Forex News Analysis by LiteForex

LiteForex analitics. Morning Market Review

EUR/USD

The euro started a new week with moderate growth against the US dollar, continuing to regain last week's losses when the market reacted to a significant reduction in the ECB's economic growth and inflation forecasts for 2019. The macroeconomic background from Europe remains ambiguous. On March 11, investors were disappointed with the publication of German statistics. Industrial output in January decreased by 0.8% MoM after rising by 0.8% MoM in December. Analysts were expecting the growth of 0.4% MoM. YoY, the index slowed down from -2.7% to -3.3%. Exports in January showed zero dynamics after a growth of 1.5% MoM in December. In contrast, imports accelerated from 0.7% MoM to 1.5% MoM. This led to a decrease in the trade surplus from EUR 19.9 billion to EUR 18.5 billion.

GBP/USD

The British pound showed a sharp increase on Monday, amid news that Prime Minister Theresa May managed to agree with the European Commission on a number of amendments to the Brexit deal. In particular, May managed to settle differences on the Ireland border issue. The European Union will abandon the previously announced protective mechanism to ensure a free border on the island, and the parties will have to work out a final solution in 2020. The pound was also growing during the Asian session today, but now the “bullish” activity on the instrument has noticeably decreased. On Tuesday, investors are awaiting a vote in the British Parliament on an updated Brexit agreement. If the parliamentarians reject the agreement, on March 13 a vote will be held on withdrawal without an agreement. On March 14, there may be a vote for the postponement of Brexit.

AUD/USD

The Australian dollar strengthened against the US dollar on March 11, retreating even further from the local lows updated late last week. The growth of the instrument was largely technical since there were no interesting macroeconomic statistics. In turn, US data provided moderate support for USD. In January, retail sales rose by 2.0% MoM after a decrease of 1.6% MoM in December. Analysts were expecting zero dynamics. Today the instrument is stable and is trading near the opening levels. A certain pressure on AUD is provided by macroeconomic statistics from Australia. Mortgage loans issued in January decreased by 2.6% MoM after rising by 6.0% MoM last month. Analysts had expected growth of 1.0% MoM. The National Australia Bank (NAB) Business Confidence Index in February fell from 4 to 2 points, which was worse than analysts' forecasts. The index of conditions for the same period decreased from 7 to 4 points.

USD/JPY

The US dollar continues to grow moderately against the Japanese yen, gradually recovering from a decline last week. The macroeconomic background remains favorable for the US currency, which determines the recovery of "bullish" sentiment. In turn, the yen lacks support amid sufficiently high investor interest in risk. On Tuesday, investors will focus on the US consumer inflation statistics for February. Analysts do not expect significant changes in the dynamics of growth of CPIs, which, in general, may further strengthen USD.

Oil

Oil prices rose moderately on March 11, responding to Saudi Arabian Energy Minister Khalid al-Falih optimistic statements that corrections to the current OPEC agreement are unlikely until June when the next meeting of the cartel will take place. Quotes are also supported by the Baker Hughes report on active oil platforms published last week, reflecting a steady decline in the number of drilling rigs. However, it still has little effect on the rate of oil production in the United States, remaining at record levels. Today, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of March 4.

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose markedly against the US dollar on Tuesday, updating local highs of March 7. Growth was happening in view of the publication of ambiguous macroeconomic statistics on consumer price dynamics from the United States. In addition, investors are still evaluating the report on the US labor market published at the end of last week. By the close of the day's session, EUR showed a correctional dynamics, which was a market reaction to the results of the British parliamentary vote on Brexit. As expected, despite Theresa May’s efforts and some concessions on the Irish border, parliamentarians rejected the agreement. Now, the country is waiting for a vote to leave the EU without the deal. If it fails (and the likelihood of this is extremely high), on March 14, Parliament will vote to postpone Brexit. On Wednesday, investors are awaiting publication of January statistics on industrial output in the Eurozone. Also, the market will be interested in speeches of the ECB representatives Yves Mersch and Benoit Coeuré.

