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Overview of the main economical events of the current day - 25/03/2014

The US Dollar Dropped after Fed’s John Williams Speech

On Monday March, 24 the US dollar dropped vs. most major currencies after Fed’s John Williams speech, where he announced that the rates will stay low for quite a long period of time. The largest growth vs. the US dollar was demonstrated by the Australian dollar, which increased amid hopes for stimulation in China, despite weak data of Manufacturing Index data in China.

The US dollar tried to increase amid weak data in the Eurozone, but it dropped after Fed’s John Williams speech, which decreased the hopes for earlier start of increase of base interest rates in the USA. Williams announced that Fed’s policy did not change deep down – he expects that rates will stay low for quite a long period of time. Rates will be increased not earlier than in the second half of 2015. Monetary policy may approach to normalization till the end of 2016, but even then the rate will stay much lower than 4%.

The US data released on Monday appeared to be mixed and had almost no influence to trading course. Chicago Fed National Activity Index increased in February after two-month decrease to 0.14 from -0.45 in January. At the same time, Markit Preliminary Manufacturing PMI decreased in March to 55.5 p. against the February reading of 57.1 p., which appeared to be the highest since May, 2010.

The euro was traded downwards in the first half of the day after the release of the Eurozone Composite PMI, which dropped in March to 2-month low. The Eurozone data appeared to be worse than expected – PMI in France increased having exceeded the reading of 50 – whereas in Germany the PMI dropped. Manufacturing Index in Germany decreased to 4-month low, Services PMI – to 2-month low. The Eurozone Flash Composite PMI decreased in March to 53.2 p. from 53.3 p. in February, whereas no changes were expected. The February reading was the highest since June, 2011.

In March in the monthly report Bundesbank announced that the German economy growth in the first quarter of the year should be strong, but in the second quarter it will slow down. ECB’s Liikanen announced that ECB will keep to soft monetary policy for economy stimulation, and is ready to take further decisive actions if necessary.

The Australian dollar refreshed the year high despite the fact that Manufacturing Activity in China decreased to 8-month low. Preliminary HSBC Manufacturing PMI in March continued its reduction for the 5th month in a row. PMI dropped to 48.1 p. from 48.5 p. in February against the expectations of growth. China is the main trade partner of Australia.

However, weak Chinese data strengthened expectations of economy stimulation on the part of Chinese authorities. The main Chinese economist HSBC announced that the situation of Chinese economy goes down amid ongoing weakening of domestic demand, and Beijing is expected to take a series of actions for growth stabilization. In the nearest future mainstreaming of economy growth is expected due to planned reforms, economic liberalization, and increase of expenses for infrastructure projects.

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Overview of the main economical events of the current day - 31/03/2014

Main Events of the Coming Week

On Friday March, 28 the US dollar was traded mixed amid reduction of the US Consumer Confidence. The US dollar decreased vs. the pound sterling and the euro, but increased vs. the yen and major commodity currencies, having added about 0.1% to the dollar index. Commodity currencies were corrected downwards after considerable growth of the previous days. Consumer Confidence data appeared to be worse than it was expected.

UoM Consumer Sentiment dropped in March to 80 p. comparing with 81.6 p. of the previous month, but appeared to be slightly higher than preliminary estimations of 79.9 p. At the same time, final data was predicted at the level of 80.5 p. The index dropped in March to the lowest reading for over 4 months. Consumer Expectations reading decreased for the nearest 6 months. FOMC Member Charles Evans announced on Friday that interest rates will stay near zero level during considerable part of 2015.

On Friday the pound sterling continued strengthening its positions amid growth of the UK Consumer Confidence in March to the highest rate for more than 6 years. Country’s services sector in January demonstrated the highest annualized growth for almost 6 years since February, 2008. The yen weakened its positions before the finish of the financial year in Japan in the end of March and impositions of sales tax since April, 1 amid positive dynamics of stock markets. Citigroup expects that Bank of Japan will increase monetary stimulation program till July, due to this fact USDJPY may increase to 108-110 till summer.

The euro sharply dropped on Friday to 4-weeks low vs. the US dollar after release of weak Spanish inflation rate data, but then it gained back all the losses amid growth of Euro-zone Economic Sentiment. Euro-zone Economic Sentiment Indicator increased in March to 102.4 p. (the highest level since July, 2011) from 101.2 p. in February, having exceeded the expectations. The indicator grows for the 11th month in a row already. All confidence indices increased, which speak for the Euro-zone economy recovery continuation in the nearest future.

Preliminary March CPI in Spain, the fourth Euro-zone economy, fixed the first case of deflation of consumer price index since 2009 (-0.2% y/y). German Inflation Rate data also demonstrated slowdown of inflation rate growth. Preliminary Consumer Price Index (y/y) increased in March by 1% against 1.2% in February and expectations of growth at the level of 1.1%. March Inflation data of the whole Euro-zone will be released on Monday March, 31. Weak Inflation data strengthened the expectations of further stimulation measures on the part of ECB.

According to the results of the previous week the US dollar demonstrated multidirectional dynamics, having added 0.1% to the dollar index. The US dollar decreased vs. major commodity currencies (more than 1%) and the pound sterling, but increased vs. the yen, the Swiss franc and the euro. According to the results of almost finished month, the US dollar increased vs. the yen, the Swiss franc, the pound sterling, and the euro – but decreased vs. AUD and NZD (more than 3%) having added 0.7% to the dollar index.

The main event of the week will be the release of key Non-Farm Payrolls on Friday in the USA, preliminary ADP data which will be released on Wednesday. In the USA on Monday Chicago PMI will be released, on Tuesday – ISM Manufacturing PMI and Construction Spending; on Wednesday – Factory Orders ж and on Thursday – ISM Non-Manufacturing PMI and Trade Balance. On Monday Fed’s Chair Janet Yellen is due to speak at the National Interagency Community Reinvestment Conference in Chicago.

The main event in the Euro-zone will be the Meeting of the European Central Bank on Thursday. Inflation decrease may provoke ECB to realize additional measures of stimulation. Recently many representatives of the ECB actively commented the possibility of interest rate decrease or even assets purchase. On Tuesday Final Manufacturing PMI and Final Services PMI will be released on Thursday; on Tuesday – Euro-zone Unemployment Change; on Wednesday – Producer Price Index; and on Thursday – Retail Sales. In Germany on Monday Retail Sales data will be released, on Tuesday – Labor Market data, and on Friday – Factory Orders.

On Monday in the UK Mortgage Approvals will be released, and since Tuesday till Thursday Manufacturing PMI, Services PMI, and Construction PMI will be released as well. On Monday Head of BOE Mark Carney is due to speak after Financial Stability Board Plenary Meeting press briefing. In Japan on Monday Industrial production data will be released, and on Tuesday – the Bank of Japan’s Tankan Quarterly Survey of Enterprises in Japan.

Meeting of the Australian Reserve Bank will be held on Tuesday, and no policy changes are expected. On Thursday retail Sales and Trade Balance data will be released, and speech of RBA’s Governor Glenn Stevens. On Monday in New Zealand ANZ Business Confidence will be released. Australia and New Zealand will revert to standard time on April, 6. On Monday in Canada GDP data will be released, on Thursday – Trade Balance data, and on Friday – Labor Market data. In China official Manufacturing PMI will be released on Tuesday, and on Thursday – Non-Manufacturing PMI.

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Overview of the main economical events of the current day - 01/04/2014

The US Labor Market Is Still Weak

On Monday March, 31 the US dollar moderately decreased vs. most major currencies, having lost 0.1% to the dollar index – amid Janet Yellen’s speech, during which she announced the necessity of monetary policy easing continuation, referring to the weakness of the labor market. Chicago PMI dropped in March to semiannual low.

Performing at the Chicago Conference Fed Chair Janet Yellen announced that the Central Bank should continue soft monetary policy for some period of time due to considerable weakness of the US labor market. In some ways the situation at the labor market is more complicated than during the recession period, she added, referring to the large amount of long-term unemployed, fractional persons, and low growth rate of salaries.
Chicago Business Barometer dropped in March to semiannual low. Chicago PMI dropped to 55.9 p. against 59.8 p. in February and expectations at the level of 58.5 p. Employment and New Orders considerably decreased in comparison with March.

The euro compensated all the losses at weak Eurozone Inflation rate, which appeared to be the lowest since October, 2009. According to preliminary data, annual inflation growth rate of the Euro-zone decreased in March to 0.5% against 0.7% in February and forecast at the level of 0.6%. Inflation in Italy also decreased to 0.4% y/y from 0.5% in the previous month.

