 2011.

The CND was in the spotlight and decreased during the whole week – it was also encouraged by mostly negative published Canadian data. The final flourish was the Canadian Labor Market Account, which demonstrated the Net Change in Employment decrease by 45 900 (the highest decrease for the last 9 months) against the expectations of growth – and the increase of Unemployment Rate by 0.3% to 7.2% (the highest rate for the last 14 months) – from 6.9% of the previous month.

Retail Sales and Import Prices will be published in the USA on Tuesday; on Wednesday – Producer Price Index, Empire State Manufacturing Index and the Beige Book; on Thursday – Headline Inflation, Capital Influx, Philadelphia Fed Manufacturing index, and NAHB House Price Balance; and on Friday – Building Permits, Housing Starts, Industrial Production, and Preliminary U. of Michigan Consumer Sentiment. Fed Chairman Bernanke due to deliver a speech titled “The Fed Yesterday, Today, and Tomorrow” in Washington DC.

Industrial Production data is to be published in the euro zone on Tuesday; on Wednesday – the Trade Balance; on Thursday – the monthly ECB account, and final Headline Inflation data. On Wednesday preliminary GDP data of 2013 will be published in Germany. On Tuesday the Inflation data will be performed in the UK, and on Friday – Retail Sales. In Switzerland Retail Sales will be published on Wednesday, and the Manufacturing Inflation – on Friday.

On Wednesday new transport facilities sales data will be published in Australia, and on Thursday – Labor Market data. NZIER Business Confidence will be performed in New Zealand on Tuesday, and on Thursday – REINZ House Sales. On Monday Bank of Canada Business Outlook Survey will be published, and on Wednesday – aftermarket House Sales data. On Tuesday Trade and Payment Balance is to be performed in Japan, and on Thursday – Core Machinery Orders. In China New Loan data will be published on Monday.

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Overview of the main economical events of the current day - 14/01/2014

The US dollar Continued to Fall

n Monday the US dollar was traded with fall Vs the most major currencies after the release of weak Non-Farm Payrolls, but rose Vs the pound, and almost didn’t change Vs the euro. AUD, NZD, and the yen continued the tendency of Friday growth. After 5-days reduction of the previous week the CAD has undergone upward correction.

There was hardly any significant statistical data in any country on Monday. The Conference Board Employment Trends Index (ETI) rose in December to 115,76 from the upwards revised November level of 115,72. The data appeared to be better than the official Employment Rate report in December. The USA budget surplus in December formed $53,2 b having exceeded the expectations at the level of $44 billion.

Fed representative Lockhart announced on Monday that Fed will continue to reduce bond purchase in case of further economy recuperation – the December Employment Rate report didn’t decrease QE3 Tapering support. Lockhart believes that the US economy growth to be high this year and may give a positive surprise – the GDP rate will grow by 2,5% - 3%. Threshold point of Unemployment rate of 6,5% is close, and perhaps Fed will have to improve the supplies marks.

The pound fell after several-days growth of the previous week, whereas the euro almost didn’t change according to the results of the day. The purchase of British oil-engineering company Amec – trading in the USA Foster Wheeler AG for $3,2 billion – has partly influenced the reduction of the pound Vs the USD.

On Monday OECD released the forecasts of global economy development especially pointed Europe’s recuperation and its positive influence to the global growth. Economic advance will be improved in the USA, the UK, Japan and the Euro zone. Though Germany will be the main mover of the Euro zone economy recuperation as before; there are also signs of GDP growth restoration in forthcoming months in France and Italy.

According to VDMA German Industrial Group data Machinery Orders rate in Germany rose by 7% comparing to the same period of the last year due to the increased external demand – more recent evidence of gradual recuperation of the key economic sector supports this data.

The rate of the Italian Industrial Production growth slightly decreased. Manufacturing activity increased in November by 0,3% after the October growth by 0,7% which coincided with the expectations.

The calendar adjusted industrial production of Italy demonstrated positive tempo of change from August 2011.

