Forex-novosti i prognoze od 23-01-2020

The U.S. Energy Information Administration (EIA) revealed on Thursday that crude inventories decreased by 0.405 million barrels in the week ended January 17. Economists had forecast a drop of 1.009 million barrels.

At the same time, gasoline stocks rose by 1.745 million barrels, while analysts had expected a climb of 3.090 million barrels. Distillate stocks fell by 1.185 million barrels, while analysts had forecast an increase of 1.014 million barrels.

Meanwhile, oil production in the U.S. was unchanged at 13.000 million barrels a day.

U.S. crude oil imports averaged 6.4 million barrels per day last week, down by 120,000 barrels per day from the previous week.

• Examining all possible export controls regarding Huawei
• U.S. is not discussing cutting Huawei out from all exports; the objective is to protect national security

The Conference Board announced on Thursday its Leading Economic Index (LEI) for the U.S. dropped 0.3 percent m-o-m in December to 111.2 (2016 = 100), following a revised 0.1 percent m-o-m gain in November (originally unchanged m-o-m).

Economists had forecast a decline of 0.2 percent m-o-m.

Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, noted: "The US LEI declined slightly in December, driven by large negative contributions from rising unemployment insurance claims and a drop in housing permits. The LEI has now declined in four out of the last five months. Its six-month growth rate turned slightly more negative in the final quarter of 2019, with the manufacturing indicators pointing to continued weakness in the sector. However, financial conditions and consumers' outlook for the economy remain positive, which should support growth of about 2 percent through early 2020."

The report also revealed the Conference Board Coincident Economic Index (CEI) for the U.S. edged up 0.1 percent in December to 107.2, following a 0.3 percent advance in November. Meanwhile, its Lagging Economic Index (LAG) for the U.S. fell 0.1 percent in December to 108.8, following a 0.4 percent rise in November.

The European Commission (EC) said on Thursday its flash estimate showed the consumer confidence indicator for the Eurozone remained unchanged m-o-m in January at -8.1.

Economists had expected the index to improve to -7.8.

Considering the European Union (EU) as a whole, consumer sentiment was also unchanged at -7.0.

Given these flat m-o-m performances, both indicators remain well above their respective long-term averages of -10.6 (Eurozone) and -9.9 (EU), the report said.

The ECB released a statement regarding the launch of its monetary policy strategy review.

Key highlights:

• This is the first review since 2003;
• Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices;
• Other considerations, such as financial stability, employment and environmental sustainability, will also be part of review;
• Expected to be concluded by end of this year;
  
• Review will be based on thorough analysis and open minds, engaging with all stakeholders

U.S. stock-index futures fell slightly on Thursday, as investors digested the latest batch of Q4 earnings reports and coronavirus headlines.

Global Stocks:

• Says incoming data are in-line with baseline scenario
• Manufacturing remains a drag
• Employment growth continues to support economy
• There are some signs of an increase in inflation that's in line with expectations
• In light of continued subdued inflation outlook, monetary policy has to remain stimulative for a prolonged period of time
• We will closely monitor inflation developments
• ECB committed to symmetry on inflation
• Eurozone inflation increase 0.3% q/q in Q3 vs +0.2% in Q2
• Weak growth reflects weakness in global trade
• Surveys and data points show some stabilization
• Near-term growth expected to similar to rates observed in previous quarters
• Risks tilted to the downside but less pronounced
• Weaker growth momentum is delaying the passthrough of inflation
• Crosscheck confirms ample degree of monetary accommodation still needed
• ECB view on risk balance was unanimous
• ECB discussed whether risks were closer to balanced
• ECB hopes to decide on strategy review in November/December
• ECB policy decisions will be independent from review
• Tiering is operating extremely well
• There is no discussion at this time to change tiering multiple
• Tiering has proven to be effective, no question about it

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

Tesla (TSLA) resumed with a Sell at UBS; target raised to $410 from $160

Exxon Mobil (XOM) downgraded to Sector Underperform from Sector Perform at Scotiabank; target $75

Tesla (TSLA) downgraded to Neutral from Outperform at Exane BNP Paribas; target $555

Chevron (CVX) upgraded to Sector Outperform from Sector Perform at Scotiabank; target $137

General Electric (GE) upgraded to Overweight from Equal-Weight at Morgan Stanley; target $14

Micron (MU) upgraded to Overweight from Equal-Weight at Morgan Stanley; target raised to $73

The data from the Labor Department revealed on Thursday the number of applications for unemployment benefits rose less than forecast last week, suggesting the U.S. labor market continues to tighten even as the pace of job growth is slowing.

