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Official FxPro Forex Broker Blog. Professional daily Forex market reviews and analysis. Economic calendar.
25 мая, 11:48

Could USD Rebound After FOMC Less Hawkish Stance?

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The FOMC released its May meeting minutes last evening stating that the overall economic assessment was little changed. The Fed sees to raise rates once again is ‘soon be appropriate’. Markets assume that it signals a rate hike in June. The minutes also signals further tightening is expected if the incoming economic data shows improved economy. The Fed sees the weak economic performance in Q1 as transitory, caused by soft consumer spending and inventory investment. Fed members considered it prudent to wait for further evidence that recent economic weakness was transitory before hiking rates again. The tone of the comments was less hawkish than expected with an increased potential for the Fed to hike rates again in June and then pause to consider developments. After the release of the minutes, per CME FedWatch tool, the probability for a June rate hike remains unchanged at 83.1%. The minutes also signals shrinking the Fed’s $4.5 trillion balance sheet in holdings of Treasury and mortgage securities later this year, by allowing a gradual maturity, setting a cap and reducing reinvestments. After the release of the minutes, the dollar index fell from a 3-day high of 97.36, breaking the support line at 97.00, as US Yields moved lower. During the early European session on Thursday the dollar index hit a 2-day low of 96.79 looking to test the support line at 96.70. USD/JPY retreated from the resistance level at 112.00 and rebounded after testing the support line at 111.50. Yesterday ECB President Draghi focussed on the risks around Euro-zone financial stability and remained optimistic that the central bank’s unorthodox policies did not pose a risk. With the fall in USD, EUR/USD rebounded from a 2-day low of 1.1167, touching a 2-day high of 1.1244. Spot gold rebounded from the significant support line at 1250, touching a 2-day high of 1259.49. US Equities reacted somewhat favourably to the Federal Reserve minutes with hopes that interest rates would not rise sharply with lower yields providing support. The S&P 500 index gained 0.25%. During the early European session on Thursday, the Dow Jones index reached a high of 21101.25 which was last seen on March 2. The S & P 500 index hit a record high of 2412.68. The initial USD move seems to deviate from the overall message in the minutes, as markets have priced in the expectations on a June rate hike, and the Fed’s hawkish stance appears to be less strong. With WTI trading higher the market witnessed a degree of profit taking. Latest EIA data recorded a 4.43mn barrel decline in inventories for the latest week. OPEC is scheduled to hold a meeting today in Vienna to discuss whether to extend the existing output cut agreement. The consensus is that OPEC will extend the agreement. It is likely that we will not see a surge after OPEC announces an extension as markets have largely priced in the expectations since May 5. On Wednesday, Brent crude spot hit the highest level of 54.80, last …

24 мая, 11:44

USD Bounces From 6-1/2-Month Low, Eyes on FOMC Minutes

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The Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion in government spending over the next decade, mainly reducing the funding for healthcare and social benefits (such as Medicaid, SNAP, pensions for government staff) and Environmental Protection Agency funds. The cuts are to be used for funding to boost economic growth and to reduce the US deficit. Nevertheless, it will result in numerous needy American citizens losing vital benefits. The plan forecasts economic growth will be increased to 3% after passing the budget cuts, tax reform, regulation reform and infrastructure plans. However, following the performance of Trump’s administration since taking office, it seems difficult for any of Trump’s plans to be passed smoothly. Markets forecast US economic growth is ranging between 1.9% – 2.2%, a 3% target seems to be a big challenge to achieve. The scale of the budget cut is substantial with a distinct possibility that Congress will reject the plan in its entirety or pass only portions of it. The dollar index has fallen approximately 2.67% since May 12th, hitting its lowest level of 96.68, post the US presidential election, on May 22. On Tuesday May 23rd, following the announcement of the budget cuts, the dollar index moved higher breaking the resistance level at 97.00 and touching a 3-day high of 97.35 early on Wednesday morning. On Tuesday, EUR/USD retreated from a 6-and-a-half-month high of 1.1267, breaking the psychological level at 1.1200 as corrective pressures intensified with consolidation around 1.1180 on Wednesday trading. USD/JPY rebounded around 0.68% from the support at 111.00, hitting a 1-week high of 112.04 on Wednesday morning. USD/JPY is currently consolidating below the psychological resistance level at 112.00. FOMC May Meeting Minutes will be released at 19:00 BST this evening. Per the CME FedWatch tool, the probability for a rate hike in June rose to 83.1% after the release of the 2018 budget plan. That said, markets are assuming the Fed will stick to its rate hike pace regardless of Trump’s Russia leak scandal and soft economic data. Keep an eye on the Minutes, we will likely get further clues about a June rate hike and updated economic outlook. Be aware that it will likely cause volatility for USD and USD crosses. Moody’s has downgraded China’s sovereign credit rating from Aa3 to A1 due to fears over rising debt levels. The new rating is same as the ratings of Czech Republic, Estonia, Israel, Japan and Saudi Arabia. The adjustment has weighed on Chinese yuan and the Chinese stock markets.

