Forex-novosti i prognoze od 07-02-2020

FXStreet notes that currency markets have been very well-behaved following the release, although economists at TD Securities do not see a compelling reason that it would shake the status quo. The report has done nothing to alter the macro or policy expectations.

“Payrolls rose 225K in January, well above expectations. The unemployment rate rose 0.1 point, but the participation rate rose 0.2 points. Overall, the labor market continues to show strength. We expect more slowing in employment the year ahead.”

“We remain biased toward broad USD firmness. EUR/USD near-term path remains tilted to the downside (1.0879/1.0925) as the region's growth prospects continue to dim amid supply chain disruptions due to the viral outbreak.” 

“We think USD/ JPY's tactical bias is to the downside. Moreover, our dashboard indicates that the pair is about 2% rich and there is an overhang of stale longs. We view 108.00/50 as the next near-term objective.”

FXStreet reports that strategists at National Bank of Canada are wagering to a drop in the EUR/USD pair by the end of the year, following economic data from the Eurozone which seems to have lost steam.

“The euro lost more than 1% in January amid virus-related USD strength but also due to ongoing domestic economic woes.”

“The eurozone’s GDP was stagnant in the fourth quarter of last year, leaving growth for 2019 as whole at a six-year low of just 1.2%.”

“Weakening growth has not surprisingly held inflation and inflation expectations back, suggesting the European Central Bank may further loosen monetary policy this year.” 

“While it kept monetary policy unchanged in January, the ECB acknowledged risks remain tilted to the downside. In anticipation of further divergence in monetary policies, we continue to expect EUR/USD to drop to 1.09 by year-end.”

• Chinese purchases of U.S. products will start as soon as possible
• U.S. has been working with WHO on coronavirus
• Says Administration thinks coronavirus could cut U.S. GDP growth by 0.2 percentage points
• Believes there will be positive developments around European trade

The Commerce Department announced on Friday the U.S. wholesale inventories fell 0.2 percent m-o-m in December instead of edging down 0.1 percent m-o-m as previously reported.

Economists had forecast the reading to remain unrevised. In November, wholesale inventories rose 0.1 percent m-o-m.

According to the report, wholesale computer equipment stocks tumbled 1.2 percent m-o-m, while automotive inventories fell 0.6 percent m-o-m and apparel inventories dropped 0.3 percent m-o-m. In addition, decreases were also recorded in machinery, furniture and professional equipment inventories. At the same time, petroleum inventories surged 7.8 percent m-o-m.

In y-o-y terms, wholesale inventories grew 2.1 percent in December.

In 2019, wholesale inventories were up 2.1 percent, following a 7.1 percent jump in 2018.

The Ivey Business School Purchasing Managers Index (PMI), measuring Canada's economic activity, climbed to 57.3 in January 2020 from an unrevised 51.9 in December 2019.

Economists had expected the gauge to hit 53.3.

A figure above 50 shows an increase while below 50 shows a decrease.

Within sub-indexes, the supplier deliveries gauge increased to 52.7 in January from 49.3 in December, while the prices index climbed to 60.7 from 59.5. At the same time, and the employment measure edged down to 51.3 in January from 51.4 in the previous month, and the inventories indicator dropped to 50.4 from 52.5.

FXStreet reports that according to analysts at TD Securities the reduction of 600k barrels per day in production recommended by the OPEC technical committee is thought to be seen as an exaggeration by Russia, and oil market is expected to be under strain in the next days.

“Headlines from Russian Minister of Energy Novak stating there are no signs Chinese demand for Russian oil and gas is falling, and noting only a 150-200k bpd hit to global demand, suggests Russia is still reluctant.” 

“We can expect an answer from Russia in the coming days, and in the meantime the oil market is likely to remain under pressure as fears of large surpluses loom large.” 

“CTAs remain sellers of Brent but have reversed course on RBOB gasoline selling, turning into buyers on the day and seeing the product outperform the complex this morning.” 

“We note gasoline is trading in whipsaw territory as the bar is razor thin for gasoline buying to flip back to major selling below $1.47/gal.”

FXStreet reports that Josh Nye, a senior analyst at RBC Economics, reviews the Canadian employment data released today. The data seem not to have affected USD/CAD after the pair raised early in the morning to 1.3312.

“Today's data suggest the labour market is far from grinding to a halt.”

“Job gains over the last six months averaged a healthy 20,000 and nearly all of that was full-time work.” 

“A low unemployment rate—now just 0.1 percentage point above its cycle low—also goes against the BoC's view that the economy is no longer close to full capacity.”