The data intensifies pressure for the ECB in terms of new measures directed for overcoming of low inflation. Retail Sales (m/m) in Germany appeared to be positive, the reading increased in February by 1.3% against the expectations of decrease. ECB’s Nowotny announced that the Euro-zone recession is over, and there will be economy growth in the region this year.

The pound sterling continued its growth for the fifth day in a row amid general weakness of the US dollar. According to the Bank of England, Mortgage Approvals decreased in February from the highest reading of more than 6 years, but it is still at considerably high level. Mortgage Approvals decreased to 70 300 against 76 800 in January, and expectations at the level of 75 000; but consumer credit increased in whole, which speaks for further recovery of Housing Market.

Then yen weakened its positions vs. all major currencies amid Russia and the USA tendency to find diplomatic solution of the Ukrainian crisis, which decreased demand for save haven currencies. On the weekend during the meeting of heads of foreign affairs of Russia and the USA confirmed the aspiration to regulate the crisis in a political way. Industrial production in Japan in February dropped at the highest pace for 8 months. The Bank of Japan’s Tankan Quarterly Survey of Enterprises in Japan demonstrated that the companies wait for deterioration а business conditions in the next quarter, which may increase expectations of further monetary policy easing by the Bank of Japan.

The Canadian dollar inconsiderably strengthened its positions after release of the Canadian economy growth data, which appeared to be better than expected. GDP in January increased by 0.5% comparing with December reading, and against the forecast of growth by 0.4% - these are the highest growth rates for over the last 6 months.

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Overview of the main economical events of the current day - 02/04/2014

The Australian Dollar Dropped After RBA Decision

On Tuesday April, 1 the US dollar was traded mixed amid controversial statistic data in the USA. Manufacturing Activity growth in the USA reached 3-month high; still the data appeared to be worse than expected. The euro strengthened its positions amid positive German and Euro-zone labor market data. The pound sterling dropped after release of the weak UK Manufacturing PMI report, which demonstrated the lowest reading for over 8 months.

The US dollar increased vs. the yen, the pound sterling, the Australian dollar, and the New Zealand dollar, but decreased vs. the euro, and the Canadian dollar, having almost no changes to the dollar index. ISM Manufacturing PMI increased in March to 53.7 p. Against 53.2 p. In February, but appeared to be lower than expected 54 p. The PMI grows for the second month in a row. The growth in March provided considerable growth of manufacturing index. Final Final Markit Manufacturing PMI stayed in March without changes and composed 55.5 p.

The euro strengthened its positions amid positive German and Euro-zone Labor Market data. German Unemployment Change decreased in March by 10,000. Unemployment Change composed 6.7% having no changes in comparison with February, reading of which was downwardly revised from 6.8%. Euro-zone Unemployment Change remained in February without changes in comparison with the January reading of 11.9%, which was reduced from 12%. The same time, Italian Unemployment Change increased in February to 13% from 12.9% in January, whereas no changes were expected.

The euro was also supported by the Euro-zone Manufacturing Activity data, which exceeded the expectations in Spain, Italy, and France, but appeared to be weaker than forecasted in German. The Euro-zone data coincided with the expectations – Final Manufacturing PMI in March composed 53 p., having decreased from the February reading at the level of 53.2 p. ECB’s Board member Vitor Constancio announced on Tuesday that ECB doesn’t see further prospects of the Euro-zone deflation, and he expects that March reading will be revised.

The pound sterling dropped after weak UK Manufacturing Activity report, which demonstrated the lowest reading for over 8 months. Manufacturing PMI decreased in March to 55.3 p. From downwardly revised 56.2 p. In February, and appeared to be lower than forecasted 56.7 p. PMI decreased for the 4th month in a row.

The Australian dollar decreased after RBA Meeting, during which the rate was left without changes at record low 2.5%. But final RBA Rate Statement was more pessimistic in comparison with the previous ones. RBA noticed that AUD is high according to historical standards, and its recent strengthening creates potential risk for economy recovery, and also aggravates exporters’ situations. Final March HSBC Manufacturing PMI in China was downwardly revised to 48 p. against initial estimation of 48.1 p. and the February reading of 48.5 p.

The Canadian dollar strengthened its positions on Tuesday amid Raw Materials Price Index growth, which demonstrated the highest monthly growth rate for over almost three years, which was mainly due to energy prices growth. Raw Materials Price Index (m/m) increased in February by 5.7%, having twice exceeded the expectations. The index increases for the third month in a row.

The yen continued its weakening on Tuesday for the 4th day in a row amid start of the new financial year in Japan and positive dynamics at stock markets. The reduction of the yen was due to the Bank of Japan’s Tankan Survey of Enterprises, which demonstrated deterioration of Business Climate prospects in Japan due to sales tax initiation.

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Overview of the main economical events of the current day - 015/04/2014

The Euro Dropped amid Draghi’s Speech

On Monday 14 April the US dollar increased vs. the euro and the yen, having added 0.33% to the dollar index amid positive Retail Sales data in the USA, which were growing in March at maximum rate for over a year and a half. The euro dropped after ECB’s Mario Draghi’s speech. The pound sterling had almost no changes according to the results of the day amid Housing Market data in the UK.

Retail Sales in the USA increased in March by 1.1% comparing to the previous month, having exceeded the expectations of growth by 0.8% m/m – the rise appeared to be the highest since September, 2012. February data was upwardly revised. Retail Sales Ex Auto rose by 0.7% against the forecast of growth by 0.5%. The leading factor of growth became the increase of auto sales, which rocketed in March by 3.1% after the increase by 2.5% in February. Sales of 10 out of 13 main categories of retail goods increased in March.

The euro dropped during the first day of the week after ECB Mario Draghi’s speech on Saturday during which he pointed the danger of excessive strengthening of the euro. Strengthening of the European currency course may provoke ECB to taking additional measures of monetary policy easing, Draghi announced. Lately the strong euro bears pressure on the inflation. The course of the euro becomes more important factor in terms of estimation of price tendencies on the part of the ECB, Draghi added.

ECB’s Christian Noyer also stated on Monday that the more intensely the euro grows the more soft the monetary policy should be. The strength of the euro is in obstacle on the way to achieving price stability. The growth of the euro which was observed last year, is unacceptable. At ECB’s disposal there is a series of policy instruments: assets purchase, interest rates decrease, and additional guide marks of monetary policy – Noyer announced.

According to the results of the day the pound sterling had almost no changes – the support is still rendered by the Housing Market data in the UK. The UK Rightmove House Prices reached in April new record high for the second month in a row. House Price Index increased in April by 2.6% - average price of the house put up for sale reached record £262,600. The growth composed 7.3% annual rate of increase in asking prices and became the highest since October, 2007. The prices grow due to lack of houses and mortgage availability.

The Australian dollar decrease after the Tuesday release of the last RBA Meeting Minutes. Reserve Bank of Australia pointed the period of interest rates stability. But the course of the Australian dollar still stays high according to historical standards. Its recent recovery doesn’t promote economy growth – and decrease of the AUD course still helps to return back to the balanced economy growth.

Reserve Bank of Australian noted that strong growth of investments to Housing Market is expected. However, the drop of investment to mining sphere and weak government expenditures will limit the growth. Labor Market indicators improved but more should be done for Unemployment Rate reduction. The New Zealand dollar was downwardly traded – Global Dairy Trade auction which will take place on Wednesday is among the risks for NZD. During the late auction milk prices reached the lowest level for over 13 months.

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Overview of the main economical events of the current day - 017/04/2014

The UK Unemployment Dropped to the 5-Years Low

On Wednesday April, 16 the US dollar was traded mixed, having almost no changes to the dollar index amid controversial statistic data in the USA. The US Industrial Output appeared to be better than expected, whereas Labor Market data appeared to be worse than expected. The pound sterling increased amid strong Labor Market data in the UK. The New Zealand dollar dropped after the release of weak Inflation Rate data.

The US dollar decreased vs. the pound sterling and the Australian dollar, but increased vs. the yen, the Canadian dollar, and the New Zealand dollar, having almost no changes vs. the euro. The US Industrial Output growth in March exceeded the expectations. Industrial Production increased in March by 0.7% m/m against the forecast of growth by 0.5%. The February growth of Industrial Production was revised from 0.6% m/m to 1.2%, which became the highest rise since May, 2010. Capacity utilization rate increased by 0.8% to 79.2% (it is the highest rate for over 15 months). Industrial Production increased for the second month in a row, and this fact is indicative of sector’s recovery after the winter recession.

