Forex-novosti i prognoze od 09-04-2021

According to ActionForex, analysts at TD Bank Financial Group note that the Canadian labour market added 303k jobs in March, well above consensus estimates that called for a 100k gain. 

"Last month’s improvement left employment 1.5% below the February 2020 level. The majority of the gains in March were in full-time work (+175k), but part-time growth was also impressive (+128k)."

"Like employment, Canada’s labour force also grew in March, increasing by 155k. Given the larger rise in employment, the unemployment rate declined to 7.5% from 8.2% in February."

"The services sector drove the gains in the month, adding 260k jobs."

"Provincially, employment increased in seven provinces. Ontario led the improvement with employment rising 182k in March. This was followed by Alberta (+37k), B.C.(+35k), and Quebec (+26k)."

"Helped by recent decisions to ease COVID-19 related restrictions, the Canadian labour market followed up a strong February with another extraordinary showing in March. While this brought employment even closer to its pre-pandemic level, the next couple of months could prove challenging for Canada’s labour market."

• Once it's clear we've weathered the virus, I want to err on the side of starting to remove extraordinary policies sooner rather than later
• Question for Fed is not to be preemptive or too reactive in talking about QE taper
• Excessive accommodation for longer than we need has side effects
• Some of the inflation in the coming months will be transitory, some won't be
• I'll also be looking at excess risk-taking in financial markets
• I'd like to see a sustainable achievement of employment, inflation goals

The Commerce Department announced on Friday the U.S. wholesale inventories rose 0.6 percent m-o-m in February, slightly better than the preliminary estimate of a 0.5 percent m-o-m gain.

Economists had forecast the reading to stay unrevised at 0.5 percent m-o-m.

In January, wholesale inventories jumped 1.4 percent m-o-m (revised from 0.5 percent).

According to the report, durable goods inventories edged up 0.3 percent m-o-m in February, while stocks of nondurable goods climbed 1.1 percent m-o-m.

In y-o-y terms, wholesale inventories increased 2.0 percent in February.

FXStreet reports that analysts at TD Securities note that the Canadian labour market continues to make substantial progress in the recovery towards pre-COVID employment levels with another 303K jobs added back in March. The CAD benefited more on the crosses than vs USD/CAD. Despite some waning momentum, there isn't a compelling catalyst to upset CAD resilience until the April Bank of Canada’s meeting.

“The labour market added 303K jobs in March, more than triple the consensus estimate of 100K. Most of the job gains were in services and April lockdowns imply a significant reversal in store next month. Still, with hours worked 2% higher and the unemployment rate dropping 7.5% this is an exceptionally strong piece of data.”

“The CAD hasn't shown much deference to domestic data surprises, but instead shown much greater sensitivity to global factors (like NA/US outperformance and reflation proxies). That said, another solid data print in Canada certainly doesn't hurt the CAD.” 

“The upcoming April MPR will be a worthy event risk for the CAD, so we are inclined to see the CAD perform reasonably well until then.”

“USD/CAD faces notable daily 'uptrend' support near 1.2540/50 (from the mid-March lows) that if convincingly broken should expose the figure and more below. But, given some uncertainty over USD direction, better prospects may lie on the crosses like EUR/CAD and CAD/antipodes.”

U.S. stock-index futures fell on Friday, dragged down by tech stocks, which declined as the U.S. bond yields rebounded from two-week lows, as inflation concerns resurged following faster-than-expected PPI data from the U.S. and China.

Global Stocks:

The Labor Department reported on Friday the U.S. producer-price index (PPI) rose 1.0 percent m-o-m in March, following an unrevised 0.5 percent m-o-m gain in February.

For the 12 months through March, the PPI increased 4.2 percent after an unrevised 2.8 percent climb in the previous month. That was the largest increase since the 12 months ended September 2011.

Economists had forecast the headline PPI would increase 0.5 percent m-o-m last month and 3.8 percent over the past 12 months.