“Today's data reduce the urgency for the BoC to lower rates (market pricing for a cut pushed back from September to October) though we continue to think the door is open to a rate cut if the economy's rebound early this year proves underwhelming.”

U.S. stock-index futures fell on Friday even after the U.S. government released better-than-expected jobs data. Investors worried about the coronavirus' impact on the global economy.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Statistics Canada reported on Friday that the number of employed people increased by 34,500 m-o-m in January, while economists had forecast a gain of 15,000 and after a revised advance of 27,300 in the previous month (originally 35,200).

Meanwhile, Canada's unemployment fell to 5.5 percent in January from 5.6 percent in December, below economists' forecast for 5.6 percent.

According to the report, full-time employment increased by 35,700 (or +0.2 percent m-o-m) in January, while part-time jobs declined by 1,200 (flat m-o-m).

In January, the number of public sector employees increased by 21,300 (+0.5 percent m-o-m), while the number of private-sector employees rose by 5,000 (flat m-o-m). At the same time, the number of self-employed grew by 8,300 (+0.3 percent m-o-m) last month.

Sector-wise, employment increased in the goods-producing sector (+1.3 percent m-o-m) but edged down in the service-producing business (-0.1 percent m-o-m).

Credit Suisse (CS) downgraded to Neutral from Outperform at Exane BNP Paribas

Ford Motor (F) downgraded to Neutral from Outperform at Credit Suisse; target lowered to $9

Ford Motor (F) downgraded to Sell from Buy at DZ Bank

Twitter (TWTR) downgraded to Neutral from Buy at Guggenheim; target raised to $36

Uber (UBER) upgraded to Buy from Neutral at MKM Partners; target $45

Twitter (TWTR) upgraded to Positive from Neutral at Susquehanna; target $47

The U.S. Labor Department announced on Friday that nonfarm payrolls increased by 255,000 in January after an upwardly revised 147,000 gain in the prior month (originally an increase of 145,000).

According to the report, significant job gains in January occurred in construction (+44,000 jobs), in health care (+36,000), and in transportation and warehousing (+28,000).

The unemployment rate rose to 3.6 percent in January from 3.5 percent in December.

Economists had forecast 160,000 new jobs and the jobless rate to stay at 3.5 percent.

The labor force participation rate rose to 63.4 percent in January from 63.2 in the previous month, while hourly earnings for private-sector workers edged up 0.2 percent m-o-m (+7 cents) to $28.44, following an unrevised 0.1 percent m-o-m gain in December. Economists had forecast a 0.3 percent m-o-m advance in the average hourly earnings. Over the year, average hourly earnings have increased by 3.1 percent, following a revised 3.0 percent rise in December (originally a gain of 2.9 percent).

The average workweek was unchanged at 34.3 hours in January matching economists' forecast.

Uber (UBER) reported Q4 FY 2019 GAAP loss of $0.64 per share, better than analysts' consensus estimate of -$0.68 per share.

The company's quarterly revenues amounted to $4.069 bln (+36.8% y/y), roughly in line with analysts' consensus estimate of $4.058 bln.

UBER rose to $39.25 (+5.82%) in pre-market trading.

EUR fell against most major currencies in the European session on Friday, weighed down by disappointing German industrial production data for December. 

Destatis reported earlier today that Germany's industrial production declined 3.5 percent m/m in December, following a revised 1.2 percent m/m advance in November. That represented the biggest drop in industrial activity since January 2009. Economists had forecast a fall of 0.2 percent m/m. In y/y terms, the German industrial output tumbled 6.8 percent after a 2.5 percent drop in November. Economists had expected a 3.7 percent decline. 

In addition, another report from Destatis revealed that Germany's trade surplus widened to EUR 15.2 billion in December 2019 from EUR 14.1 billion in the same month of the previous year, but narrowed from EUR 18.3 billion in November 2019. According to the report, exports advanced 2.3 percent y/y in December, while imports gained 1.2 percent y/y. In 2019 as a whole, however, Germany's trade surplus narrowed to EUR 223.6 billion from EUR 228.7 billion in 2018, with exports and imports rising 0.8 percent and 1.4 percent, respectively.

Elsewhere, USD traded higher against its major counterparts ahead of the release of the U.S. employment report (due at 13:30 GMT). It is expected that the report will confirm that the U.S. labour market is in robust condition. The dollar index, a measure of the value of the U.S. dollar relative to the value of a basket of currencies, edged 0.1% higher to 98.57. Solid jobs data could boost the U.S. currency further.

FXStreet notes that the Reserve Bank of Australia (RBA) has updated its forecast for the economy of the oceanic country and analysts at ANZ Research are still thinking on a rate cut in April. AUD/USD continues its downtrend started this year.

