Morning Market Review
2019-07-02 08:37 (GMT+2)
EUR/USD

The euro showed a steady decline against the US dollar on Monday, retreating to June 20 levels. EUR was pressured by ambiguous macroeconomic statistics from Europe and China, as well as the general correctional sentiment in favor of the dollar, which remained pressured all last week in view of the start of the G20 summit. The summit ended optimistically. Investors enthusiastically greeted the results of the meeting of Donald Trump and Xi Jinping, who managed to prevent another increase in import duties. In addition, the parties agreed to continue full-format trade negotiations, therefore, there's still a possibility of a final trade deal. Today, the pair is trading in a flat. Investors are focused on the statistics on retail sales in Germany in May and the European producer price indices.

GBP/USD

At the beginning of the week, the British pound fell against the US dollar updating local lows of June 20. Traders returned to active sales of the pound amid the publication of weak macroeconomic statistics from the UK. In addition, as the trade conflict between the USA and China gradually fades, more and more investors are following the uncertain prospects for Brexit. The Markit Manufacturing PMI in June fell from 49.4 to 48.0 points, with a forecast of a decline to 49.2 points. Consumer lending in May slowed from 0.968 billion to 0.822 billion pounds, which turned out to be worse than market expectations of 0.967 billion. The number of approved mortgage applications in May also showed a decline from 66.045 to 65.409 thousand (forecast 65.600K). On Tuesday, investors expect the publication of the Construction PMI, as well as speech by the Bank of England head Mark Carney.

AUD/USD

The Australian dollar fell significantly against the US one on Monday, departing from local highs of May 7. The decline in the instrument was largely technical in nature since it was preceded by a 9-day "bullish" rally of AUD. The instrument was additionally pressured by published macroeconomic statistics from Australia and China. The Australian AiG Manufacturing PMI in June fell from 52.7 to 49.4 points. The Chinese Caixin Manufacturing PMI in June fell from 50.2 to 49.4 points, with a forecast of 50.0 points. Today, the pair is trading in both directions. Investors are focused on the RBA interest rate decision. As expected, the regulator reduced the rate from 1.25% to 1.00%, explaining that by the need to support inflation and the level of employment.

USD/JPY

The US dollar rose against the Japanese yen on Monday, updating local highs of June 19. The instrument was supported by positive results of the meeting between Donald Trump and Xi Jinping, who managed to achieve a temporary truce in a trade conflict. The yen was pressured by published macroeconomic statistics from Japan. Nikkei Manufacturing PMI in June fell from 49.8 to 49.3 points, which turned out to be worse than the expectations of 49.5 points. The consumer confidence index for the same period fell from 39.4 to 38.7 points, against the forecast of growth to 40.4 points.

Oil

Oil prices showed a decline on July 1, although multidirectional dynamics was observed during the day. The quotes are strongly supported by the OPEC  decision to extend the existing agreement on limiting oil supplies until March 2020. Thus, Saudi Arabia to some extent ignored the demands of Donald Trump to increase the volume of supplies in order to further reduce prices. On July 2, OPEC will hold talks with non-members that have previously joined the agreement. For example, Russia is also expected to support the cartel, which will provide additional support to quotes. Oon Tuesday, investors are also focused on the publication of the API report on oil reserves. Last week, the report showed a sharp decline in stocks of 7.55 million barrels.

Morning Market Review
2019-07-04 08:17 (GMT+2)
EUR/USD

The euro showed ambiguous dynamics against the US dollar on Wednesday, updating local highs of June 20. The support came from good macroeconomic statistics. The Markit Services PMI in June rose from 52.9 to 53.6 points, while the forecast was for growth to 53.4 points. The Composite Manufacturing PMI for the same period strengthened from 51.8 to 52.2 points, which also turned out to be better than forecast (52.1 points). Another factor supporting the euro remains the likelihood of lowering interest rates by the Fed as early as the July meeting. In addition, US President Donald Trump continues to exert strong pressure on the regulator, openly calling for the devaluation of the dollar. Today, EUR is correcting. Investors are focused on a block of European statistics on retail sales for May, as well as a speech by ECB representative Philip Lane and ECB Vice President Luis de Guindos.

GBP/USD

The pound finished Wednesday with a moderate decline against the US dollar, continuing the development of the "bearish" impulse formed at the beginning of the week. The British currency continued to be pressured by weak macroeconomic statistics from the UK. In May, the BRC retail price index showed a decline of 0.1% YoY after rising by 0.8% YoY last month. The Markit Services PMI in June fell from 51.0 to 50.2 points, while investors did not expect any changes. Today, the attention of the market has shifted to data from the USA, which turned out to be ambiguous. Among the negative aspects, one can note the decline in production orders in May by 0.7% MoM after a decrease by 1.2% MoM and a slowdown in the ISM Services PMI in June from 56.9 to 55.1 points with a forecast of 55.9 points.