23 мая, 11:32

How will FOMC Minutes Affect USD Post Slump on Trump’s Scandal ?

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Recently Trump’s leak scandal has been leading the USD move instead of economic performance. Last week USD had its biggest weekly fall since the US presidential election because of the scandal. The markets are concerned it will result in Trump’s plans not being able to be executed and worsen the economic slowdown. In addition, North Korea launched its second ballistic missile towards Japan on Sunday further lifting regional tension. The dollar index hit a new post presidential low of 96.68 on Monday, due to extended market concerns over the FBI investigation on Trump’s Russia leak scandal. On Tuesday, during early European session, it rebounded, however then followed by a retracement after testing the resistance level at 97.00. On Tuesday, EUR/USD hit a new high of 1.1267 last seen on November 9. Per CFTC data released last Friday Euro long positions have reached a 3-year high. Gold has rebounded over the past two trading sessions touching a 3-day high of $1263.64 this morning. The next move of USD will likely depend on the FOMC, the progress of the FBI investigation into Trump’s Russia leak scandal, and upcoming economic data. If there are further adverse findings from the FBI’s investigation USD will likely see a further fall. Conversely, without further adverse findings, we will likely see a rebound of USD. Despite the Trump scandal and soft economic data, per the CME FedWatch tool, the probability for a rate hike in June only saw a modest drop to 78.5%. That said, markets are assuming the Fed will stick to its rate hike pace regardless of political turmoil and economic slowdown. The FOMC May Meeting Minutes will be released at 19:00 BST on Wednesday May 24, we will likely get further clues about a June rate hike and economic outlook. We will see a set of US economic data to be released between 14:45 – 15:00 BST this afternoon. It will likely affect USD and USD crosses.

22 мая, 11:38

Conservative’s Approval Rating Drops Ahead of General Election

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The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211 a level not seen since November 9th of last year. On Monday morning, during the European session, the dollar index experienced a moderate rebound, touching 97.29, as the market is aware of a strong support level at 97.00. GBP/USD hit a high of 1.3047 on May 18, last seen September 29, breaking a significant resistance at 1.3000. On Monday morning, during the early European session, GBP/USD saw a retracement falling below 1.3000 as a result of the dollar rebound. GBP/USD has rallied 3.75% since Theresa May announced a snap general election. Consensus about GBP has turned to bullish from bearish with many shorts being closed out as Cable has rallied higher. The UK general election will be held on June 8th – less than 3 weeks away. Per recent polls (conducted by Business Insider and GFK) 48% of Brits will vote for the Conservative Party, seeing an increase of 7% comparing to the previous polls, 28% will vote for the Labour Party, in line with the previous polls. Per polls conducted by the tabloid newspaper The Daily Mail on May 20th, the approval rating for the Conservative Party is 46% whereas with Labour it is 34%. The Brexit negotiation is one of the focuses of the election, the Conservative Party has pledged a smooth and orderly Brexit. To attract Labour party voters the Conservatives changed their policies; focusing more on the needs of workers and middle classes, enhancing NHS’ financial conditions (by reducing free services offered to wealthy elders) and controlling the number of immigrants into the UK. These new policies are expected to help the Conservative Party to obtain 56 seats from other parties, especially from UKIP. Per recent polls, the Conservative Party is expected to win a landslide victory in the election. Polls forecast the Conservative Party will win 390 seats, out of the 650 seats in the Parliament, becoming the outright majority with a 130 seats lead. On May 20th it was reported that Theresa May plans to cancel school free lunches as it is not necessary for those families which can afford it, taking government spending reallocation into consideration. The announcement caused a slide in approval rating for the Conservative Party. Per the latest polls conducted by YouGov, the difference of approval rating between the Conservative and the Labour now narrows to 9% (the approval rating for the Conservatives dropped to 44%, whereas with the Labour it increased to 35%). Regardless of this fall the Conservative Party is still expected to win the General Election.