The yen continued its correctional growth for the second day in a row amid the futures reduction at Nikkei almost by 2% - the Japanese markets were closed due to the holiday. Stock markets of the American session also demonstrated negative dynamics. The Dow Jones Industrial Average fell by 1,1% on Monday which appeared to be the most considerable fall from 20 September of the previous year. USDJPY pair decreased lower 103 rate for the first time since 18 December 2013.

The Australian dollar reached monthly high Vs the USD on Monday, and the New Zealand dollar almost reached the 2-months high Vs the dollar. Housing Market data of Australian appeared to be a bit better than expected – Home Loans in Australia increased in November by 1,1% m/m, and by 15,3% comparing to the previous year.

NZD strengthened its positions before the release of NZIER Business Confidence, which increased in the forth quarter to the level of 52%, comparing to 38% of the previous quarter. The index appeared to be the highest for almost 20 years from June 1994.

CAD was undergoing upward correction after 5-days decrease of the last week and almost didn’t react the quarterly BOC Business Outlook Survey. The survey didn’t demonstrate considerable improvement of the expectations, but its decrease was not pointed out. The participants of the survey hope for export and investment increase, this fact lets to expect support of the economic growth.

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Overview of the main economical events of the current day - 16/01/2014

Empire State Manufacturing Index Reached its 20-months High

On 15 January on Wednesday the US dollar rose Vs most major currencies amid the release of positive data of Empire State Manufacturing Index and Producer Price Index. Euro was traded downwards amid the deceleration of economic growth in Germany in 2013.

Empire State Manufacturing rocketed in January. Empire State Manufacturing Index shot up to 12,51 p. in January from the upwards revised December reading of 2,22 p., and reached its high from May 2012. The growth to only 3,75 p. was expected. The new orders subindex increased most of all (2-years high), as well as the general business conditions, shipments and inventories. New-York is the largest metropolis and the most important economic center of the USA and the whole world.

Producer Price Index in the USA in December increased by 0,4% m/m after 3-months decrease which coincided with the expectations. Annual Producer Price growth rate in the USA in December exceeded the expectations (+1,1%) and increased by 1,2% after the growth by 0,7% in November. Producers Price Index Ex Food & Energy increased by 1,4% y-o-y against the expectations of growth by 1,3%. The US headline inflation data will be released on Thursday.

On Wednesday FOMC Member Evans announced the QE3 reduction plan seems substantiate, and QE3 Tapering by $10 billion in January will be continued – however, the US economy will need Fed’s special support for quite a long time. The Central Bank will save low rates for a long time even after achieving 6,5% Unemployment Rate. The USA House of Representatives approved the draft bill of the government funding till September. It is expected that the Senate will approve the bell on Saturday.

The pound fell to more than 3-week low Vs the US dollar. The euro was also traded downwards amid more weak than expected Real German GDP Growth data. The economic growth rate of Germany slacked to 0,4% in 2013 from 0,7% of the previous year – whereas the annual growth by 0,5% was expected. German Public Finances Balance of the last year made 0,1% of GDP Ratio in 2012. Balanced budget was forecasted (indicator values at the level of 0,0%).

The Euro zone Trade Balance increased in November to €16.0 b from € 14.5 b of the previous month, which appeared to be less than expected growth to € 16.7 b. The Euro zone export rate was reduced in November for the first time for the last 4 months. ECB’s Yves Mersch informed about the possible inflation deceleration in the Euro zone, though he doesn’t observe direct danger yet.

The yen continued to lose its position for the second day in a row amid the Stock Market growth after the release of the US Retail Sales positive data. On Wednesday Nikkei 225 rocketed by 2,5%, having recuperated after strong Tuesday fall since August 2013. The Australian dollar was traded downwards amid crediting recession in China, the largest trading partner of Australia. New Loans fell in December to 482,5 b yuans from 624,6 b in November, whereas less decrease to 590 b was expected. AUDNZD pair reached 8-year low.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 20/01/2014

The Main Events of the Week

On 17 January on Friday the US dollar increased Vs main major currencies, despite weak Consumer Confidence. The pound rocketed after strong Retail Sales data in the UK and won back most of the last week losses.