AUD/USD

The Australian dollar strengthened against the US one since July 2, updating local highs of May 7. The instrument is growing against the background of the publication of a rather uncertain macroeconomic statistics from the USA. Also, it is supported by the prospect of a Fed rate cut in July and the overall pressure that Donald Trump puts on the regulator. The improvement in the US-China trade relations also helps AUD, which counts on the growth of Chinese production. Today, the pair is trading in an uptrend. The published statistics on retail sales from Australia in May provides little support. The indicator rose by 0.1% MoM after falling by 0.1% MoM last month but did not reach the forecast (0.2%). US markets are closed on Thursday to celebrate Independence Day.

USD/JPY

The US dollar remains pressured against the Japanese yen, trading mostly in a downtrend after the update of local maxima at the beginning of the week. The ADP Employment Report published yesterday had a moderate pressure on the dollar. In June, the report reflected the growth of new jobs in the private sector by 102K versus 41K last month. The analysts suggested an increase in employment of 140K. Initial jobless claims for the week of June 28 decreased from 229K to 221K, with a forecast of 223K. Continuous jobless claims also fell, from 1.694 to 1.686 million (forecast 1.675 million). Today, the instrument is traded in both directions. Low investor activity is caused by closed US markets on the occasion of Independence Day. Moderate support for the yen is provided by investment performance. The volume of foreign investment rose by 58.5 billion Japanese yen after a decrease of 313.3 billion over the past period. Investments in foreign bonds rose by 514.3 billion yen after rising by 497.8 billion.

Oil

Oil prices rose moderately on July 3, partially recovering from a sharp decline on Tuesday. Quotes continued to be supported by the positive results of the OPEC+ meeting, at which it was decided to extend the existing agreement to restrict supplies for another 9 months. The growth was also supported by the API report on oil reserves, published on Tuesday, which indicated a reduction by 5 million barrels. On Wednesday, the US Department of Energy published a report, which failed to meet expectations. For the week of June 28, according to EIA, oil reserves fell by only 1.085 million barrels after a decline of a record 12.788 million for the last period. The report also reflected growth in US oil production from 12,100 to 12,200 million barrels per day.

Morning Market Review
2019-07-08 08:24 (GMT+2)
EUR/USD

On Friday, the euro fell significantly against the US dollar updating local lows of June 19. The reason for the emergence of a confident downward dynamics were strong data on the US labor market. The number of nonfarm payrolls in June increased by a record 224K after growth by 72K last month. Analysts had expected an acceleration of positive dynamics only by 160K, which seemed to be a very optimistic estimate. The unemployment rate in June rose from 3.6% to 3.7%, while the average hourly wage did not change from the previous 3.1% YoY. The euro was pressured by German data. The production orders in May decreased by 2.2% MoM and 8.6% YoY, which was significantly worse than the expected values of –0.1% MoM and −5.7% YoY. Today, investors are focused on a block of macroeconomic statistics from Germany on the industrial output and the trade balance for May.

GBP/USD

The British pound closed last week with a confident decline against the US dollar. The growth of "bearish" activity was connected to unexpectedly strong employment data in the June report on the US labor market. Instead of the planned 160K, the US economy added 224K of nonfarm payrolls, which heightened hopes of abandoning the interest rate cut during the July meeting of the Fed. However, in the monetary policy report, the regulator will point out a slowdown in GDP growth, despite rising consumption and some positive trends in the labor market. The wording remains the same and the Fed promises to act "according to the situation". Published on Friday, macroeconomic statistics from the United Kingdom was ambiguous. The Halifax home price index in June fell by 0.3% MoM after growth of 0.4% MoM in May. Analysts were expecting a decline of −0.2% MoM.

AUD/USD

The Australian dollar dropped significantly against the US one at the end of last week, interrupting another growth attempt and returning to the levels of the beginning of the month. This market reaction was caused by the publication of strong data on employment in the US, which strengthened the arguments in favor of maintaining the Fed's current monetary policy. The Australian dollar remains pressured amid the lack of progress in the US-China trade negotiations, but the macroeconomic statistics from Australia provides moderate support to the instrument. On Friday, investors were optimistic about the data on the AiG Construction PMI. In June, the index rose from 40.4 to 43.0 points, above market expectations. Today, the instrument is supported by data on the number of vacancies. In June, the ANZ index showed a steady growth of 4.6% MoM after a decrease of 8.2% MoM last month.

USD/JPY

The US dollar rose against the Japanese yen on Friday, updating local highs of June 18. At the end of the week, confident support for the US currency was provided by data on the US labor market for June, which reflected a sharp increase in nonfarm payrolls by 224K (with a forecast of 160K). At the same time, the report indicated an increase in unemployment and a slowdown in the average hourly wage MoM in June. Published on Friday, macroeconomic statistics from Japan was ambiguous. The index of coincident indicators in May rose from 102.1 to 103.2 points, while the index of leading indicators decreased from 95.9 to 95.2 points. Today, the pair is trading in both directions. The yen is pressured by mixed macroeconomic statistics from Japan. Bank lending slowed in June from 2.6% to 2.3% YoY, while the forecast was 2.8% YoY. The demand for machine-building products in May fell by 7.8% MoM after a growth of 5.2% MoM last month.