According to the report, the initial claims for unemployment benefits increased by 6,000 to a seasonally adjusted 211,000 for the week ended January 18.

Economists had expected 215,000 new claims last week.

Claims for the prior week were revised upwardly to 205,000 from the initial estimate of 204,000.

Meanwhile, the four-week moving average of claims dropped 3,250 to 213,250 last week, the lowest level since September.

EUR traded mixed against its major counterparts in the European session on Thursday after the ECB announced its monetary policy decision after the January meeting. As it was widely expected, the bank remained its main refinancing rate unchanged at 0.00 percent. Its interest rates on the marginal lending facility and the deposit facility were also left unchanged at 0.25 percent and -0.50 percent, respectively. ECB's policy statement offered little new information as well. The only new point was the announcement of the first strategic review of its policy. The bank promised to reveal further details about the review today at 14:30 GMT.

JPY rose against its major counterparts and CNY fell amid growing fears over the potential spread of the deadly new virus from China during the Lunar New Year period, set to kick off this Saturday. Deaths from this virus rose to 17 on Thursday with nearly 600 confirmed cases. The disease was first discovered in the Chinese city of Wuhan and then spread to several other cities in the country as well as Thailand, Japan, South Korea and even the U.S. During the Lunar New Year holidays, hundreds of millions of Chinese are expected to travel domestically and overseas, heightening the risk of more transmissions. Beijing canceled large-scale New Year celebrations to contain the virus from spreading. 

Elsewhere, AUD strengthened after data indicated an unexpected drop in unemployment to a nine-month low. Australian Bureau of Statistics (ABS) reported the unemployment rate in Australia came in at a seasonally adjusted 5.1% in December. That beat economists' forecasts for 5.2%, which would have been unchanged from the November reading. The Australian economy added 28,900 jobs last month, beating expectations for an advance of 15,000 jobs after gaining 38,500 jobs in the previous month.

Freeport-McMoRan (FCX) reported Q4 FY 2019 earnings of $0.02 per share (versus $0.11 per share in Q4 FY 2018), beating analysts' consensus estimate of $0.00 per share.

The company's quarterly revenues amounted to $3.911 bln (+6.2% y/y), beating analysts' consensus estimate of $3.689 bln.

FCX rose to $12.40 (+0.65%) in pre-market trading.

The European Central Bank (ECB) remained its main refinancing rate unchanged at 0.00 percent on Thursday, as widely expected.

Its interest rates on the marginal lending facility and the deposit facility were also left unchanged at 0.25 percent and -0.50 percent, respectively.

In its policy statement, the ECB repeated the Governing Council expects its key interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

In addition, the European regulator said that it will continue to make net purchases under its asset purchase programme (APP) at a monthly pace of €20 billion. These purchases are expected to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

The ECB also repeated that it intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

It was also announced that further details about the review of the ECB's monetary policy strategy would be released today at 14:30 GMT.

American Airlines (AAL) reported Q4 FY 2019 earnings of $1.15 per share (versus $0.97 per share in Q4 FY 2018), missing analysts' consensus estimate of $1.16 per share.

The company's quarterly revenues amounted to $11.313 bln (+3.4% y/y), roughly in line with analysts' consensus estimate of $11.324 bln.

The company also issued in-line guidance for FY 2020, projecting EPS of $4.00-6.00 versus analysts' consensus estimate of $5.12.

AAL fell to $27.10 (-0.81%) in pre-market trading.

Procter & Gamble (PG) reported Q4 FY 2019 earnings of $1.42 per share (versus $1.25 per share in Q4 FY 2018), beating analysts' consensus estimate of $1.37 per share.

The company's quarterly revenues amounted to $18.240 bln (+4.6% y/y), roughly in line with analysts' consensus estimate of $18.367 bln.

The company also issued in-line guidance for FY 2020, projecting revenues of +4-5% y/y to ~$70.4-71.1 bln versus analysts' consensus estimate of $70.69 bln, up from +3-5% y/y prior.

PG fell to $123.94 (-1.29%) in pre-market trading.

Travelers (TRV) reported Q4 FY 2019 earnings of $3.32 per share (versus $2.13 per share in Q4 FY 2018), beating analysts' consensus estimate of $3.27 per share.

The company's quarterly revenues amounted to $7.075 bln (+5.7% y/y), missing analysts' consensus estimate of $7.259 bln.

TRV fell to $138.50 (-2.01%) in pre-market trading.

FXStreet reports that analysts at TD Securities (TDS) offered a brief preview of Thursday's key event risk – the latest monetary policy update by the European Central Bank (ECB).