Preliminary UoM Consumer Sentiment in January suddenly fell to 80,4 p. comparing to 82,5 p. in December – whereas growth to 83,5 p. was expected. The U.S. Industrial Production in December increased by 0,3% m/m which coincided with the expectations. The U.S. Building Permits appeared to be worse than expected, whereas Housing Starts – better.

Building Permits in December decreased by 3% to 986 000, Housing Starts decreased by 9,8% to 999 000. The readings a little bit fell from 5-years high, but still continue to be at a high rate. During 2013 Building Permits increased by 17,5% comparing to 2012 to 974 000, Housing Starts – by 18,3% at an annual rate to 923 400 – this is the best annual result since 2007.

The pound rocketed after strong Retail Sales data in the UK and won back most of the last week losses. In December Retail Sales in the UK demonstrated record high month growth since February 2010, +2,6% - having considerably exceeded the growth expectations by 0,4%. In an annual rate Sales increased by 5,3%, which appeared to be the best result since October 2004. According to the results of 2013 Retail Sales growth rate became the most immense for the last 9 years.

[B]Change of Major Currencies Vs the US Dollar during the Week[/B]

According to the results of the week the US dollar added 0,78% according to the dollar index Vs the rest major currencies. Besides the strong Retail Sales data, last week the US dollar was also supported by numerous speeches of Fed representatives almost everyone of whom supported further QE3 Tapering. The Australian dollar decreased Vs the US dollar most of all (-2,40%). Then the euro (-0,94%), the Swiss franc (-0,80%), the Canadian dollar (-0,65%), the New Zealand dollar (-0,55%), the pound (-0,33%), and the yen (-0,14%).

There is a Bank Holiday in the USA on Monday. Afterwards this week little data will be released. On Thursday Existing Home Sales, Chicago Fed National Activity Index, FHFA House Price Index, Markit Flash Manufacturing PMI, and CB Leading Indicator will be released. From Wednesday till Saturday World Economic Forum Annual Meetings will take place in Swiss Davos.

The main events of the Euro-zone will be the Tuesday release of German ZEW Economic Sentiment; and Flash Manufacturing PMI and Flash Services PMI in France, Germany and the whole Euro zone on Thursday. ZEW and PMI are expected to increase, and it will point further economy recuperation in the Euro zone. On Thursday in the Euro-zone Current Account and Flash Euro-zone Consumer Confidence will be released. On Monday in Germany Industrial Inflation data is going to be released, on Thursday in France – Business Confidence Indicator, and on Friday in Italy – Retail Sales.

The main event in the UK will be the release of Labor Market report and Bank of England Minutes. On Tuesday CBI Industrial Order Expectations will be released, on Wednesday – Public Sector Net Borrowings, on Thursday – CBI Released Sales, and on Friday – BBA Mortgage approvals. On Wednesday BOJ Interest Rate Decision will be announced, and on Thursday – BOJ Monthly Report will be released. On Monday in China big block of data will be released (GDP, Industrial Production, Retail sales, Fixed Asset Investment), and on on Thursday – Preliminary HSBC Manufacturing PMI.

On Wednesday in Australia quarterly Consumer Price Index will be released, and Westpac Consumer Confidence as well, and on Thursday - Consumer Inflation Expectations. On Tuesday in New Zealand quarterly Report on Consumer Inflation will be released, and on Thursday – Business NZ Manufacturing Index. On Tuesday in Canada Manufacturing and Wholesale Sales will be released, on Thursday - Retail Sales, and on Friday - Consumer Price Index. On Wednesday BOC Interest Rate Decisions will be announced, BOC Monetary Policy Report will be released, and BOC Press Conference will take place.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 21/01/2014

The Euro Increased Before the Release of ZEW Report

On 20 January on Monday the US dollar was traded slightly downwards vs. most major currencies amid low trading volume. The U.S. Markets were closed due to the celebration of Martin Luther King Day. The dollar continued the tendency decreasing for seven days in a row already. The euro increased before the Tuesday release of German ZEW Survey.

