Forex-novosti i prognoze od 14-02-2020

FXStreet reports that Philip Marey, a US strategist at Rabobank, take a look at the campaign promises made by Bernie Sanders, at present the strongest candidate from the far left, and a self-described ‘Democratic Socialist.’ The US dollar could head lower if a 'radical' Democratic candidate wins the elections. 

“A ‘Red President’ – supported by Democratic majorities in the Senate and the House of Representatives – would reverse Trump’s tax cuts and deregulation efforts, and make a radical shift in the spending pattern of the federal government.”

“However, what would not change very much is international trade policy.” 

“The spending plans of the left are so ambitious that the increase in tax revenue is likely to be outstripped by the increase in federal government spending.” 

“So under ‘the Red President’ the corporations and the rich pay more taxes, while the banks are cut into pieces. Meanwhile, workers will get a bigger slice of the pie and there will be jobs for all, college for all, Medicare for all and a Green New Deal.”

FXStreet notes that Japan is scheduled to release preliminary Q4 GDP data on 17 February, trade data for January and core machine orders for December on 19 February and CPI inflation for January and the All Industry Activity Index for December on 21 February. Economists at Standard Chartered Bank share their forecast.

“We expect growth to have turned negative (-0.9% q/q) on a seasonally adjusted basis in Q4, reversing from four consecutive quarters of positive growth. (...) We expect growth to have dropped 3.5% on an annualised basis.” 

“We expect the trade deficit to have widened to JPY 1,674bn from JPY 154.6bn as the decline in imports was likely far lower than in exports.”

“Headline inflation likely eased to 0.7% y/y from 0.8% y/y in December as oil prices eased in January after having increased in December. We think weak domestic consumption after the tax hike weighed on CPI inflation. Core CPI inflation likely stayed at the same level as December, at 0.9%. The All Industry Activity index – a key measure of Japan’s overall levels of production activity in the industrial sector – likely rose 1.2% m/m in December on expectations of a better external environment.”

The Commerce Department announced on Friday that business inventories edged up 0.1 percent m-o-m in December, following an unrevised 0.2 m-o-m drop in November.

That was in line with economists' forecast for a 0.1 percent m-o-m increase.

According to the report, stocks at manufacturers rose 0.5 percent m-o-m in December, while retail inventories remained unchanged m-o-m, and stocks at wholesalers fell 0.2 percent m-o-m and.

In y-o-y terms, business inventories increased 2.2 percent in December.

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment rose to 100.9 in early February.

Economists had expected the index would decrease to 99.5 this month from January's final reading of 99.8.

According to the report, the index of current U.S. economic conditions decreased to 113.8 in February from 114.4 in the previous month. Meanwhile, the index of consumer expectations grew to 92.6 this month from 90.5 in January.

The report noted that just 7% of all respondents mentioned the coronavirus when asked to explain their economic expectations in early February, and only 10% of survey respondents mentioned some aspect of the presidential election as having a potential impact on their economic expectations.

The Federal Reserve reported on Friday the U.S. industrial production fell 0.3 m-o-m in January, following a revised 0.4 percent m-o-m decline in December (originally a 0.3 percent m-o-m drop).

Economists had forecast industrial production would decrease by 0.2 percent m-o-m in January.

According to the report, the January drop was due to a 4.0 percent m-o-m tumble in the output of utilities, which was attributable to a large decrease in demand for heating due to unseasonably warm weather. In addition, manufacturing output edged down 0.1 percent m-o-m in January as the production of civilian aircraft slowed significantly. Excluding the production of aircraft and parts, factory output advanced 0.3 percent m-o-m. The mining production rose 1.2 percent m-o-m in January.

Capacity utilization for the industrial sector decreased 0.3 percentage point m-o-m in January to 76.8 percent. That was in line with economists' forecast and 3.0 percentage points below its long-run (1972-2019) average.

In y-o-y terms, the industrial output dropped 1.0.8 percent in January, following a revised 0.9 percent fall in the prior month (originally a 1.0 percent decline).

U.S. stock-index futures traded little changed on Friday, as investors digested the U.S. retail sales and industrial production, and continued to assess the economic fallout of the coronavirus outbreak.

Global Stocks:

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

The Commerce Department announced on Friday the sales at U.S. retailers rose 0.3 percent m-o-m in January 2020, following a revised 0.2 percent m-o-m advance in December 2019 (originally a 0.3 percent m-o-m gain).

Economists had expected total sales would increase 0.3 percent m-o-m in January.

