Vector Securities - Analytics

    Vector Securities

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    The Fed decided to lay down a smokescreen


    At its session FOMC admitted slowdown of economy in the second half of 2015 and noted that the role of external factors grew. The Committee will estimate events in financial markets thoroughly. The phrase about “high confidence” in political prospects disappeared from the communiqué. Herewith, it was noted that further steps are still possible in March. In other words, any scenario is possible. Everything will depend on economic state, as usual. Following publication of communiqué dollar lost slightly, players digest this information.

    Although FOMC communiqué on outcomes of yesterday’s session provoked dollar’s weakening, still, it is a short-term driver. Today series of important reports will be published, and they can have more active influence on the market. First of all, it is the data on German inflation. The ECB desire to take more aggressive measures of economic stimulation will depend on these very data. Weak inflation will limit further growth of euro. A little later, the report on durable goods orders will be published in the U.S.A. And there are many questions about dollar. Forecasts on orders are weak, what can provoke further slow retreat of dollar.

    Speaking of local data, it is worth paying attention to the first evaluation of GDP for the 4th quarter in the U.K. Now there is an opinion that pound’s reaction to probable exit of the U.K. from the EU was premature and excessive. Against this background good statistics can play a positive role for correction of British currency. Besides, tomorrow the Bank of Japan will hold its regular session on monetary policy during Asian session. Unchanged parameters of monetary policy will give yen an opportunity to try to continue strengthening, which has been detected this year.

     

    Trade tactics:

    At this moment we don’t see good signals to enter the market. Everything is uncertain. EURUSD pair has got stuck in the range firmly, and there are no reasons to leave it. We are waiting.

     

    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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