“The RBA sees growth getting back to around 3% in 2021. In the near-term, GDP growth is expected to be lower than previously forecast, reflecting the impacts of the coronavirus and the bushfires.” 

“The RBA forecast that the unemployment rate would decline sooner rather than later, yet would still only reach 4.8% by mid-2022, above the estimated NAIRU of 4.5%.”

“We expect the unemployment rate to drift higher, as employment growth slows before the labour market restrengthens.” 

“We have stuck with our April rate cut call, but the risk is that the next cut comes later.” 

“The RBA now expects H1 2020 headline inflation to be softer than it previously forecast, revising down to 1¾% from 2%.”

FXStreet reports that analysts at Westpac note the Reserve Bank of Australia (RBA) has released its quarterly Statement on Monetary Policy and the key theme has been a surprisingly confident outlook for the Aussie economy. 

“The bank’s point forecasts have GDP growth of 2% for 2019, 2.7% for 2020 and 3% in 2021. That compares to 2.3%, 2.8% and 3.1% in the previous SMP released in November.”

“Our forecast is considerably more downbeat, with growth now expected to come in at 1.9% this year, factoring in the impact of bushfires and a preliminary assessment of the impact from the coronavirus.”

“The case for further policy accommodation will become clear to the RBA as its overly-optimistic expectations are not met. We have April pencilled in for the next cut but recognise that the Governor may need more time to be convinced that further action will be required.”

• Uncertainties in oil production persist in Libya, Iran and Venezuela
• U.S. oil production is seen rising by less than 1 mln bpd in 2020
• Have no information on restrictions on Russian oil and gas supplies to China

FXStreet reports that FX strategists at UOB Group noted USD/JPY could trade within the 108.30-110.30 range during the next weeks.

24-hour view: “Were of the view that ‘there is scope for USD to move above 110.00’ yesterday. USD subsequently edged to a high of 109.99 before trading sideways. The quiet price action has resulted in a mixed outlook USD could continue to trade in a quiet manner, albeit likely at a higher range of 109.80/110.15.”

Next 1-3 weeks: “There is not much to add to our update from Wednesday (05 Feb, spot at 109.45). As highlighted, USD is expected to trade sideways for a period, likely between two major levels of 108.30 and 110.30. While the top of the expected range is within sight, at this stage, there is no early indication that USD is ready to move above this level in a sustained manner.”

FXStreet reports that Chinese authorities are set to release inflation data for the month of January on 10 February and strategists at Standard Chartered Bank forecast a slight rise. USD/CNY is currently at 7.000 after a strong week for the dollar.

"China will publish January inflation data on 10 February. We expect CPI inflation to have edged up to 4.8% y/y from 4.5% in December."

"Non-food CPI inflation may have increased slightly to 1.4% y/y on higher prices of fuel, medicine and daily necessities."

"China will release monetary data on 10-15 February. M2 growth likely edged up 0.1ppt to 8.8% y/y in January. We expect loan growth to have eased 0.1ppt to 12.2%. New Chinese yuan (CNY) loans likely reached CNY 3.4tn, compared to CNY 3.2tn in January 2019. We expect total social financing (TSF) growth to have stayed at 10.7% y/y in January."

CNBC reports that economists forecast a slight pickup in job growth in January over December, but warmer weather could have been a positive factor that could have encouraged more hiring than expected in construction and some other industries.

Economists expect 158,000 nonfarm payrolls were added in January, up from 145,000 in December. Unemployment is expected to hold steady at 3.5%, while average hourly wages were expected to grow by 0.3%.

About 500,000 jobs will be cut from March 2018 through March 2019 as part of benchmark revisions. That would wipe out about 40,000 jobs a month and is the largest reversal in that number since the financial crisis. Sectors with the most jobs lost are retail and leisure and hospitality.

"There could also be adjustments to job growth later in 2019 as a result of the benchmark revisions, but we do not expect that those changes will be large enough to change our view that the labor market remains strong overall," according to Citigroup economists. They do note that the stronger 220,000 monthly pace of job growth originally reported in 2018 will be lower, after the revisions.

Economists said the ADP's stronger-than-expected 291,000 jobs for January, reported earlier this week, suggests that there was more hiring due to milder weather. That could also be a factor in the government report's, expected Friday at 8:30 a.m. ET. But the government's monthly employment report does not always reflect the same outcome as ADP.

January 2020 was the fifth-warmest on record, though it was also a month with a lot of precipitation, according to NOAA.

FXStreet reports that the Reserve Bank of New Zealand (RBNZ) is scheduled to announce its monetary policy decision on 12 February and economists at Standard Chartered Bank make their predictions. NZD/USD has been trading down this year, currently at 0.6422.