Oil

Oil prices rose moderately on July 5, despite the general strengthening of the dollar. Quotes are supported by growing tensions around Iran, as well as by the OPEC+ decision to extend the agreement on limiting oil supplies for another 9 months. In addition, investors are optimistic about the resumption of the US-China trade negotiations this week, counting on signals on the industrial activity increase in China.

Morning Market Review
2019-07-10 08:25 (GMT+2)
EUR/USD

The euro continued a decline against the US dollar on Tuesday, updating local lows of June 19. The single currency is pressured by uncertain macroeconomic statistics from Europe, as well as a fairly optimistic mood on the dollar. Yesterday, Fed Chairman Jerome Powell had a speech, which was devoted to the problem of banks reliability and stress tests program. His speech on July 10 will be much more important since it will be devoted to the problems of monetary policy. Some analysts believe that, given the latest report on the US labor market, the Fed will try to take a wait-and-see attitude and refuse to cut rates during the July meeting. In addition, on Wednesday the ECB meeting is expected and the publication of the FOMC minutes.

GBP/USD

The pound declined markedly against the US dollar on Tuesday, updating local lows of January 3. The "bearish" dynamics was facilitated by the uncertain macroeconomic statistics from the UK. In June, the BRC retail price index again showed a decline of 1.6% YoY after declining by 3.0% YoY last month. Analysts had expected positive dynamics of 0.8% YoY. On July 10, the market expects the publication of a large block of statistics from the UK. Among other things, investors are focused on the dynamics of industrial output in May, GDP growth rates in May (and the forecast for June), as well as the trade balance. In the USA, the focus of attention will be the speech of Fed Chairman Jerome Powell in Congress.

AUD/USD

The Australian dollar continues to develop a downward trend against the US one, updating local lows of June 21. "Bearish" sentiment is supported by the strengthening of USD amid a possible refusal of the Fed to reduce interest rates during the July meeting. The last report on the US labor market, which reflected a sharp increase in the level of employment, may be the reason for the regulator to do this, although it also showed an increase in the unemployment and a slowdown in wage growth. Today, the instrument continues to trade within a downtrend. AUD is pressured by weak macroeconomic statistics from Australia. Westpac consumer confidence index in July showed a decline of 4.1% MoM after declining by 0.6% MoM last month.

USD/JPY

The US dollar continues to grow moderately against the Japanese yen, as interest in risk remains on the market. Investors await possible signals from the Fed to maintain a waiting position amid the publication of a strong report on the US labor market. Published macroeconomic statistics from Japan exerts additional pressure on the yen. Yesterday, traders were disappointed with the preliminary data on the demand for machine-building products and equipment. In June, the indicator dropped sharply by 38.0% YoY after a decline of 27.3% YoY a month earlier. Today, the yen is pressured by an index of domestic prices for corporate goods. In June, the indicator decreased by 0.5% MoM and 0.1% YoY, whereas investors expected –0.3% MoM and +0.3% YoY.

Oil

Oil prices showed a moderate increase on July 9, as investors concentrated on growing tensions in the Middle East. Additional support for quotes is still provided by the decision of OPEC+ to extend the agreement to restrict production for another 9 months. A powerful "bullish" signal was the API report on oil reserves published yesterday. For the week of July 5, stocks fell sharply by 8.129 million barrels after declining by 5.000 million over the past period. However, the previous API report was significantly different from the data of the Department of Energy, so investors still prefer to wait for the publication of official data.

Morning Market Review
2019-07-12 08:45 (GMT+2)
EUR/USD

The euro showed ambiguous dynamics against the US dollar on Thursday, having managed to update the local maxima of July 5. The European currency was supported by published macroeconomic statistics from Germany. The harmonized consumer price index in June rose by 0.3% MoM after rising by 0.1% in May. The index showed an increase of 1.5% YoY, which also turned out to be better than market expectations of 1.3%. Information about the ECB meeting on monetary policy of 5-6 June, which was also published yesterday, put moderate pressure on the euro. The protocols reflected the revision of the Eurozone GDP for 2019 up to 1.2% YoY. However, for 2020 and 2021, GDP forecasts were revised down to 1.4% YoY. The regulator also expects current interest rates to remain unchanged at least until the first half of 2020. Today, investors are focused on the publication of May statistics on industrial output in the Eurozone.

GBP/USD

The pound ended Thursday with ambiguous dynamics. Despite the growth during the day, with the opening of the American session, the "bearish" sentiment recovered, which led to the correction and closing of the pair in the red zone. Traders were rather skeptical about the Bank of England financial stability report published on Thursday. However, the document reflected the readiness of the UK financial system to the negative consequences of the "tough" Brexit. But investors were much more interested in the published macroeconomic statistics on consumer inflation in the USA. In June, the consumer price index, excluding food and energy, rose by 0.3% MoM and 2.1% YoY, with a forecast of 0.2% MoM and 2.0% YoY.