19 мая, 11:28

Markets Priced In OPEC Output Cut Extension

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There are two upcoming events that are expected to impact the price of Oil; firstly, the Iran presidential election will be held today (May 19th) and secondly, the OPEC meeting will be held on May 25 in Vienna. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil production. Overall, the execution of OPEC’s output cut agreement has been sound. However, some OPEC member states exempted from the agreement, such as Iran, Libya, and Nigeria, have been increasing their production. Some non-OPEC oil producers, such as Russia and Kazakhstan, also attempt to enlarge their production. In addition, the US shale oil industry has seen a marked recovery since February last year because of higher oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week. Since May 2016 the US has added more than 400 new rigs. In general, the oil supply remains high, which has and will offset OPEC’s output cut effort to an extent. If OPEC announces that the output cut is to be extended we will likely see a moderate rally in oil prices, instead of a surge, as markets have priced in the extension to an extent. Oil prices have rebounded approximately 7% since May 5th. On Thursday, WTI spot hit a 4-week high of $50.29 a barrel. Brent crude spot hit a 4-week high of $53.29 a barrel. USD/CAD has seen a 1% retracement since May 5th because of the oil price rebound. The level at 1.3500 will likely provide a stronger support. Today we will see the release of a set of Canadian economic data for March and April, including; CPI, core CPI and retail sales. These data releases will likely affect CAD and CAD crosses. On Thursday, the dollar index hit a post presidential election low of 97.26, then experienced a moderate rebound, touching 97.96 then retraced, as there is heavy pressure at the level at 98.00. USD/JPY hit a 3-and-a-half week low of 110.22 with the downtrend holding above a significant support line at 110.00. Gold has seen a 1.19% correction after hitting a 2-and-a-half-week high of $1264.92 because of the dollar rebound. It was reported that the Trump Camp had contacted Russian officials 18 times by phone and emails before the presidential election (from April to November 2016). Some election staff pointed out that it is not unusual for presidential candidates to contact foreign officials. However, liaison with a non-aligned country (Russia) with high frequency seems to be unusual. The downtrend of USD has been temporarily held; the next move of USD will likely depend on upcoming economic data, FOMC minutes and the progress of the FBI investigation into Trump’s Russia leak scandal.

18 мая, 11:36

Trump Faces Biggest Political Crisis Since Taking Office

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The Department of Justice has appointed former FBI head Robert Mueller to investigate whether Russia intervened during the 2016 presidential election. Recent reports from the US are indicating that the probability that Trump’s presidency will end this year is around 29% following the Russia leak scandal. Trump is now facing his biggest political crisis since taking office. Opinion polls, conducted by Politico and Morning Consult, that were released on Wednesday showed that Trump’s approval rating has hit a new low of 42% with half of the registered voters disapproving of Trump’s performance as a president. Polls, conducted by Public Policy Polling, are showing 48% of Americans and 81% of Hilary’s voters hope to see Trump’s presidency to end. With the lack of support from his own Republican Party, Trump’s political career and USD prospects become even more gloomy. Following the firing of FBI director James Comey it was reported that the two candidates to replace him, Judge Merrick Garland and Senate John Cornyn, both showed no interests to take over the position. The leak scandal hit USD and US stock markets, pushing safe havens up. The VIX index (volatility index) rallied more than 20% on Wednesday. On Wednesday, the dollar index saw its fourth straight loss hitting a low of 97.30 (last seen November 9 2016). The Index has retraced around 2.22% from May 12 to 17. USD/JPY saw its biggest intra-day loss this year hitting a 3-week low of 110.51. EUR/USD saw its fourth straight gain hitting a high of 1.1171 (again last seen November 9 2016). Spot gold surged hitting a 2-and-a-half week high of $1263. The Dow Jones index fell by 1.76%, hitting a low of 20591.80 & the S & P 500 index fell by 1.82%, hitting a low of 2353.33 (both lows not seen since April 21). During the early European session, on Thursday, the dollar index saw a moderate rebound with bulls attempting to recover the 97.50 level. The disappointment with Trump’s administration, some soft economic data and profit-taking has resulted in USD giving up almost all its post presidential gain. Since Trump took office in January, apart from passing the new healthcare bill, there are hardly any other worthy achievements. Instead, most of his policies have caused substantial controversy and turmoil. In addition, lack of enough support from the Republican Party makes Trump’s political career and USD prospects even more gloomy.

