Forex-novosti i prognoze od 28-04-2021

According to ActionForex, analysts at TD Bank Financial Group note that Canada's retail sales rebounded in February amid easing containment measures.

"After a weak January, retail sales rebounded 4.8% m/m in February, helped by the easing of restrictions in Ontario and Quebec. The headline was slightly better than Statistics Canada’s preliminary forecast, which called for a 4.0% gain. "

"Gasoline sales were a source of significant strength in the report (+12.3%) on the back of higher gas prices. Gasoline sales were also higher in volumes terms (+6.8%) with gas stations benefiting from improved mobility trends. Vehicle and parts sales also shifted into higher gear, rising by 5.0%."

"Core sales, which exclude the two categories mentioned above, also rose in February (+3.8%). Gains were broad-based, with most categories faring better on the month."

"Food & beverage (-1.4%) and health & personal care (-0.8%) stores were the only categories where sales declined in February, however, both remain higher than what they were a year-ago."

"Retail sales rebounded in February, and likely in March, amid easing containment measures which took place during that time. However, progress remains highly dependent on the path of the virus, which has since taken a turn for the worse as a vicious third wave led to higher caseloads and hospitalizations. Recent spending and mobility data suggests that retail sales are likely to weaken once again in April amid renewed restrictions and stay-at-home orders."

"The third wave of the virus means that Canadian shoppers and retailers will need to wait a bit longer before spending picks up again. Acceleration in the vaccination campaign in recent weeks and modest reduction in new cases offers optimism that better days are not too far ahead."

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories rose by 0.090 million barrels in the week ended April 23, following a build of 0.594 million barrels in the previous week. Economists had forecast a gain of 0.659 million barrels.

At the same time, gasoline stocks edged up 0.092 million barrels, while analysts had expected an increase of 0.508 million barrels. Distillate stocks tumbled by 3.342 million barrels, while analysts had forecast a decrease of 0.648 million barrels.

Meanwhile, oil production in the U.S. fell by 100,000 barrels a day to 10.900 million barrels a day.

U.S. crude oil imports averaged 6.6 million barrels per day last week, increased by 1.2 million barrels per day from the previous week.

eFXdata reports that Credit Agricole CIB Research discusses its expectations for today's FOMC policy meeting.

"With the meeting unlikely to exceed the already dovish investor expectations, we think that any surprises today could be on hawkish side. In particular, of key importance for the FX markets would be any indications in the updated text of the statement and during Fed Chair Powell’s press conference that the economy has started closing the gap to FOMC’s objectives." 

"Moreover, investors will focus on any signals that the Fed sees the ongoing recovery as having a greater staying power and thus as posing upside risks to its economic projections."

FXStreet reports that Senior Economist at UOB Group Alvin Liew comments on the recent BoJ event.

“The Bank of Japan (BOJ), as widely expected, decided to keep its policy measures unchanged at its Monetary Policy Meeting today (27 Apr). And in its April 2021 outlook for economic activity and prices (The Bank’s View), the BOJ unsurprisingly kept its cautious recovery outlook and upgraded its growth forecasts although the easing growth trend remains intact until FY2023. The most notable change was the inflation forecast downgrade for FY2021 and the persistent view of well below 2% inflation forecasts in FY2022/2023.”

“While today’s policy inaction was in line with market expectations, the weaker inflation outlook reinforces our view that the BOJ will not be tightening anytime soon, and will maintain its massive stimulus in the next few years, possibly at least until FY2023. We also keep our view for the BOJ to do more and enhance its monetary policy easing further.”

• ECB's monthly bond purchases remain flexible and depend on market conditions
• We do not target asset prices
• PEPP was designed to deal with the pandemic and its duration is linked to the pandemic crisis phase
• ECB could adjust tiering multiple if necessary
• Bank profitability is one of the key priorities for our banking supervisors in 2021

U.S. stock-index futures traded flat on Wednesday, as investors assessed a big batch of Q1 earnings reports and the U.S. President Biden's $1.8 trillion "American Families Plan" while awaiting the outcomes of the U.S. Federal Reserve's latest meeting.