At the same time Housing Market data didn’t reach the predictions. Building Permits dropped I March by 2.4% to 990,000, whereas decrease by 0.4% was expected. Housing Starts increase previous month only by 2.8% to 946,000 against the forecast of growth by 7%. New Housing Construction volume continued growing in March, but recovery is still unsteady and irregular due to mortgage loan rates increase and weak wages hike.

Fed’s Chair Janet Yellen announced on Wednesday that decisions regarding monetary policy will depend on three main factors: labor underutilization, low inflation, and possible disincentives for recovery. Yellen emphasized the weakness of Labor Market, its complicated dynamics and slow recovery, as well as the risk of low inflation. Economy prospects are not defined; Fed will watch the terms while policy formation.

On Wednesday the pound sterling almost exceeded the highs of 2009 after the release of strong Labor Market report in the UK, which demonstrated the decrease of Unemployment Rate to the lowest rate for over 5 years. ILO Unemployment Rate dropped in February to 6.9% from 7.2% in January. Decrease lower than 7% happened for the first time since 2009. Claimant Count Change reduced in March by 30,400 having coincided with the expectations – and reached the lowest rate since November, 2008.

The euro had almost no changes according to the results of the day. Final Inflation Rate data in the Euro-zone in March coincided with the initial estimations – Consumer Price Index growth decelerated in March to 0.5% y/y comparing to increase by 0.7% in February. Annual growth rate of Core Inflation Ex Energy and Food decreased to 0.7% from 1% in February, having slightly exceeded the forecast (+0.8% y/y).

The yen weakened its positions on Wednesday amid growth of Japanese stock market – Nikkei 225 rocketed by 3% after the most considerable weekly fall for over 3 years. BOJ’s Kuroda announced that the Central Bank will make every effort to achieve 2% target inflation rate.

The Canadian dollar decreased after the BOC decision to leave the key interest rate without changes. The Central Bank pointed downward risks for inflation and decreased the GDP growth forecast for 2014 due to deceleration of export and capital investment rate. BOC Poloz expressed neutral position in terms of interest rate, but he announced that on this very stage it is impossible to eliminate the possibility of its decrease.

The Australian dollar strengthened its positions amid Chinese economy growth data, which appeared to be better than it was expected. Chinese GDP growth rate in the first quarter decelerated to 7.4% y/y from 7.7% in the 4th quarter of 201, but appeared to be better than expected growth by 7.3%. At the same time, Industrial Output and Fixed Asset Investment in March appeared to be worse than expected. The New Zealand dollar dropped after the release of weak Inflation Rate data, but then it negated almost all the losses. Inflation increased in the 1st quarter only by 0.3% q/q against the forecast of +0.5%.

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Overview of the main economical events of the current day - 22/04/2014

The Yen Dropped after the Release of Trade Balance in Japan

On Monday 21 April the US dollar was traded mixed amid Easter holidays in majority of developed countries and absence of any significant macro statistics. The yen dropped after the release of weak Trade Balance data in Japan.

The US dollar strengthened its positions vs. the euro and the yen, but had almost no changes vs. the pound sterling and major commodity currencies – having added 0.14$ to the dollar index. Chicago Fed National Activity Index considerably decreased in March, but February data was upwardly revised. CB Leading Indicator increased in March more than it was expected.

Chicago Fed National Activity Index dropped in March to 0.20 p. from 0.53 p., but not to 0.14 p. as it was forecasted earlier. The index’s three-month moving average (CFNAI-MA3) increased to a neutral reading in March from –0.14 in February. The index still marks the growth of the activity, though its deceleration was pointed. The biggest contribution was made by industrial indicators and Sales.

CB Leading Indicator increased in March by 0.8% after its strengthening by 0.5% in February; it has exceeded the expectations of growth by 0.7%. The index grows for the third month in a row. After the winter break the economy growth recovers. Steady growth of Employment, rise of Consumer Confidence, and Demand promote increase of household spending. Five out of ten readings of the index improved in March, but decrease of Building Permits didn’t let the indicator demonstrate a more significant growth.

The yen dropped to the lowest rate vs. the US dollar for over two weeks after the release of weak Trade Balance data in Japan. Trade Balance deficit in Japan expanded in March to 1.45 trillions of yen in comparison with the deficit of 0.80 trillions of yen in the previous month, having considerably exceeded the predictions at the level of 1.07 trillions of yen.

Increase of Trade Balance deficit in Japan was caused by weakening of export from Japan, which increased by 1.8% y/y against the expectations of growth by 6.3%. Import increased to 18.1% y/y having exceeded the forecasts of growth by 16.2%. Trade Balance deficit in Japan is fixed for the 21th month in a row – it is the longest period since 1979.

The euro dropped at the American session lower than the reading of $1.38 after several days of trading that was higher than this rate. Market volatility decreases: weekly range of the EURUSD pair last week appeared to be the lowest throughout the trading history of the common European currency – just 75 p.

German Ministry of Finance announced on Monday that there are no visible deflation tendencies in the country – German economy enjoys a boom which will expand in 2014. German GDP growth will be weaker in the 2nd quarter in comparison with strong rise in the 1st quarter on which the mild weather affected.

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Overview of the main economical events of the current day - 23/04/2014

The Australian Dollar Sharply Dropped Amid Inflation Rate Data

On Tuesday 22 April the US dollar was traded slightly downwards vs. most major currencies amid persisting fall of Existing Home Sales in the USA. The euro and the pound sterling were traded upwards. The Australian dollar sharply dropped after the release of weak Inflation Rate report in Australia.

The US dollar decreased vs. the euro, the pound sterling, the Australian dollar, and the New Zealand dollar; increased vs. the Canadian dollar ad had almost no changes vs. the yen and the Swiss franc. The US dollar gained back part of the losses against the euro after the release of Housing Market data, which appeared to be better than expected.

Existing Home Sales in the USA decreased in March by 0.2% in comparison with the previous month – to 4.59 m of houses, whereas decrease by 0.9% m/m was expected. Sales stayed at the lowest level since July 2012 as it was in the previous month – and they decrease for seven months in a row from the last eight months. Persistent fall of Existing Home Sales points that the recovery of Housing Market will be slower than it was expected earlier.

FHFA House Price Index increased in February by 0.6% m/m which coincided with the expectations. Richmond Manufacturing Index appeared to be better than forecasted – it increased to 7 p. in April against -7 p. in March, whereas growth only to 0 p. was expected. The Richmond Fed’s regional manufacturing activity recovers after the reduction in February and March.

On Tuesday the euro was traded upwardly amid increase of Consumer Sentiment in the Euro-zone, the pound sterling also strengthened its positions. Preliminary Consumer Confidence in the Euro-zone increased in April to -8.7 p. against -9.3 p. in March, having exceeded the expectations of growth to -9.1 p. The reading became the best since October 2007 before the financial crisis. Consumers of the Euro-zone started evaluating their prospects in a more optimistic way; improvement of the Labor Market situation promotes increase of confidence supporting the economy recovery.

Construction volume in the Euro-zone increased in February by 0.1% m/m after the growth by 1.6% in January. Increase of Construction decelerated in February, though it continues for the third month in a row. ECB’s Benoit Coeure announced on Tuesday that ECB follows the euro’s course in order to evaluate the influence of persistent power of the European currency for the strong inflation rate in the Euro-zone. Citigroup estimates more than 50% possibility of ECB’s asset purchase this year.

The Australian dollar strengthened its positions on Tuesday before the key Inflation Rate report in Australia. CB Leading Index increased in February by 0.3% m/m, the growth continues for the sixth month in a row. However Inflation data appeared to be worse than expected, and AUD sharply dropped. Consumer Price Index increased in the 1st quarter by 0.6% q/q, whereas growth by 0.8% was predicted. Preliminary HSBC Manufacturing PMI also increased in April less than expected (48.4 p.) – to 48.3 p.

The Canadian dollar slightly decreased after the release of the US data, which appeared to be better than expected. CAD had almost no reaction for Wholesale Sales data in Canada, which exceeded the expectations. Wholesales Sales increased in February by 1.1% m/m against the expectations of growth by 0.7%. The growth rate appeared to be the highest for over seven months.

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Overview of the main economical events of the current day - 29/04/2014

The Pound Sterling Hits the Year Highs

On Monday 28 April the US dollar was traded mixed amid the US Pending Home Sales data which appeared to be better than expected. The pound sterling and the euro increased before the start of two-days FOMC Meeting on Tuesday, the results of which will be announced on Wednesday.