17 мая, 11:47

USD Hit Post Election Low on Trump’s Russia Leak Scandal

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It was widely reported that President Trump shared highly sensitive information with the Russia Ambassador at a recent meeting at the White House putting further pressure on USD. During today’s early European session the dollar index hit the lowest level of 97.74 last seen November 09 2016, EUR/USD traded as high as 1.1121 a level last seen November 09 2016. In line with the continued weakness in USD, spot gold had a fifth day of gains trading at a 2-week high of 1244.91. To date the dollar index has almost given up all of the post presidential election rally, retracing about 1.4% over the past 4 trading sessions. Per CFTC data (Commodity Futures Trading Commission), Hedge funds’ USD long positions have reduced to the lowest level since August 2016. Japanese Q1 GDP first reading will be released at 00:50 BST on Thursday. The Japanese economy has seen a recovery since last year. The global economy also saw a recovery, helping exports. However, as inflation has not yet seen a stable upswing the Japanese economic recovery is still fragile. The performance of the Q1 GDP will likely affect JPY and the JPY crosses. USD/JPY has retraced in the past week as a result of the weakening of USD. USD/JPY hit a 1-week low of 112.24 on Wednesday during early European session. There are two upcoming events that will likely affect oil markets; firstly, the Iran presidential election will be held this Friday, May 19th and secondly the OPEC meeting will be held on May 25. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil supply. Iran has greatly increased its oil output after the US sanction was removed. The US shale oil industry has seen a marked recovery since February last year because of higher oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week. The increase in shale oil supply has offset OPEC’s recent output cut effort to an extent. However, the Saudi Arabia Oil Minister, Khalid al-Falih, stated on May 8th at the Asia Oil and Gas Conference in Malaysia that “the output cut could be extended another 6 months or even further into 2018”. OPEC will hold a meeting in Vienna on May 25 where the decision whether to extend the output cut agreement will likely be announced. Oil prices have retraced substantially around 12.88% since April 12th and have experienced a 3.74% rebound since May 5th. Last Wednesday’s EIA crude oil inventory data saw a drop of 5.247 million barrels hitting the lowest level this year helping push oil prices higher. WTI and Brent crude oil will likely see selling pressure at $50 and $53 respectively. The US EIA Crude Oil Inventories data (for the week ending May 12) will be released at 15:30 BST this afternoon. Please be advised that this release is likely to cause significant volatility in oil prices.

16 мая, 12:59

Push & Pull: USD Pressure & EUR Strength

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The Asian session saw equities climb to a fresh-two year high early on Tuesday on the back of an overnight rise in Wall Street fueled by reports that President Trump had disclosed classified information with the Russian Foreign Minister without necessary authorization from the source. This re-fueled the continued underlying uncertainties and reinforced doubts surrounding the Administration’s economic agenda. Oil continued extending extended gains following a pledge from the major producers Saudi Arabia and Russia to push for an extension of supply cuts into 2018. EURUSD has broken the psychological 1.1000 level as a result of the likelihood of a shift in Eurozone economic policy for the second half of 2017. ECB Chief Economist Praet commented “that the balances of risk would be assessed at the June meeting”. However, he also stated that “the central bank would need to be very careful over removing policy accommodation”. The dollar index continued lower trading around 98.55 with May’s low of 98.50 forming a slight support area. Per the latest CME Fedwatch; the expectations of a rate increase in June is now at a 73.8% probability compared to 84% last week. With a degree of “risk-on” sentiment gold has seen a slight rise from early May lows of $1214 to trade just above $1234. Today sees the release of UK CPI at 9:30 BST; forecast at 2.6% from the last release of 2.3% and US Housing Starts at 13:30 BST; expecting a minimal gain from the previous release.

