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    FOMC minutes are unlikely to bring something new, but the market expects them


    Messages about negotiations between several oil-producing countries, appeared last week, became the driver in oil market, what provoked sharp bounce in the stock market. Outcomes of negotiations, which became known yesterday, cooled bulls. Investors hoped for an agreement on decrease in production volumes, but these countries managed to agree only on its freezing at current levels. Besides, the condition under which agreement comes into force if Iran and Iraq join it, what makes agreement difficult to implement. Fall in oil prices by more than 2 dollars was a logical result. Surprisingly, the stock market reacted indifferently to this event, where growth continued yesterday. However, it should be noted that American stock indices grew only by the size of futures, reached the day before, when the stock market was closed. The situation was contradictory in the exchange market. British pound fell considerably – weak statistics on inflation and continued speculations about exit from the EU became good reason for sales. Trade currencies followed oil prices for the whole day. The common currency ignored weak data of ZEW report. As we supposed, the market has already included in fall the day before. Pair’s attempts to grow failed – it does not succeed in it in growing stock market. As a result, the pair closed almost at opening level. At this moment, euro tries to increase again, and renewed fall in Asian stock markets supports it – they are in red color once again. The pair needs to rise above 1.1200to make technical picture more positive. 
    Apparently, everything remains for the Fed today. To be more precise, for minutes of last FOMC session. They are unlikely to add something new to current situation. It is difficult to say what the market will use as a reason for movement. It is obvious that chances for increase in rates at March session decreased sharply. Under conditions of unstable economic growth, the Fed will hardly take one more increase in rates. If American statistics continue to give such contradictory results, when dollar will have to retreat further. Today the U.S.A. will publish data on housing market (laying of new houses, building permits), producers’ prices and industrial production. Probably, the data will be mixed again. Actually, in case of weak data, the result of trades can be defined before publication of FOMC minutes today. Considering local data, the report on British labor market is of most interest. Until this moment, it hasn’t given reasons for disappointment for last months. Therefore, pound has chance to regain yesterday’s losses partially. 
     
    Trade tactics:
    As we planned, yesterday we opened long position in EURUSD pair from 1.1128, stop is set at the entry point now. From our point of view, the situation remains uncertain. To renew growth, the pair needs to close above 1.1200. If it doesn’t happen, then the second key support at 1.1060 – 1.1070 will be under threat. 
     
    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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