The euro reached 8-weeks low vs. the dollar at the beginning of Monday, but then strengthened its position before the release of German ZEW Economic Sentiment on Tuesday which is expected to demonstrate growth to new 8-year highs. German Production Inflation appeared to be slightly better than expected.

Producer Price Index increased in December for the first time for 5 months – by 0,1% in relation to previous month, whereas changes were not expected. Industrial Orders in Italy increased in November by 2,3% m/m against the growth expectations by 0,3%. Italian Industrial Sales rose in November by 0,9% after decrease by 0,7% in the previous month.

On Monday the pound was traded upwards. According to Sky News International Monetary Fund plans to revise the UK economic growth forecast earlier than for any other large economy. The Fund may increase the economic growth forecast of 2014 from 1,9% to 2,4%. Meanwhile Rightmove House Price Index in the UK increased in January after 2-month decrease which appeared to be highest in history price growth in January.

The yen strengthened its position amid drop of Asian Stock Markets due to the weakening of Chinese economic growth data – Nikkei 225 dropped by 0,6%. Industrial Production and Investment into Capital Funds data in December also appeared to be worse than expected. Growth rate of the second largest world economy in the 4th quarter decreased to 1,8% q/q from 2,2% q/q in the 3rd quarter, whereas decrease to 2% only was expected. In 2013 GDP of China increased by 7,7% which coincided with 2012 growth rate which was the worst since 1999.

Deceleration in the 4th quarter was mainly induced by investment growth slowdown. Investment into Capital Funds in 2013 increased by 19,6% against the growth expectations by 19,8%. Industrial Production increased in December by 9,7% in an annual rate comparing with the growth by 10% in an annual rate - whereas growth by 9,8% in an annual rate was expected.

The Australian dollar had almost no reaction to the Chinese GDP data, and according to the results of the day it has slightly strengthened its positions after 4-days decrease. TD Securities – Melbourne Institute Inflation suddenly demonstrated high Consumer Price growth in December – by 0,7% m/m (the highest growth rate almost for 4 years). Inflation growth in Australia may force the Reserve Bank of Australia to save the rate unchanged. UBS forecasts AUDUSD decrease to 0,86 during 3 nearest months.

The New Zealand dollar decreased at the beginning of the day after announce of the earthquake at the Northern Island of New Zealand, but then won back all the losses - the actual damage after the earthquake appeared to be minor. Meanwhile, REINZ House Price Index dropped in December by 1% m/m – decrease occurred for the first time for the last 5 months. House Sales decreased in December by 1,1% in an annual rate, after decrease by 6,6% in an annual rate in the previous month.

NZD rocketed after the strong Inflation report. Consumer Price Index increased in the 4th quarter by 0,1% toward the previous quarter, whereas decrease by 0,1% was expected. In an annual rate inflation strengthened its position by 1,6% having exceeded the growth expectations by 1,5%.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 23/01/2014

The UK Unemployment Rate Dropped to Almost 5-years Low

On Wednesday the US dollar increased vs. the Canadian dollar and the yen amid finished meetings of the Bank of Canada and Japan – but decreased vs. the pound and the Australian dollar. The pound rocketed after positive Labour Market report release, and approached to the highs of the beginning of the year. The Australian dollar strengthened its position after the Inflation Report release in Australia for the 4th quarter which has exceeded the expectations.

The dollar increased inconsiderable vs. the rest major currencies, having strengthened its position by 0.1% according to the dollar index. For the second day in a row there were no significant macrostatistic data in the USA on Wednesday. Therefore a lot of statistic data is expected to be released on Thursday – Unemployment Rate, Existing Home Sales, Chicago Fed National Activity Index, and FHFA House Price Index.