According to the report, almost 60 percent of the March increase in the index for final demand can be traced to a 1.7-percent climb in prices for final demand goods (the largest gain since the index began in December 2009). In addition, the index for final demand services advanced 0.7 percent.

Excluding volatile prices for food and energy, the PPI went up 0.7 percent m-o-m and jumped 3.1 percent over 12 months (the largest advance since the 12 months ended September 2018). Economists had forecast gains of 0.2 percent m-o-m and 2.7 percent y-o-y.

FXStreet reports that S&P 500 above 4068 can keep the immediate risk higher for a test of test pivotal resistance from the top of its 12-year trend channel from the 2009 low at 4115. With the market already moving into “extreme” territory, analysts at Credit Suisse would then be highly cautious of an interim top here.

“The S&P 500 remains above high-level price support at 4068 and we look for a push above the 4100 psychological barrier for a move to Fibonacci projection resistance at 4104/08 next, then what we view as more significant resistance at the top of the 12-year trend channel from the 2009 low at 4115.” 

“Although we continue to look for a move to our 4200 next core objective this quarter, with market already at the beginning of its ‘typical’ extreme - 15% above the 200-day average and also above daily, weekly and monthly Bollinger Bands - we would be highly cautious of an interim top around 4115/25.”

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

Raytheon Technologies (RTX) initiated with an Outperform at Wolfe Research; target $97

Credit Suisse (CS) downgraded to Equal-Weight from Overweight at Morgan Stanley

Honeywell (HON) upgraded to Buy from Hold at Deutsche Bank; target raised to $244

Statistics Canada reported on Friday that the number of employed people increased by 303,100 m-o-m in March (or +1.6 percent m-o-m) after an unrevised gain of 259,200 m-o-m in the previous month.

Economists had forecast an advance of 100,000 m-o-m.

Meanwhile, Canada's unemployment rate fell to 7.5 percent in March from 8.2 percent in February, exceeding economists’ forecast for 8.0 percent. This was the lowest rate since February 2020.

According to the report, full-time employment increased 175,400 (or +1.2 percent m-o-m) in March, while part-time jobs rose by 127,800 (or +3.9 percent m-o-m).

In March, the number of public sector employees grew by 45,500 (or +1.1 percent m-o-m), and the number of private sector employees surged by 201,300 (or +1.7 percent m-o-m). Meanwhile, the number of self-employed climbed 56,400 (or +2.1 percent m-o-m) last month.

Sector-wise, employment increased both in goods-producing (+1.1 percent m-o-m) and service-producing (+1.8 percent m-o-m) businesses.

FXStreet reports that economists at Credit Suisse appraise that GBP/USD maintains a bearish “reversal day” to keep the risk lower in its range with the next support seen at 1.3641.

“Below support at 1.3706 should see weakness extend next to test the 1.3670 March low and then 1.3641 - the 38.2% retracement of the September/February rally - which we would look to hold at first. A break though can clear the way for further weakness to 1.3567, with better support seen starting at the December high at 1.3514 and stretching down to 1.3458/52 - the ‘neckline’ to the long-term base, 50% retracement of the rally from September and YTD low at 1.3458/52, where we would look for signs of a better floor.” 

USD appreciated against most of its major counterparts in the European session on Friday as the U.S. bond yields rebounded from two-week lows, as inflation concerns resurged following faster-than-anticipated Chinese data on the producer price index (PPI) for March. 

The National Bureau of Statistics (NBS) reported on Friday the factory gate prices climbed 4.4% y/y in March, the steepest annual pace since July 2018. Economists had forecast a 3.5% y/y rise for March, following a 1.7% gain in the prior month. 

Benchmark 10-year Treasury note yields jumped five basis points to 1.67% early Friday. On this backdrop, the U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.20% to 92.25.

The assurances from the Federal Reserve Chair Jerome Powell on Thursday that the Fed had the tools to curb accelerating prices were not enough to calm the inflation worries. Speaking at the event hosted by the IMF yesterday, Powell said that he expected any inflation resulting from economic recovery to be “temporary”, but if prices move "persistently and materially above levels we are comfortable with" the central bank has the tools to curb them.