AUD/USD

The Australian dollar is steadily strengthening against the US dollar, updating local highs since July 5. Published on Thursday, macroeconomic statistics from Australia turned out to be ambiguous, which, however, did not prevent the AUD from maintaining an uptrend. Moreover, investors partially ignored the strong US data on consumer inflation, which increased the likelihood of the Fed keeping the interest rates unchanged in July. Investment loans for the construction of new homes in May declined by 1.7% MoM after declining by 2.2% MoM last month. The volume of mortgage loans in May showed zero dynamics after a decline of 0.9% MoM in April.

USD/JPY

The US dollar showed a decline against the Japanese yen on July 11 but managed to recover by the closing of the day session, having received support from strong consumer inflation data. Moderate support was also provided by data on applications for unemployment benefits. For the week of July 5, the number of initial jobless claims decreased from 222K to 209K, significantly better than the forecast of 223K. Today the instrument is again trading in a downtrend, despite the publication of ambiguous statistics from Japan. Industrial output in May slowed from 2.3% to 2.2% MoM, which turned out to be worse than analysts' expectations. YoY, the decline deteriorated from −1.8% to −2.1%. However, the use of production capacity increased from 1.6% to 1.7% MoM.

Oil

Oil prices showed a slight increase on July 11 but corrected to the opening marks by the end of the day session. Quotes were supported by the closure of a number of oil rigs in the Gulf of Mexico in anticipation of the storm. In addition, investors are closely watching the development of tensions in the Middle East after the deterioration of US-Iranian relations. On Friday, investors are focused on Baker Hughes report on active oil platforms in the USA.

Morning Market Review
2019-07-16 08:31 (GMT+2)
EUR/USD

The euro showed a negative trend against the US dollar on July 15, departing from local highs, updated on Thursday. On Monday, there were no interesting macroeconomic statistics from the Eurozone, so investors concentrated on existing data and releases from China. In the US, only the New York Fed Manufacturing PMI has been published. In July, the figure rose by 4.3 points after falling by 8.6 points in June and with the forecast of growth by only 2.0 points. Today the pair is trading ambiguously, waiting for the appearance of new drivers. Investors are focused on a block of statistics on business sentiment in Germany and the Eurozone from the ZEW Institute. Also, investors are awaiting the publication of data on consumer prices in Italy for June and the Eurozone trade balance for May. The USA will respond by releases on retail sales and industrial output for June. By the end of the daily session, the market expects the speech of Fed Chairman Jerome Powell.

GBP/USD

The pound fell markedly against the US dollar on Monday. A certain pressure on the British currency was caused by weak statistics on the dynamics of housing prices. The Rightmove house price index in June showed a decline of 0.2% MoM and 0.2% YoY after rising by 0.3% MoM and 0.0% YoY in May. An additional negative factor is growing uncertainty around Brexit. In the near future, elections will be held for the new prime minister, who will have to resolve issues of coordinating a deal with the EU. The current deadline implies the Brexit by October 31, and some candidates, for example, Boris Johnson, insist on a "tough" Brexit, if parliament re-blocks the agreement. Today, investors are focused on statistics on the labor market. Also, the speech of the Bank of England's head Mark Carney is expected.

AUD/USD

The Australian dollar continues to grow steadily against the US one, updating local highs since July 4. Monday's macroeconomic statistics from China provided strong support to AUD. The data indicated a sharp increase in industrial output in June from 5.0% to 6.3% YoY, with a forecast of 5.2% YoY. China's quarterly GDP accelerated from 1.4% to 1.6% (forecast 1.5% QoQ). YoY, as analysts had expected, GDP slowed down from 6.4% to 6.2%. Today, the pair is trading in both directions, waiting for the appearance of new drivers on the market. Investors are focused on the protocol of the RBA meeting of July 2, at which the regulator decided to reduce the interest rate by 25 basis points to 1.00%.

USD/JPY

The US dollar showed a flat dynamics against the Japanese yen on Monday and today shows a slight growth. There were no data from Japan, as the markets were closed on the occasion of the Marine Day. On Tuesday, there would be also no publications from Japan, so investors will focus on releases from the USA. The focus is on statistics on retail sales and industrial output for June. Fed Chairman Jerome Powell is expected to speak, as well as a number of other Fed representatives, among whom are Raphael Bostic, Michelle Bowman, and Charles Evans.

Oil

Oil prices declined slightly on July 15, responding to the publication of controversial macroeconomic statistics from China. Quotes are still supported by a high degree of tension in the Middle East, as well as the lack of progress in the US-China trade negotiations. Chinese data pointed to weak economic growth in annual terms, but also reflected a sharp increase in industrial output, which correlates well with the increase in crude oil imports. Import volumes rose to a record high of 13.07 million barrels per day (by 7.7% YoY). Growth was promoted by the launch of new refineries in China. On Tuesday, investors are focused on the publication of the API report on oil reserves for the week of July 12.