The pound rocketed after positive Labour Market Report release, having approached to 3-weeks highs of the beginning of the year. ILO Unemployment Rate dropped in September-November by 0.3% to 7.1% - the lowest rate for almost 5 years since February 2009. Decrease to only 7.3% was expected. Claimant Count Change in December decreased a little less than it was expected - to 24 000 instead of 32 000.

Unemployment Rate approached to target rate of the Bank of England, after that it may consider the matter of interest rate increase. The decrease of Unemployment Rate to 7% was expected not earlier than in the second half of 2015. Nonetheless in the last released minutes of the BOE it was stated that there is no necessity to increase interest rates even if the Unemployment Rate reaches 7% in the nearest future.

The yen weakened amid 2-days meeting of the BOJ, during which the course of the monetary policy was saved at the same level as it was expected. BOJ left economy estimation unchanged for the 5th month in a row. BOJ Governor Kuroda announced that current monetary policy will be the same if there are no upward or downward risks for the economy. Fewer experts suppose the Central Bank will agree to QE in 2014 as the inflation gathers pace.

The Australian dollar strengthened its position after release of the Australian Inflation Rate which exceeded the expectations. Consumer Price Index increased in the 4th quarter by 0.8% having twice exceeded the growth expectations by 0.4%. In an annual rate inflation increased by 2.7% against the forecast of +2.4%, which appeared to be the highest for the last 2 years. The data lower the possibility of further decrease of the rate by the Reserve Bank of Australia. Meanwhile Westpac Consumer Confidence decreased in January for the second month in a row – the index dropped by 1.7% to 103.3 p. – the lowest for the last six months.

The Canadian dollar sharply fell after the BOC Rate Statement during which the interest rate was left at the same level, but the final announcement in which the Central Bank highlighted the downwards inflation risks was considered as a milder one. At the press-conference the BOC Governor Poloz announced the Canadian dollar is still a problem for exporters, and weakness of the Canadian dollar is advantageous for the economy. In the quarterly BOC Monetary Policy Report the Canadian currency was mentioned to stay strong, and this fact complicates non- recourse Canadian export.

By MasterForex Company

[ajpipsmaker]

Do you think the drop in the unemployment rate can force the BOE to raise the interest rates ahead of the planned schedule?
I have a doubt on that. I think the GBPUSD may find it hard to overcome the 1.6700 level.
If I look at the weekly chart, then I see that the pair has several resistances on the way up.
However, if the pair breaks this level, then I do not see any major hurdle before the psychological 1.7000 level.
I am very annoyed with the rise in the pair currently.
We have not seen any substantial retrace for the pair.

Cheers!

[MasterForex_Broker]

Overview of the main economical events of the current day - 24/01/2014

Manufacturing PMI in China Dropped to Half-Year Low

On Thursday the US dollar decreased vs. most major currencies amid negative macrostatistics data in the USA. The euro increased amid the growth of Manufacturing PMI in France, Germany, and Eurozone. The Australian dollar dropped after release of Manufacturing PMI decrease data in China.

On Thursday the US dollar demonstrated a sharp drop for the last 3 months, and reached 3-weeks low according to the dollar index. Negative data in China, which caused a strong decrease of Stock Markets, inflicted the USA data bearing mostly negative character as well. The driver of the dollar weakening was increasing yen – futures at Nikkei dropped by more than 3%.

Initial Unemployment Claims in the USA last week appeared to be slightly better than expected (330 000), and increased by 1 000 to 326 000. Chicago federal National Activity Index dropped in December to +0.16 from +0.69 in November against the expectations of growth. Preliminary Markit Manufacturing PMI decreased in January to 3-months low of 53.7 p. from 54.4 p. in December, whereas growth to 55 p. was expected.

FHFA House Price Index in November demonstrated the lowest rates of addition for 15 months, +0.1% - against the expectations of growth by 0.4%. Annualized Existing Home Sales increased less than it was expected, to 4.81 m of houses – whereas sales at the level of 4.93 m were forecasted before. CB Leading Index strengthened its positions in December only by 0.1% against the expectations of growth by 0.2%.

