Once again, yesterday’s trades in the exchange market were inactive. The market ignored quite good data on retail sales in Germany, euro renewed weekly minimums after their publication. And that was the end. During the remaining time there was tedious movement in narrow ranges. The market lacks fresh drivers, it reacts electively to local data. The data on Canadian GDP, which appeared to be better than predicted, brought a fresh breeze to trades of Canadian dollar. It lowered concerns that the Bank of Canada would decrease interest rate at the nearest session. Canadian dollar grew, but others remained indifferent to it.
Last night the Fed head Janet Yellen spoke on the issue of banking supervision. There was nothing about monetary policy and the speech didn’t cause specific interest. Publication of Australian GDP for the 4th quarter had also limited influence. The data met forecasts, still, the RBA head expressed concerns about increased unemployment, what leaves the issue of a new decrease of rates open.
Speaking about today’s economic statistics, we find it difficult to single out something. The market has reacted too inactively to the data for last days. In the Eurozone final data on business activity PMI in service sphere and retail sales will be published. In both cases moderate positive can be expected. Now it is unclear whether it will be enough to cause interest to the common currency or not. Yesterday the market ignored European statistics. In the U.S.A. the ADP report on employment in the private sector and ISM business activity in service sphere will be published. And there is nothing dramatic either, though moderate decrease of ISM is expected. In the evening the Fed report on economic state “Beige book” will be published. The Fed holds firm to the stance that recovery of US economy should be gradual, noting some problems, and it is confident that recovery will continue. However, weak inflation starts to worry market’s players and doubts about increase in rates this year start to appear. Peculiar “status quo” has formed, few undertake sharp movements. Current trend of dollar’s strengthening is retained, still, strengths for its continuation are disappearing, it needs new strong drivers. Probably, everything will be decided during last days of the week, when the ECB session will be held and US report on labor will be published.
What concerns local data, we’d like to highlight the Bank of Canada session on monetary policy scheduled for today. Analysts’ opinions differ – whether it will leave rates unchanged or decrease. The short-term reaction of the market will depend on it.
At this moment our point of view about current situation remains the same. We hold short position in EURUSD pair from 1.1235, stop is at the entry point. Aims are still in the range 1.1100 – 1.1120.
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