"We expect the RBNZ to keep the policy rate on hold at 1.0%."

"The recent economic data has been supportive of an on-hold stance. Q4- 2019 inflation data came in higher than expectations. Q4 labour market data also reflected a healthy labour market, with unemployment and underutilisation rates falling to decade lows.

"Given that economic growth is generally still soft, downside risks to growth from the coronavirus outbreak may lead the RBNZ to adopt a dovish tone."

FXStreet reports that in opinion of FX Strategists at UOB Group, AUD/USD could head towards the 0.6800 area in the near-term.

24-hour view: "Yesterday, we held the view that 'the rapid rise over the past couple of days is deep in overbought territory and further advance is unlikely'. AUD subsequently traded between 0.6727 and 0.6765, narrower than our expected sideway-trading range of 0.6725/0.6775. The current sideway-trading phase appears to be on-going even though the slightly weakened underlying tone suggests a lower range of 0.6720/0.6760."

Next 1-3 weeks: "We cautioned that 'the month-long weak phase in AUD appears to be close to an end'. The subsequent breach of the 'strong resistance' level at 0.6760 confirms that Tuesday's low of 0.6679 is a short-term bottom. The immediate risk from here is tilted to the upside towards 0.6800. At this stage, the prospect for AUD to move above 0.6800 is not high but it would continue to grow as long as 0.6695 is intact."

According to the report from Istat, in December 2019 estimates of retail trade increased both in value and in volume terms by 0.5% in the month-on-month series.

In the 4th Quarter of 2019 estimates show there was no growth, as the value of sales remained stable and the volume of sales was up 0.1% compared with the previous Quarter.

Year-on-year both value and volume of retail trade rose for the seventh consecutive month in December 2019, increasing by 0.9% and 0.6% respectively.

Total sales of large scale distribution slightly increased by 0.1% from December 2018, while small scale distribution decreased by 0.9%.

In the year-on-year series, online sales largely increased in December 2019, reaching its highest peak in the year 2019 at 38.3%.

With regard to non-food products, the largest growths were reported for Computers and telecommunications equipment (+6.6%) and Shoes, leather goods and travel items (+6.1%), while the largest falls reported concerned Pharmaceutical products (-2.5%) and Stationary, books, newspapers and magazines (-1.9%).

Looking at annual growth rates of retail trade, the whole of 2019 increased by 0.8% (both value and volume). Internet sales saw significant growth in 2019, rising at a rapid rate by 18.4% from the previous year.

FXStreet reports that the uptrend of the GBP/USD is showing signs of exhaustion as analysts at Commerzbank note. Therefore, key levels should be watched closely.

"GBP/USD has eroded its uptrend and sits on the December low at 1.2905. We are unable to rule out that this will hold for another recovery to the 1.3285 Fibonacci retracement."

"Failure at 1.2905 would put the 55-week ma at 1.2805 and the 200-day moving average at 1.2694 back on the plate."

eFXdata reports that Credit Agricole discusses EUR/CHF outlook and maintains a structural long position targeting a move towards 1.15.

"We remain long EUR/CHF as a trade recommendation. Even though better risk sentiment has been weighing on the single currency too, elevated CHF long positioning coupled with rising risk of the SNB considering additional policy action as soon as in March is likely to put a floor below the cross," CACIB notes.

"Last but not least, January CPI out of Switzerland will attract attention. While next week's data is unlikely to offer much relief on the price front, it will keep the SNB in a position to consider additional easing steps if needed as early as March. We advise against buying the CHF at these levels," CACIB adds.

According to the report from Halifax Bank of Scotland, UK house prices in January were 4.1% higher than in the same month a year earlier. Economists had expected a 3.0% increase.

On a monthly basis, house prices rose by 0.4%. Prices were expected to remain unchanged.

In the latest quarter (November to January) house prices were 2.3% higher than in the preceding three months (August to October)

Russell Galley, Managing Director, Halifax, said:

"House prices kicked off the year with a modest monthly increase, rising by 0.4% in January following the stronger gains of 1.8% and 1.2% seen in December and November respectively. As a result, annual growth remained relatively stable at 4.1%, up just a fraction from the end of 2019. A number of important market indicators continue to show signs of improvement. We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy. However, it's too early to say if a corner has been turned. The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy".

FXStreet reports that in opinion of FX Strategists at UOB Group, EUR/USD has increased the probability of a deeper pullback to the 1.0945 level.