The euro sharply increased after the release of positive Purchasing Manager Index in France, Germany, and the Eurozone. All preliminary PMI’s increased in January, and almost all of them appeared to be better than expected. Manufacturing and Services PMI in France in January reached 3-months high; in Germany – 32- and 2-months high, and in the Eurozone – 32- and 4-months high. Eurozone Flash PMI Composite increased to 31-months high of 53.2 p. from 52.1 p. in December.

The Swiss franc demonstrated the greatest increase on Thursday, it was due to Swiss National Bank proposal to increase the countercyclical capital buffer, which they must have for insurance against risks in the Housing Market – it may lead to repatriation of capital for appropriation. The pound was traded upwards and closed higher than 1.66 vs. the dollar for the first time since the beginning of May 2011.

The Australian dollar dropped and refreshed the annual low after the release of Manufacturing PMI decrease data in China. Preliminary HSBC Manufacturing PMI suddenly dropped in January to half-year low of 49.6 p. from 50.5 p. in December. The Index decreased lower than 50, and this fact points activity decay for the first time for 6 months.

The Canadian dollar continued decrease, having dropped on Thursday to new 4-year low, but then it gained back all the losses – after release of Retail Sales in Canada which appeared to be slightly better than expected. Retail Sales increased in November by 0.6% m/m, having exceeded the expectations of growth by 0.2%. Core Retail Sales increased by 0.4% m/m which appeared to be slightly better than forecasted +0.3%.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 27/01/2014

Main Events of the Coming Week

On Friday the US dollar was traded mixed amid the absence of any statistics in the USA, and it almost had no changes according to the dollar index. The US dollar decreased vs. the yen, the Swiss franc, and the Canadian dollar, but increased vs. the Australian dollar, the New Zealand dollar, the pound, and the euro.

The yen continued its growth on Friday for the second day in a row amid the fall of Stock markets, which strengthened after the release of negative data in China. Nikkei 225 Futures dropped by 5% during the week –it was the highest weekly decrease since May 2013. American DJIA decreased by 3.5% during the week – it was the worst weekly result since November 2011. The CBOE Volatility Index, which is often called the index of fear – has rocketed on Friday almost by 30% till the highest level since the middle of October.

The pound dropped after the BOE’s Governor Carney announced that the new Interest Rates Guidance will be updated in February in relation with Unemployment which has fallen faster than expected. The economy will have to work its long way before the rates will be increased, he added.

The Canadian dollar a bit strengthened its position on Friday before the release of Inflation rate data in Canada which in whole coincided with the expectations. The rate of annual inflation in Canada decreased in December to 1.2% from 0.9% in the previous month, but it was still lower than the BOC target rate of 2%.

On Friday the Australian dollar dropped lower than $0.87 for the first time since July 2010 amid the comments of the RBA’s Board Member Heather Ridout about the forecast of the Australian dollar’s drop even lower in order to support the economy recuperation. To her opinion, fair AUD standard for exporters and importers will be $0.80.

According to the results of the week the USA also demonstrated mixed dynamics having lost 1% according to the dollar index. Dollar increase vs. commodity currencies: the Canadian dollar (+1.15%), the Australian dollar (+1.13%), and the New Zealand dollar (+0.51%); but decrease vs. the yen (-1.94%), and the European currencies: the Swiss franc (-1.69%), the euro (-0.99%), and the pound (-0.33%).

The main event of the coming week will be the FOMC meeting on 28-29 January, the results of which will be announced on Wednesday. The January meeting will be the last for Ben Bernanke – on 31 January he will resign, and on 1 February Janet Yellen will follow him. The majority of analysts interrogated by Bloomberg expect that Fed will assets purchase by $10 и to $65 и per month, and will continue QE3 Tapering at the same pace during the future meetings. Weak Non-Farm Payrolls data in December was probably caused by weather anomaly.