“Today's ECB meeting should be fairly low-key, with our base case seeing no change in rates or the policy statement, and a continuation of the more upbeat tone from the December meeting. The focus today will almost certainly be on the announcement around the ECB's monetary policy strategy review, with markets looking to its scope and mandate for any hints into future policy moves.”

“In December though Lagarde said that, "There is no preconceived landing zone at this point in time," and we expect to see a repetition of that message today, as she tries to avoid sending any kind of signal on whether the implications of the review are likely to be hawkish or dovish for policy.”

“Our base case sees EURUSD modestly higher as the ECB extends its more positive outlook. Overall, however, we do not think this meeting will see any significant breaks of recent ranges. For today's event, we note that the 1.1070 area contains a cluster of technical supports. This suggests that may be the key pivot for price action surrounding today's policy decision.”

Comcast (CMCSA) reported Q4 FY 2019 earnings of $0.79 per share (versus $0.72 per share in Q4 FY 2018), beating analysts' consensus estimate of $0.77 per share.

The company's quarterly revenues amounted to $28.398 bln (+2ю0% y/y), roughly in line with analysts' consensus estimate of $28.177 bln.

CMCSA rose to $48.25 (+1.71%) in pre-market trading.

FXStreet reports that analysts at Danske Bank offered a quick review of Thursday’s Norges Bank policy decision to leave the key rate unchanged at 1.50%, broadly in line with market expectations.

“This morning, Norges Bank (NB) left the sight deposit rate unchanged at 1.50% in a decision widely expected by both markets and analysts. This was a 'small' meeting that only included a press release, i.e. there was no monetary policy report, revised rate path nor press conference.”

“In the evaluation of the domestic economy, NB concluded that new information supports the view that capacity utilization is above normal, but that the economy is close to a peak and inflation is close to target. On the external environment, NB stated that the risk of a sharp downturn is reduced, but is not eliminated.”

“In sum, NB clearly expects the policy rate to remain unchanged at least until the next 'main' meeting in March. This is line with our expectations, but we still pencil in a rate hike in June 2020, even if the probability of this call materialising has fallen considerably in recent weeks and arguably is not much more than 50% at this stage.”

• Adds the agreement should allow discussions next week at the OECD
• U.S. proposal for future tax deal to be optional is no longer on the table

Francesco Pesole, an FX Strategist at ING, notes they think that the ECB meeting should have limited implications for EUR/USD.

"The two key points in the Bank’s message should be that data suggests a pick-up in inflation, and the manufacturing cycle has bottomed out. However, most of the focus is likely to fall on the launch of the strategy review, specifically in relation to the duration (we think until year-end), and who will participate in the process (EU Parliament, academic groups). Our economists think the review will eventually lead to a new definition of price stability of “around 2%” from "below, but close to, 2%". The meeting will also give markets another chance to assess ECB President Christine Lagarde’s communication style; her first months have been characterised by very balanced rhetoric. All in all, we see little scope for any surprises and the options market is mirroring this view, with event vol breakevens at 26 pips in EUR/USD, sizably lower than the historical average for an ECB meeting (although the number is also reflecting the general low volatility environment)."

FXStreet reports that FX Strategists at UOB Group suggested the idea that USD/CNH could have bottomed out in the 6.8450 region.

24-hour view: "While USD did not advance further to 6.9250 as expected yesterday (high: 6.9180), the upside bias remains intact. However, as the momentum has moderated, the path to 6.9250 is likely to be gradual rather than explosive. Support is at 6.9020 followed by 6.8840 and only a break of the latter would indicate that USD is transiting into a sideways pattern."

Next 1-3 weeks: "We highlighted yesterday (21 Jan, spot at 6.8700) that the decline in USD 'is in oversold territory' but held the view that it 'could dip below 6.8400 but the July 2019 low near 6.8170 is likely out of reach'. The manner by which USD subsequently surged to a high of 6.9126 came as a surprise. While our 'strong resistance' at 6.9200 is still intact, the outsized gain is enough to indicate that USD has found a short-term bottom at 6.8460 on Monday (20 Jan). The current USD strength is viewed as the early stages of a correction phase. From here, the recovery could extend to 6.9650. At this stage, the prospect for a sustained rise above 6.9650 is not high. On the downside, support is at 6.8800 but only a move below 6.8650 would suggest the correction phase has ended."

FXStreet reports that in opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the bearish view on the cross is seen unchanged while below 1.0836.

"EUR/CHF will remain directly offered below resistance at 1.0836 (mid August low) and we target the June 2016 and January 2017 lows at 1.0632/23. The market has traded through its accelerated downtrend but not sustained the break and we suspect will consolidate further near term."