GBP/USD

The pound fell sharply on Tuesday, departing from local highs of 28 February. The reason for the return of active sales were the results of voting in the UK Parliament on the country's withdrawal from the EU. There were 391 votes "against", while only 242 voted "for". The parliamentarians did not appreciate the efforts of Theresa May, which led to the fact that Brussels made some amendments to the agreement on the Irish border. On March 13, there will be another vote, about the withdrawal from the EU without the deal. This initiative is expected to also fail to be approved since it seems that parliamentarians are determined to keep the UK within the EU. On Tuesday, macroeconomic statistics from the UK provided some support for the pound. In January, GDP increased by 0.5% MoM after declining by 0.4% MoM in December. Analysts were expecting the growth of 0.2% MoM. Industrial output in January rose by 0.6% MoM after falling by 0.5% MoM last month.

AUD/USD

On Tuesday, the Australian dollar ended with moderate growth, which led to the update of the local maxima of March 6. Today, AUD is trading down, which is facilitated by weak macroeconomic statistics from Australia. Westpac consumer confidence index in March showed a decline of 4.8% MoM after rising by 4.3% MoM last month. The instrument is still pressured by the publication of statistics on mortgage lending and Business Confidence/Conditions indices on Tuesday.

USD/JPY

The US dollar is trading in both directions with the Japanese yen, playing out an ambiguous macroeconomic background and lasting uncertainty in the market. The pressure on the dollar on Tuesday was caused by weak macroeconomic statistics on consumer inflation in the United States. The Consumer Price Index in February rose by 1.5% YoY. In January, the prices increase was 1.6% YoY. The index excluding food and energy slowed from 0.2% MoM to 0.1% MoM. YoY, prices rose by 2.1% after growing by 2.2% last month. Today, the yen is pressured by data from Japan. The demand for machine-building products in January fell sharply by 5.4% MoM and 2.9% YoY, while analysts expected a decline of 1.7% MoM and 2.3% YoY.

Oil

Oil prices rose slightly on Tuesday, supported by optimistic statements from Saudi Arabia, which regularly fulfills its obligations under the OPEC agreement and is trying to accelerate the process of reducing exports. Additional support is provided by supply disruptions from Venezuela, where there are problems with electricity supply. The report on oil reserves of the American Petroleum Institute (API), published on Tuesday, indicated a decrease in reserves by 2.58 million barrels after rising by 7.29 million over the previous period. On March 13, investors expect the publication of the final report on oil reserves in the USA from the Department of Energy.

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose against the US dollar on Wednesday, updating local highs of March 5. Moderate support for the euro was provided by good macroeconomic statistics from the Eurozone. Industrial output in January rose by 1.4% MoM after falling by 0.9% MoM last month. Analysts had hoped for the emergence of positive dynamics, however, they were counting on a more modest growth of 1.0% MoM. YoY, production still shows a negative trend of -1.1% (significantly higher than forecasts of -2.1%y). In turn, the published macroeconomic statistics from the USA has managed to please investors with an increase in the volume of orders for durable goods. In January, the indicator rose by 0.4% MoM after rising by 1.34% MoM last month. Analysts were expecting a decline of -0.5% MoM.

GBP/USD

The British pound rose significantly against the US dollar on Wednesday, rising to new record highs since June 14, 2018. After the failure of the vote on the Brexit deal in the British parliament on March 12, which caused the emergence of ambiguous trading dynamics, the pound is generally trading positively, hoping to postpone the exit from the EU. Yesterday, the Parliament also rejected the idea of a country leaving the European Union without the deal, which leads Prime Minister Teresa May to the only possible way out of the situation. On March 14, there will be the third vote, on the postponement of Brexit. Speaking yesterday, May once again called on parliamentarians to approve the current version of the deal with the EU, since, without an agreement, the UK would have to ask for a longer delay, and this can only lead to a general complication of the process. There are quite a few Brexit opponents, and they will definitely try to take advantage of this hitch to lobby for a re-referendum. In addition, in May 2019, regular elections to the European Parliament will be held.