The market participants are now awaiting the release of U.S. PPI data, due at 12:30 GMT. Economists expect the U.S. producer prices to increase 0.5% m/m and 3.8% y/y for March.

• Says talks on six-month extension of aid to help cover business’s fixed costs are ongoing
• Hopes for decision before the parliament’s summer break

FXStreet notes that the VIX index - a measure of the expected volatility of the S&P 500 - has fallen towards 17 this month, its lowest level since the onset of the COVID-19 crisis. This has coincided with the S&P 500 breaking above 4,000 for the first time ever. According to economists at Capital Economics, falling VIX doesn’t have to herald a correction in the U.S. equities.

“There may be growing concerns that a correction in the S&P 500 lies around the corner because the expected volatility of the index has fallen to a pre-pandemic low. On the contrary, we think that the S&P 500 will remain underpinned this year by a strong economic recovery aided by very accommodative monetary and fiscal policy.”

“While the recent decline in the VIX index might convey the impression that investors are becoming too complacent, it is perhaps surprising that it hasn’t fallen more quickly and to an even lower level. After all, expected volatility tends to be informed by the volatility investors have observed in the past. And the 30-day volatility of the S&P 500 had already dropped to near a pre-pandemic low earlier this year.”

“The VIX index remains even now significantly higher than it was before the crisis took hold. This may be partly due to very strong demand for call options on individual equities, which has driven the overall put/call ratio for them down sharply.”

FXStreet reports that the Credit Suisse analyst team notes that EUR/USD continues to struggle to clear its 200-day average at 1.1892 and the current strength stays seen as a temporary and corrective move higher.

“Support for a setback remains seen at 1.1860 initially, below which can ease the immediate upside bias for a fall back to 1.1823/22, which we look to hold initially. Below 1.1795/87 though is needed suggest a more decisive rejection of the 200-day average has been seen, clearing the way for a move back to 1.1737, then a retest of 1.1703/1.1695.”

“A sustained move above 1.1892 can see strength extend further to the 38.2% retracement of the entire 2021 fall at 1.1948/50, potentially even the mid-March highs at 1.1990/92, but with this 1.1950/1.1992 zone expected to prove a much tougher barrier and we look for a more important cap here.” 

FXStreet notes that the AUD/USD pair traded around 0.7700 in March before moving heavily toward the end of the month. In the view of economists at Mizuho Bank, though April will see confirmation that Australia’s fundamentals are recovering firmly. The Aussie’s downside will probably edge lower with an eye on rising US long-term interest rates and the spread of COVID-19, for example.

“A second A$100 billion bond-buying program will be launching mid-April. The RBA holds over 60% of all 3-year Australian government bonds (the target for purchases under the yield curve control program). It has managed to keep the 3-year government bond yield around its goal of 0.1% by pushing borrowing costs 100bps below the regular rate of 25bps. However, with Australia recovering swiftly from the covid slump, expectations for tapering are increasing and there is growing anticipation for rate hikes. As such, the Australian dollar will remain bullish from the middle to the end of the year.” 

“US interest rates have risen and this has roiled stock prices, while Europe is struggling with a new COVID-19 wave and the slow rollout of vaccines, so the greenback will probably continue to undergo a comprehensive rise, with the AUD/USD pair likely to remain in adjustive mode in April.” 

Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE at ING, notes that, despite the fact that they are dollar bears in 2021 and are eager to see signs that the bear trend has restarted after a tricky first quarter, it seems too early to conclude that it’s time to sell the dollar.

"Yes, the market has dialled back some of the pressure on the Federal Reserve to tighten early (US 5-year yields softening and April 23 Fed Funds futures rallying 10 ticks), but that pressure looks set to return. One only has to look at China’s March producer price index of 4.4% YoY to see the wave of forthcoming inflation in 2Q and an uncomfortable quarter for Fed communications. Here our bond strategy team are convinced we have not seen the top in US 10-year yields."