Excluding auto, retail sales also rose 0.3 percent m-o-m in January after a revised 0.6 percent m-o-m climb in the previous month (originally a 0.7 percent m-o-m surge), matching economists' forecast for a 0.3 percent m-o-m gain.

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, and are used in GDP calculations, were flat m-o-m in January after a downwardly revised 0.2 percent m-o-m rise in December.

In y-o-y terms, the U.S. retail sales surged 4.4 percent in January, following a revised 5.5 jump in the previous month (originally a 5.8 percent increase).

The Labor Department reported on Friday the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, was unchanged m-o-m in January, following a revised 0.2 percent m-o-m gain in December (originally a 0.3 percent m-o-m advance). Economists had expected prices to drop 0.2 percent m-o-m last month.

According to the report, in January, falling fuel prices (-2.2 percent m-o-m) offset increasing prices for nonfuel imports (+0.2 percent m-o-m).

Over the 12-month period ended in January, import prices rose 0.3 percent, helped by a jump in fuel prices (+11.3 percent), which more than offset a drop in nonfuel prices (-0.9 percent).

Meanwhile, the price index for U.S. exports surged 0.7 percent m-o-m in January, following an unrevised 0.2 percent m-o-m decrease in the previous month. That was the largest monthly advance since March 2019.

Rising prices for both agricultural (+2.0 percent m-o-m) and nonagricultural (+0.7 percent m-o-m) exports contributed to the January climb.

Over the past 12 months, the price index for exports increased 0.5 percent, boosted by gains in prices for both agricultural (+3.1 percent) and nonagricultural (+0.2 percent) exports. That was the first 12-month rise in the index since April 2019.

EUR traded slightly lower against its most major counterparts in the European session on Friday after the Eurozone's Q4 GDP data showed the region's economic growth remains weak.

Eurostat reported its second estimate confirmed the Eurozone's GDP grew only 0.1 percent q/q in the fourth quarter of 2019, below 0.3 percent q/q expansion reported in the previous quarter. That marked the weakest rate of growth since the first quarter of 2013. Meanwhile, the Eurozone's annual economic expansion was revised lower to 0.9 percent in the fourth quarter (from 1.0 percent in advanced estimate), the weakest pace since the fourth quarter of 2013. 

In addition, Destatis' report revealed that Germany's economy stagnated in the fourth quarter. The German GDP was unchanged q/q from the previous quarter, the preliminary estimate showed. Economists' had expected a growth of 0.1 percent q/q. The third-quarter growth, however, was revised up to 0.2 percent q/q from 0.1 percent q/q. In y/y terms, the economy expanded by 0.4 percent in the last quarter, following an upwardly revised 0.6 percent advance in the third quarter and matching forecasts. In 2019, the German economy grew 0.6 percent after a 1.5 percent gain in 2018. That was the slowest pace since 2013.

NVIDIA (NVDA) reported Q4 FY 2019 earnings of $1.89 per share (versus $0.80 per share in Q4 FY 2018), beating analysts' consensus estimate of $1.67 per share.

The company's quarterly revenues amounted to $3.105 bln (+40.8% y/y), beating analysts' consensus estimate of $2.980 bln.

The company also issued upside guidance for Q1 FY 2020, projecting revenues of $2.94-3.06 bln (down from its prior guidance of $3.04-3.16 bln) versus analysts' consensus estimate of $2.86 bln.

NVDA rose to $287.78 (+6.28%) in pre-market trading.

FXStreet reports that according to FX Strategists at UOB Group, there is still scope for USD/CNH to extend the current consolidation in the next weeks.

24-hour view: “USD traded between 6.9716 and 6.9915 yesterday, narrower than our expected sideways trading range of 6.9650/6.9980. The price action offers not much clues and USD could trade between 6.9650 and 6.9980 for now.”

Next 1-3 weeks: “USD touched 7.0230 early last week and since then, it traded sideways in a relatively choppy manner. The price action is in line with our view from last Thursday (06 Feb, spot at 6.9780) wherein USD is expected to “trade sideways for now. Momentum indicators are mostly neutral and from here, we continue to expect USD to trade within a 6.9500/7.0230 range.”

Yandex N.V. (YNDX) reported Q4 FY 2019 earnings of RUB16.06 per share (versus RUB20.95 per share in Q4 FY 2018), missing analysts' consensus estimate of RUB23.31 per share.

The company's quarterly revenues amounted to RUB51.696 bln (+33.1% y/y), roughly in line with analysts' consensus estimate of RUB51.821 bln.

