Forex-novosti i prognoze od 07-04-2021

FXStreet reports that according to strategists at Credit Suisse, gold (XAU/USD) needs to hold below the $1755/65 neighborhood to maintain its immediate downside bias.

“Gold has retested and again held key support at $1682/71 – the 38.2% retracement of the entire 2015/2020 bull market and the recent and June 2020 lows. Resistance at $1755/65 needs to cap to suggest this is just a temporary hold ahead of an eventual break in due course, with support then seen next at $1620/15 and ultimately the ‘measured top objective’ and 50% retracement at $1564/61.”

“Above $1765, the yellow metal would see a near-term base established for a deeper recovery to $1855/75, but with a fresh cap looked for here.”

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories fell by 3.522 million barrels in the week ended April 2, following a drop of 0.876 million barrels in the previous week. Economists had forecast a draw of 1.436 million barrels.

At the same time, gasoline stocks surged by 4.044 million barrels, while analysts had expected a decrease of 0.221 million barrels. Distillate stocks rose by 1.452 million barrels, while analysts had forecast an advance of 0.486 million barrels.

Meanwhile, oil production in the U.S. decreased by 200,000 barrels a day to 10.900 million barrels a day.

U.S. crude oil imports averaged 6.3 million barrels per day last week, up by 119,000 barrels per day from the previous week.

The Ivey Business School Purchasing Managers Index (PMI), measuring Canada’s economic activity, climbed to 72.9 in March from 60.0 in February. This pointed to the strongest expansion in economic activity since March 2011.

Economists had forecast the indicator to increase to 60.5 in March.

A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Within sub-indexes, the employment measure jumped to 62.7 in March from 54.0 in the previous month, while the inventories indicator rose to 61.7 from 57.8 and the supplier deliveries gauge increased to 39.6 from 38.6. At the same time, the prices index fell to 75.1 in March from 80.2 in February. 

• We are still some ways before reaching goals
• Substantial further progress bar for reducing asset purchases won't be met for a while
• Very optimistic about economic growth prospects
• Hopefully employment goal in sight before too long
• Achieving inflation goal may prove more difficult
• Economy has a good deal of momentum but still a long way to go before regaining pre-pandemic levels
• We need to get higher rates of inflation and solidify 2% inflation expectations

U.S. stock-index futures fell slightly on Wednesday, as investors remained relatively calm awaiting the release of the minutes from the Fed’s latest meeting later today.

Global Stocks:

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

Statistics Canada announced on Wednesday that Canada recorded a trade surplus of CAD1.04 billion in February, compared with a revised CAD1.21-billion surplus in January (originally a CAD1.41-billion surplus). This was the first time since late 2016 that the trade balance was in a surplus position for two consecutive months.

Economists had forecast a surplus of CAD1.00 billion.

According to the report, Canada’s exports fell by 2.7 percent m-o-m to CAD49.86 billion in February, led by the declines in the metal and non-metallic mineral products (-10.9 percent m-o-m), motor vehicles and parts (-10.2 percent m-o-m), and aircraft and other transportation equipment and parts (-20.3 percent m-o-m). Meanwhile, imports decreased by 2.4 percent m-o-m to CAD48.82 billion in February (the lowest level since August 2020), primarily due to lower imports of motor vehicles and parts (-7.8 percent m-o-m) and energy products (-21.4 percent m-o-m).

Merck (MRK) resumed with a Sector Perform at RBC Capital Mkts; target $79

Pfizer (PFE) resumed with a Sector Perform at RBC Capital Mkts; target $42

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

The U.S. Commerce Department reported on Wednesday that U.S. the goods and services trade deficit widened to $71.1 billion in February from a revised $67.8 billion in the previous month (originally a gap of $68.2 billion). This was the biggest trade deficit on record.

Economists had expected a deficit of $70.5 billion.

According to the report, the February increase in the goods and services reflected an advance in the goods deficit of $2.8 billion to $88.0 billion and a decline in the services surplus of $0.5 billion to $16.9 billion.

In February, exports of goods and services from the U.S. fell 2.6 percent m-o-m to $187.3 billion, while imports went down 0.7 percent m-o-m to $258.3 billion, as the global COVID-19 pandemic and the economic recovery continued to impact the international trade.

Year-to-date, the goods and services deficit surged 68.6 percent from the same period in 2020. Exports plunged 8.7 percent, while imports climbed 4.1 percent.