During the last week of the month in the USA New Home Sales will be released on Monday; on Tuesday – Durable Goods Orders, S&P/Case-Shiller Composite-20 HPI, and CB Consumer Confidence; on Thursday - Advance GDP for the 4th quarter, and Pending Home Sales; and on Friday - Personal Income & Personal Spending, Chicago PMI, and Revised UoM Consumer Sentiment.

The main event in the Eurozone will be the German IFO - Business Climate release on Monday, and on Friday - Eurozone CPI Estimate. IFO Index and Inflation growth are expected. On Thursday Euro-Zone Confidence Indices from European Commission will be released; and on Friday – Unemployment Rate. On Wednesday German GfK Consumer Confidence will be released; on Thursday – Reports on Labour Market and Inflation; and on Friday – Retail Sales.

The main event in the UK will be the Tuesday release of Preliminary GDP for the 4th quarter. It is expected that the economy growth rate a bit weakened in the 4th quarter – to 0.7% q/q comparing to 0.8% in the 3rd quarter. BOE’s Governor Carney will perform on Wednesday. In Japan on Thursday Retail Sales report will be released; and on Friday – a big block of statistics of the end of the month: inflation, unemployment, industrial production.

In Australia on Tuesday NAB Business Confidence will be released, on Thursday – Quarterly Import Prices report; and on Friday – Quarterly Producer Price Index. On Thursday RBNZ Interest Rate Decision will be announced; on Friday Trade Balance data will be released, and RBNZ Governor Graeme Wheeler will perform. There will be GDP data in Canada on Friday as well.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 28/01/2014

German Business Climate Reached 2,5-years High

On 27 January on Monday the US dollar was traded mixed before the beginning of the 2-days FOMC meeting on Tuesday, and almost didn’t change according to the dollar index. The US dollar decreased vs. the pound sterling and the Australian dollar, and a bit increased vs. the yen, the Swiss franc, and the Canadian dollar. According to the results of the day the euro had almost no changes amid the growth of the German Ifo Business Climate.

Trading of the first day of the week underwent staid, and the participants abstained from active actions before the important events which will take place this week. Few statistical data of Monday didn’t significantly influence the trading process. The US New Home Sales appeared to be considerably worse than it was forecasted, whereas manufacturing index appeared to be better.

The US New Home Sales in December dropped by 7% comparing with the previous month – to 414 000 of new houses in an annual rate, whereas the reading was forecasted to be at the level of 455 000. Home Sales decrease for the second month in a row from the 5-years highs being reached in autumn. Anomalously cold weather could influence the decrease of sales activity.

Dallas Fed Manufacturing Activity in January increased to 3.8 against 3.7 in December, whereas the decrease was expected. Markit Flash Services PMI strengthened its position in January to 56.6 p. from 55.7 p., having exceeded the expectations of growth to 56.2 p.

The euro had almost no changes according to the results of the day amid the improvement of the Business Climate in Germany. According to the Ifo Institute for Economic Research, German IFO - Business Climate increased in January to the highest rate since July 2011 of 110.6 p. from 109.5 p. in December, having exceeded the expectations of growth to 110 p. German IFO - Current Assessment increased to 112.4 p. (the highest since June 2012), comparing with 111.6 p. in December which coincided with the forecast. German IFO - Expectations strengthened its positions more than expected (108 p.) – to 108.9 p. from 107.4 p.

According to January German Bundesbank Monthly Report released on Monday – the German production sector gathers pace, and the Central Bank expects the GDP growth rate increase in the 1st quarter of 2014. Meanwhile, Governor of the Bank of Italy and the ECB Governing Council Member, Ignazio Visco, indicated that the central bank could cut its key interest rates further and engage in asset purchases, provided the outlook of the region deteriorates. According to the forecasts of a series of Banks, ECB may cut the interest rates in the nearest future due to the record high Unemployment rate and Credit decrease.