AUD/USD

The Australian dollar showed ambiguous dynamics on Wednesday and is actively declining today. The instrument is pressured by weak statistics on industrial output from China. In January, sales increased by 5.3% YoY after rising by 5.7% YoY last month. Analysts were expecting the growth of 5.56% YoY. The retail sales index in China in January rose by 8.2% YoY without showing the expected decline to 8.1% YoY. Moderate support for AUD was also provided by expectations of consumer price inflation in Australia. In March, the index rose by 4.1% MoM after rising by 3.7% MoM last month.

USD/JPY

The US dollar shows an upward trend against the Japanese yen. The US currency is still supported by fairly optimistic market sentiment and moderate investor interest in risk. Published on Wednesday, macroeconomic statistics from the USA failed to meet all expectations of analysts but proved to be quite good, unlike Japanese statistics. Nondefense capital goods, excluding aircraft shipments, in January rose by 0.8% MoM after falling by 0.9% MoM last month. The experts counted on the growth of only 0.1% MoM. However, the producer price index in February rose by a mere 0.1% MoM and 1.9% YoY, with forecasts of 0.2% MoM and 1.9% YoY. Japanese statistics reflected a sharp decline in demand for machine-building products. In January, the indicator fell by 5.4% MoM and 2.9% YoY. Experts counted on -1.7% MoM and -2.3% YoY.

Oil

Oil prices are moderately rising, updating local highs of November 2018. One of the main growth factors was the EIA report on inventory dynamics published yesterday. As of March 8, oil and petroleum products in US warehouses decreased by 3.862 million barrels, after rising by 7.069 million over the previous period. Analysts expected growth of 2.655 million barrels. In addition, the report reflected a reduction in the overall production in the US from 12.100 million to 12.000 million barrels per day. During the Asian session on March 14, the instrument is trading in both directions, pressured by weak statistics on industrial output in China.

LiteForex analitics. Morning Market Review

EUR/USD

The euro ended the week with moderate growth. The instrument was able to update the local maxima of March 4, but, at the end of the daily session on Friday, investors returned to profit taking. EUR was supported by good data on consumer inflation in the Eurozone in February. As expected, the price index rose by 0.3% MoM and 1.5% YoY, against -1.0% MoM and 1.4% YoY. The core CPI remained at 0.3% MoM, coinciding with the forecasts. In turn, published macroeconomic statistics from the United States failed to meet market expectations. Industrial output in February rose by 0.1% MoM after declining by 0.4% MoM last month. Analysts were expecting growth of 0.4% MoM. New York FRB Manufacturing index in March fell from 8.8 to 3.7 points, with expectations of growth to 10.0 points. But the consumer confidence index from the University of Michigan has managed to support the dollar. In March, according to preliminary estimates, the index rose sharply from 93.8 to 97.8 points while the forecast was 95.3 points.

GBP/USD

In the past few days, the pound shows ambiguous dynamics. Investors are still focused on Brexit. Last week, the Parliament rejected the next version of the agreement on the country's withdrawal from the EU, after which it voted against Brexit without the deal and for extending the action of Article 50 of the Lisbon Treaty until June 30. Prime Minister Theresa May still hopes to convince parliamentarians to approve the current version of the agreement until March 21, which will allow the UK to request the European Council to slightly extend the dates. Otherwise, if the transaction is postponed until June 30 or a later date, the negotiations may be significantly delayed, and a full-fledged political crisis will take place in the UK. Among the EU countries, there is still no consensus regarding the postponement of Brexit. This issue is expected to be discussed at the EU summit this week.

AUD/USD

The Australian dollar returned to growth on Friday and continues to actively develop "bullish" dynamics today, updating local highs of March 1. AUD is supported by the tense situation around the US-China trade negotiations, as well as the possible refusal of North Korea from further negotiations on nuclear disarmament. Investors also follow the domestic political situation in the USA. March 15, it became known that President Donald Trump put a veto on Congress resolution, which was supposed to cancel the earlier state of emergency on the border with Mexico. Recall that in this way Trump expected to receive the required USD 8 billion for the construction of the wall, while only USD 1.375 billion was allocated for this in the budget.