The US dollar increased vs. the New Zealand dollar, the Australian dollar, and the yen, but decreased vs. the euro, the pound sterling, and the Canadian dollar, having lost slightly less than 0.1% to the dollar index. The US dollar was decreasing in the first half of the day vs. the European currencies, but gained back almost all the losses to DX after the release of the US Pending Home Sales data, which increased for the first time after 8-month reduction.

NAR Pending Home Sales increased in March by 3.4% m/m after the decrease by 0.5% in February – whereas growth by only 1% was expected in March. Monthly growth rate became the highest since January, 2012. Pending Home Sales Index increased in March to 97.4 from upwardly revised 94.2 in February, which was the lowest reading of the index since autumn 2011.

The March growth of Pending Home Sales is the sign of stabilization possibilities and quit of sector out of the weakness period. Dallas Fed Manufacturing Activity also appeared to be better than expected and increased to 7-months high. The index increased in April to 11.7 against 4.9 in March, having exceeded the forecasts of growth to 6. At that Production and New Orders strengthened their positions to 4-years high, and Employment – to 2-years high.

The euro was in requisition during the European session on Monday and strengthened its positions to 2-week high vs. the US dollar. According to analysts of CitiFX China, which diversified its foreign exchange reserves, stood for purchase of the euro and the pound sterling. Growth of the Italian Consumer Confidence to the highest rate for over more than 4 years supported the strengthening of the euro. Italian Consumer Confidence jumped in April to 105.4 p. in comparison with 101.9 p. in March, whereas the decrease of the index was expected.

ECB’s President Mario Draghi announced on Monday that he doesn’t expect any deflation continuity for the Euro-zone in the economy of which he sees positive signs – but the growth of the economy is still weak. Draghi expects for the continuation of the problem of low inflation, but QE is far from being realized. QE is still a possible variant of monetary policy, but it is considerably relative. ECB’s Noyer also eliminated the risk of deflation in the Euro-zone, but he marked that the high course of the euro pressurizes the prices and promotes inflation slowdown.

The pound sterling refreshed the high of the year and reached new 4.5 year high vs. the US dollar before the release of GDP growth data on Tuesday. The UK Hometrack House Prices continued its growth for the 15th month in a row due to the fact the impulse at the Housing Market expanded beyond London. House Prices growth is driven by low interest rates of the Bank of England, real estate deficit for sales and economy strengthening, which creates new working places.

Economic growth continued to gather pace in April, alongside predictions of even stronger growth in the next quarter, according to the latest CBI Growth Indicator. Growth strengthened across the retail and service sectors, while manufacturing output growth remained solid. The outlook for the next three months points extremely strong broad-based growth.

On Monday the New Zealand dollar was traded downwards and reached the lowest rate vs. the US dollar for over almost a month before the release of New Zealand Trade Balance data. The released data almost coincided with the expectations – Trade Balance proficit increased in March to 920 m of New Zealand dollars against the forecast of 937 m. the yen weakened its positions amid positive dynamics of stock markets and absence of signs of aggravation of situation around Ukraine, which led to decrease of demand for save heaven currency.

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Overview of the main economical events of the current day - 06/05/2014

The US Non-Manufacturing PMI Still Grows

On Monday 5 May the US dollar was traded with a slight decrease vs. most major currencies, having almost o changes to the dollar index amid Non-Manufacturing Growth in the USA.

Released data of Non-Manufacturing PMI growth to 8-month high didn’t have impact to trades which passed on Monday at thin volume with low activity. Market participants still evaluate Non-Farm Payrolls released at the end of the last week, the data considerably exceeded the forecasts – speech of Fed’s Chair Janet Yellen with possible comments to the recent data is also expected on Wednesday.

US Non-Manufacturing PMI continued in April for the second month in a row and exceeded the expectations. ISM Non-Manufacturing PMI increased in April to 55.2 p. in comparison with 53.1 p. in March, whereas growth only to 54.1 p. was expected. Production, Inventories, New Orders, and Import demonstrated the largest growth, whereas Employment demonstrated decrease after considerable growth of the previous month. The data indicates resuming of the US economy acceleration.

At the same time Markit demonstrated decrease of Services PMI in the USA in April. Final Markit Services PMI decreased in April to 55 p. from 55.3 p. in March, though it exceeded the initial estimations of 54.2 p. The Conference Board Employment Trends Index continued its growth in April for the sixth month in a row and strengthened its positions to 118 p. against the upwardly revised 117.77 p. in March. Five out of ten index components increased in April.

The euro inconsiderably increased on Monday amid release of quarterly EU Economic Forecasts. European Commission forecasts gradual recovery of the region’s economy till the end of 2015, but it also warns that low inflation and strain in relations with Russia may prevent the region’s overcoming the crisis.

European Commission decreased the forecasts of the Euro-zone economy for 2015, and also decreased the forecasts of inflation and unemployment for the nearest two years. GDP growth forecast for 2015 is reduced to 1.7% from 1.8% (the forecast for the current year is left without changes). Inflation forecasts are decreased for 2014 to 0.8% from 1% and forecasts for 2015 – to 1.2% from 1.3%. Unemployment in 2014-2015 is expected at the level of 11.8% and 11.4% respectively against the previous forecast of 12% and 11.7%.

Sentix Investor Confidence sharply decreased in May after 4 months of growth. The index dropped to 12.8 p. in comparison with 14.1 p. in April against the expectations of growth. In March Euro-zone Producer Price Index continued reduction for the third month in a row, having decreased by 0.2% m/m which added concerns of low inflation which may prevent region’s economy recovery. Producer Price Index dropped in March by 1.6% in an annual rate after the decrease by 1.7% in February which was the largest decrease since December 2009. At the same time ECB’s Mersch announced that ECB doesn’t see inflation or deflation risks in mid-term.

On Monday the Australian dollar appeared to be under pressure after release of weak Chinese data and Australian Labor Market, but till the end of the day it gained back all the decrease. HSBC Final Manufacturing PMI strengthened its positions in April only to 48.1 p. from 48 p. in March, whereas it was conveyed about the growth to 48.3 p. The index increased after 5 months of reduction when it dropped to 8-month low.

Building Approvals in Australia dropped in March by 3.5% m/m after the reduction by 5.4% in February, whereas growth of the reading was expected. The New Zealand dollar was traded upwards on Monday continuing the tendency of growth of the last week. The Canadian dollar also rose amid general weakness of the US dollar.

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Overview of the main economical events of the current day - 12/05/2014

Main Events of the Coming Week

On Friday 9 May the US dollar increased vs. all major currencies, having added 0.56% to the dollar index amid large-scale growth of the American currency against the euro and European currencies. The euro and the pound sterling continued its reduction on Friday. The Canadian dollar dropped after the release of Employment Change in Canada.

The euro continued its decrease on Friday, having dropped to monthly low vs. the US dollar – after on Friday ECB’s Mario Draghi signaled that ECB is ready to soften monetary policy during the next Meeting in June. German Trade Balance and Industrial Output in Italy also appeared to be worse than expected. German Trade Balance proficit decreased in March to 10-month low at the level of €14.8 m from €15.8 m in February against the expectations of growth. German Export reduced in March for the second month in a row. Industrial production in Italy dropped in March by 0.5% m/m against the expectations of growth by 0.3%.

The pound sterling decreased after the release of the UK March Industrial Output, which dropped by 0.1% m/m, whereas no changes were expected. Manufacturing Output increased by 0.5% m/m, having exceeded the forecasts by 0.3% - for the 1st quarter of this year the manufacturing growth became the highest for over 15 years (+1.4% q/q). The pound sterling rallied after the release of NIESR GDP Estimate, according to which the growth of the British economy accelerated. The UK GDP growth for three month till April composed 1% (against +0.8 in the previous month), which is the highest growth since June 2010.

The Canadian dollar sharply dropped after release of the Canadian Employment Change. Employment rate dropped in April by 28,900 against the expectations of growth by 12,000 which became the worst result for over 4 months. Unemployment had no changes at the level of 6.9% as it was forecasted. The Australian dollar slightly decreased on Friday and had almost no reaction for the release of quarterly RBA monetary policy report in which the forecasts of inflation growth for this year were slightly decreased, whereas forecasts of GDP growth were increased.