Global Stocks:

FXStreet notes that S&P 500 remains well supported for now and the spotlight remains on the 4200-level. Economists at Credit Suisse continue to look for a cap here and for a corrective/consolidation phase to emerge.

“Below support at 4118 is needed to mark a minor top to add weight to this view for a fall back to 4068, then 4034/20, where we would then look for a fresh floor. Below though would warn of a more protracted correction lower and a move towards the 63-day average, currently at 3958.”

“Big picture, even if correct, our bias would be to view a pullback/correction from 4200 as temporary and corrective, with a clear break in due course seen opening the door to a move to 4260 next, then 4350.”

“We can often see 10%-15% above the 200-day average as the upper extreme for the S&P 500, which is where the market currently resides.”

“OnBalanceVolume for the S&P 500 remains unable to confirm the new highs and holds a bearish divergence, warning the trend is losing ‘buying power’, adding weight to our view we are approaching a potential peak.”

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

Travelers (TRV) resumed with a Neutral at Credit Suisse; target $153

Alphabet A (GOOGL) target raised to $3000 from $2500 at Monness Crespi & Hardt

Statistics Canada announced on Wednesday that the Canadian retail sales jumped 4.8 percent m-o-m to CAD55.08 billion in February, following an unrevised 1.1 percent m-o-m drop in January. This marked the first monthly increase retail sales since November 2020.

Economists had forecast a 4.0 percent m-o-m gain for February.

According to the report, sales decreased in 9 of 11 subsectors in February, led by higher sales at motor-vehicle and parts dealers (+5.0 percent m-o-m) and gasoline stations (+12.3 percent m-o-m, the largest increase since June 2020). Excluding motor vehicle and parts dealers, retail sales also rose 4.8 percent m-o-m in February compared to a 1.2 percent m-o-m fall in January and economists’ forecast for a 3.7 percent m-o-m climb. Meanwhile, core retail sales, which excludes gasoline stations and motor vehicle and parts dealers, grew 3.8 percent m-o-m in February, driven by higher sales at general merchandise stores (+6.1 percent m-o-m) and clothing and clothing accessories stores (+23.7 percent m-o-m, 23.7%, the first gain since September 2020).

In y-o-y terms, Canadian retail sales climbed 6.0 percent in February, following an unrevised 1.3 percent advance in January.

FXStreet notes that EUR/JPY has surged sharply higher following its recent bullish “reversal day” and analysts at  Credit Suisse stay bullish for a move to our target of the 61.8% retracement of the entire 2018/2020 bear trend at 132.55.

“We stay bullish and look for a move to 131.99/132.01 next and then our target of the 61.8% retracement of the entire 2018/2020 bear trend at 132.55. We would look for a cap here and a fresh phase of consolidation.” 

“A direct break of 132.55 would see the risk stay directly higher with resistance seen next at the September 2018 highs at 133.12/13.” 

“Support moves to 131.38 initially, below which can see a pullback to 130.98/85, then 130.57."

Boeing (BA) reported Q1 FY 2021 loss of $1.53 per share (versus -$1.70 per share in Q1 FY 2020), being worse than analysts’ consensus estimate of -$1.08 per share.

The company’s quarterly revenues amounted to $15.217 bln (-10.0% y/y), missing analysts’ consensus estimate of $15.950 bln.

BA fell to $240.00 (-1.02%) in pre-market trading.

USD advanced against most of its major rivals in the European session on Wednesday as investors assessed the details of the U.S. President Joe Biden's spending plan, while awaiting the release of the Federal Reserve's policy statement.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.12% to 91.02.

The White House released the details of President Biden's The American Families Plan that "includes $1.8 trillion in investments and tax credits for American families and children over ten years", which are to be funded through tax increases on the wealthy, particularly a hike in the top tax rate on the wealthiest Americans to 39.6 percent from 37 percent currently. Biden is expected to repeat the details of this plan while addressing a joint session of the U.S. Congress later today.

The Fed will announce the outcomes of its April policy meeting today at 18:00 GMT. This event will be followed by a press conference of the Fed’s Chair Jerome Powell half an hour later.