"Events have not helped the environment in emerging markets, where Brazil, in particular, is battling with Covid-19, Turkey’s monetary policy is under scrutiny and tensions in eastern Ukraine, and the prospect of fresh sanctions hangs over Russia. Indeed, portfolio flows into emerging markets have stalled since late February. Continued patience may therefore be required for the global story that will attract funds out of the USD. DXY can easily correct back to 92.50/70."

"Elsewhere today, Canada’s March jobs figures may come in on the strong side in line with last week’s US non-farm payrolls. However, any help to CAD should be short-lived as the recent rise in Covid-19 cases in Canada and the relatively slow vaccination roll out may leave CAD underperforming the rest of G10 pro-cyclical currencies."

FXStreet reports that analysts at Credit Suisse discuss EUR/GBP prospects.

“Whilst we would look to see a weekly close above key resistance at 0.8643/65 our bias is for this to be achieved to see a base established to reinforce a recovery theme. Additionally, a close above 0.8574 today would also see a bullish ‘reversal week’ established to further reinforce a recovery story. We would then look for a move to 0.8732 next, then the 38.2% retracement at 0.8761.”

“Big picture, we would not rule out a move back to the ‘neckline’ to the medium-term top at 0.8861.

CNBC reports thatU.S. Treasury yields climbed on Friday morning, ahead of the release of the March producer price index, which measures wholesale price inflation.

The yield on the benchmark 10-year Treasury note rose to 1.665%. The yield on the 30-year Treasury bond advanced to 2.338%. 

The U.S. Bureau of Labor Statistics is set to publish the March PPI data at 12:30 GMT.

Yields rebounded in early trading after falling in the previous session following dovish comments on the economy from Federal Reserve Chairman Jerome Powell. He called the recovery from the pandemic “uneven” on Thursday, signaling a more robust recovery is needed.

Treasury yields have been rapidly moving higher recently over concerns about inflation, amid the economic recovery from the coronavirus. However, the Federal Reserve has said it will let inflation run hotter if this helps achieve full employment.

FXStreet reports that according to economists at MUFG Bank, the shared currency is set to take advantage of the recent outperformance of cyclical stocks.

“The Euro Stoxx 600 cyclical index relative to the overall Euro Stoxx Index has begun to outperform after a period of underperformance. Cyclicals outperformed from May last year through to 25th February but then went into a period of under-performance through to the end of March. Cyclicals have again started to outperform and is taking EUR/USD higher now. This cyclical performance relative to the overall market performance correlates tightly with EUR/USD and if this can be sustained it would suggest further EUR/USD gains are possible.”

“The outlook on vaccinations is improving and the pessimism that existed in March has diminished. The outlook now relative to elsewhere looks a little less concerning, prompting liquidation of EUR short positions. That could have further to run over the short-term.”

Reuters reports that European Central Bank Vice President Luis de Guindos said that euro zone authorities should only withdraw their monetary and fiscal stimulus gradually and accompany a recovery in the pandemic-struck euro zone economy.

"The withdrawal of fiscal and monetary support measures must be prudent and gradual," de Guindos told, but cautioned that keeping stimulus in place for too long could cause the "zombification" of the economy by allowing unviable companies to survive.

FXStreet reports that in the view of economists at Mizuho Bank, the cable will continue moving with a heavy topside in April.

“The markets have been impressed by the high pace of COVID-19 vaccinations in the UK, but this seems to be growing less potent as a factor impacting trading. Of course, it will only be natural if this factor fades away as other countries also implement vaccination programs (with the Biden administration’s plans to increase vaccination rates also likely to have an impact).” 

“After being slightly overshadowed by other central banks recently, the Bank of England’s MPC will not be meeting in April. The GBP/USD pair will probably be swayed by comments by MPC members, but these are unlikely to shift the pair’s trend.”