The company also issued download guidance for FY 2020, projecting revenues of RUB214-221 bln versus analysts' consensus estimate of RUB228.58 bln.

YNDX fell to $46.80 (-3.74%) in pre-market trading.

NFXStreet reports that economists at the National Bank of Canada Financial markets summarize the situation of the Canadian housing market which has recovered since a year ago. USD/CAD is dealt at 1.325. 

“If you hadn’t noticed, Canada’s housing market is back. It’s amazing what a difference a year (or two) can make; as at December 2019, nation-wide resales had skied 22% above year-ago levels.”

“So while growth in consumer credit has downshifted sharply, a reinvigorated housing market has keyed a turnaround in mortgage credit growth. Particularly noteworthy has been the reported pick-up at Canada’s chartered banks, where B-20 regs had earlier produced a deeper chill.” 

“To summarize then, Canada is seeing a meaningful increase in mortgage lending, with almost all of it fixed-rate in nature. Those familiar with this subject matter understand that timing is important; few things in life are seemingly as seasonal as Canadian housing activity.”

FXStreet reports that FX Strategists at UOB Group expect USD/JPY to stay side-lined for the time being.

24-hour view: “We highlighted yesterday ‘USD could ease from here but any weakness is likely limited to 109.65’. USD subsequently dipped to 109.60 before trading sideways for the rest of the sessions. While the underlying tone still appears to be on the soft side, this would likely translate into a lower trading range of 109.50/110.00 (a sustained decline below 109.50 is not expected).”

Next 1-3 weeks: “USD edged above 110.00 yesterday and touched 110.13. While upward momentum has not improved by much, the firm underlying tone suggests USD could edge upwards and test the top of our expected 109.20/110.30 sideway-trading range (narrowed from 109.00/110.30). As highlighted on Tuesday (11 Feb, spot at 109.75), the top of the range at 110.30 appears to be more vulnerable but USD has to register a NY closing above this level or the next resistance at 110.65 is unlikely to come into the picture. Overall, the current mild upward pressure could improve further as long as USD does not move below the bottom of the expected range at 109.30.”

• Ensuring safety, health of the people is a major task for the country
• We need to improve the medical insurance aid system for major diseases a
• Will push the rollout of biosecurity law as soon as possible
• Will will push forward national management of pensions for elderly

FXStreet reports that FX Strategists at UOB Group believe AUD/USD will likely move into a consolidative phase in the next sessions.

24-hour view: "Our expectation for AUD to "drift lower to 0.6700" did not quite materialize as it traded between 0.6707 and 0.6745. The underlying tone still appears to be a bit soft and from here, barring a move above 0.6745 (minor resistance at 0.6730), AUD could edge down towards 0.6690."

Next 1-3 weeks: "AUD rebounded and moved above our 0.6740 'strong resistance' as it rose to 0.6750 yesterday (12 Feb). While our view from Monday (10 Feb, spot at 0.6675) wherein we expected 'further weakness to 0.6620' is proven wrong, we are not convinced the current short-term AUD strength could extend much higher. For now, we expect AUD to trade sideways between 0.6650 and 0.6780. Looking forward, only a clear breach of 0.6780 would suggest that Monday's low of 0.6657 is a more significant bottom than currently expected."

FXStreet reports that economists at Rabobank note that the Swiss National Bank (SNB) has the mandate to maintain CPI inflation near 2% on a yearly basis but is currently running at just 0.2%. CHF's strength is not welcomed by SNB, economists said.

"The strong performance of the CHF can be associated with Switzerland's robust fundamentals which ensure that the currency is considered by many investors to be store of value. While there have been a wide number of exogenous factors which have sparked flows into safe-haven currencies such as the CHF or the JPY over the years, the CHF is particularly sensitive to bad news stemming from the Eurozone."

"Even if coronavirus fears lessen, the recent worsening in Eurozone economic data threatens to keep the CHF stronger for longer. The SNB is mandated to ensure price stability which equates with a rise in CPI inflation of less than 2% y/y. Swiss headline CPI inflation is currently running at just 0.2% y/y and has not been above the 2.0% level since a temporary spike in 2008."

"In view of the SNB's long-standing difficulties in supporting inflation, sporadic inflows associated with safe-haven demand for the CHF are very unwelcome. Even so, it is our expectation that Eurozone growth will be sluggish this year implying that EUR/CHF is likely to continue to trade heavily. In addition, any surge in coronavirus fears are also likely to benefit the CHF given its safe-haven status."