Market participants do not expect the U.S. central bank to make any changes to its monetary policy stance at the meeting, leaving interest rates and asset purchases unchanged to bolster the economy. However, close attention is expected to be paid to the signals of when the Fed might start to reduce its QE program and its inflation outlook. 

Ahead of today's Fed decision,  the benchmark 10-year U.S. Treasury yield increased two basis points to 1.637%.

FXStreet notes that USD/CAD is expected to see some consolidation above 1.2365, however, the Credit Suisse analyst team core bias stays bearish, with resistance at 1.2455 expected to cap.

“With a large bearish ‘outside day’ and bearish cross lower in daily MACD momentum still in place, we stay bearish, with a break below 1.2365 expected post a lengthier pause. With this in mind, the next major support below here is seen at a major corrective price low at 1.2265/51, which is similarly expected to prove a tough initial barrier. Nevertheless, with a major long-term top in place, we still see scope for an eventual move to 1.2062, the 2017 low.” 

“Near-term resistance stays at 1.2455/73, which we expect to cap on any rebound from 1.2365."

Visa (V) reported Q2 FY 2021 earnings of $1.38 per share (versus $1.39 per share in Q2 FY 2020), beating analysts’ consensus estimate of $1.26 per share.

The company’s quarterly revenues amounted to $5.729 bln (-2.1% y/y), beating analysts’ consensus estimate of $5.543 bln.

V rose to $232.60 (+1.17%) in pre-market trading.

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. dropped 2.5 percent in the week ended April 23, following an 8.6 percent surge in the previous week. According to the report, applications to purchase a home plunged 4.8 percent, while refinance applications decreased 1.1 percent.

Meanwhile, the average fixed 30-year mortgage rate decreased from 3.20 percent to 3.17 percent, the lowest level since the end of February.

“Even with a few weeks of lower rates, most borrowers have likely already refinanced, which is why activity has decreased in seven of the last eight weeks,” noted Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Starbucks (SBUX) reported Q2 FY 2021 earnings of $0.62 per share (versus $0.32 per share in Q2 FY 2020), beating analysts’ consensus estimate of $0.52 per share.

The company’s quarterly revenues amounted to $6.668 bln (+11.2% y/y), missing analysts’ consensus estimate of $6.752 bln.

The company also issued upside guidance for FY 2021, projecting EPS of $2.90-3.00 versus analysts’ consensus estimate of $2.84 and revenues of $28.5-29.3 bln versus analysts’ consensus estimate of $28.53 bln.

SBUX fell to $114.16 (-1.71%) in pre-market trading.

Microsoft (MSFT) reported Q3 FY 2021 earnings of $1.95 per share (versus $1.40 per share in Q3 FY 2020), beating analysts’ consensus estimate of $1.77 per share.

The company’s quarterly revenues amounted to $41.706 bln (+19.1% y/y), beating analysts’ consensus estimate of $40.834 bln.

MSFT fell to $255.85 (-2.34%) in pre-market trading.

FXStreet notes that Brent rose 1.2% yesterday as the commodity continued to rebound off its support of $65. Strategists at Credit Suisse still look for Brent Crude to retest its $71.38/75 highs.

“Brent Crude consolidation is still seen as temporary ahead of a retest of resistance from the $71.38/75 highs of 2020 and 2021. Furthermore, the strength in broader commodities should also keep Brent well supported. Although $71.75 may still cap yet, we continue to look for an eventual break for a move to $75.60, then the ‘“measured flag objective’ at $79.10.” 

“Support is seen at the 63-day average at $64.07.”

Alphabet (GOOG) reported Q1 FY 2021 earnings of $26.29 per share (versus $9.87 per share in Q1 FY 2020), beating analysts’ consensus estimate of $15.64 per share.

The company’s quarterly revenues amounted to $55.300 bln (+34.4% y/y), beating analysts’ consensus estimate of $51.396 bln.

GOOG rose to $2430.00 (+5.33%) in pre-market trading.

White House released the details of the U.S. President Biden's The American Families Plan that "includes $1.8 trillion in investments and tax credits for American families and children over ten years", which are to be funded by tax increases on the wealthy.