"Initial resistance is 1.0836, but while contained by 1.0891 (55 day ma) it will remain offered."

"In order to alleviate downside pressure the cross will need to regain the 1.1058 October high on a daily chart closing basis to generate some upside interest (not favoured)."

CNBC reports that with global debt set to exceed $257 trillion in the first quarter of 2020, the head of the Institute of International Finance (IIF) has warned that "white elephants" in emerging markets could pose a problem.

Total worldwide debt hit $253 trillion by the end of September 2019, with record-low interest rates making it easier for corporates, governments and individuals to borrow.

Global debt compared against total output surpassed 322% in the third quarter of 2019 and will continue to grow, according to the latest IIF report.

"We see a huge run-up in debt and leverage in this cycle, whether it's emerging markets or mature markets, whether it's corporates, sovereigns or households, and yet interest rates don't move, so maybe markets are telling us that we still have more capacity … but I worry about it nonetheless," IIF President told CNBC.

In particular, Adams highlighted that $8 trillion in outstanding foreign-denominated debt from the emerging markets, of which $2 trillion will need to be rolled over this year.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, has suggested that the upside momentum in Cable could extend to the 1.3285 level.

"GBP/USD saw another recovery yesterday, which has eroded last weeks high and we will assume that there is scope for a deeper recovery to the 1.3285 Fibonacci retracement."

"The market should remain underpinned by the 1.2874 uptrend and the December low at 1.2908. Failure at the 4 month uptrend would put the 200 day moving average at 1.2689 back on the plate."

• Doesn't see a new minimum exchange rate at the moment

• Negative rates have side effects, SNB trying to minimise those side effects.

• That gives us the freedom to maintain negative rates for longer and also to cut the rate if necessary.

• SNB conducts independent monetary policy, does not follow the ECB.

• Balance of risks is tilted to the downside.

• Needs to take international environment into account.

• SNB could still cut rates if needed.

• We still have a highly valued Swiss franc, important to keep expansive policy.

• SNB can intervene as necessary.

• Never intend to weaken the franc for any advantage.

FXStreet reports that Brian Martin, Analyst at Australia and New Zealand Banking Group (ANZ) offers insights on the key challenges that the euro is likely to face starting out the new decade.

"The euro is starting the new decade with a growth crisis in Italy and an extremely limited policy arsenal. The current restrictive fiscal framework needs to be addressed and the incomplete banking and capital markets union completed.

Italy will hold a regional election in the traditionally left-wing stronghold of Emilia-Romagna this weekend. A victory for the right-wing Lega Party would exert serious pressure on the fragile coalition government in Rome and push BTP yields higher.

Ensuring the euro in its current format is a continued success means that it must work for all member countries. That is not the case at present. The new EU Commission cannot be complacent and must champion growth."

The severity of the rapidly spreading coronavirus outbreak in China that's claimed more than a dozen lives is still unknown, and the extent of its spread will only be clearer after the Lunar New Year holidays, said David Roche of Independent Strategy, CNBC reports.

Hundreds of millions of Chinese will traveling during the week-long holiday period as China celebrates the Spring Festival.

"The bad news is that the worst has yet to come, as the number of new infections is still on the rise," warned Larry Hu, economist at Macquarie Capital.

Much is still not known about the mysterious new virus that has killed 17 people so far and infected nearly 600 others worldwide. The disease, first discovered in the Chinese city of Wuhan, has spread to Beijing, Shanghai and other populated cities in the country. Cases in Thailand, Japan, South Korea and even the United States, have also been discovered.

The World Health Organization will convene again on Thursday, a day after deciding not to designate the outbreak of the virus as a global health emergency.

eFXdata reports that Bank of America Global Research discusses its expectations for ECB policy meeting.

"Although the meeting this week is not the time for an ECB policy shift, we see risks that the tone may start changing. The announcement of the policy review itself could be a flag for an eventual policy compromise. The ECB will also have to acknowledge the improving data, although from a very low basis, and fewer tail risks from trade policy and Brexit," BofA notes.

"Given green shoots in data and further upside to core inflation, a discussion about the risk balance shifting to "neutral" could start fairly soon. Combined with increasing emphasis on the need to monitor "side effects" from negative rates, the risk balance for this week is for a hawkish surprise. The risk of hawkish-leaning undertones at the ECB meeting supports our front-end steepener recommendations. We see positive risks for the EUR from the meeting," BofA adds.