According to the results of the week the US dollar demonstrated mixed dynamics vs. major currencies, having added 0.46% to the dollar index (the highest growth for 7 weeks). The US dollar increased vs. The Swiss franc, the euro, the pound sterling, and NZD, but decreased vs. AUD, CAD, and the yen. The most considerable growth to the dollar index was accounted for the last two days of the week after Mario Draghi’s announcement of possible softening measures in June.

On Monday in the USA Federal Budget Balance will be released; on Tuesday – Retail Sales and Import Prices; on Wednesday – Producer Price Index; on Thursday – Philadelphia Fed Manufacturing Index, NAHB Housing Market Index, Consumer Price Index, Treasury International Capital (TIC) Flows, and Industrial Output; and on Friday – Building Permits, Housing Starts, and Preliminary U. of Michigan Consumer Sentiment. On Friday Fed Chair Janet Yellen is due to speak at the US Chamber of Commerce and US Small Business Administration as part of National Small Business Week, in Washington DC.

The main event of the week in the Euro-zone will be the Thursday release of preliminary GDP of France, Germany, Italy, and the whole Euro-zone for the 1st quarter to 0.4% q/q against 0.3% in the previous quarter. On Wednesday the Euro-zone Industrial Output will be released; on Thursday – Final Inflation Rate and monthly ECB’s report; and on Friday the Euro-zone Trade Balance will be also released. On Tuesday German ZEW Economic Sentiment is going to be released; and on Wednesday – Final Inflation Rate. On Tuesday Inflation Rate data will be released in Italy as well, and on Wednesday it will be released in France and Spain.

The most important day for pound sterling will be Wednesday when the UK Labor Market will be released – and Quarterly BOE Inflation report will be released with new forecasts about Unemployment, GDP, and Inflation Rate; after that BOE’s Governor will have a report. On Thursday in Japan Preliminary GDP for the 1st quarter will be released. On Tuesday in China Industrial Output, Retail Sales, and Fixed Asset Investment will be released.

On Monday in Australia NAB Business Confidence will be released; on Tuesday – House Price Index and Home Loans; and on Thursday – New Motor Vehicle Sales. On Tuesday Annual Budget Release will be performed in Australia. On Wednesday in New Zealand quarterly Retail Sales report and semiannual RBNZ Financial Stability Report will be released; and RBNZ Wheeler’s press-conference will also take place. On Thursday Annual Budget Release of New Zealand will be performed as well.

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Overview of the main economical events of the current day - 15/05/2014

Pound Sterling Dropped After Double Impact

On Wednesday 14 May the US dollar was traded downwards vs. most major currencies, having lost slightly less than 0.1% to the dollar index amid the US Producer Price Index. The pound sterling dropped after the release of the UK Labor Market and BOE Inflation Reports.

On Wednesday the index dollar stopped its 5-day growth despite released Producer Price Index which appeared to be better than expected. The US dollar was pressed by 10-year US Treasury Yield till the lowest rate since October.

Producer Price Index increased in April by 0.6% in comparison with the previous month having thrice exceeded the expectations. PPI increased in April by 2.1% in an annual rate, having exceeded the forecasts by 1.7%. Annual PPI Growth Rate appeared to be the highest for over two years. Core Consumer Price Index ex Food and Energy increased in April by 1.9% against the expectations of growth by 1.4%.

The euro stopped the decrease and slightly increased amid Industrial Production. Euro-zone Industrial Production decreased in March by 0.3% m/m which coincided with expectations. Industrial Production reduced by 0.1% in an annual rate, whereas growth by 0.9% y/y was predicted. ECB’s Praet announced that ECB is preparing whole range of measures of fighting with inflation deceleration. Among the measures Praet mentioned decrease of core interest rate, introduction of negative deposit rate, and new round of loan program. He also mentioned that asset purchase new program launch similar to FOMC’s program should not be expected from ECB.

The pound sterling dropped to 4-week low vs. the US dollar after release of the UK Labor Market. Unemployment decreased in accordance with the expectations; however decrease of unemployed and increase of average earnings index appeared to be worse than expected. The UK Unemployment Rate dropped by 0.1% in the 1st quarter to 6.8% - this is the lowest rate for over 5 years. Claimant Count Change reduced in April by 25,100 and didn’t manage to reach the forecasted 30,000. Average Earnings Index increased in the 1st quarter by 1.7% against the expectations of growth by 2.1%.

Additional pressure for the pound sterling was brought by the report of BOE which spoke for tendency of soft policy. BOE left the GDP and Inflation Rate forecasts without changes. The report market further improvement of economy and Labor Market, but all in all it saved its mild tune. Capacity Utilization Rate had almost no changes since February, having composed 1%-1.5% despite recent improvement of Labor Market and increase of economy growth forecasts. The report dispelled hopes for earlier increase of interest rate pointing the fact that it will be increased in the end of the 1st quarter or in the beginning of the 2nd quarter of 2015. Many market participants expected it in the end of the current year.

The Australian dollar increased to monthly high vs. the US dollar after the Tuesday release of Budget Execution Review of Australia for the next financial year, which was positively accepted by the investors. Australia switches to policy of tax increase and reduction of spending for the fight with deficit budget. New Zealand dollar also strengthened its positions after the release of RBNZ Financial Stability Report. RBNZ’s Wheeler announced that financial system of New Zealand will stay strong despite the risks.

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Overview of the main economical events of the current day - 19/05/2014

Main Events of the Coming Week

On Friday 16 May the US dollar was traded mixed, having almost no changes to the dollar index amid controversial US data. Housing Market exceeded the expectations, whereas the US Consumer Confidence dropped.

On Friday the US dollar was traded with a slight change vs. major currencies, having strengthened its positions vs. the Swiss franc, the New Zealand dollar, and the euro, but having decreased vs. the Canadian dollar and the pound sterling. Building permits and Housing Starts increased last month which appears to be the sign of recovery after unfavorable winter.

Building Permits increased in April by 8% to 1.08 m of houses – this is the highest rate for over 6 years since June 2008. Housing Starts increased last month by 13.2% to 1.07 m of houses (5-month high). Building Permits increase by 1% and Housing Starts increased by 3.6% were predicted.

Consumer Confidence decreased in May from the highest rate of 10 months, which was reached in April despite the expectations of growth. Preliminary UoM Consumer Sentiment dropped in May to 81.8 p. in comparison with Final April reading of 84.1 p., whereas in May the growth to 84.5 p. was expected. Both Present Situation and Expectations decreased. Energy, petrol, and Food prices growth negatively influenced Consumer Sentiment.

The euro was traded with a slight decrease amid the Euro-zone Trade Balance. Euro-zone Trade Balance proficit with seasonal adjustment increased in March less than it was expected – to €15.2 B from €15.0 B in February, whereas growth to €17.3 B was predicted. At that export and import dropped for the first time since late 2013. The New Zealand dollar slightly decrease amid the speech of the Minister of Finance of New Zealand who announced that NZD course is still high, which makes economy rebalancing complicated.

According to the results of the week the US dollar demonstrated multidirectional dynamics vs. Major currencies, having added 0.24% to the dollar index and having strengthened its positions to DX for the second week in a row. The US dollar increased vs. the European currencies, but fell vs. the yen and commodity currencies, having no changes vs. AUD. The US dollar demonstrated the largest growth vs. the Swiss franc and the euro, and the most considerable fall vs. the yen and the Canadian dollar.

On Wednesday in the USA Last FOMC Meeting Minutes will be released; on Thursday – Existing Home Sales, Flash Markit Manufacturing PMI, Chicago Fed National Activity Index, and CB Leading Index; and on Friday – New Home Sales. On Wednesday Fed’s Chair Janet Yellen is due to deliver opening remarks at the New York University Graduates Commencement Ceremony.

On Monday in the Euro-zone Construction Output will be released; on Wednesday – Current Account and Preliminary Consumer Sentiment; on Thursday – Flash Manufacturing PMI and Flash Services PMI for France, Germany, and the whole Euro-zone (a slight decrease of the indices is predicted). From Thursday till Saturday European Parliamentary Elections will take place. On Tuesday in Germany Producer Price Index will be released, and on Friday – German IFO Business Survey, and Final GDP for the 1st quarter.

On Tuesday in the UK Inflation Rate data will be released; on Wednesday – Last Bank of England Meeting Minutes and Retail Sales; and on Thursday – second estimation of GDP for the 1st quarter, government finance, and Core Machinery Orders, and on Wednesday – Trade Balance. The results of two-days Bank of Japan Meeting will be announced on Wednesday. On Thursday in Flash HSBC Manufacturing PMI will be released.