Morning Market Review
2019-07-19 08:24 (GMT+2)
EUR/USD

The euro rose significantly against the US dollar on Thursday, returning to the local highs of July 15. The single currency was still supported by moderately optimistic data on consumer inflation in the Eurozone in June. In addition, investors were noticeably disappointed with the US statistics on the housing market, which turned out to be below market expectations. There was no new data from the Eurozone on Thursday, so the euro developed a correctional dynamics amid the lack of progress in the US-China negotiations. Today, the instrument again trades in both directions with a noticeable predominance of "bearish" sentiment. Investors expect the publication of data on industrial inflation in Germany for June and the statistics on the balance of the current account in the Eurozone in May.

GBP/USD

The British pound strengthened against the US dollar on July 18, returning to the levels of the week's beginning. The pound was strongly supported by data on retail sales in the UK, which lowered concerns about a further slowdown in the British economy (especially in view of a possible "tough" Brexit). In June, retail sales increased by 1.0% MoM after a decline of 0.6% MoM in May. YoY, sales accelerated from 2.2% to 3.8%, which was significantly better than the forecast of 2.6%. Today, investors are noticeably cautious, fearing to develop an upward trend in the instrument. The focus is on data on the dynamics of public sector borrowing in June, as well as the publication of statistics on the University of Michigan consumer confidence index for July.

AUD/USD

The Australian dollar rose substantially against the US one on Thursday, updating local highs of April 24. It is curious that AUD has managed to show quite active growth, despite the ambiguous report on the Australian labor market for June. It reflected employment growth for mere 0.5K jobs, while in May the growth was 45.3K. Analysts were expecting growth of 10.0K jobs. Macroeconomic statistics from the USA published on Thursday was moderately optimistic. The secondary jobless for the week on July 5 decreased from 1.728 to 1.686 million, with an expected decrease only to 1.700 million. Initial jobless claims expectedly increased from 208K to 216K. Most of the support for USD currency was provided by the Philadelphia Fed Manufacturing PMI, which rose from 0.3 to 21.8 points in July against the forecast of growth to 5 points.

USD/JPY

The US dollar showed a steady decline against the Japanese yen on Thursday, updating local lows of June 26. Today, the pair is trading with quite active growth, being influenced by technical factors. Investors are focused on a block of macroeconomic statistics from Japan on consumer inflation, which, however, does not have a noticeable effect on the instrument. The national consumer price index in June showed an increase of 0.7% YoY, which coincided with the previous data and forecasts of experts. In turn, the activity index in all industries in May rose by 0.3% MoM after rising by 0.9% MoM last month, while investors expected negative dynamics of −0.2% MoM.

Oil

Oil prices showed ambiguous trend on July 18, updating monthly local minima. Quotes began to fall amid a sharp decline in US stock exchanges, as well as due to expectations of a quick recovery in production in the Gulf of Mexico after the hurricane last week. The instrument is also pressured by a previously published report from the EIA, which indicated a decrease in crude oil reserves, but also reflected a sharp increase in gasoline and distillate stocks. Investors are also reacting negatively to deadlocked US-China trade negotiations. Apparently, the situation will not change as long as the US authorities do not ease the sanctions on the Chinese company Huawei. On Friday, a Baker Hughes report on active oil rigs in the US is expected.

Morning Market Review
2019-07-23 08:26 (GMT+2)
EUR/USD

The euro showed a moderate decline against the US dollar on July 22, continuing the development of a strong "bearish" impulse formed on Friday. Monday's macroeconomic background remained insignificant; therefore, investors were still focused on the upcoming meetings of the world central banks. On Thursday, the ECB will publish the minutes of its meeting. Given the negative macroeconomic statistics and rather gloomy prospects for the world economy, it is likely that the European regulator is announcing a new interest rate cut. However, the likelihood of such an outcome just exceeded 50%, so the intrigue remains. On Tuesday, the market expects the publication of data on bank lending in the Eurozone and preliminary statistics on the level of consumer confidence.

GBP/USD

The British pound is trading in a downward trend against the US dollar, developing a correction formed at the end of last week. The pound remains pressured amid uncertain prospects around Brexit. Today we will know the name of the new prime minister, who, following Theresa May, will have to deal with the issue of concluding an agreement with the EU. Chances are high that the new prime minister will be former foreign minister, Boris Johnson, who has previously actively advocated a "tough" Brexit if the EU does not make concessions on the Irish border. On Tuesday, investors are also awaiting the publication of the minutes of the Financial Policy Committee meeting and the CBI report on changes in the volume of industrial orders in July.

AUD/USD

The Australian dollar showed ambiguous dynamics against the US dollar on Monday, retaining the "bearish" impulse formed at the end of last week. AUD is pressured by a tense situation around the US-China trade negotiations, which again come to a standstill. Investors are also awaiting a Fed meeting at the end of July, which could result in interest rates lowering. The speeches of the official representatives of the regulator at the end of the week provoked a fairly strong correction in favor of USD, and now conversations are about the scale of the upcoming easing, rather than about the fact of the rate cut.