"Having breached the 2017 low around 1.0624, technical indicators suggest that EUR/CHF could be headed towards 1.05. That said, momentum currently appears to be stretched which suggests there is scope for a period of consolidation around current levels. For now, we maintain our 3-month EUR/CHF forecast of 1.06."

According to a flash estimate published by Eurostat, seasonally adjusted GDP rose by 0.1% in both the euro area (EA19) and the EU27 during the fourth quarter of 2019, compared with the previous quarter. In the third quarter of 2019, GDP had grown by 0.3% in both zones.

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 0.9% in the euro area and by 1.2% in the EU27 in the fourth quarter of 2019, after +1.2% and +1.5% respectively in the previous quarter. Economists had expected a 1.0% increase in the euro area.

During the fourth quarter of 2019, GDP in the United States increased by 0.5% compared with the previous quarter (after +0.5% also in the third quarter of 2019). Compared with the same quarter of the previous year, GDP grew by 2.3% (after +2.1% in the previous quarter).

According to an estimation of annual growth for 2019, based on quarterly data, GDP grew by 1.2% in the euro area and 1.4% in the EU27.

FXStreet reports that Westpac Institutional Bank forecast a sharp drop in Q4 GDP for Japan,

"Q4 GDP for Japan will be released Monday and if economists are correct we will see a sharp contraction. Current consensus is for a -3.8% SA QQ annualised outcome in Japanese GDP as a result of the increase in consumption tax, the impact of Typhoon Hagibis and ongoing tension over trade developments."

"The very sharp rebound that consensus appears to be forecasting for Q1 GDP looks somewhat questionable given the very obvious risks to Q1 growth at the moment. "

"The fact that the Bloomberg Japan GDP tracker is pointing to a much larger Q4 correction in growth is indeed a warning sign."

According to the report from Istat, in December 2019 seasonally-adjusted data, compared to November 2019, decreased for outgoing flows (-0.9%) and increased for incoming flows (+0.8%). Exports fell for both non EU countries (-1.0%) and EU countries (-0.8%). Imports dropped by -1.8% for non EU countries and increased by +2.6% for EU countries.

Over the last three months, seasonally-adjusted data, compared to the previous three months, raised for exports (+0.9%) and decreased for imports (-1.7%).

In December 2019, compared with the same month of the previous year, exports raised (+4.2%) and imports decreased (-2.2%). Outgoing flows increased by +5.1% for non EU countries and by +3.4% for EU countries. Incoming flows dropped by -5.9% for non EU area and increased by +0.3% for EU area. The trade balance in December 2019 amounted to +5,013 million Euros (+5,761 million Euros for non EU area and -748 million Euros for EU countries).

In the year 2019, outgoing flows increased by 2.3% (+1.1% for EU countries and +3.8% for non EU countries) and incoming flows decreased by 0.7% (0.0% for EU countries and -1.8% for non EU countries) compared with 2018.

In 2019 the trade balance registered a surplus of 52,940 million euro compared to the surplus of 39,280 million euro in 2018; excluding energy, the surplus was equal to 91,418 million euro, up compared with a 81,045 million euro surplus in 2018.

CNBC reports that Singapore must be prepared for the number of people in the country infected with the new coronavirus disease to continue to climb in the coming weeks, a minister said on Friday.

As of Thursday noon, Singapore had 58 confirmed cases of COVID-19, 15 of which have recovered and been discharged, according to the country's Ministry of Health. The Southeast Asian nation with a population of 5.7 million has one of the highest numbers of cases outside China.

Singapore has not recorded any deaths, but that too is something people must be "psychologically prepared" for as the number of cases continues to rise, said Janil Puthucheary, senior minister of state at Singapore's Ministry of Transport and Ministry of Communications and Information.

"I think it's really too early to talk about a peak. Cases are coming in on a daily basis and you have to have the expectation there are going to be more cases over the next few weeks," he told CNBC's.

"The issue is really whether these are going to be cases that are linked to the existing spread, existing cluster, links to China or whether we have an increasing number of cases that are unlinked community spread ... At the moment, most of the cases can be linked back to known clusters," he added.

FXStreet reports that a move below $5,700/t was near before base metals were able to recover. There are still troubles on the horizon for the red metal as auto sales in China are expected to plummet, ANZ Research informs.

"Copper threatened to break below USD5,700/t before buying returned, pushing the red metal back above USD5,800/t."

"The data doesn't seem to be getting any better. The Passenger Car Association said that auto sales in China fell 22% to 1.71m units in January. It also predicts a 30% fall in February and a 5% fall for the full year."