According to the report from Istat, in February 2021 estimates for seasonally adjusted index of retail trade increased by 6.6% in value terms in the month on month series, likewise volume grew by 7.2%. Economists had expected a 2.0% increase in value terms.

In the three months to February 2021, despite the monthly growth, value of sales fell by 2.2% and volume contracted by 2.6% when compared with the previous three months.

Year-on-year, value of retail trade continued to decrease, dropping by 5.7%. Volume sales contracted by 7.0%.

In February 2021, all channels of distribution, besides e-commerce, continued their fall when compared with February 2020. Large-scale distribution was down 5.8%, small-scale distribution dropped by 7.6% and non-store retail sales decreased by 6.6%. This last channel of distribution has been recording no growth for 13 consecutive months.

Online sales continued their rise in February 2021, with sales up 35.8% compared with the same period a year earlier.

Looking at the value of sales for non-food products, all sectors experienced no growth besides computers and telecommunications equipment (+12.0%) and electric household appliances, audio-video equipment (+8.9%). The largest annual falls were reported for shoes, leather goods and travel items (-12.7%) and pharmaceutical products (-12.3%).

Reuters reports that data from the China Association of Automobile Manufacturers (CAAM) showed that auto sales in China surged in March for their 12th consecutive month of gains, as the world’s biggest car market leads the sector’s recovery from the COVID-19 pandemic.

Sales reached 2.53 million vehicles in March, up 74.9% year-on-year. Sales of new energy vehicles (NEVs) increased 239% in March to 226,000 units.

NEV makers, such as homegrown Nio Inc and Xpeng Inc, as well as foreign groups, such as Tesla Inc, are expanding manufacturing capacity in China as it promotes greener vehicles to cut air pollution.

Chen Shihua, a senior executive at CAAM, said the industry body expects the chip supply shortage to have bigger negative impact on China’s auto production in the second quarter than in the first.

According to the report from Halifax Bank of Scotland, on a monthly basis, house prices in March were 1.1% higher than in February. In the latest quarter (January to March) house prices were 0.3% higher than in the preceding three months (October to December). House prices were 6.5% higher than in March 2020.

Russell Galley, Managing Director, Halifax, said: “Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1% compared to February. This rise – the first since November last year – means the average property is now worth £254,606, a new record high. A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5% annually, or £15,430 in cash terms. Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average. Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.”

During today's Asian trading, the dollar recovered some of the losses, but may still record the highest weekly decline since the beginning of the year after stronger-than-expected statistics in Europe, an unexpected increase in applications for unemployment benefits in the United States and dovish comments from the Fed.

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 0.25%.

"In short, the energy of the dollar's rebound in the first quarter has dried up, just as it did in the bond sell - off," said Keith Jukes of Societe Generale.

Federal Reserve Chairman Jerome Powell said that the jump in spending on the back of the opening of the US economy, together with supply-side bottlenecks, is likely to increase prices this year, but it will not result in a steady increase year after year, which the Fed considers inflation.

The number of applications for unemployment benefits in the United States over the past week rose to 744,000, while analysts, based on preliminary data, predicted a figure of 680,000. 

The euro fell against the US dollar, which was due to the publication of data on Germany. According to provisional data of the Federal Statistical Office (Destatis), in February 2021, production in industry was down by 1.6% on the previous month on a price, seasonally and calendar adjusted basis. Economists had expected a 1.5% increase. Compared with February 2020, which was the month before restrictions were imposed due to the corona pandemic in Germany, real production decreased by a calendar adjusted 6.4% in February 2021. In January 2021, the corrected figure on the production in industry showed a decrease of 2.0% (provisional: -2.5%) from December 2020.

According to the report from INSEE, in February 2021, output plummeted again in the manufacturing industry (−4.6%, after +3.3%) as well as in the whole industry (−4.7%, after +3.2%). Economists had expected a 0.5% increase in the whole industry.

Compared to February 2020 (the last month before the first general lockdown), output remained in sharp decline in the manufacturing industry (−7.1%), as well as in the whole industry (−6.6%).