USD/JPY

The US dollar has been rising against the Japanese yen since the end of last week, recovering from local lows of June 26, updated last Thursday. On Monday, investors were focused on the speech of the head of the Bank of Japan, Haruhiko Kuroda, who reaffirmed his readiness to resume economic stimulation in the event of further growth in global uncertainty. In addition, Kuroda is ready for additional monetary easing to achieve a target inflation rate of 2%. Today, the pair is trading in an uptrend. Market participants are waiting for the publication of US macroeconomic statistics. The focus will be on Redbook statistics on retail sales, as well as the dynamics of sales in the secondary housing market.

Oil

Oil prices showed ambiguous dynamics on July 22, closing with almost zero results. Quotes are still supported by growing tensions in the Persian Gulf. Last week, investors reacted violently to the seizure of a British tanker by Iran in response to similar actions by Britain in early July. In turn, the pressure on prices is exerted by a further decline in demand for petroleum products amid a slowdown in global economic growth. Today, in addition to the publication of macroeconomic statistics from the United States, the API report on oil reserves for the week of July 19 is expected. The previous report reflected a decline in stocks by 1.401 million barrels.

Morning Market Review
2019-07-29 08:38 (GMT+2)
EUR/USD

EUR showed a moderate decline against USD on July 26, approaching the record lows of May 2017, updated the day before. The development of the "bearish" dynamics of the instrument was facilitated by not the strongest macroeconomic data from Europe. The German Import Price Index in June fell by 1.4% MoM and 2.0% YoY, which was significantly worse than market expectations (–0.8% MoM and –1.5% YoY). In turn, the data published in the US was able to provide moderate support to USD. Preliminary estimates reflected a slowdown in the US economy in Q2 2019 from +3.1% to +2.1% YoY, which turned out to be somewhat better than market expectations of +1.8% YoY. Pressure on EUR is also exerted by the prospect of another monetary policy easing by the ECB, which is not straightforward yet. It is likely that the regulator will decide on new interest rate reductions only in the first half of 2020.

GBP/USD

GBP declined significantly against USD on Friday, updating local lows of April 2017. British investors are still focused on Boris Johnson's victory in the elections. The new head of the Conservative Party is still engaged in the selection of the government and has not yet noted any concrete steps in the Brexit issue, but the market is very negative. In particular, investors draw attention to the criticism of Johnson by the Minister for Foreign Affairs of Ireland. During the Asian session on July 29, the instrument is trading ambiguously, waiting for new drivers to appear at the market. A large block of macroeconomic statistics from the UK is planned to be published today. The first in line will be the data on Nationwide House price index. The statistics on BoE Consumer Credit and Mortgage Approvals in June are also expected to be released.

AUD/USD

AUD closed on Friday with a steady decline against USD, updating local lows of June 21. At the end of last week, there were no interesting macroeconomic statistics from Australia; therefore, the movement of the instrument was largely technical. In turn, the data on the dynamics of US GDP for Q2 2019 contributed to the preservation of the "bearish" dynamics. Contrary to forecasts of a slowdown in the US economy to +1.8% YoY, real data indicated an increase of +2.1% YoY, which may be a signal in favor of maintaining the current monetary policy at the Fed meeting at the end of the month. On Wednesday, July 31, investors are also awaiting the publication of important statistics on the dynamics of consumer inflation in Australia for Q2 2019.

USD/JPY

USD showed insignificant growth against JPY on Friday, having updated local highs of July 10. The development of ambiguous trading dynamics was promoted by macroeconomic publications from Japan and the USA, as well as the fact of fixing long profits after the rally of the dollar last week. During the Asian session on July 29, the pair is trading in both directions. The focus of investors is on the retail sales data in Japan. In June, sales volumes showed zero dynamics on a monthly basis, after rising by 0.4% MoM last month. Analysts expected the increase of +0.8% MoM. In annual terms, the increase has slowed from +1.3% YoY to +0.5% YoY, with the forecast of +0.2% YoY.

Oil

Oil prices showed ambiguous trading dynamics at the end of last week, as the growth of tensions in the Middle East was held back by signals of a slowdown in US economic growth. Despite the fact that Friday's data on US GDP for Q2 2019 turned out to be better than expected (+2.1% YoY against the forecast of +1.8% YoY), the slowdown rate is quite noticeable, therefore one can still expect steps aimed at stimulating the national economy by the Fed. Baker Hughes report on active oil platforms in the US published last Friday showed moderate support for quotations, indicating a further reduction in the number of drilling rigs from 779 to 776 units.

Morning Market Review
2019-08-01 08:57 (GMT+2)
EUR/USD

EUR showed a steady decline against USD on Wednesday updating record lows of May 2017. The instrument was under pressure from weak macroeconomic statistics from the euro area. According to preliminary estimates, euro area's GDP in Q2 2019 slowed down from +0.4% QoQ to +0.2% QoQ, which coincided with market expectations. In annual terms, the indicator decreased from +1.2% YoY to +1.1% YoY, which turned out to be better than the forecast. Preliminary data on consumer inflation were also disappointed. In July, the Core Consumer Price Index slowed down from +1.1% YoY to +0.9% YoY against the forecast of +1.0% YoY. With the opening of the US session and the publication of the Fed’s decision to lower the interest rate by 0.25 points, the instrument managed to partially recoup; however, during the Asian session on August 1, the market again has strong "bearish" sentiment.