FXStreet reports that the AUD/USD pair is reverting lower from the “neckline” to its top at .7681 in early trading today and analysts at Credit Suisse look for further downside to unfold in due course

“AUD/USD remains capped by the ‘neckline’ to its large ‘head and shoulders’ top, currently at 0.7681, with mild weakness unfolding in early trading today. We look for this area to ideally cap and for downside to take over again following the completion of the aforementioned top.” 

“We see support initially at 0.7606/.7596, beneath which would open the door to a move back to the cluster of supports at 0.7564/32. We would look for a short breather at this stage, however removal of here would subsequently open up 0.7517, then 0.7500/7499 – the 50% retracement of the surge from November 2020.”

FXStreet notes that oil prices have jumped up by around 20% since the beginning of the year. Economists at Capital Economics still expect the release of ‘pent-up’ demand at a time of constrained global supply to deepen the market deficit and increase oil prices in the near-future, but recent developments - particularly on the supply side - have convinced them to revise down oil mid-year price forecasts.

“OPEC+ production now looks set to rise faster than we had anticipated in the coming months, although it will remain below pre-virus levels. OPEC+ announced that output quotas would increase by 350,000 bpd in May and June, and by 440,000 bpd in July. Beyond July, we think that high prevailing prices will incentivise further rises in OPEC+ production.”

“We expect global oil demand to be markedly higher this year compared to last year. We are revising up our forecast of US consumption as the rapid easing of lockdowns and fiscal stimulus are likely to boost transport activity. However, in the near-term, strong US demand growth will be partly offset at the global level by our downward revision to consumption in the EU and parts of the developing world, owing to the re-imposition of virus-related travel restrictions.”

“We still expect oil prices (Brent) to peak at $75 per barrel in Q3 ($80 previously) on the back of a rebound in global demand. However, steady increases in OPEC+ production will start to clear the market deficit and we still expect prices to fall to $70 by end-2021 and $60 by end-2022.”

EUR rose against most of its major counterparts in the European session on Wednesday following stronger-than-expected Eurozone private sector's activity data for March. 

IHS Markit reported that the Eurozone's private sector economy returned to growth during March, supported by a record increase in manufacturing output. The IHS Markit Eurozone PMI Composite Output Index rose to 53.2, up from 48.8 in February and a flash estimate of 52.5. This was the highest reading since July 2020. Economists had forecast the indicator to be unrevised at 52.5. Manufacturing production grew by the most in nearly 24 years of data collection, while services output fell at the slowest rate in the current seven-month sequence of contraction. Supporting the improvement in overall Eurozone private sector activity was an increase in new orders. Overall, new sales rose at the fastest pace in two-and-a-half years, with new export business rising at the strongest rate in over six-and-half years of data collection. Backlogs of unfinished business posted a gain for the first time since November 2018, while employment growth accelerated to the greatest degree since June 2019. However, a surge in output prices intensified concerns for near-term inflation. According to IHS Markit, output price inflation accelerated during March to its strongest since the start of 2019.

Investors also digested comments by the European Central Bank's board member Klaas Knot, who said that the Eurozone's economy is on course for a robust recovery in the second half of the year that could allow the ECB to start phasing out its emergency bond purchases in the third quarter.

Elsewhere, French finance minister Le Maire said he expects a quick economic rebound and a return to pre-pandemic growth in 2022.

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. plunged 5.1 percent in the week ended April 2, following a 2.2 percent drop in the previous week. This was the largest decline since the week ended February 19.

According to the report, refinance applications fell 5.3 percent, while applications to purchase a home declined 4.6 percent.

Meanwhile, the average fixed 30-year mortgage rate rose from 3.33 percent to 3.36 percent, the highest since the week ended June 5.

“Refinance applications declined for the fifth straight week, but there was a gain in VA loan activity,” noted Joel Kan, an MBA economist. “Overall, refinance demand has decreased, with volume over the past 10 weeks down by more than 30%.”

FXStreet notes that slow vaccine rollout and increased policy resistance to market pressure leave the Credit Suisse analyst team neutral on NZD/USD.

“We remain neutral on NZD and expect NZD/USD to trade between 0.6870 and 0.7200. In AUD/NZD, we think that mean reversion will drive a slow convergence back to 1.0800. 

“New Zealand’s vaccine rollout is lagging the rest of the developed world; investors might now reassess the validity of NZ’s so-far successful strategy of ‘micro-lockdowns’.”