USD/JPY

The US dollar shows ambiguous dynamic against the Japanese yen. After updating local highs on March 15, the dollar is trading downwards against the background of technical factors and uncertain prospects for the US negotiations with the PRC and the DPRK. Today, flat dynamics is observed, which is also characterized by an extremely low level of volatility. The yen is pressured by statistics on imports and exports from Japan. In February, exports dropped by 1.2% YoY after falling by 8.4% YoY last month. The decline in imports was 6.7% YoY after a drop of 0.8% YoY in January. The experts were expecting -5.8% YoY. Such a significant decrease in the indicator allowed the trade surplus to slightly increase in February to 339 billion Japanese yen, which turned out to be better than market expectations.

Oil

Oil prices showed a decline on Friday, which was a market reaction to new data indicating a slowdown in the global economy and growth in US production. However, by the end of the daytime session, the instrument managed to win back almost all the losses, in particular, due to the publication of the Baker Hughes report. For the week of March 15, the number of active oil platforms in the United States decreased from 834 to 833 units, which was the fourth decline in a row. The quotes are also supported by the actions of OPEC+. At the moment, the reduction in the volume of oil supplies is even slightly ahead of the initially agreed figures, which allows leveling the active growth of production in the United States. The next meeting of OPEC+, which will decide on the current agreement on limiting production, will be held on April 17-18.

LiteForex analitics. Morning Market Review

EUR/USD

The euro continues to grow moderately against the US dollar, updating local highs of March 4. On Monday, after the update of the highs, the euro declined significantly due to the strengthening of the US dollar index, but the "bullish" mood on the instrument remained. Moderate support for the instrument was provided by data on the Eurozone trade balance. In January, the balance surplus increased from 16.0 billion to 17.0 billion euros, which turned out to be significantly better than forecasts, which suggested a decrease to 13.2 billion. In turn, the American statistics was neutral. The NAHB retail housing prices index in March remained at 62 points, contrary to forecasts of growth to 63 points. On Tuesday, investors will be focused on a block of indicators on economic sentiment in the Eurozone and Germany from ZEW. Also, traders are interested in Construction PMI in the Eurozone in January.

GBP/USD

The British pound returned to decline on Monday, updating local lows of March 13. However, by the end of the day session, the instrument managed to win back almost half of the losses, and today's trading is going upwards. Yesterday, the pound was pressured by news that House of Commons Speaker John Bercow blocked Prime Minister Theresa May’s proposal to hold a re-vote on the current version of the agreement with the EU. Bercow stated that the government could not put the same proposal to the vote twice. Thus, May will have to ask Brussels for a longer delay, since the process of developing a new agreement will be extremely difficult. The process of postponement itself can also be very painful since this requires the unanimous decision of all EU member states. Today, investors will pay attention to the data on the UK labor market in January/February.

AUD/USD

The Australian dollar shows moderate growth, receiving support from the weak positions of the US currency. Today, the instrument is trading in both directions, responding to the publication of the RBA minutes of March 5 and the dynamics of housing prices. In 4Q2018, the housing price index decreased by 2.4% QoQ and 5.1% YoY, which was noticeably worse than the data for the previous period (-1.5% QoQ and -1.9% YoY). Analysts had expected -2.0% QoQ and -0.4% YoY. The published RBA protocol did not have a significant impact on the instrument since it did not show anything new. As before, the regulator complained about the growing external risks, especially in Europe and Asia, however, noted the positive impact of rising oil and coal prices.

USD/JPY

The US dollar has returned to decline against the Japanese yen, updating local lows of March 14 today. The US currency is weakening amid increasing uncertainty caused by the publication of ambiguous macroeconomic statistics. In addition, investors are anxiously awaiting news regarding the US-China trade negotiations. Recently, the media reported that the meeting of the two heads of state could be postponed from late March to April, but it has not yet received official confirmation. The data on industrial production in Japan published on Monday provided the yen with moderate support: in January, the index rose by 0.3% YoY against the zero dynamics of last month.