• "In all, the American Families Plan includes $1.8 trillion in investments and tax credits for American families and children over ten years. It consists of about $1 trillion in investments and $800 billion in tax cuts for American families and workers."
• "President Biden is calling for a national partnership with states to offer free, high-quality, accessible, and inclusive preschool to all three-and four-year-olds, benefitting five million children and saving the average family $13,000, when fully implemented."
• The plan will also "offer two years of free community college to all Americans, including DREAMers".
• The plan will also provide families with a range of options to choose from for their child, from child care centers to family child care providers, Early Head Start, and public schools that are inclusive and accessible to all children.
• The plan will "create a national comprehensive paid family and medical leave program".
• Extend the Child Tax Credit increases in the American Rescue Plan through 2025 and make the Child Tax Credit permanently fully refundable. The President is calling for the Child Tax Credit expansion, first enacted in the American Rescue Plan, to be extended. This legislation expands the Child Tax Credit from $2,000 per child to $3,000 per child for six-years old and above, and $3,600 per child for children under six. It also makes 17-year-olds eligible for the first time and makes the credit fully refundable on a permanent basis, so that low-income families—the families that need the credit the most—can benefit from the full tax credit.
• The plan will "increase the top tax rate on the wealthiest Americans to 39.6 percent" (from 37%). 
• Households making over $1 million—the top 0.3 percent of all households—will pay the same 39.6 percent rate on all their income, equalizing the rate paid on investment returns and wages.
• "The President is also calling on Congress to close the carried interest loophole so that hedge fund partners will pay ordinary income rates on their income just like every other worker."
• "Finally, high-income workers and investors generally pay a 3.8 percent Medicare tax on their earnings, but the application is inconsistent across taxpayers due to holes in the law."

Advanced Micro (AMD) reported Q1 FY 2021 earnings of $0.52 per share (versus $0.18 per share in Q1 FY 2020), beating analysts’ consensus estimate of $0.44 per share.

The company’s quarterly revenues amounted to $3.445 bln (+92.9% y/y), beating analysts’ consensus estimate of $3.204 bln.

The company also issued upside guidance for Q2 FY 2021, projecting revenues of $3.5-3.7 bln versus analysts’ consensus estimate of $3.28 bln.

For the full FY 2021, it sees revenues up ~50%, which translates to ~$14.64 bln versus analysts’ consensus estimate of $13.33 bln.

AMD rose to $88.92 (+4.35%) in pre-market trading.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects gold to retry the upside as the $1730/23 zone is held off.

“Gold’s up move has faltered at the 55-day ma at $1800.64 for now. More worrying is the fact that the Elliott wave counts have turned more negative and are implying a retracement towards the $1730/23 zone. Provided it holds there we should retry the topside once again.”

“Above the 55-day ma lies the 200-day ma at $1856.36 and the downtrend at $1876. We suspect that this will hold the topside for now.”

RTTNews reports that the Asian Development Bank forecast developing Asia to rebound this year although the renewed outbreak of the coronavirus poses threat to the recovery.

According to the latest Asian Development Outlook 2021, economic growth in developing Asia will rebound to 7.3 percent this year from -0.2 percent last year, underpinned by global recovery and early progress in vaccination. However, growth will moderate to 5.3 percent in 2022.

The agency noted that robust exports coupled with gradual recovery in household consumption will boost economic activity in China this year. The country's GDP is projected to expand 8.1 percent in 2021 and 5.5 percent in 2022.

India's economy is expected to grow 11.0 percent in the fiscal year 2021, which ends on March 31, 2022, amid a strong vaccine drive. GDP growth in the FY2022 is seen at 7.0 percent.

South Asia's GDP growth is expected to rebound to 9.5 percent in 2021, following a 6.0 percent contraction in 2020, before moderating to 6.6 percent next year. East Asia's GDP is expected to grow 7.4 percent in 2021 and 5.1 percent in 2022.

On the price front, the ADB said inflation in developing Asia is set to ease to 2.3 percent from 2.8 percent in 2020, as food-price pressures ease in India and China. Nonetheless, the rate will rise to 2.7 percent in 2022.

FXStreet reports that FX Strategists at UOB Group noted that USD/CNH faces extra gains on a breakout of the 6.5050 level.