On Tuesday in Australia Last Meeting Minutes of the Reserve Bank of Australia and CB Leading Index will be released; and on Wednesday – Westpac Consumer Confidence, and Wage Price Index. On Monday in New Zealand quarterly Producer Price Index will be released, and on Thursday – Inflation Expectations. On Wednesday in Canada Wholesale Sales will be released; on Thursday - Retail Sales, and on Friday – Inflation Rate.

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Overview of the main economical events of the current day - 20/05/2014

Bundesbank Waits For German Economy Slow Down

On Monday 19 May the US dollar was traded downwards vs. most major currencies, having lost 0.05% to the dollar index amid absence of any significant macro statistics in the USA and the Euro-zone. The euro was traded upwards, whereas the pound sterling and the yen had almost no changes according to the results of the day.

The US dollar slightly decreased vs. the euro, but increased vs. the Australian dollar and the Canadian dollar, having almost no changes vs. other major currencies. The US dollar gained back almost all the losses of the beginning of the day during the American session. Decrease of US Treasury Yield negatively affected the US dollar in the first half of the day. 10-Year US Treasury Yield dropped on Monday to 2.50 – the lowest rate since July 2013.

On Monday the euro was traded upwardly vs. the US dollar, but lost part of the losses after the speech of ECB’s Yves Mersch who announced that possibility of taking measures of monetary policy easing at ECB’s June Meeting considerably increased. ECB has all the tools for further policy easing, and all the members of the Governing Council are of the same mind about using it in order to fight with risks of low inflation.

Euro-zone Construction reduced in March by 0.6% in comparison with February after 4 months of growth. Especially tense decrease in the construction sector was noticed in Germany – the largest Euro-zone economy. According to Bundesbank monthly report released on Monday German economy growth deceleration is expected in the second quarter. Increased risks in developing countries and geopolitical uncertainty in Eastern Europe also complicate the situation for the country’s economy.

The pound sterling had almost no changes according еще у results of the day before the release of Tuesday Inflation Rate data in the UK. Acceleration of annual inflation growth rate to 1.8% in comparison with 1.6% in March is expected. Rightmove House Price in the UK continued its growth for the fifth month in a row. Rightmove House Price Index increased in May by 3.6% m/m which appeared to be the highest monthly growth rate since April 2002.

The yen increased to its high vs. the US dollar for over 3.5 months amid decrease of stock markets, but then negated almost the whole growth gained during the day. Core Machinery Orders in Japan increased in March by 19.1% in relation to the previous month, having trice exceeded the forecast. Strong data decrease the possibility of new stimulation measures on the part of Bank of Japan which is positive for the yen. On Tuesday two-day BOJ Meeting will begin, the results of the meeting will be announced on Wednesday.

The New Zealand dollar was upwardly traded in the first half of the day amid positive Producer Price Index and Services PMI in New Zealand, but then it lost the whole growth. PPI Input increased in the 1st quarter by 1% q/q, having twice exceeded the expectations. PPI Output also exceeded the expectations of growth by 0.4% q/q having strengthened its positions by 0.9%.

Performance Services Index increased in April by 0.4 p. to 58.9 p. – the highest reading for over more than 6 years since November 2007. Acceleration of Services Activity is one more sign of continuing economy growth in the country. Market participants wait for the results of milk auction GlobalDairyTrade. Dairy production is one of the most important spheres in the country’s economy – about 25% falls on New Zealand’s export. Since February milk prices dropped by 20% approximately. The Australian dollar was traded downwards on Monday before the Tuesday release of the last RBA Meeting Minutes.

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Overview of the main economical events of the current day - 22/05/2014

The US Dollar Dropped After the Release of FOMC Meeting Minutes

On Wednesday 21 May the US dollar was traded volatile, having almost no changes to the dollar index amid release of the last FOMC Meeting Minutes. The pound sterling strengthened its positions amid positive UK Retail Sales.

The US dollar was traded upwards vs. most major currencies almost the whole day, and it strengthened its positions to the dollar index by more than 0.3% - but then it lost almost all the growth after the release of the last FOMC Meeting Minutes. Altogether April Meeting Minutes had no considerable changes in comparison with the March Meeting. FOMC Members discussed the strategy of stimulation program tapering and spoke up for further testing of instruments of monetary policy. However, there were no allusions to probable data of the first rate increase or the possible growth ratio.

The euro refreshed 3-month low vs. the US dollar after the release of Euro-Zone Current Account, the proficit of which dropped to the lowest rate for over 6 months due to the reduction of visible trade of balance. Seasonal adjusted Current Account proficit of the Euro-Zone reduced in March to €18.8B from €21.8B in February against the expectations of growth.

At the same time Euro-Zone Consumer Confidence continued to grow in May for the third month in a row, having reached the highest rate since October 2007 despite reserved tense situation between the EU and Russia. Preliminary Euro-Zone Consumer Confidence strengthened its positions to -7.1 against -8.6 in April, having considerably exceeded the expectations. The euro gained back part of the losses after the release of FOMC Meeting Minutes.

The pound sterling continued its growth for the fifth day in a row amid positive UK Retail Sales. Retail Sales increased in April by 1.3% in relation to the previous month, having almost trice exceeded the expectations. Retail Sales annual rate increased by 6.9% which appeared to be the highest growth for over 10 years since May 2004. About 5.7% of GDP fall s to the share of Retail Sales.

Last Bank of England Meeting Minutes demonstrated that there are first signs of disputes among MPC Members, and there are different opinions in terms of the right course of monetary policy. According to the Meeting Minutes some MPC Members consider that policy stiffening should be started earlier in order the Central Bank might start gradual interest rate increase if the economy growth stays intense. Gradual rate increase may speak for the necessity of earlier policy stiffening.

The yen strengthened its positions after the announce of the results of two-day Bank of Japan Meeting, but then it negated the whole growth amid stock markets strengthening during the American session. BOJ left monetary policy without changes by solid voice and announced that current easing program has the desirable effect. BOJ signaled the growth of confidence in economy recovery and increased the estimation of capital investments.

BOJ’s Governor Kuroda announced on Wednesday that there are no reasons for the yen’s strengthening – however, BOJ will not try to affect foreign exchange courses by means of monetary policy and follow the example of other Central Banks. Japanese Merchandise Trade Balance Total appeared to be worse than expected due to considerable impost growth. Trade Balance deficit reduced in April to 0.81 trillion а нуты from 1.45 trillion of yen in March; however a more considerable reduction of the deficit to 0.65 trillion was predicted.

The Australian dollar decreased on Wednesday to the lows of early May vs. the US dollar after the release of weak Australian Consumer Confidence, but till the end of the day it negated the whole growth. Westpac Consumer Sentiment sharply dropped in May by 6.8% in comparison with April – to the lowest rate for over almost three years since August 2011. AUD was also pressed by the fall of iron ore prices to its 20-month low. The New Zealand dollar was negatively affected by decrease of dairy products prices which dropped on Wednesday during GlobalDairyTrade auction by 1.8% in comparison with the previous auction.

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Overview of the main economical events of the current day - 23/05/2014

Euro-Zone Manufacturing Activity Dropped to 6-Month Low

On Thursday 22 May the US dollar was traded upwards vs. most major currencies, having added 0.2% to the dollar index amid controversial US data. The euro was traded downwards amid weak German and Euro-Zone Manufacturing Activity. The pound sterling dropped after the release of the UK GDP.

The US Markit Flash Manufacturing PMI rose in May to three months high at the level of 56.2 p. in comparison with 55.4 p. in April, having considerably exceeded the expectations. CB Leading Index increased in April by 0.4% m/m, having exceeded the expectations of growth by 0.3% - the index strengthens its positions for the third month in a row due to improvement of Housing Market and financial sector terms. Kansas Fed Manufacturing Activity strengthened its positions to 10 p. in comparison with 7 p. in April, whereas no changes were expected.

The US Existing Home Sales increased last month for the first time this year, which may point acceleration of Housing Market recovery. Sales increased in April by 1.3% m/m to three-month high at the level of 4.65 m of houses in comparison with 4.59 m in March, though a slightly more growth by 2.2% m/m was expected. The decrease of requirements for mortgages, decrease of employment, and record low mortgage rate helped to calm the situation of Housing Market in anticipation of spring period of active sales which will be crucial for the US Housing Market.