“With the government having taken macroprudential measures to cool down housing, the RBNZ is less likely to address the issue through its traditional monetary policy tools. The more fundamentals-driven case for tightening is far from strong: the unemployment rate is still at 2016 levels, domestic CPI metrics remain unthreatening and upside growth potential is limited by closed international borders.” 

“Given how responsive the currency has been to changes in expectations around non-traditional monetary policy, we think the RBNZ may prefer to tiptoe around the possibility of tightening in order to avoid an unwelcome rally in the NZD.” 

FXStreet reports that economists at UBS believe EUR/GBP is set to march downward in the coming months due to Britain's upbeat vaccination campaign and, therefore, have downgraded their forecast for the pair.

“In the next two quarters EUR/GBP may find support: Remaining uncertainty around EU-UK trade relations may stabilize the pair at around 0.83, while with synchronized global growth later on EUR/GBP may even test the 0.80 level. On the other side, we expect 0.90 to provide hard upside resistance.” 

“One risk factor is that UK economic growth could slow more than is currently forecast, forcing a stronger reaction from policymakers. Worsening COVID-19 dynamics could further heighten risk aversion and lift EUR/GBP.”

“Over the medium to longer-term, GBP is likely to outperform EUR. Diverging paths on the economy and the language of central banks are still likely to favor sterling against the euro in the coming few months. Longer-term, the Bank of England will continue to have less of a problem achieving its inflation target than the European Central Bank  will.” 

“We have recently lowered our end June and September EUR/GBP forecasts to 0.85 (0.88) and our year-end target to 0.84 (0.87). In addition, our 1Q22 forecast has been cut to 0.83 (0.87).”

• Number of intensive care patients is rising

• Says Fed should be aggressively using its tools when we’re in the middle of crisis
• Agrees with what Fed is doing now in terms of asset purchases and stance of policy generally
• Believes that as we’re making progress toward meeting our goals, the economy would be much healthier if we wean off these extraordinary measures
• There’s reason to be optimistic about the future
• But we’re not out of the woods yet
• Raising short-term rates off near-zero levels does not necessarily translate to pulling back support for the economy
• Willing to be much more accommodative in the months, years ahead to reach Fed goals but that does not necessarily mean near-zero rates

Reuters reports that a draft communique showed that the world's financial leaders will agree on Wednesday to boost the resources of the International Monetary Fund by $650 billion so it can better help vulnerable countries deal with the effects of the COVID-19 pandemic.

The draft also returned to a pledge to fight protectionism in world trade, a reference dropped since March 2016 on the insistence of the administration of former U.S. president Donald Trump.

G20 financial leaders will also agree to extend for a final time a debt-servicing suspension for the world's most vulnerable countries until the end of 2021, the draft showed.

FXStreet reports that economists at Credit Suisse still see scope for the EUR/GBP pair to move lower, targeting 0.8400.

“In terms of administering covid vaccine first doses, the UK stands as the clear leader among major economies, even if it is lagging when it comes to second doses. This unusual approach of getting first doses out as fast as possible seems to have worked, based on collapsing cases and especially hospitalization numbers.”

“The 5% decline seen in EUR/GBP in Q1 is among the strongest declines seen in the history of the cross. This reflects clear divergence in growth prospects seen in Q1 between the UK and euro area relative to expectations at the end of 2020. But this also reflects a starting point which was one of the weakest GBP levels seen since then too. This suggests more GBP gains are possible, and we would look to sell rallies towards EUR/GBP 0.8750, targeting 0.8400 medium-term (stop: 0.8840).”

Reuters reports that Dutch central bank chief Klaas Knot said that the euro zone economy is on course for a robust recovery in the second half of the year that could allow European Central Bank to start phasing out its emergency bond purchases in the third quarter.

"If the economy develops according to our baseline, we will see better inflation and growth from the second half onwards," Knot said. "In that case, it would be equally clear to me that from the third quarter onwards we can begin to gradually phase out pandemic emergency purchases and end them as foreseen in March 2022."

The ECB stepped up bond buying last month under its 1.85 trillion-euro Pandemic Emergency Purchase Programme, worried that rising yields, mostly a spillover from a U.S. Treasury selloff, could derail the bloc's eventual recovery.

"To the extent that higher nominal yields are driven by better inflation and growth prospects, to me that's entirely benign," he said. "If real rates are roughly constant, it means that higher nominal rates are entirely due to higher inflation expectations and that is something I'm comfortable with."

FXStreet reports that economists at Credit Suisse expect the EUR/USD pair to remain in a mild downtrend. Their expected Q2 range is 1.14-1.21.

