Vector Securities - Analytics

    Vector Securities

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    We are waiting for what Janet Yellen will say today

    We are waiting for what Janet Yellen will say today
    After the achieving of an agreement with Greece on Monday didn’t provoke euro’s growth (investors thought that actual arm-twisting of Greece in acceptance conditions of creditors hid the problem deeper, but didn’t solve it), Tuesday was quite calm. We can highlight two events – weak data on retail sales in the U.S.A.( but dollar’s weakening due to this was only short-term) and unexpected statement of the Bank of England head Carney about probable increase in rates in the nearest future. It is interesting to note that it is not the first time he made such a statement. As a result, it was British pound benefited most by the closure of the day. 
    As tension with Greece is slightly lightening, players’ focus is returning to fundamental factors. Today the focus will be on the U.S.A. First of all, it’s economic statistics – industrial production, business activity of NY, producers’ prices. We have already stopped to orient at forecasts on US economy, they have too rarely coincided with the reality recently. The market reacts on fact and movements are usually short-term. Against this background today’s speech of Janet Yellen before the Bank Committee of finances and forecasts on economy. If the market doesn’t hear confidence about prospects of US economic recovery in her speech, then dollar can face sales again. In case of tougher signals of increase in rates this year, we will see the opposite picture. In the evening regular Beige book will be published, but after Yellen’s speech it won’t be actual.
    Speaking of local events, we can highlight data on labor market in the U.K. And here again as last month investors’ focus will be probably on growth rates of wages. The Bank of England will take into account this very indicator while estimating prospects of growth of inflation expectations. After yesterday’s comments of Carney, British inflation takes the first place for investors. 
     
    Trade tactics:
    As before, we don’t see well-grounded signals for entry into the market. Our technical analysis shows vague picture of current state of the market. “Holidays” are too long, but we have to be patient. Now we stay out of the market.
     
    Any opinions, advice, news, research, analyses, prices or any other information presented on this webpage is provided as general market commentary and does not constitute investment advice. "Vector Securities" shall not be liable for any loss, including loss of profit, which may arise directly or indirectly from the use of this information. 

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