In February, output plunged in the manufacture of transport equipment (−11.4% after −3.0%). It decreased sharply in “other manufacturing” (−4.0% after +3.9%), in mining and quarrying, energy, water supply (−5.4% after +2.8%) and in the manufacture of machinery and equipment goods (−5.3% after +8.8%). It declined more modestly in the manufacture of food products and beverages (−2.0% after +1.6%). Conversely, it continued to expand in the manufacture of coke and refined petroleum after the reopening of several refineries that had been shut down in late 2020 (+11.5% after +6.8%).

In February 2021, output yet remained in sharp decline compared to its February 2020 level in most industrial activities. It plummeted in the manufacture of coke and refined petroleum (−20.5%) and in the manufacture of transport equipment (−25.7%), especially in the manufacture of other transport equipment (−33.6%). Compared to February 2020, output decreased more moderately in the manufacture of machinery and equipment goods (−3.8%) and in “other manufacturing” (−3.8%), thanks in particular to the sub-branches of electrical equipment (+5.3%) and pharmaceuticals (+9.5%).

EUR/USD

Resistance levels (open interest**, contracts)

$1.2001 (752)

$1.1956 (1407)

$1.1937 (2553)

Price at time of writing this review: $1.1887

Support levels (open interest**, contracts):

$1.1849 (2466)

$1.1800 (4286)

$1.1750 (4727)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date April, 9 is 72482 contracts (according to data from April, 8) with the maximum number of contracts with strike price $1,1750 (4727);

GBP/USD

$1.3804 (100)

$1.3767 (226)

$1.3740 (379)

Price at time of writing this review: $1.3684

Support levels (open interest**, contracts):

$1.3648 (359)

$1.3599 (911)

$1.3549 (948)

Comments:

- Overall open interest on the CALL options with the expiration date April, 9 is 10632 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 14952 contracts, with the maximum number of contracts with strike price $1,3750 (1307);

- The ratio of PUT/CALL was 1.41 versus 1.41 from the previous trading day according to data from April, 8

* - 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.

According to provisional data of the Federal Statistical Office (Destatis), in February 2021, German exports were up 0.9% and imports 3.6% on a calendar and seasonally adjusted basis compared with January 2021. Destatis also reports that, after calendar and seasonal adjustment, exports were 2.1% lower than in February 2020, the month before restrictions were imposed due to the coronavirus pandemic in Germany. Imports increased by 0.2% in calendar and seasonally adjusted terms in February 2020.

Germany exported goods to the value of 107.8 billion euros and imported goods to the value of 89.7 billion euros in February 2021. Compared with February 2020, exports decreased by 1.2% and imports increased by 0.9% in February 2021.

The foreign trade balance showed a surplus of 18.1 billion euros in February 2021. In February 2020, the surplus amounted to 20.3 billion euros. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of 19.1 billion euros in February 2021.

The German current account of the balance of payments showed a surplus of 18.8 billion euros in February 2021, which takes into account the balances of trade in goods (+18.6 billion euros), services (+1.2 billion euros), primary income (+7.7 billion euros) and secondary income (-8.8 billion euros). In February 2020, the German current account had shown a surplus of 21.6 billion euros.

According to provisional data of the Federal Statistical Office (Destatis), in February 2021, production in industry was down by 1.6% on the previous month on a price, seasonally and calendar adjusted basis. Economists had expected a 1.5% increase.

Compared with February 2020, which was the month before restrictions were imposed due to the corona pandemic in Germany, real production decreased by a calendar adjusted 6.4% in February 2021.

In February 2021, production in industry excluding energy and construction was down by 1.8%. Within industry, the production of capital goods showed a decrease of 3.2% and the production of intermediate goods of 1.0%. The production of consumer goods increased by 0.2%. Outside industry, energy production was down by 1.0% in February 2021 and the production in construction decreased by 1.3%.

In January 2021, the corrected figure on the production in industry showed a decrease of 2.0% (provisional: -2.5%) from December 2020.