GBP/USD

GBP showed ambiguous dynamics against USD on Wednesday, interrupting the development of a confident downward rally, which brought the instrument to record lows of March 2017. GBP was supported by the expectation of a decrease in the interest rate by the Fed, which was fully justified. The US regulator lowered the rate by 0.25 points, as expected by most experts, while already halting the balance reduction (previously this process was supposed to be completed in September). During the Asian session on August 1, the instrument is trading downwards, waiting for new drivers to appear at the market. On Thursday, investors are focused on the Bank of England decision on interest rates and comments by the head of the British regulator Mark Carney. No changes in the monetary policy are expected from the Bank of England, since it is obvious that the regulator will take a wait and see attitude in anticipation of the next Brexit deadline.

AUD/USD

AUD fell significantly against USD on Wednesday, continuing to develop a confident downtrend since July 19. However, during yesterday's Asian session, the instrument showed moderate growth caused by the publication of strong statistics on consumer inflation. The Consumer Price Index in Q2 2019 rose by 0.6% QoQ after zero dynamics in the previous quarter. Analysts had expected growth rate at 0.5% QoQ. YoY, the growth of the index accelerated from +1.3% to +1.6%. Today, the pair is trading in both directions. Moderate support for the instrument is provided by Australia's Manufacturing PMI. In July, according to data from Commonwealth Bank, the index exceeded expectations of 51.4 points and amounted to 51.6 points. Additional support was provided by Chinese statistics. Caixin Manufacturing PMI in July rose from 49.4 to 49.9 points, exceeding the forecast of 49.6 points.

USD/JPY

USD showed moderate growth against JPY on Wednesday, updating other local highs. The growth of the instrument was not impeded by the fact that the Fed cut interest rates, or by the publication of controversial macroeconomic statistics from the US. As expected, the regulator lowered the interest rate by 0.25 points and announced the suspension of the balance reduction program from the beginning of August. Published data indicated a sharp decline in Chicago's PMI in July from 49.7 to 44.4 points with a forecast of 50.6 points. At the same time, ADP Nonfarm Employment Change report in July reflected a steady increase of 156K jobs with an increase of 112K last month. Analysts expected a growth of 150K. On Friday, investors are awaiting the publication of the July report on the US labor market.

Oil

Oil prices showed a decline on Wednesday, retreating from updated local highs of July 17. The decrease in the interest rate by the Fed by 0.25 points did not provide significant support to the instrument, since the market had already taken a similar outcome into account. At the same time, during the day, oil was supported by the API report published the day before and the EIA report released on Wednesday. A report from the Department of Energy indicated a decrease in US oil inventories by 8.496 million barrels after a decrease of 10.835 million barrels over the past period. Analysts expected a much more modest reduction of 2.588 million barrels. At the same time, the report also reflected an increase in oil production in the United States from 11.300 to 12.200 million barrels per day.

Morning Market Review
2019-08-06 08:47 (GMT+2)
EUR/USD

EUR rose against USD on Monday, updating local highs of July 23. EUR was supported by the actions of the US administration, which went on softening its position in the trade dispute with the EU. In particular, the parties managed to reach an agreement on increasing the volume of imported meat from the US to the EU countries. At the same time, trade relations between the US and China continue to deteriorate. Following the decision of Donald Trump to introduce an additional 10% duty on Chinese goods worth USD 300 billion, China promised to respond with tit-for-tat measures. In the meantime, the market can observe a sharp depreciation of the Chinese yuan against the US dollar, which Donald Trump commented on, calling the actions of the Chinese authorities a "serious violation".

GBP/USD

The British pound showed a slight increase against the US dollar on Monday. British Markit Services PMI supported GBP moderately. According to July data, the index rose from 50.2 to 51.4 points, which turned out to be better than neutral forecasts. A more confident growth of the instrument was hindered by increasing market tension as the Brexit date approached and the trade relations between the USA and China worsened. During today's Asian session, GBP is also trading higher, based on the publication of moderately optimistic macroeconomic statistics. BRC Retail Sales Monitor in July showed an increase of 0.1% YoY after declining by 1.6% YoY last month.

AUD/USD

AUD closed Monday with a steady decline against USD, reacting to another aggravation of trade relations between the US and China, which threatens to further slow down the global economy. The development of the "bearish" dynamics in the instrument was also facilitated by macroeconomic statistics. AiG Services Index in Australia went down from 52.2 to 43.9 points in June. Chinese Caixin Services PMI for the same period retreated from 52.0 to 51.6 points with a forecast of 51.9 points. During today's Asian session, the pair is trading with an increase. The focus of investors is on the RBA decision on the interest rate. As expected, the Australian regulator kept the interest rate unchanged at 1%, maintaining the same rhetoric. The RBA expects moderate growth in Australia's economy at 2.50–2.75% in 2019 and 2020. According to the regulator, inflation will return to the target level of 2% by 2020.