Oil

Oil prices continued moderate growth during the new week in the market, supported by the efforts of OPEC+. After the meeting of the OPEC+ member countries in Azerbaijan, it was decided to cancel the April meeting of the cartel, where, as expected, the future of the current agreement was to be discussed. Thus, it is actually extended until June, when a new meeting is scheduled. In addition, exporting countries report the toughening of the obligations under the agreement, which allows the market to remain stable in the context of growing US oil production. On Tuesday, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of March 15.

LiteForex analitics. Morning Market Review

EUR/USD

The euro rose rapidly against the US dollar on Wednesday, updating local highs of February 4. The reason for the emergence of a confident "bullish" dynamics was the weakening of the US currency amid the publication of the minutes of the Fed meeting. As expected, the regulator left the interest rate unchanged at 2.5%. At the same time, which turned out to be the most important, the Fed clearly stated that it is not going to make two planned rate hikes this year. In 2020, as before, the regulator expects only a one-time rate increase. The euro could not strengthen more confidently due to the uncertainty around Brexit, as there is still no consensus regarding the postponement of the UK exit from the EU.

GBP/USD

The British pound closed Wednesday's trading with a steady decline, updating local lows of March 13. The "dovish" rhetoric of Fed Chairman Jerome Powell practically did not support the weakened pound, although it contributed to the development of a minor correction. The instrument remains pressured by the rapidly delaying Brexit process, which threatens to exacerbate the internal political situation in the UK. Theresa May still expects a postponement to the end of June, while some representatives of the EU state the need for a longer delay. Some support for the pound yesterday was provided by the statistics on consumer inflation in the UK. In February, the consumer price index rose by 0.5% MoM and 1.9% YoY after the previous data of -0.8% MoM and 1.8% YoY. However, the core index in February slowed down from 1.9% YoY to 1.8% YoY.

AUD/USD

The Australian dollar shows strong growth against the US one, supported by the soft position of the Fed and published macroeconomic statistics from Australia. In addition, the growth of AUD is promoted by the continuing uncertainty in the Brexit process and in the US-China trade negotiations. Today, the instrument is also trading in an uptrend, however, the "bulls" are facing significant resistance. Investors are focused on the report on the Australian labor market in February. The level of unemployment suddenly decreased from 5.0% to 4.9%. The last time the unemployment rate fell below 5% was in July 2011. At the same time, the employment level in February showed an increase of only 4.6K jobs, which is significantly lower than the growth of 39.1K last month. Analysts were expecting growth of 14.0K jobs.

USD/JPY

The US dollar fell sharply against the Japanese yen on Wednesday, retreating to local minima of February 27. The reason for the appearance of the "bearish" dynamics was the decision of the Fed to abandon the two planned rate hikes this year. Additional support for the yen was provided by the reduced investor interest in risk. In particular, the market reacted to the publication of updated forecasts from the Fitch agency. The forecast for the growth rate of the world economy in 2019 was revised from 3.1% to 2.8%. Next year, the global economy may grow by 2.8% instead of previous forecasts of 2.9%. Today the instrument is relatively stable, partly due to the closed markets in Japan on the occasion of a national holiday.

Oil

Oil prices continue to grow moderately, updating local highs of November 2018. Quotes are supported by data from the US Department of Energy, indicating a sharp reduction in oil stocks. As of March 15, reserves in US warehouses declined by a record 9.589 million barrels after declining by 3.862 million last week. Analysts predicted a slight increase by 0.309 million barrels. The "bullish" dynamics is also supported by the policy of OPEC+ and the expansion of US sanctions against Venezuela.