12 мая, 11:36

Eyes on US Retail Sales and CPI Releases

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Friday May 12th will see the release of a set of crucial US data for April at 13:30 BST; retail sales, retail sales excluding autos, CPI and core CPI. Please be aware that it will likely affect USD and USD crosses along with commodities. The dollar index has rebounded over the past four trading sessions after hitting a 6-month low of 98.40 on May 5. Gold prices saw a rebound on Thursday, and spot gold has now touched a four-day high of $1229.85 on Friday during early European session. US retail sales (MoM) saw a downtrend over the past three months mainly caused by the decline in auto and petroleum sales. The consensus for the April figure is an optimistic forecast of 0.6%. However, sales in April for the three automobile tycoons, Ford, Chrysler and GM, saw a further falling of 7.1%, 7% and 5.8% respectively. The declines will likely weigh on the upcoming data. US retail sales outlook seems to be a bit gloomy before auto sales see a recovery. Retail sales excluding autos (MoM) also saw a downtrend over the past three months with the reading for March, surprisingly, was a zero growth, not seen since August 2016. US CPI (YoY) has seen a healthy upswing since May 2015; staying above the Fed’s 2% target since December 2016. Core CPI (YoY) has been oscillating steadily in the range between 2.1% – 2.3% since January 2016. On Thursday, the Bank of England (BoE) announced that; interest rates remain unchanged at 0.25% and the asset purchase programme also remains unchanged at £435 billion which are both in line with market expectations. The BoE sees inflation to be above their 2% target for the next three years due to weak GBP. Consumption will continue to experience a slowdown; however, this will be balanced by rising trade and investment. Wage growth is expected to be quicker in 2018. The BoE forecasts interest rates are likely to remain at the current level until late 2019. However, monetary policy may need to be tightened more than the markets expect over the next three years. The BoE also predicts the Brexit process to be smooth. The BoE holds a positive outlook on inflation and economy. However, with regards to monetary policy, it is not very likely for the BoE to undertake a large-scale tightening until the Brexit negotiation deal has a clear outline. In addition, the BoE seems to be overly optimistic about the Brexit negotiation process. The EU is unlikely to make the process easy for the UK, to avoid encouraging other member states leaving following Brexit. GBP/USD fell from 1.2940 after the UK data was released, holding above the significant support line at 1.2900. This support level was breached following the BoE announcement with GBP/USD hitting a 1-week low of 1.2848.

11 мая, 11:17

GBP Struggles Ahead of BoE Announcements

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Today will see the release of a set of UK economic data for March at 09:30 BST, including manufacturing production, industrial production, and trade balance. This will be followed by the Bank of England’s (BoE) interest rate decision and monetary policy minutes at 12:00 BST and the NIESR GDP estimate (Feb to April) at 13:00 BST. Recent UK economic data has been soft lowering market expectations for a rate hike. The general election will be held on June 8 and, with the Brexit procedure ongoing, the BoE is unlikely to take any actions at least before the election result; therefore, they are likely to keep policies steady until the Brexit negotiation deal has a clear outline. GBP/USD has rallied approximately 3% since Theresa May’s announcement of a snap general election on April 18th. On Monday May 8th GBP/USD hit a 7-month high of 1.2988. The bulls failed to breach the significant psychological level at 1.3000 since then. Markets seem to be taking a cautious stance ahead of the BoE announcements. The BoE’s announcement will likely cause a move to GBP and GBP crosses. With a hawkish comment, it will likely cushion GBP/USD. Conversely, with a dovish comment, we will likely see a correction downward. ECB Governor Draghi stated on Wednesday that “the Eurozone economy is becoming increasingly solid and downside risks have further diminished”. However, it is too early for the ECB to remove QE as inflation pressure continues to be subdued. Although the Eurozone recovery is sound, with the expectation ECB is not yet going to remove QE, EUR/USD only rebounded around 20 points during the speech, followed by a retracement due to the strengthening of USD. EUR/USD hit a 2-week low of 1.0852 after Draghi’s speech. German Q1 GDP first reading will be released at 07:00 BST, Friday May 12th. It will be followed by a set of crucial US data for April at 13:30 BST including retail sales, core retail sales, CPI and core CPI. The German unemployment rate has seen a downtrend since 2009. The global economic recovery helping to boost German exports. German business confidence for April hit a 6-year high indicating German companies regard the economic outlook as optimistic. German GDP has been oscillating in the range between 1.2% – 3.1% in 2016. The consensus for Q1 GDP is 1.7%, with a better-than-expected reading it will likely provide further support for EUR and the DAX index. The Dax index hit a record high of 12834.45 on May 5th, lifted by market expectations on Macron’s victory. It has seen a 44.2% surge since February 2016.

