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    Weekly Technical Analysis Report week 16/02/2015

    In Europe. Greece agreed on Thursday to talk to its creditors about the way out of its hated international bailout in a political climbdown that could prevent its new leftist-led government running out of money as early as next month. Prime Minister Alexis Tsipras, attending his first European Union summit, agreed with the chairman of euro zone finance ministers, Jeroen Dijsselbloem, that Greek officials would meet representatives of the European Commission, the European Central Bank and the IMF on Friday. Tsipras won election last month promising to scrap the 240 billion euro ($273 billion) bailout, end cooperation with the "troika", reverse austerity measures that have cast many Greeks into poverty and negotiate a reduction in the debt burden. The procedural step forward came after the ECB's Governing Council extended a cash lifeline for Greek banks for another week, authorizing an extra 5 billion euros in emergency lending assistance (ELA) by the Greek central bank. The council decided in a telephone conference to review the program on Feb. 18.

    Mark Carney insisted the Bank of England will look through an inflation slump as officials signaled higher borrowing costs could come sooner than investors anticipated. While the governor presented forecasts showing the rate of price growth will drop below zero in the coming months, he blamed weakening oil prices and said domestic pressures are building. That means the central bank may be headed for rate increases for the first time in more than seven years, even as its counterparts in the euro area and Sweden unleash additional stimulus to prevent deflation. The BOE’s forecasts, published in its quarterly Inflation Report, are based on market expectations for the first rate increase from a record-low 0.5 percent in the third quarter of 2016. Forward contracts are now fully pricing in a quarter-point increase by February next year. Launching the Bank's inflation report, Mark Carney added that prices were likely to rebound around the turn of the year, so this did not mean the economy had entered deflation. But he said if low inflation persisted, the Bank could cut rates further. Inflation stands at 0.5%, the joint lowest level on record. That is well below the Bank's target of 2%, and prompted a letter from Mr Carney to Chancellor George Osborne explaining the situation.

    Euro zone economic growth accelerated unexpectedly in the final quarter of 2014 as the bloc's largest member, Germany, expanded at more than twice the expected rate. A preliminary estimate showed the economy of the 18 countries sharing the euro expanded by 0.3 percent between October and December compared with the previous three months, the European Union's statistics office Eurostat said on Friday. Year-on-year, euro zone growth was 0.9 percent in the fourth quarter, also 0.1 percentage points higher than expected. The euro zone's biggest economy, Germany was a clear outperformer, growing by 0.7 percent in the quarter, far surpassing expectations of a 0.3 percent rise.

    In U.S.A. Applications for unemployment benefits climbed last week to a level that’s consistent with progress in the U.S. labor market. Jobless claims rose by 25,000 to 304,000 in the week ended Feb. 7, higher than forecast, from a revised 279,000 in the prior period, a Labor Department report showed Thursday in Washington.

    U.S. stocks were poised for another upbeat trading day on Friday, with stock futures mirroring gains in Europe and Asia, with consumer sentiment and import-price data on tap to give clues to the health of the U.S. economy. Futures for the S&P 500 index SPH5, 0.15% added 3.60 points, or 0.2%, to 2,087.70, indicating that the benchmark could nudge a record close. The index on Thursday closed just 0.1% shy of its all-time closing high of 2,090.57 hit in late December, after a solid session on Wall Street fueled by a cease-fire agreement between Russia and Ukraine, a pickup in oil prices and merger news. Futures for the Dow Jones Industrial Average DJH5, 0.19% added 38 points, or 0.2%, to 17,970 on Friday, while those for the Nasdaq 100 index NDH5, 0.21% climbed 11.50 points, or 0.3%, to 4,356.25. The Nasdaq ended at its highest level since 2000 on Thursday.

    In Asia. China's economy is now more sustainable and domestic consumption is steadily rising, Chinese Central Bank Vice Governor Yi Gang told a G20 meeting of finance officials earlier last week. Yi's remarks came after China posted its slowest economic growth in 24 years in 2014, with a cooling housing market, slowing investment and recent underwhelming exports expected to weigh further on domestic demand this year. To stoke growth and bank lending, China's central bank last week reduced the amount of cash that banks have to hold as reserves for the first time in over two years. That was after it had unexpected cut interest rates in November. Yi also was quoted on the central bank's website on Wednesday as saying that the central bank was closely monitoring China's property market and shadow banking sector, and increasing the transparency of the nation's local government debt. China's shadow banking business, which includes investment trusts and bill acceptances, ballooned to 45 trillion yuan ($7.21 trillion) at the end of 2014, according to estimates by ratings agency Moody's Investors Service.

    On the Commodities markets . Oil prices fell as much as 3 percent on Wednesday after U.S. stockpiles hit record highs, and analysts and traders said the market could shed more of a two-week rebound that was spurred by expectations of lower output. U.S. crude stocks rose by almost 5 million barrels last week to reach nearly 418 million barrels, the highest since 1982, when records started being kept, government data showed. Analysts polled by Reuters had forecast a build of nearly 4 million barrels.

    Oil rose above $60 a barrel on Friday for the first time this year, bringing gains this week to 4 percent, supported by signs that deeper industry spending cuts may curb excess supply. Brent for April delivery LCOc1 was up $1.12 at $60.40 by 1120 GMT (06:20 a.m. EST), after trading at a high of $60.54 earlier in the session. The March contract expired overnight. U.S. crude CLc1 was up 80 cents at $52.01.

    Global gold demand slumped to its lowest level in five years in 2014 as bar and coin buying plunged and jewelry purchases cooled, according to the World Gold Council (WGC). Overall demand totaled 3,924 tonnes, down 4 percent on year at its lowest level since 2009, the WGC's quarterly demand trends report, published on Thursday, showed. Total bar and coin investment fell 40 percent to 1,064 tonnes as investors, who had made major purchases in 2013 amid a sharp fall in prices, held back from further purchases, the industry group said. Gold futures edged higher Friday, with a second consecutive advance helping to narrow a weekly loss for the precious metal. Gold for April delivery GCJ5, 0.29% gained $3, or 0.2%, to $1,223.20 an ounce.

    NZD was the strongest currency against USD, appreciated by 1.28% on Friday (weekly basis), while NZDUSD traded around 0.7440 area. CHF was the weakest currency against greenbacks, depreciated by -0.42% and USDCHF traded around 0.9283.

     
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