On Monday the yen slightly decreased after 2-days growth amid the weak Trade Balance data in Japan. Trade Balance Deficit in December was 1.30 trillion yen against the forecast of 1.22 trillion. During 2013 the Trade Balance Deficit increased almost twice comparing with 2012 to 11.5 trillion, which is mainly due to the import growth of energy supplies and the weakness of the yen.

The pound sterling gained back more than a half of the Friday losses before the Tuesday release of the Preliminary GDP data in the UK for the 4th quarter. The Canadian dollar went on decreasing, it was partly due to the speech of the Minister of Finance of Canada who announced that the weakness of the Canadian dollar is induced by the comparatively positive situation in the USA; he also mentioned the deflationary risk for the Canadian economy.

By MasterForex Company

[ajpipsmaker]

Moments ago, the US durable goods orders data was released.
The outcome was disappointing as it registered a decline of 4.3%.
Also, the core durable orders registered decline of 1.6%.
The market was not expecting any decline.
These are weak numbers, and can weigh a lot on the US dollar.
The pairs like AUDUSD may find bids, as the pair is already trading at low levels.
Tomorrow, we have FOMC meeting, which can be a catalyst for the market.
We have to be very cautious while trading around the same event.

Trade safe traders!

[MasterForex_Broker]

Overview of the main economical events of the current day - 30/01/2014

Fed Continued Tapering of QE3

On 29 January on Wednesday the US dollar dropped vs. the yen and the Swiss franc; increased vs. the New Zealand dollar and the Australian dollar; and had almost no changes vs. the euro, the pound sterling and to the dollar index – amid the FOMC decision about QE3 Tapering, which coincided with the expectations. The yen increased amid the decrease of stock markets. The New Zealand dollar dropped after the announcement of the meeting’s results of the Reserve Bank of New Zealand.

The US dollar had almost no reaction to the Fed decision which in whole coincided with the expectations. FOMC saved the base interest rate without changes and reduced bond purchases since February by $10 и per month to $65 b. FOMC voted was unanimous for the first time since June 2011. FOMC prudently continued tapering bond purchases during further meetings. FOMC upgraded assessment of economy’s performance and announced that economy has picked up in recent quarters.

Easing of the economic situation and labor market becomes visible. Economy and labor market prospects’ risks became more balanced. Household spending, business investment advanced “more quickly”. At the same time labor market indicators are mixed, though they demonstrate further improvement. In whole FOMC announcement suffered little changes comparing with the previous month. FOMC did not mention recent spottiness of developing markets.

The pound sterling is still supported by good data of the UK statistics, on Wednesday it was the House market data. Nationwide House Prices exceeded the expectations (+8.5% y/y) and demonstrated the fastest annual growth rate since May 2010, +8.8%. House Prices are supported by considerable growth of employment sector, record low mortgage rate, and confidence growth.

The euro has almost no changes according to the results of the day as well amid German GfK Consumer Confidence growth to 6.5-years high. Out run German Gfk Consumer Confidence increased in February to the highest rate since August 2007 – 8.2 p. against 7.7 p. in January – and exceeded the expectations at the level of 7.6 p. The growth was due to the optimism about the economy state and steady German Labor Market.

The yen reached its high since 6 December of the previous year amid the stock markets decrease, which led to safe assets demand decrease. Futures at Nikkei 225 dropped on Wednesday by 1.5%. The Swiss franc also strengthened its positions amid the consumption growth in Switzerland. The UBS consumption indicator jumped to 1.81 index points in December from 1.40. Although the rise was apparent across all sub-indicators, the significant increase was chiefly due to the strong performance of new car registrations and high levels of confidence among retailers.

The New Zealand dollar dropped after the Reserve Bank of NZ kept cash rate unchanged – though the probability of increase in rates was estimated from 30% to 50%. Besides, RBNZ’s Wheeler announced that current high exchange rate is not sustainable in long run. However, Wheeler is expected to start rate adjustment soon, which speaks for high probability of the increase during the nearest meetings. Interest rates need to return to more normal levels, but scale and speed of rises depend on economic indicators that will be released further – Wheeler added.

By MasterForex Company