Daily Technical & Fundamental Analysis

State of euro-area economy can be a concern
23 November, 2018 14:24

State of euro-area economy can be a concern

On Friday, the euro has kept attempting to maintain the yesterday's upturn driven by the careful stance of the US dollar bulls. As for the Italian issue, the euro generally stays aside it and reacts just sketchy. However, this factor naturally adds some occasional instability. With the recent euro-area PMI, the euro to US dollar exchange rate collapsed from the peaks above the 1.14 handle. Given the current state of the European economy, it will be hard to find a reason to prepare the market for the interest rate revision by the European Central Bank run by Mario Draghi and his team.

US dollar uptrend can apparently be broken only by strong factors
21 November, 2018 17:00

US dollar uptrend can apparently be broken only by strong factors

The US dollar strengthening has slowed down following the Tuesday buying boom. However, the greenback still shows good positions, as the European investors reportedly maintain optimistic mood even despite tough situation everywhere. However, the Brexit and Italian budget are still in the spotlight in the market being the key factors that prevent European currencies from soaring.

Italy closer to EU budget penalty
21 November, 2018 16:21

Italy closer to EU budget penalty

Italy has got one step closer to the fines from the European Commission citing sharp noncompliance of the Italian draft budget to the EU requirements. Brussels confirmed that Italy strongly violated the Stability and Growth Pact. As a result, Italy can face a fine of 0.2% of GDP for that. Along with budget noncompliance, the European Commission prepared a separate report about Italian state debt, which was rescheduled on fears of debt burden in the country. As a result, it was discovered that Rome failed to comply with EU lending rules as well. It is expected that Italy will face slower GDP at 1.1% in 2018 (1.6% in 2017), while in 2019 the rate will be 1.2%. At the same time, the EC believes that the budget deficit will hike to 2.9% and 3.1% in 2019 and 2020 respectively.

Italian budget issue still can shake euro
20 November, 2018 17:10

Italian budget issue still can shake euro

The European Central Bank stated that the regional bond market faces minimal impact from the Italian issue. Meanwhile, the gap between the yield of 10Y bonds of Italy and Germany expanded to 335 basis points. The European currency is sensitive about this fact. The euro-to-US dollar rate plunged from the top of 1.1470 to the bottom line of 1.1403 after numerous attempts to break the $1.15 handle. As a result, the 1.14 handle is under a threat now.EU can raise pressure on Italy, one of the leading economies in the euro-area, which definitely will play against the European currency.

Prices for oil may slide to $60
20 November, 2018 15:57

Prices for oil may slide to $60

Brent oil managed to somewhat recover to $67/bbl, though the rebound was short lived. A mid-term outlook remains pessimistic despite local demand for the oil. As a result, prices have inevitably decreased to the support level of $60/bbl. Risk instruments are said to face a risk of even bigger losses until the situation gets clear. The last hope is the upcoming meeting of OPEC members slated for early December, the market expert noted. In the case of fruitful meeting and the countries agree on production cutbacks, oil can receive some support. Still, this scenario is barely possible. 

Situation runs high in UK Cabinet
19 November, 2018 14:10

Situation runs high in UK Cabinet

The sterling posted gains on Monday, which indicate the second positive day for the currency in a row. Today, the sterling to US dollar exchange rate was recorded above the 1.28 handle. The British currency keeps moderately rising targeting 1.29. However, the observed dynamics is mainly driven by the US dollar which shows unstable positions rather than the sterling. The greenback is affected by the US Fed alarm signals, as the regulator is concerned about the global economy, which can amend further monetary tightening policy followed by the US Federal Reserve. 

Upcoming G20 summit poses risk to greenback
16 November, 2018 17:19

Upcoming G20 summit poses risk to greenback

The US dollar is fluctuating, though the sentiments mainly bearish now. The sterling, in its turn, has managed to become generally stable following the recent collapse. The potential quit of Theresa May and no-deal Brexit can drive sterling down, though now it manages to survive to restrain the greenback's rebound. The G20 summit is about to take place in Argentine in two weeks, which can bring more risks to the US dollar.

Sterling down again, UK Cabinet hit by new quits
15 November, 2018 15:34

Sterling down again, UK Cabinet hit by new quits

The US dollar regains positions benefiting from the events that hit the UK. Specifically, Dominic Raab, Secretary of State for Exiting the EU, has resigned being against the variant of the Brexit deal with the proposed terms. Moreover, Work and Pension Secretary, Esther McVey also quits the Cabinet. In this situation, the vote of unconfidence in the Prime Minister, Theresa May, is getting more and more real. As a result, the sterling bulls have had to step back for now. The sterling-to-US dollar exchange rate failed to take roost above $1.30, and now the rate plunged to $1.2792. The UK political drama and Brexit are in the spotlight now.

Oil market needs new support factors to strengthen
15 November, 2018 14:17

Oil market needs new support factors to strengthen

The oil market shows some signs of stabilization. The Brent prices had been already less volatile despite further bearish API report. Specifically, the prices managed to stay above the 65 handle and even moved up to 66. A slight upward trend is seen at the Thursday's trading. Last week, as the American Petroleum Institute reported, reserves of crude shale oil in the USA soared by 8.8 million bbl, while the forecast was set at about 3.2 million bbl. Petroleum reserves rose 200,000 bbl, though distillates ones decreased by 3.2 million bbl. The market insiders did not overact this data, which can mean that they the market is focused now on the statements of OPEC+ members and wait for new messages regarding oil production decreases. Specifically, these factors will be the main drivers for the Brent prices in the near term.

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.