Next 1-3 weeks: “Our latest narrative was from last Friday where we indicated that ‘risk is still for a lower USD but any weakness is expected to encounter solid support at 6.4700’. USD dropped to 6.4713 before rebounding. The rebound ahead of the solid support coupled with oversold conditions suggests that the prospect for further USD weakness is not high. That said, only a break of 6.5050 (‘strong resistance’ level previously at 6.5200) would indicate that the weakness in USD that started about 2 weeks ago has come to an end.”

Bloomberg reports that a New Zealand central bank policy maker has pushed back against claims that record low interest rates are widening social inequalities by driving up house prices, saying they are also keeping people in work.

“The best social policy program ever invented was employment,” Peter Harris, an external member of the Reserve Bank’s Monetary Policy Committee, said . “Lower interest rates have also contributed to higher employment and more stable incomes.”

The RBNZ has been accused of contributing to a widening gap between rich and poor as its ultra-loose monetary policy helped drive a 24% surge in house prices over the past year, locking many first-time buyers out of the property market. 

Harris said low borrowing costs were just one of a number of factors behind the boom in asset prices, which was occurring globally. Higher rates could worsen inequality by denting confidence, driving up unemployment and raising mortgage servicing costs, Harris said.

“Are people better off out of a job and owning a house and paying a high interest rate on their mortgage, or are they better off when employment is reasonably robust, where incomes are stable and mortgage interest costs are lower?” he asked.

The RBNZ has cut its cash rate to 0.25% and embarked on quantitative easing to nurse the economy through the pandemic. Harris reiterated that the committee is in no rush to remove stimulus.

FXStreet reports that analysts at Goldman Sachs remain upbeat on the outlook for commodities.

“Oil is seen rising to $80/bbl, global consumption will surge 5.2m b/d over the next six months, which is 50% larger than the next biggest increase over that timeframe since 2000. 

The magnitude of the coming change in the volume of demand -- a change which supply cannot match -- must not be understated. Copper to reach $11,000/ton.”

“Expect greater mobility, aided by vaccines, a seasonal upswing in transportation, manufacturing and construction, beginning now and accelerating into June. The pace of vaccination accelerates in Europe; increased travel demand will result in easing of international travel curbs in May. “

Reuters reports that investment bank Morgan Stanley said that there is a 15% chance of Scottish independence from the United Kingdom and a 30% risk of second independence referendum.

Current polls suggest that the Scottish National Party (SNP) could win an outright majority in May 6 polls, and with the pro-independence Greens also set to pick up some seats, the Scottish parliament, Holyrood, looks almost certain to have a majority in favour of independence.

"With the pro-independence parties likely to secure a majority in the May 6 Holyrood election, we see a 15% chance of independence," Morgan Stanley said.

FXStreet reports that economists at Morgan Stanley see four reasons why European equities could continue to outperform global peers.

“The economic data across Europe has come in considerably better than expected. Looking forward, one consequence of the initial delay in Europe’s recovery is that there is further room for improvement in some of the key economic indicators over the summer months.”

“The European stock market is very global in nature, with European companies also benefiting from the strong growth all around the world. So far this year, consensus earnings forecasts for 2021 have risen by over 5%.”  

“Europe’s so-called ‘unloved’ characteristics mean that the region looks considerably cheaper than global peers and investor positioning is much more muted.”

“The European Recovery Fund should get the green light soon. These monies should both boost the underlying economic growth, especially in the periphery, and further reduce political risk premium. If this, in turn, piques investor interest back towards the region, then this could be a powerful catalyst for further outperformance ahead since global flows are often a key marginal driver of European equity performance.”

During today's Asian trading, the US dollar rose against most major currencies on expectations of the outcome of the two-day meeting of the Federal Reserve System (Fed).

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.18%.

The results of the Fed meeting will be released today at 18:00 GMT, and at 18:30 GMT, the press conference of Fed Chairman Jerome Powell will begin. Investors are waiting for signals from Powell about when the Fed may start reducing stimulus. Earlier, Powell promised to warn the markets in advance about the planned changes in the Fed's policy. The consensus forecast of analysts shows that the Fed will not raise the base rate until 2023.