USD/JPY

USD continued to decline against JPY at the beginning of the new trading week, updating local lows from the beginning of the year. During today's Asian session, the instrument shows sharp growth, recovering to the levels of last Friday. The market is reacting violently to the aggravation of trade relations between the United States and China, which threatens a new round of deceleration of the global economy. In addition, China began to actively devalue the national currency in order to mitigate the damage from new import duties. Moderate support for the yen on Tuesday is provided by macroeconomic statistics published in Japan. Household Spending in June grew by 2.7% YoY after growth by 4.0% YoY last month. Analysts expected an increase of +1.3% YoY. Average Cash Earnings in June showed an increase of 0.4% YoY after a decline of 0.5% YoY in May. The indicator was better than expected –0.8% YoY.

Oil

On Monday, oil prices fell, reacting to the aggravation of the US-China trade conflict: on Friday, Donald Trump threatened to introduce 10% duty on the remaining Chinese imports in the amount of USD 300 billion from September 1. The PRC said that in this case it would go for retaliatory measures but for now, Beijing is actively depreciating the national currency in order to mitigate the potential damage from new restrictions. In addition to the risks of a slowdown in the global economy and a decrease in oil demand, an aggravation of the conflict could threaten the resumption of imports of Iranian “black gold” from China, bypassing US sanctions. Today, investors are awaiting the publication of an API report on oil reserves for the week of August 2. The previous report reflected a decrease in reserves of 6.024 million barrels.

Morning Market Review
2019-08-08 08:41 (GMT+2)
EUR/USD

The European currency showed ambiguous trading against the US dollar on Wednesday. Powerful pressure on the instrument was exerted by macroeconomic statistics published in Germany. Industrial production in June showed a decrease of 1.5% MoM after an increase of 0.3% MoM last month. Analysts had expected the decline of 0.4% MoM. In annual terms, the decrease in the indicator reached –5.2% YoY after –3.7% YoY in May. Experts counted on improving dynamics and reducing production by only 1.8% YoY. USD, in turn, is under pressure from the worsening trade relations between the US and China. The day before, China said it would refuse to purchase American agricultural equipment, and would also consider introducing additional reciprocal import duties. In addition, Donald Trump puts pressure on the Fed and literally demands to continue lowering interest rates.

GBP/USD

GBP fell slightly against USD on Wednesday, reacting to weak statistics from the UK. Halifax Housing price Index in July showed a decrease of 0.2% MoM after a decrease of 0.4% MoM last month. Analysts counted on the appearance of positive dynamics (+0.3% MoM). There were few interesting macroeconomic statistics from the USA yesterday, so investors generally adhered to the previous drivers. During the Asian session on August 8, GBP shows corrective growth, despite the continued negative macroeconomic background. RICS House Price Balance in July collapsed by 9% after falling by 1% last month.

AUD/USD

AUD showed ambiguous dynamics against USD on Wednesday. The instrument updated record lows at the opening of the session, responding to the publication of weak macroeconomic statistics from Australia and rather unexpected decision of the RBNZ to lower the rate immediately by 0.50 points. Then, with the opening of European sites, AUD managed to correct, and a further weakening of USD led to the restoration of the pair to the opening levels. During today's Asian session, the pair is trading with a raise. The instrument is supported by good macroeconomic statistics from China, which indicated an increase in exports and a slower decrease in the trade surplus. In July, China's surplus amounted to 45.06B dollars against 50.98B last month. Analysts had expected a decline to 40.00B.

USD/JPY

The US dollar maintains an uncertain downward trend against the Japanese yen, still located near local lows since the beginning of the year. The yen is in demand amid growing market turmoil triggered by a sharp deterioration in trade relations between the US and China. In addition, the market fears new steps from the Fed aimed at easing monetary policy, especially given the constant pressure on the regulator from Donald Trump. The Bank of Japan, in turn, took a wait-and-see approach. According to the latest protocols, the Japanese regulator notes the continued upward momentum for inflation and has not yet considered the possibility of additional stimulus at the next meetings. During today's Asian session, the instrument is trading in both directions, reacting to the publication of ambiguous macroeconomic statistics from Japan. Foreign Investments in Japanese Stocks for the week as of August 2 reduced by JPY 339.9B. Foreign Bonds Buying, in turn, increased by JPY 286.2B.

Oil

Oil prices showed a sharp decline on Wednesday, reaching new seven-month lows against a backdrop of continued deterioration in US-China trade relations. Additional pressure on the quotes was exerted on Wednesday by a report on oil reserves from the US Department of Energy. For a week as of August 2, oil stocks in US warehouses unexpectedly increased by 2.385M barrels, after a decrease of 8.496M barrels over the past period. Analysts had expected negative dynamics to remain at –2.845M barrels. US refining capacity utilization also rose by 3.4% to 96.4%, following an increase in production from 12.200M to 12.300M barrels per day.