• Wants to see governments stepping up action

• The world is more shock-prone as it is interconnected currently

• Sees signs of trade, industrial slowdown bottoming out

• We are in a better place at the start of 2020 than in 2019

• Consensus is that global rates will be low for longer

• Fed, PBOC have policy space

• Other countries need to look at fiscal tools more closely

FXStreet reports that analysts at Danske Bank offered a brief overview of Thursday's important market-moving events - the highly anticipated European Central Bank (ECB) meeting and Norges Bank rate decision.

"Today's highlight will be the ECB meeting which is set to focus on the strategic review and not on new policy messages, see ECB Preview - Time to reveal the scope, 17 January and our ECB strategic review "What, why, how? 10 critical questions for the strategic review. Media reported that ECB governing council members received documents concerning the strategic review, which will officially be launched today. Bloomberg reported yesterday that ECB will split the discussions in two parts (one on inflation and one on climate, communication etc). On the economic side we expect the ECB to confirm its easing bias and acknowledge its downside risk assessment, but also note the fading downside risks."

"In Norway, we expect Norges Bank to leave its policy rate at 1.5% and reiterate that it will remain unchanged "in the coming period" at its rate-setting meeting on Thursday. This is one of the bank's "interim" meetings, with no new monetary policy report or press conference, and historically the threshold for any new signals at such meetings has been relatively high."

J.P. Morgan Chase CEO Jamie Dimon told CNBC that negative interest rates are one of the only things that concern him in a market.

"The only thing I have trepidation about is negative interest rates, QE, and the diversion between stock prices and bond prices and yield and stuff like that," Dimon said on "Squawk Box".

"It's kind of one of the great experiments of all time, and we still don't know what the ultimate outcome is," Dimon said.

Negative interest rates have been used by central banks in Japan and Europe to try to stimulate their stubbornly stagnant economies.

"I think it's very hard for central banks to forever make up for bad policy elsewhere," Dimon said. "That puts in them in a trap. We're a little bit in that trap today with rates so low around the world."

"I would never buy a negative rate bond, not unless I was forced," Dimon added. "In history whenever you've seen anything like that, it doesn't necessarily end well."

Dimon added that he was worried about the repercussions from quantitative easing, along with risks from cyber attacks or geopolitical events.

During today's Asian trading, the US dollar rose slightly against the euro, but fell against the Japanese yen in the face of renewed demand for safe haven assets due to concerns about a new virus that causes pneumonia, which was detected in China. The number of deaths from pneumonia caused by a new coronavirus in China rose to 17 on Thursday with nearly 600 confirmed cases.

The ICE Dollar index, which shows the value of the US dollar against six major world currencies, rose 0.03% to 97.55.

The pound fell slightly against the dollar, following yesterday's rally due to lower chances of a Bank of England rate cut.

The Australian dollar rose 0.31% against the US dollar after data indicated an unexpected drop in unemployment to a nine-month low. Australian Bureau of Statistics said the unemployment rate in Australia came in at a seasonally adjusted 5.1% in December. That beat forecasts for 5.2%, which would have been unchanged from the November reading. The Australian economy added 28,900 jobs last month, beating expectations for an increase of 15,000 jobs after gaining 38,500 jobs in the previous month.

FXStreet reports that according to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the pair faces the next hurdle at the 200-day SMA in the 1.1130 region.

"EUR/USD continues to hold over the uptrend at 1.1073. The intraday Elliott wave signals remain slightly negative but ideally this trend line will continue to hold. Initial resistance is the 1.1132 200 day ma."

"Overhead the market is facing tough resistance at 1.1184-1.1240 - namely the 55 week ma, the 2019-2020 down channel and the recent high. This guards the 200 week ma at 1.1359, which continues to represent a critical break point medium term."

EUR/USD

Resistance levels (open interest**, contracts)

$1.1257 (3483)

$1.1214 (3219)

$1.1179 (1977)

Price at time of writing this review: $1.1081

Support levels (open interest**, contracts):

$1.1039 (2708)

$1.0995 (1846)

$1.0948 (934)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 7 is 53975 contracts (according to data from January, 22) with the maximum number of contracts with strike price $1,1350 (4682);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3260 (1267)

$1.3233 (979)

$1.3210 (1733)

Price at time of writing this review: $1.3126

Support levels (open interest**, contracts):

$1.3046 (2658)

$1.3014 (1164)

$1.2977 (3183)

Comments:

- Overall open interest on the CALL options with the expiration date February, 7 is 24885 contracts, with the maximum number of contracts with strike price $1,3600 (3938);

- Overall open interest on the PUT options with the expiration date February, 7 is 21854 contracts, with the maximum number of contracts with strike price $1,3000 (3183);

- The ratio of PUT/CALL was 0.88 versus 0.86 from the previous trading day according to data from January, 22

* - 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.