At the same time, about 45% of economists who participated in a Bloomberg survey in the period from April 16 to 21 expect that the FOMC will announce plans to gradually reduce the volume of securities repurchases in the fourth quarter of this year.

In addition, investors expect today the address of US President Joe Biden to both Houses of Congress. As White House press Secretary Jen Psaki said last week, the focus will be on the social spending plan. The plan may amount to $1.8 trillion, and it will, in particular, include support for families with children.

According to the report from Insee, in April 2021, households’ confidence in the economic situation has been stable: the synthetic index remains at 94, below its long-term average (100).

In April, the households’ opinion balance related to their future financial situation has lost four points and fell back below its long-term average. In contrast, the opinion balance related to their personal past financial situation has increased slightly. It has gained one point and remains above its average.

The share of households considering it is a suitable time to make major purchases has increased. The corresponding balance has gained two points compared to the previous month and exceeds its long-term average.

In April, the share of households considering it is a suitable time to save has increased again. The corresponding balance gains two points in April and reach a new historical high.

Households’ opinion balance related to their future saving capacity has also gained two points. Households’ opinion balance related to their current saving capacity has been stable, clearly above its average.

Households' fears about the unemployment trend have been almost stable in April, at a high level. The corresponding balance has lost one point but remains well above its average.

In April, households considering that prices will be on the rise during the next twelve months have been a bit more numerous than in March. The corresponding balance has gained two points, and remains above its long-term average.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2175 (1328)

$1.2145 (1653)

$1.2124 (1359)

Price at time of writing this review: $1.2066

Support levels (open interest**, contracts):

$1.2025 (1363)

$1.1987 (1329)

$1.1943 (1184)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 7 is 54495 contracts (according to data from April, 27) with the maximum number of contracts with strike price $1,2000 (3327);

GBP/USD

$1.3995 (783)

$1.3968 (1855)

$1.3947 (897)

Price at time of writing this review: $1.3873

Support levels (open interest**, contracts):

$1.3807 (388)

$1.3772 (413)

$1.3732 (1922)

Comments:

- Overall open interest on the CALL options with the expiration date May, 7 is 12361 contracts, with the maximum number of contracts with strike price $1,4200 (2933);

- Overall open interest on the PUT options with the expiration date May, 7 is 18439 contracts, with the maximum number of contracts with strike price $1,3750 (1922);

- The ratio of PUT/CALL was 1.49 versus 1.50 from the previous trading day according to data from April, 27

* - 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 UOB Group’s FX Strategists noted that USD/JPY could visit the 109.30 area in the next weeks. 

Next 1-3 weeks: “Yesterday, we highlighted that the ‘recent weak phase has run its course’. We added, USD ‘is in a consolidation but is likely to test the top of the expected 107.60/108.75 range first’. While our view was correct, we did not anticipate the rapid surge that took out the 108.75 resistance. Momentum has improved quickly and considerably. Further gains to 109.30 would not be surprising but at this stage, the prospect for extension to 109.70 is not high. Overall, USD is expected to trade with an upward bias as long as it does not move below the ‘strong support’ level at 108.00. On a shorter-term note, 108.35 is already quite a strong level.”

According to the report from GfK, rising infection rates and the need to tighten the lockdown restrictions are weighing on the consumer climate in Germany. While the propensity to buy again increased moderately, economic and income expectations decreased significantly. As a result, GfK is forecasting a decrease of 8.8 points in consumer confidence for May 2021, down 2.7 points from April this year (revised from -6.1 points). 

Hopes for further easing of restrictions and a revival of consumption have been noticeably dampened. Above all, the tightening of contact restrictions left its mark on economic and income expectations in April. In the previous month, hopes were still high that consumer confidence — also supported by increasing vaccination numbers — could recover more quickly.

Rolf Bürkl, GfK consumer expert comments on the subject: “The recovery of the domestic economy will continue to lag due to the third wave. As in 2020, consumption will again not be a pillar of the economy this year. In the years before the pandemic, private consumer spending had still made an important contribution to the growth of the German economy.”