FOREX News Today
European Outlook: Most Asian stock markets are down on the day, disappointing earning results added to Yen strength weighed on Japanese markets. Oil prices are higher and the front end WTI future is comfortably above USD 44 per barrel, but investors remain cautious ahead of this week’s round of central bank decisions, which kicks off with the Fed announcement today, which will be followed by the BoJ tomorrow. Fed is unanimously expected to maintain and unchanged rate stance (there is no press conference). Hence, the focus will be on the nuances of the policy statement and we see some risk that it will be more hawkish than markets expect. In Europe, the focus is on the first release of UK. Q1 GDP data, which is expected to confirm that growth moderated somewhat at the start of the year. The UK. also has CBI reported sales data for April.
Australian CPI much weaker than expected: The headline figure for the quarter (q/q) -0.2% expected +0.2%, previous reading +0.4%. The yearly y/y 1.3% from previous 1.7% and expectations of 1.7%. The ‘trimmed mean’ (Core inflation) also lower at 0.2% (0.5% expected and 0.6% q/q) and 1.7% y/y expectations were for 2.0% previously 2.1%. This is a very large variance over one fifth lower than expectations. Low inflation is effectively a tightening of interest rates so this poor number raises the expectations of the RBA having to cut rates. The RBA next meet May 3. AUDUSD fell over 1.7% and is currently trading at 0.7610.
ECB’s Coeure: Only sharp EUR appreciation would be concern. The Executive Board member seems to suggest that current levels are not a problem and won’t trigger further ECB action on their own. At the same time Coeure hit out at critics of the ECB’s policy, seeing that some of them miss the bigger picture. Especially Germany has been very critical of the central bank’s policies, but Coeure stressed that these critiques do not hamper the central bank’s ability to function, which implies that political pressure won’t prevent further action if the ECB sees the necessity to act.
US Weak Sentiment Signals: Revealed a weak round of March durable goods figures thanks to weak equipment data, and an expectations-led April consumer confidence drop. Yet, the April decline in the Richmond Fed index to 14 from 22 translated to a surprisingly strong 55.7 on an ISM-adjusted basis, while the Markit Services flash PMI rose to 52.1 from 51.3. Thanks to the weak equipment data, the mix lowered our GDP growth forecast to a flat figure from 0.3% in Q1 and a 2.0% clip from 2.2% in Q2. The factory sector remained weak through March despite the bounce for factory sentiment, and we still expect an upturn in the factory figures in Q2.
Main Macro Events Today
- FOMC Rate Decision: 18:00 GMT – No change expected and as there is no press conference the actual words in the Monetary Policy Statement released at 18:30 GMT will be scrutinized very closely.
- UK – GDP Prelim:. 08:30 GMT – A fall to 0.4% is expected from 0.6% last quarter and the y/y figure is expected to shrink to 2% from 2.1% last time. GBPUSD has been in a strong uptrend recently.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Janne Muta
Chief Market Analyst
If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:
http://www.topforexbrokerscomparison.com
About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
“My mission is to help you to become a confident and successful trader”
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.