Daily Technical & Fundamental Analysis

USA posted faster inflation in October, December interest rate rise getting more real
14 November, 2018 18:28

USA posted faster inflation in October, December interest rate rise getting more real

The USA released inflation report for October today. As the data shows, the inflation rose by 2.5% y-o-y over the period under review, coming in line with the market outlook. At the same time, the rate increased by 0.3% m-o-m, which also corresponds to the previously voiced forecasts. At the same time, the core CPI, excluding power sources and food, showed an increase of 2.1% y-o-y instead of anticipated 2.2%. Faster inflation being above the target level set at 2% will be a strong reason for the tougher monetary policy. It is highly possible that the US Federal Reserve will lift the rate during the December meeting. However, there are some players considering inflation as the key threat for the US economy to deal with.

Sterling barely pays attention to positive reports, Brexit in focus
13 November, 2018 17:17

Sterling barely pays attention to positive reports, Brexit in focus

US dollar has slowed down, so other currencies mostly managed to take a breath following the recent greenback's aggression. The sterling was among these currencies showing attempts to rebound from the bottom below the 1.2826 handle touched yesterday. Still, the current recovery is hardly strong enough, so it appears to be a break before the new series of the decline. It should be noted good labour market results in the UK and a lack of the sterling reaction to the report. In the near term, sterling sales on the rise will keep making sense in particular given strong US dollar.

Oil prices attempt to rebound but fail so far
13 November, 2018 15:00

Oil prices attempt to rebound but fail so far

The recent upturn of the oil prices has turned to be short-lived, with the new selloffs to follow. The quotes just reached the 72 handle, but then Brent prices resumed collapsing even at a higher pace. Specifically, the 69 handle was broken for the first time since April as the market expert noted. On a Tuesday trading oil shows attempts to recover, though they are not firm enough to be signs of the upward impulse shaping. The Brent prices partly failed to rebound due to another aggressive message of Donald Trump saying that the current prices are too high.

Bearish trend gathers pace in oil market
09 November, 2018 16:55

Bearish trend gathers pace in oil market

Prices for oil slumped on Thursday, with Brent oil hitting the August bottom of 70.55/bbl. Bearish sentiments were fueled by soaring US Dollar after the bullish rhetorics of the US Federal Reserve. Additional pressure is said to come from weaker demand in the world amid global economic slowdown. Bulls can just expect that OPEC+ exporters will support the market during the upcoming meeting in Abu Dhabi. The oil organization may give a clear sign that everything is under their control as well as express readiness to limit oil production to prevent the oversupply.

Interest rate unlikely to change in November
08 November, 2018 17:22

Interest rate unlikely to change in November

The market is no longer focused on the election issue in the USA. Thus, risk aversion activities are fading away as well. Last week, second-tier currencies, including Indian rupee, South African rand, Turkish lira and Chilean peso enjoyed good demand. US Federal Reserve will most likely leave the interest rate unchanged after a this-week meeting. As a result, the rate will still be 2.00-2.25%, which in tandem with no scheduled press conference today will result in a moderate response of the markets. The markets reportedly plan to see balanced conditions once Donald Trump agrees upon monetary and fiscal softening. The event-trigger risks are likely to be low in 2019, and the global economic slowdown is already in the outlook. Stock prices may keep rising, while the greenback may move downwards.

Oil market suffers from negative reports
07 November, 2018 14:11

Oil market suffers from negative reports

The oil market was full of negative reports over the past day – prices plunged below the 72 handle for the first time since late August, hitting $71.15/bbl. However, the rates somewhat managed to offset daily decline over Tuesday. Nevertheless, the quotes stay generally weak. Extra pressure also came from the outlook released by the US Department of Energy, which upgraded the outlook of oil extraction in the USA by 1.5% and 2.6% for 2018-2019 respectively.