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed a confident decline against the US dollar on Thursday, departing from local highs of February 4, updated the day before. The decline in the pair was largely due to technical factors of the correction of USD after a long decline. In addition, investors fix their profits before the weekend. Macroeconomic statistics from the United States, which supported the dollar on Thursday, include the Philadelphia Fed Manufacturing Index. In March, the figure rose sharply from -4.1 to 13.7 points, with a forecast of growth only to 4.5 points. Initial Jobless Claims for the week on March 15 decreased from 230K to 221K, which turned out to be better than market expectations (225K). Today, investors are focused on the statistics on business activity in the Eurozone (and separately France and Germany) and the United States. Also, the market expects representatives of the ECB Luis de Guindos and Yves Mersch to speak.

GBP/USD

The British pound showed ambiguous dynamics on Thursday, updating the local minima of March 11. There were lots of drivers for GBP, so the dynamics was extremely mixed. As expected, the Bank of England left monetary policy unchanged. The key rate remained at 0.75%, and the decision was made unanimously. The QE program has kept its volume of 435 billion pounds. In the accompanying statement, the BoE spoke a lot about the risks around Brexit, noting that it is now reasonable to take a wait-and-see attitude. Meanwhile, the EU has approved a deferment option for the UK. If parliament manages to agree on the deal, the final date will be postponed to May 22. Otherwise, the new deadline will be April 12.

AUD/USD

The Australian dollar is developing a corrective decline, retreating from local highs, updated on March 21. The reason for the appearance of the "bearish" dynamics of the instrument was an ambiguous report on the Australian labor market in February. Investors were optimistic about the decrease in the unemployment rate from 5.0% to 4.9% but were disappointed with the extremely weak growth in the employment rate - by 4.6K after 39.1K last month. Additional pressure was provided by an indicator of credit card spendings. In February, it rose by 6.4% YoY after rising by 6.9% YoY in January. Experts expected a slowdown of only up to 6.8% YoY.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on Thursday, recovering previously lost positions and retreating from the updated local minima of February 15. Technical factors contributed to the development of correctional dynamics for the dollar, as well as moderate optimistic macroeconomic statistics from the US, published the day before. Today, the instrument again is traded in both directions. Investors are focused on Japanese data on consumer prices and the Manufacturing PMI. The national consumer price index in February rose by 0.2%YoY after a similar increase in January. Analysts expected growth of up to 0.3% YoY. Excluding the price of fresh food, the index slowed down from 0.8% YoY to 0.7% YoY, while the forecast was 0.6% YoY. The Nikkei Manufacturing PMI in March remained at 48.9 points.

Oil

Oil prices showed a decline on Thursday, retreating from local maxima following the large-scale correction of the US dollar. Quotes are still supported by the confident position of OPEC+, which promises a further restriction of production volumes by the largest suppliers. Additional support comes from data indicating a sharp decline in US oil stocks. On March 22, in addition to statistics on business activity, Baker Hughes will report on active oil platforms in the United States.

LiteForex analitics. Morning Market Review

EUR/USD

EUR ended the week last week with a steady decline against USD, renewing its lows since March 12. The development of the “bearish” dynamics was largely due to poor macroeconomic EU statistics, as well as growing concerns about the Brexit process and the US-China trade negotiations, which contributed to a decrease in investors’ interest in risk. The statistics released on Friday reflected a decline in Composite Manufacturing Markit PMI in March from 51.9 to 51.3 points against a forecast of growth to 52.0 points. Services PMI fell from 52.8 to 52.7 points. In addition, investors paid attention to data from Germany. German Manufacturing PMI fell from 47.6 to 44.7 points against the forecasts of growth to 48.0 points. German Service PMI fell from 55.3 to 54.9 points.

Today, during the Asian session, the pair is growing slightly. Traders are awaiting the publication of a block of on German IFO business sentiment statistics.

GBP/USD

On Friday, GBP rose against USD, being corrected after a significant decline on Thursday. The currency was supported by the EU’s decision to grant the United Kingdom a postponement of Brexit until May 22. However, the EU has put forward several conditions. If the British Parliament does not approve the existing version of the agreement with the EU, the postponement will be valid only until April 12. The document also excludes the possibility of additional negotiations on the agreement. Thus, Theresa May has time until March 29 to convince parliament to accept the current version of the agreement. Meanwhile, in the UK, the political crisis continues to flare up, and a petition published on the Internet for the abolition of Brexit has gained over 5 million signatures. Increasingly, information appears in the media about the growing number of ministers in favor of Teresa May’s resignation.