“At its March meeting, the ECB said it would conduct PEPP asset purchases at a ‘significantly higher pace than during the first months of this year’. This is in line with a clear and explicitly stated intention to suppress yields and resist the upward pressure stemming from the rise in US Treasury yields.”

“We target EUR/USD 1.15 during the quarter, and only see a sustained bounce after EU vaccinations clearly ramp up and/or the European Recovery Fund spending plans impress.”

“Loose monetary conditions, which include a softer EUR, are contributing to both strong equity markets and rising inflation expectations in the euro area. This will encourage the ECB to carry on with its current plan, especially while the underlying economy remains fragile, prone to lockdown risk and lacking a US-style fiscal impulse.”

According to the report from IHS Markit/CIPS, UK service providers reported a strong rebound in business conditions during March, with activity, new orders and employment all picking up since the previous month. Renewed job creation in March represented the first overall expansion of staffing numbers across the service sector since the start of the coronavirus disease 2019 (COVID-19) pandemic. The forthcoming easing of government stringency measures also contributed to another improvement in business expectations for the year ahead. Around 66% of the survey panel forecast an increase in activity over this period, while only 8% predict a fall. This signalled the strongest optimism since December 2006.

At 56.3 in March, up sharply from 49.5 in February, the headline seasonally adjusted UK Services PMI Business Activity Index posted above the 50.0 no-change level for the first time since October 2020. Moreover, the latest reading signalled the fastest rate of output expansion for seven months. However, economists had expected an increase to 56.8.

Rising levels of activity were linked to a recovery in business and consumer spending, while some parts of the service economy commented on a boost from higher residential property transactions during March. Survey respondents often commented on pent up demand and work on projects that had been delayed at an earlier stage of the pandemic. Stronger client demand and forward bookings ahead of easing lockdown measures contributed to an increase in total new work for the first time in six months. The rate of new business expansion was the fastest since last August, despite a sustained reduction in export sales. 

March data pointed to a renewed increase in business activity across the UK private sector as a whole, reflecting robust rises in manufacturing production and service sector output. The seasonally adjusted UK Composite Output Index registered 56.4, up from 49.6 in February and above the neutral 50.0 threshold for the first time in 2021 to date. Moreover, the latest reading signalled the strongest rate of output growth for six months.

According to the report from IHS Markit, underpinned by a series record increase in manufacturing output, the eurozone private sector economy returned to growth during March. After accounting for seasonal effects, the Eurozone PMI Composite Output Index posted 53.2, up from 48.8 and the highest level since last July. The index was also above the earlier flash reading for March.

The second-fastest increase in private sector output in two-and-a-half years was driven in the main by a surge in manufacturing production, the strongest in nearly 24 years of data collection. In contrast, services output fell again, although only marginally and at the slowest rate in the current seven-month sequence of contraction.

The improved activity picture was broadly seen across the eurozone, with all nations experiencing a rise in their headline indices during March. 

Supporting the rise in overall eurozone private sector activity was an increase in new orders – again led in the main by the manufacturing economy. Overall, new sales rose at the sharpest degree in two-and-a half years. Moreover, demand increased across both domestic and external markets, with new export business rising at the strongest rate in over six-and-half years of data collection. Rising new business added to overall workloads, with firms reporting an increase in backlogs of unfinished business for the first time since November 2018. 

Finally, amid growing hopes that vaccination programmes will provide the basis for a strong rise in activity in the second half of 2021, business confidence improved to a 37-month peak.

CNBC reports that according to Goldman Sachs, a second wave of Covid-19 infections is expected to slow India’s economic recovery in the three months between April to June.

The investment bank lowered India’s growth forecast for the quarter from 33.4% year-on-year previously, to 31.3%. It cited lower consumption and services activity likely due to increased social restrictions that are being put in place by India’s state and federal governments to tackle the new outbreak.

Goldman said it expects gross domestic product (GDP) to contract sequentially by 12.2% quarter-on-quarter on an annualized basis for the three months ending June — which marks the first quarter of India’s fiscal year that began on April 1 and ends on March 31, 2022. 

“With virus cases surging to a new high of over 100K/day over the weekend, and a host of states including Maharashtra announcing stricter lockdown restrictions which are likely to broaden out in coming weeks, we expect Q2 GDP growth to be slower than we had initially anticipated,” Goldman analysts wrote.

FXStreet reports that economists at Credit Suisse lowered their USD/CAD target from 1.2550 to 1.2260. 