The US Labor Market appeared to be worse than expected – the number of Initial Unemployment Claims increased from 7-years low after two weeks of decrease. The US Initial Unemployment Claims last week increased by 28,000 to 326,000, whereas growth only to 310,000 was expected. Four-Week Moving Average of Initial Claims decreased by 1,000 – from 323,500 to 322,500. Total number of unemployed reached the lowest rate since the recession period, and this fact points general of the US Labor Market situation.

Chicago Fed National Activity Index sharply dropped in April lower than the zero level which corresponds with the growth of the trend. The index decreased in April to -0.32 from +0.34 in March, whereas decrease only to zero level was expected.

The euro was traded downwards amid weak German and Euro-Zone Manufacturing Activity which dropped to 6-month low. French Activity dropped lower than 50 p. which dropped above 50 indicates industry expansion, below indicates contraction.

Euro-Zone Flash Composite PMI decreased in May from 3-years high at the level of 54 p. to 53.9 p. which coincided with the expectations. At the same time German and Euro-Zone Services PMI increased to 35-month high having exceeded the expectations. ECB’s Weidmann announced that ECB is ready to use unconventional measures of fighting with risks of Euro-Zone low inflation.

The pound sterling dropped after the release of the second estimation of the UK GDP growth which was confirmed at the level of +0.8% q/q, +3.1% y/y, however many components were revised. Exports, Gross Fixed Capital Formation, and Industrial Production were decreased – whereas Private Consumption, Government Spending, and Construction were upwardly revised. Industrial Orders appeared to be worse than expected – CBI Industrial Order Expectations increased from -1 in April to 0 in May against the expectations of growth to 4.

The Australian dollar rocketed after the release of Chinese Manufacturing PMI which appeared to increase to 5-month high, however then it dropped amid US dollar’s strengthening. Chinese HSBC Flash Manufacturing PMI sharply increased in May to 49.7 p. in comparison with 48.1 p. in April, having considerably exceeded the expectations. Chinese data led to growth of Asian stock markets and weakening of the yen to weekly low vs. the US dollar. The Canadian dollar increased on Thursday before the Friday release of Inflation rate, having ignored weak Canadian Retail Sales report, which demonstrated the drop of sales in March by 0.1% m/m against the expectations of growth – but previous month data was revised upwards.

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Overview of the main economical events of the current day - 27/05/2014

German Consumer Confidence Is Still Persistently High

On Monday 26 May the US dollar was traded slightly downwards vs. most major currencies amid absence of any significant macro statistics in most countries and weekend in the USA and the UK. The euro slightly strengthened its positions amid stable German Consumer Confidence.

The euro dropped in the beginning of the day vs. the US dollar in comparison with the lows of the previous week amid the results of the European Parliament elections, where far-right and European skeptics achieved high results, whereas traditional parties sustained considerable losses. This may complicate further work of the Parliament and put ECB’s efforts of further economy stimulation under threat.

The euro slightly strengthened its positions after the release of German Consumer Confidence, which continues to stay at the highest rate for over 7 years for the 4th month in a row – and it didn’t decrease in contrast to previously released ZEW and IFO indices. According to Gfk German Consumer Confidence Leading Index stayed in June at the level of 8.5 p. as it was expected. Persistent tension in Ukraine has not sufficiently influence German Consumer Sentiment, and strong Labor Market promoted strengthening of optimism in terms of economy situation development.

On Monday at ECB’s Conference in Portugal ECB’s President Mario Draghi marked low inflation rate in the Euro-Zone and announced that ECB will not allow its preservation for a long time. “Besides traditional tools associated with the change of interest rate, ECB has opportunity of long-term lending banks and purchase of asset covered bonds, as well as large-scale asset purchase. The choice of time is essential in this case” – Draghi said.

This statement became another sign of the fact that during the next Meeting, which will take place next Thursday, ECB may take new measures of monetary policy easing. Bloomberg survey, which was held last week, demonstrated that 90% of economists wait for monetary policy easing at ECB’s Meeting on 5 June. According to another survey 29 from 47 economists wait for ECB Interest Rate and Deposit Facility Rate decrease at the same time. JPMorgan believes that decrease of both rates is taken into account in the pair of EUR/USD.

The New Zealand dollar got under pressure in the beginning of the day after the release of New Zealand Trade Balance, which appeared to be worse than expected in April - but then it negated almost the whole decrease amid some weakness of the US dollar. New Zealand export dropped in April by 11% m/m. Trade Balance proficit decreased last month to 534 m of New Zealand dollars in comparison with 920 m in March, whereas decrease only to 667 m was forecasted. Balance proficit is fixed for the 6th month in a row.

The yen had almost no reaction for the release of Bank of Japan 30 April Meeting Minutes and speech of BOE Deputy Governor Kikuo Iwata. BOE Meeting Minutes brought no surprise. Kikuo Iwata announced that BOE get more and more positive reaction for current easing program and persistently approaches the target inflation rate of 2%.

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Overview of the main economical events of the current day - 28/05/2014

The US Durable Goods Orders Grow For The Third Month In A Row

On Tuesday 27 May the US dollar strengthened its positions vs. most major currencies, having added less than 0.1% to the dollar index amid macro statistics in the USA. The pound sterling dropped after the release of BBA Mortgage Approvals.

Durable Goods Orders, Housing Market, and Business Activity appeared to be better than expected. Durable Goods Orders in the USA, Leading Index, and Investment Activity increased in April by 0.8% m/m against the expectations of decrease by 0.7%. Previous month data was revised upwards.

However, the growth of Orders in April was mainly due to the increase of military orders, which rocketed by 39.3%. Durable Goods Orders Ex Defense dropped by 0.8%. Durable Goods Orders Ex Transportation increased by 0.1% m/m, whereas no changes were expected. Key indicator of future business investments – Nondefense Capital Goods Orders Ex Aircraft – dropped in April by 1.2% m/m after the growth by 4.7% in March.

The US S&P/Case-Shiller Composite-20 HPI increased in March by 12.4% y/y, having exceeded the expectations of growth by 11.8%. S&P/Case-Shiller Home Price Index strengthened its positions in March for the first time after four months of decrease. The Federal Housing Finance Agency (FHFA) also appeared to be better than it was forecasted. FHFA Housing Price Index increased in March by 0.7% m/m against the expectations of growth by 0.5%.

CB Consumer Confidence strengthened its positions in May to 83 p. in comparison with 81.7 p. in April which coincided with the expectations. Current Assessment, Labor Market in particular, and Economy Prospects Expectations, Employment, and Personal Finance appeared to be more positive in May than in the previous month.

The US Markit Flash Services PMI reached in May the highest rate for over 26 months: 58.4 p. in comparison with 55 p. in April. Richmond Fed Manufacturing Index was left unchanged in May at the level of 7 p., whereas decrease to 5 p. was expected.

The euro was traded downwards amid speech of ECB’s officials who exasperated the expectations of monetary policy easing, though at the beginning of the day the euro slightly strengthened its positions. ECB’s Nowotny announced that the Euro-Zone Inflation Rate is considerably lower the target ECB’s rate of 2%, and it is so low, that there is a risk of economy growth decrease. Nowotny indicated that the discussions held incline to decrease of interest rates. ECB’s President Draghi noted that ECB keeps in mind the risks connected with too long periods of low inflation, but he doesn’t see the risk of deflation.

The pound sterling dropped amid release of BBA Mortgage Approvals in the UK. According to BBA, Mortgage Approvals dropped in April to 8-month low against the expectations of growth. Mortgages decrease last month to 42,200 in comparison with 45,000 in March. At the same time New Mortgages turned into cash increased to £12.2 И against £11 И in March, and it is the highest monthly total since August 2008.

The Australian dollar strengthened its positions on Tuesday to weekly high vs. the US dollar amid increase of iron ore prices – iron ore is the largest item of Australian export. Iron ore prices repulsed from lows of 20 months after the comments of Chinese prime-minister at the end of last week where he pointed the increased readiness for taking stimulation measures considering the downward risks.

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Overview of the main economical events of the current day - 2/06/2014

Main Events of the Coming Week

On Friday 30 May the US dollar decreased vs. most major currencies, having lost 0.17% to the dollar index amid weak US Consumer Sentiment. The US Personal Spending also reduced in April for the first time this year.

UoM Consumer Sentiment decreased in May to 81.9 p. in comparison with 84.1 p. in April – and appeared to be higher the initial evaluate of 81.8 p., but considerably higher the expectations at the level of 82.5 p. Current Assessment considerably fell in May as well. Food prices growth, high prices for oil, and slow growth of wages decreased Consumer Sentiment.