10 мая, 11:19

BoE Expected to Keep Rates Steady

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ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST today. It will be Draghi’s first speech after the French election so traders should be aware of any comments on the Eurozone’s economic outlook or hints of a possible gradual removal of QE. Thursday May 11th is a crucial day for GBP traders with the release of a series of UK economic data at 09:30 BST. Followed by the Bank of England’s (BoE) interest rate decision and monetary policy minutes at 12:00 BST and the NIESR GDP estimate (Feb to April) at 13:00 BST. Recent UK economic data has been soft, lowering market expectations for a rate hike. The general election will be held on June 8 and, with the Brexit procedure ongoing, the BoE is unlikely to take any actions at least before the election result; therefore, they are likely to keep policies steady until the Brexit negotiation deal has a clear outline. UK inflation saw an upswing following the Brexit vote, reaching the central bank’s 2% target, due to the weakening of GBP since the Brexit referendum. A weak pound is beneficial for exports and inflation, however, as wage growth has slowed down the rising inflation will likely undermine consumer expenditure; one of the major drivers of the economy. GBP/USD has rallied approximately 3% since Theresa May’s announcement of a snap general election on April 18. On Monday May 8 GBP/USD hit a 7-month high of 1.2988, trading just below the significant psychological level at 1.3000, where heavy selling pressure is expected. The BoE’s announcement will likely cause a move to GBP and GBP crosses. With a hawkish comment GBP/USD will likely breach the level at 1.3000. Conversely, with a dovish comment, we will likely see a correction downward. The French election outcome has lifted markets’ risk-on sentiment and resulted in safe heavens retreat, US and European treasury yields rise thereby pushing USD and EUR up against JPY. On Tuesday, the dollar index hit a 2-week high of 99.55. USD/JPY hit a high of 114.32, and spot gold hit a low of 1214.15, previously reached on March 15. Bank of Japan (BoJ) Governor Kuroda stated on Tuesday that the Japanese and global economy saw a recovery, however, the BoJ will continue its QE programme as inflation is expected to reach above the 2% target in 2018. The statement further weighed on JPY. The Bank of Japan has been considering a gradual removal the long-standing QE. However, while the economic recovery is still fragile, it is likely that it will take an extended period for the BoJ to implement it until it sees solid and stable economic and inflation growth.

09 мая, 11:19

Concerns Eased for Fed and ECB after Macron’s Victory

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The dollar index saw a rebound with strong bullish momentum on Monday after hitting a 6-month low of 98.40 last Friday. This morning, during the European session, the dollar index bulls have recovered the significant resistance level at 99.00. USD/JPY hit a high of 113.83, last seen on March 15. The dollar index has given up most of the post US presidential election gain. That means, a large number of dollar long positions which were opened around the US presidential election have been closed. Per the CFTC data (Commodity Futures Trading Commission, the week ending May 2), the number of dollar long positions have dropped to the lowest level since October 2016. Last Thursday the US Congress has finally passed the replacement of the Obamacare bill with the American Healthcare Act. Even though it was passed by a narrow majority it symbolises Trump’s first victory since taking office which has lifted market confidence in Trump’s administration to an extent. There are several Fed presidents scheduled to make speeches this week. Boston Fed president Rosengren (non-voter) and Dallas Fed president Kaplan (voter) will speak on Tuesday with Chicago Fed president Evans (voter) speaking on Wednesday. The outcome of the French election has eased the Fed policymakers’ concerns about the impacts on the US economy from the Eurozone turmoil after Le Pen’s presidency. Per the CME’s FedWatch tool, the probability for a rate hike in June has increased to 87.7%. On Monday two Fed officials made speeches. The Cleveland Fed president Mester sees two more rate hikes until the end of the year, to prevent economic overheating. St. Louis Fed president Bullard stated that “as the Qi GDP figure was weak, and inflation was soft, the Fed is likely to raise rates once by the end of the year, instead of twice”. However, the two Fed officials are both non-voters this year and their comments have limited impacts on markets. EUR/USD retraced on Monday from a 6-month high of 1.1021 due to profit-taking after the French presidential election and the dollar rebound. ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST on Wednesday May 10. It will be Draghi’s first speech after the French election, be aware of any comments on economic outlook or hints of possible gradual removal of QE.