Iran to record oil supplies collapse in November, some upturn possible later
06 November, 2018 15:46

Iran to record oil supplies collapse in November, some upturn possible later

Oil exports from Iran collapsed on extended US sanctions in mid-2018. However, the major importers from Iran are going to boost buying benefiting from softer restrictions granted by Washington. The USA met halfway the largest investors (India, China, South Korea, Japan, Italy, Greece, Taiwan and Turkey) and agreed to make some concessions regarding the restrictions. These countries can buy out at least some volumes for another 180 days, so oil exports can hike beginning from December.

Good labour market report can promote interest rate upturn
02 November, 2018 17:30

Good labour market report can promote interest rate upturn

The US labour market has posted a good performance in October, including non-farm employment figures, as the report of US Department of Labour released today showed. Average hourly earnings rose 3.1% y-o-y, which came in line with the expectations. For reference, the last-month increase was 2.8% y-o-y. As for the unemployment rate, it stays low in the USA, expectedly reaching 3.7% in October, unchanged from September. According to the American economists, a job increase of 200,000 adds some 3% to US GDP. In October, we see as much as 250,000 in the non-farm segment and this fact will support the GDP growth unless this rate is recalculated and downgraded afterwards. The Federal Reserve pays attention to such data as non-farm payroll while determining further revision of the interest rate. In this case, the observed good results can promote further upward revision of the rate during the upcoming meeting of the Fed open market committee. At the same time, the currency market hardly reacted to this report, the market analyst noted.

Strong labour market report can support US dollar
01 November, 2018 15:59

Strong labour market report can support US dollar

The US dollar is losing grounds in the second half of the week, though ADP posted good enough labour market report. Earlier, traders used this report as a guideline for the outlook regarding the main report to be released on Friday. The private employment rate hiked by more than 200,000, which indicates that the US labour market in a good fettle now. However, fluctuations of the sentiments fueled US dollar weakening. Demand for the greenback as well as risk aversion activities slackened. Extra pressure on the US Dollar index came from the soaring sterling on the recent progress in the Brexit. Specifically, it was reported that the UK and EU representatives agreed that the UK financial companies will maintain access to the EU market after the divorce. In this situation, the sterling hit 1.29, with the euro follows to toe reaching 1.14.

Oil shortage fears fading away in the market
30 October, 2018 17:04

Oil shortage fears fading away in the market

Oil prices decreased at a moderate pace during the Monday trading following the rebound recorded late last week. Brent oil failed to hit the 78 handle, and quotes fell below 77, which has been observed today as well. The commodities market has to cope with several challenges at the beginning of this week. First of all, the USA keeps raising drilling activity, which indicates possible hikes of shale oil production. This week, the players seem to become more optimistic. Specifically, risk assets are on the rise now driven by Donald Trump's statements concerning the long-awaited trade deal with Beijing.

Japanese yen can show rise later
30 October, 2018 15:27

Japanese yen can show rise later

The US dollar is getting higher vs the yen this week. The rate is again close to the 113.00 handle, though customers become more careful approaching the psychological level, which means possible profit taking in the market. Investors have become more optimistic about the long-lasting US-China trade war, following recent Trump's message in which he expressed confidence in the agreement with the Chinese party. With this message, the market is naturally somewhat lifting in spirits especially given the previous statements. However, as the market analyst noted, Donald Trump is well known for his changing opinion. However, we should not forget that the US president was not sure that Beijing was ready for the deal. As a result, this is definitely not a progress with the risk to persist.

Euro still can move downwards
29 October, 2018 16:51

Euro still can move downwards

The euro preserves in its attempts to rebound during the Monday trading session. Last Friday, the currency managed to jump from the bottom to some $1.1335. The 1.14 handle is the main battlefront now, as the break of this level may soften sellers' pressure on the euro-to-US dollar rate. S&P agency downgraded its rating outlook for Italy to negative last weekend. However, the rating remained unchanged. At the same time, players mostly feared that the rating would be decreased, and they were happy with such a decision. Meanwhile, in Italy, state bonds rebounded with such background, while the yield dipped.