The US Personal Spending sharply reduced in April by 0.1% m/m against the expectations of growth by 0.2%. Personal Spending increased in March by 1% m/m (the highest rate since August 2009). Personal Spending decreased of the first time for over a year which became the new sign of the US economy slowdown after several negative months when the data was corrupted by the deterrent weather. At the same time Chicago PMI increased in May to 7-month high at the level of 65.5 p. from 63 p. in April against the expectations of decrease.

The pound sterling strengthened its positions on Friday amid growth of the UK Consumer Confidence to the highest rate for over 9 years since April 2005. GfK Consumer Sentiment increased in May to zero in comparison with -3 in April, having exceeded the expectations of growth to -2 p. The euro also increased despite the decrease of inflation rate in Spain and Italy. According to preliminary data annual inflation growth rate dropped in May – in Italy from 0.6% to 0.5%, and in Spain – from 0.3% to 0.2%.

The Canadian dollar decreased amid the Canadian economy growth. Annual GDP growth deteriorated in March to 8-month low at the level of 2.1% from 2.3% in February, whereas no changes were expected. The Canadian Quarterly GDP annualized slowed down in the first quarter to 1.2% in comparison with 2.7% in the previous quarter and the forecast of 1.8%. The lowest growth rate for over 5 quarter was mainly due to sharp decrease of investment and export.

The yen strengthened its positions after the release of Japanese inflation rate, but then it negated the whole growth. Japanese inflation accelerated in April to the highest rate since 1991, whereas industrial production and household spending dropped after the increase of sales tax. Consumer Price Index increased in April to 3.4% y/y in comparison with the growth by 1.6% in March.

According to the results of the week the US dollar demonstrated mixed dynamics vs. major currencies and had almost no changes to the dollar index. The US dollar decreased vs. the Australian dollar, the yen, and the Canadian dollar; increased vs. the New Zealand dollar and the pound sterling; and had almost no changes vs. the euro and the Swiss franc. Weak economy growth rate and the US Consumer Confidence put additionally pressurized the US dollar. According to the results of May the US dollar added slightly more than 1% to the dollar index, and the dynamics was mixed as well: the US dollar increased vs. major European currencies and NZD, but decreased vs. the yen, CAD, and AUD.

During the coming first week of the month there will be a lot of important data released, including the US Non-Farm Payrolls, and the Meeting of four major Central Banks which will also take place this week. The major event will be the release of the key US Non-Farm Payrolls on Friday; preliminary ADP will be released on Wednesday. On Monday ISM Manufacturing PMI and Construction Spending will be released; on Tuesday – Industrial Orders; on Wednesday – Trade Balance, ISM Services PMI and Beige Book; on Thursday – weekly Unemployment Claims.

The major event in the Euro-Zone will be the Meeting of the European Central Bank, the results of which will be announced in Thursday. Decrease of all three ECB rates is expected as well. ECB will probably take other measures of easing as well which will be directed for acceleration of economy growth and inflation rate. On Tuesday important preliminary inflation rate will be released in the Euro-Zone – no changes of inflation rate are expected (0.7% y/y). On Monday Final Manufacturing PMI will be released; and on Wednesday – Final Services PMI; on Tuesday – Euro-Zone Unemployment Rate; on Wednesday – Revised GDP of the first quarter; and on Thursday – Retail Sales.

On Monday in German preliminary Inflation Rate will be released; on Thursday – Industrial Orders, and on Friday – Trade Balance and Industrial Production. In the UK Manufacturing PMI, Construction PMI, and Services PMI will be released in the first three days. On Monday BOE Monetary & Financial Statistics will be released; and on Friday – Trade Balance. On Thursday the results of Monthly BOE Meeting will be announced – no policy changes are expected. On Wednesday and Thursday G7 Meeting in Brussels will take place.

On Tuesday in China Non-Manufacturing PMI and HSBC Final Manufacturing PMI will be released; and on Sunday 8 June – Trade Balance. On Tuesday in Australia Retail Sales will be released, and RBA will announce the results of its Meeting about rates; on Wednesday GDP for the first quarter will be released; and on Thursday – Trade Balance. On Wednesday in Canada Trade Balance will be released; on Thursday – Building Permits and Ivey PMI; and on Friday – Labor Market report. On Wednesday the results of the BOC Meeting about the rates will be released.

By MasterForex Company

[MasterForex_Broker]

Overview of the main economical events of the current day - 05/06/2014

The US Services Activity Rocketed to 9-Month High

On Wednesday 4 June the US dollar strengthened its positions vs. most major currencies, having added 0.17% to the dollar index amid growth of Services Activity increased to the highest rate for over 9 months. The euro decreased amid weak Euro-Zone Services Activity.

The US Services Activity continued to grow for the third month in a row and reached in May the highest rate since August 2013. The US ISM Services PMI rose in May to 56.3 p. in comparison with 55.2 p. in April, having exceeded the expectations of growth to 55.5 p. Backlog of Orders, New Orders, Business Activity, and Employment increased most of all. Markit data also pointed acceleration of Services Activity growth in the USA in May to the highest rate for over more than two years – since March 2012. According to Fed’s Beige Book economy activity increased during recent two weeks in all US regions and this fact promoted increase of Consumer Spending.

At the same time ADP Employment and the US Trading Balance released on Wednesday appeared to be worse than expected. ADP Employment Change in the USA increased in May only by 179,000 in comparison with downwardly revised previous month’s reading at the level of 215,000 and the forecast of 210,000. Employment Change appeared to be the lowest for over 4 months. On Friday the US Labor Department will perform official Non-Farm Payrolls report. It is expected that Non-Farm Payrolls in May increased by 218,000 against 288,000 in April, and Unemployment increase by 0.1% to 6.4%.

The US Trade Balance deficit spread in April to 2-years high due to considerable growth of import, which appeared to be the highest throughout the history. Trade Balance deficit increased in April by 6.9% m/m to $47.2 billion, having considerably exceeded the expectations at the level of $40.8 billion. Previous month Trade Balance deficit at that was revised downwards – to $44.2 billion from the March reading of $40.4 billion. Import increased in April by 1.2% m/m, whereas export decreased by 0.2% m/m. Import growth indicates that consumers and companies started their spending recovery after winter fall.

The euro decreased amid Euro-Zone Services Activity which slowed down stronger than the initial estimate. Euro-Zone Final Services PMI in May composed 53.2 p. and appeared to be lower initial estimations of 53.5 p. Euro-Zone Flash Manufacturing PMI and Flash Services PMI decreased from 3-year high of 54 p. to 53.5 p., whereas 53.9 p. was reported before. Euro-Zone Revised GDP of the 1st quarter was confirmed at the level of 0.2% - at the same time 4th quarter data was revised upwards to +0.3% q/q from +0.2%.

The pound sterling the least decreased vs. the US dollar on Wednesday amid strong UK Services Activity growth rate. Services PMI just slightly decreased in May – from 58.7 p. to 58.6 p., whereas a more considerable decrease to 58.2 p. was predicted. Country’s services sector continued to steadily develop in May due to increase of new working places and creation of new companies, which is supported by the forecast of the Bank of England about the UK GDP growth this year by 3%. At the same time, BOE’s Richard Sharp announced that despite explosive growth of activity the economy of the UK is still unsteady and vulnerable to a whole range of risks – both inside ТВ outside the country.

The Canadian dollar dropped to its month low vs. the US dollar amid finished BOC’s Meeting during which the Overnight Rate was left without changes. Bank of Canada pointed downward risks for inflation prospects and weak export growth. Canadian economy recovers after the break in the 1st quarter, but the dynamics is slightly less than it was expected before. Canadian Trade Balance appeared to be worse than expected. Trade Balance deficit of 0.64 billion CAD was fixed in April, whereas its proficit of 0.20 billion was expected. Export dropped by 1.2% m/m, whereas import increased by 1.4% m/m to its record high.

Only the Australian dollar managed to strengthen its positions vs. the US dollar on Wednesday after the release of positive Australian economy growth rate which appeared to be the highest for over 2 years. Country’s GDP in the 1st quarter increased by 1.1% q/q, having exceeded the expectations of growth by 1%. Export gave a more contribution to the growth than before – in whole Australian economy returns to upward trend. New Zealand dollar was traded downwards amid drop of commodity prices. ANZ Commodity Prices dropped in May by 2.2% m/m after the drop by 3.7% in April, the decrease continues for the third month in a row.

By MasterForex Company