“The fundamental picture in Canada remains unequivocally strong, as the prospect of US demand momentum adds to the already beneficial impact from oil prices and from the multi-year consolidation/retooling of the local energy transportation network. The strong fiscal spending effort from the Trudeau government provides a homegrown source of support for CAD.”  

“We think the loonie has potential to appreciate further over the course of Q2. We lowered our USD/CAD target from 1.2550 to 1.2260. From a tactical standpoint, we see risks that suggest caution is warranted in picking entry levels for short USD/CAD positions, ideally north of 1.2700.”

During today's Asian trading, the US dollar was trading steadily against the euro and the yen. The growth of risk appetite in global markets, thanks to strong statistics on the US economy published earlier this week, as well as the prospects for increasing fiscal stimulus by the US authorities, is putting pressure on the dollar. The weakening of the US currency in recent days also contributed to the decline in US treasury bond yields from 14-month peaks recorded earlier.

The International Monetary Fund (IMF) yesterday improved its forecast for global economic growth for 2021 to 6% from 5.5%. The forecast for the recovery of the US economy for the current year was raised to 6.4% from 5.1%, the euro zone economy - to 4.4% from 4.2%.

Analysts say that as long as the COVID-19 situation remains difficult in the eurozone, while vaccination is moving fast in the US and the economy is recovering, the potential for strengthening the euro against the dollar is limited.

The focus of the market on Wednesday is the minutes of the meeting of the Federal Open Market Committee (FOMC) from March 16-17, which will be released at 18:00 GMT.

The ICE index, which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose by 0.02%.

Reuters reports that the Statistics Office said that Germany's public sector deficit reached 189.2 billion euros in 2020 thanks to the coronavirus pandemic, the first deficit since 2013 and the highest budget shortfall since German reunification three decades ago.

The pandemic has devastated Europe's largest economy, even though it has proven more resilient than many expected, partly because of continuing strong export demand from China.

The statistics office said that public spending rose 12.1% to 1.7 trillion euros as the government pulled out all the stops to offset the impact of months of lockdown, while tax take fell 3.5% to 1.5 trillion euros.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2005 (874)

$1.1961 (1294)

$1.1925 (2788)

Price at time of writing this review: $1.1872

Support levels (open interest**, contracts):

$1.1835 (2532)

$1.1795 (4235)

$1.1748 (4726)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date April, 9 is 71415 contracts (according to data from April, 6) with the maximum number of contracts with strike price $1,1750 (4726);

GBP/USD

$1.3914 (712)

$1.3879 (321)

$1.3827 (380)

Price at time of writing this review: $1.3775

Support levels (open interest**, contracts):

$1.3735 (1297)

$1.3693 (1047)

$1.3665 (287)

Comments:

- Overall open interest on the CALL options with the expiration date April, 9 is 10478 contracts, with the maximum number of contracts with strike price $1,3950 (1278);

- Overall open interest on the PUT options with the expiration date April, 9 is 14854 contracts, with the maximum number of contracts with strike price $1,3750 (1297);

- The ratio of PUT/CALL was 1.42 versus 1.56 from the previous trading day according to data from April, 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.

FXStreet reports that in the opinion of FX Strategists at UOB Group, EUR/USD could re-test the 1.1945 level in the next weeks.

Next 1-3 weeks: “We noted yesterday that EUR ‘is in a corrective rebound’. We highlighted that ‘in view of the nascent build-up in momentum, any EUR strength is likely limited to 1.1870 for now’. While our expectation for a stronger EUR is correct, the pace of advance has been more rapid than expected (EUR rose to 1.1877 during NY hours). In other words, the rebound in EUR could extend further. The next major resistance is at 1.1945. Overall, EUR is expected to trade with a positive bias as long as it does not move below 1.1770 (‘strong support’ level has moved higher from yesterday’s level of 1.1745). On a shorter-term note, 1.1820 is already quite a strong level.”

RTTNews reports that the latest survey from the Australian Industry Group showed that the construction sector in Australia continued to expand in March, and at a faster rate.

Seasonally adjusted Performance of Construction Index score of 61.8. That's up from 57.4 in February and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The indexes for new orders, employment and supplier deliveries all hit record highs, as house builders nationwide scrambled to commence residential projects as soon as possible in order to meet the final Home Builder deadline. Capacity utilization surged up to 81.3 percent in March, towards its recent high in December. Conditions were positive but slower in apartment building, commercial building and engineering construction.