24-hour view: "We highlighted yesterday that 'a breach of the solid 1.0980/90 support zone could potentially lead to a rapid drop to 1.0955'. While the anticipation for a breach of the support zone was not wrong, the subsequent decline did not quite reach 1.0955 (overnight low of 1.0963). The rapid drop appears to be overstretched but there is scope for EUR to test 1.0955 first before a recovery can be expected. Resistance is at 1.1000 followed by 1.1020."

Next 1-3 weeks: "We detected the pick-up in downward momentum yesterday (06 Feb, spot at 1.1000) and highlighted that 'the solid 1.0980/90 support zone is vulnerable'. EUR subsequently cracked the support zone and dropped to a low of 1.0963. Downward momentum has improved further and from here, barring a move above 1.1040 ('strong resistance' was at 1.1055 yesterday), EUR is expected to move towards 1.0945. Looking ahead, the support below 1.0945 is at 1.0910."

According to the report from INSEE, in December 2019, output decreased in the manufacturing industry (−2.6%, after −0.4%), as well as in the whole industry (−2.8%, after 0.0%). Economists had expected a 0.3% decrease in the whole industry.

Over the last quarter, output went down slightly in manufacturing industry (−0.4%), as well as in the whole industry (−0.6%).

Over the last quarter, output slumped in the manufacture of coke and refined petroleum products (−18.5%). It declined in the manufacture of machinery and equipment goods (−2.1%), in mining and quarrying, energy, water supply (−1.5%) and in the manufacture of transport equipment (−0.9%). Conversely, output increased slightly in "other manufacturing" (+0.2%) and in the manufacture of food products and beverages (+0.4%).

In the manufacturing industry, output of the last quarter was lower than the same quarter of 2018 (−0.7%), as well as in the whole industry (−0.8%).

Over a year, output slumped in the manufacture of coke and refined petroleum products (−28.3%). It decreased also in the manufacture of transport equipment (−3.3%), in the manufacture of machinery and equipment goods (−2.0%) and in mining and quarrying, energy, water supply (−1.0%). In contrast, output increased slightly in "other manufacturing" (+0.6%) and in the manufacture of food products and beverages (+0.3%).

During today's Asian trading, the US dollar has changed slightly against the Euro and the yen. The Chinese currency, meanwhile, fell against the dollar and the Euro.

Support for the dollar continued to be provided by yesterday's data from the us Department of labor, which showed that the number of initial applications for unemployment benefits fell by 15,000 last week., up to 202,000. This was the lowest level since mid-April.

At the same time, labor productivity in the United States increased by 1.4% in the fourth quarter of 2019. Experts predicted a 1.6% increase in labor productivity in the fourth quarter.

The yuan fell against the dollar ahead of the release of Chinese data on foreign trade and international reserves for January. In addition, Chinese President XI Jinping and US President Donald trump confirmed their commitment to the first phase of the trade deal in a telephone conversation.

The focus remains on the coronavirus outbreak in China. As of 00: 00 hours local time on Friday, the number of cases of pneumonia caused by a new type of coronavirus was 31,161 people, the fatal outcome was recorded in 636 cases, the state Committee of China for health Affairs reported.

According to provisional data of the Federal Statistical Office (Destatis), in December 2019, production in industry was down by 3.5% on the previous month on a price, seasonally and calendar adjusted basis. Economists had expected a 0.2% decrease. In November 2019, the corrected figure shows an increase of 1.2% (primary +1.1%) from October 2019.

In December 2019, production in industry excluding energy and construction was down by 2.9%. Within industry, the production of capital goods decreased by 3.5% and the production of consumer goods by 2.0%. The production of intermediate goods showed a decrease by 2.6%. Outside industry, energy production was up by 2.0% in December 2019 and the production in construction decreased by 8.7%.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1151 (2819)

$1.1101 (4036)

$1.1051 (1397)

Price at time of writing this review: $1.0979

Support levels (open interest**, contracts):

$1.0949 (1341)

$1.0900 (674)

$1.0850 (408)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 7 is 68631 contracts (according to data from February, 6) with the maximum number of contracts with strike price $1,1150 (4400);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3100 (1824)

$1.3051 (655)

$1.3003 (1306)

Price at time of writing this review: $1.2943

Support levels (open interest**, contracts):

$1.2893 (1675)

$1.2848 (1936)

$1.2799 (1232)

Comments:

- Overall open interest on the CALL options with the expiration date February, 7 is 26040 contracts, with the maximum number of contracts with strike price $1,3600 (3908);

- Overall open interest on the PUT options with the expiration date February, 7 is 21292 contracts, with the maximum number of contracts with strike price $1,3000 (2748);

- The ratio of PUT/CALL was 0.82 versus 0.86 from the previous trading day according to data from February, 6

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.