FXStreet reports that the cable is painting a potential continuation pattern on the chart, therefore, today's outlook for the GBP/USD pair is bullish, according to Karen Jones, an analyst at Commerzbank.

"GBP/USD is rallying from 1.2872 and this increasingly looks like a potential continuation pattern developing on the chart."

"Rallies will find initial resistance at the 55-day ma at 1.3063 ahead of the near term resistance line at 1.3120 and will need to regain this latter level on a closing basis to alleviate downside pressure and confirm the move higher to initially 1.3285."

According to the report from Federal Statistical Office, the Producer and Import Price Index remained unchanged in January 2020 compared with the previous month. The index stood at 100.7 points (December 2015 = 100). Petroleum products in particular saw higher prices, while pharmaceutical preparations became cheaper.

Compared with January 2019, the price level of the whole range of domestic and imported products fell by 1.0%.

In particular, higher prices for scrap, petroleum products and watches were responsible for the growth in the Producer Price Index compared with the previous month. By contrast, meat, gas and electricity became cheaper.

The Import Price Index registered lower prices compared with December 2019, particularly for pharmaceutical preparations. Price decreases were also seen for petroleum and natural gas, non-ferrous metals and products made therefrom, communication equipment and other fabricated metal products. By contrast, price increases were seen in particular for petroleum products. Vegetables and potatoes also became more expensive.

The US dollar on Friday rose to the highest in more than two years against the euro on a new wave of concerns about the spread of a new type of coronavirus in China. The yen has risen against most currencies.

According to experts, the economic impact of the epidemic on the United States will be less significant compared to European countries, which increases the attractiveness of American assets.

"Europe and especially Germany have very strong trade links with Asian markets, particularly China," said Mazen Issa, senior currency analyst at TD Securities.

The ICE Dollar index, which shows the value of the US dollar against six major world currencies, rose 0.03% from the previous day.

The pound rose slightly. Yesterday it was announced that the new British Finance Minister will be chief Secretary to the Treasury Rishi Sunak, who will replace the resigned Sajid Javid.

eFXdata reports that Danske Research discusses EUR/USD outlook and sees a scope that 1.12 might already be the high for 2020, while the low is yet to come.

"EUR/USD dropped to its lowest level since 2017, to the 1.08. This was underway over January and is due to a host of factors. Relative data surprises are part of it. But further, the hope for many was that Europe would pick up pace and outshine US financial assets as the former supposedly recovered in Q1. But this hope for Europe (and EM) outperforming the US never got going and turning positions into long EUR/USD is now the consensus story," Danek notes.

"As of now, the easiest way to get an uptick in EUR/USD is via visible Chinese easing or for the Fed to signal more rate cuts. But this remains elusive. In turn, we would not be surprised if 1.12 turns out to have been the high of 2020 in EUR/USD, whereas we have probably yet to see the low," Danske adds.

According to the report from Federal Statistical Office (Destatis), German economic growth stagnated in Q4.

• Germany Q4 preliminary GDP 0.0% vs +0.1% q/q expected

• Prior (Q3) +0.1%; revised to +0.2%

• GDP non-seasonally adjusted +0.3% vs +0.2% y/y expected

• Prior +1.0%; revised to +1.1%

• GDP working day adjusted +0.4% vs +0.3% y/y expected

• Prior +0.5%; revised to +0.6%

EUR/USD

Resistance levels (open interest**, contracts)

$1.0969 (1107)

$1.0934 (700)

$1.0907 (285)

Price at time of writing this review: $1.0836

Support levels (open interest**, contracts):

$1.0805 (2764)

$1.0773 (2094)

$1.0734 (1582)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date March, 6 is 101855 contracts (according to data from February, 13) with the maximum number of contracts with strike price $1,1200 (6384);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3159 (3453)

$1.3132 (3866)

$1.3111 (2100)

Price at time of writing this review: $1.3049

Support levels (open interest**, contracts):

$1.2982 (639)

$1.2953 (1435)

$1.2919 (2192)

Comments:

- Overall open interest on the CALL options with the expiration date March, 6 is 27167 contracts, with the maximum number of contracts with strike price $1,3050 (3866);

- Overall open interest on the PUT options with the expiration date March, 6 is 28859 contracts, with the maximum number of contracts with strike price $1,2800 (3658);

- The ratio of PUT/CALL was 1.06 versus 1.07 from the previous trading day according to data from February, 13

* - 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.