AUD/USD

On Friday, AUD steadily declined, balancing the active growth of the instrument on Wednesday, March 20. The weakness of the currency is due to the growing uncertainty on the Brexit and the negotiations between the United States of America and China. Meanwhile, on Friday, during a television interview, Donald Trump noted that the negotiation process was going well and was likely to lead to an agreement. Trump also commented on the government’s intention to retain a number of protective duties after signing the agreement, stressing that this would not prevent the resolution of existing conflicts.

Today, investors expect a small block of American and Australian statistics. In the US, the Chicago Fed National Activity in February will be published, and Australia, the February import and export data will be released. Also, the traders are focused on the speech of the economic adviser to the head of the RBA Luci Ellis.

USD/JPY

On Friday, USD fell sharply against the JPY, renewing its lows since February 11, under pressure from poor US macroeconomic statistics. Thus, in March, Markit Manufacturing PMI decreased from 53.0 to 52.5 points, which turned out to be worse than the forecast of 53.6 points. Service PMI fell from 56.0 to 54.8 points, while the value was not expected to change. In turn, sales in the US secondary housing market in February rose sharply by 11.8% MoM after falling by 1.4% MoM last month. Analysts expected growth of + 2.2% MoM. Today, during the Asian session, the instrument is moderately reducing, and investors expect new drivers to appear on the market.

On Monday, the traders will focus on the publication of the Japanese activity index in all industries in January and the speech of the representative of the Bank of Japan, Yutaka Harada.

Oil

On Friday, oil prices declined moderately, continuing the development of the “bearish” impulse formed the day before. Investors avoid additional risk in the face of new signals of a slowing global economy. In addition, traders are concerned about the lack of visible progress in the US-China trade negotiations and the exacerbation of the political crisis in the UK amid problems with Brexit. Meanwhile, prices are still supported by a policy of further reducing oil production, taken by OPEC +. Friday’s Baker Hughes Oil Rig report also had a positive effect on the rate. During the reporting week, the number of US rigs decreased from 833 to 824 units, which is the fifth decline in a row.

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR rose steadily against USD, retreating from lows since March 12, renewed late last week. EUR was supported by an unexpectedly strong IFO Germany business sentiment data. The March German Business Expectations rose from 93.8 to 95.6 points while the forecast was 94.0 points. German IFO Business Climate Index jumped from 98.7 to 99.6 points, while analysts expected a decline to 98.5 points. German Current Assessment for the same period rose from 103.6 to 103.8 points, against the forecasts of a decline to 102.9 points. Today, during the Asian session, the instrument slightly increases, waiting for the appearance of new drivers on the market. On Tuesday, traders will focus on US housing market data. In Germany, April GfK German Consumer Climate will be released.

GBP/USD

Yesterday, GBP moved horizontally against USD and closed in the red zone. The currency is still under pressure from the uncertain situation around Brexit. Until the end of the week, Theresa May has to get agreement between the British parliament and the EU but parliamentarians are not likely to unite. The media gets information that an increasing number of ministers insist on the imminent resignation of the Prime Minister, and the idea of ​​a repeated referendum is growing stronger among the public sentiment. Yesterday, in her speech in the British Parliament, Theresa May acknowledged that she did not find enough support but would try to look for additional ways to bring the current version of the agreement to the third vote in parliament. Some analysts believe that May may take extreme measures and will offer parliamentarians approval of the agreement in exchange for his resignation. If the UK fails to approve a deal with the EU until March 29, on April 12, the country will have to follow the “hard” scenario.

AUD/USD

Yesterday, AUD was actively growing against USD, balancing a decline at the end of the last trading week. The correction was due to a number of technical factors, while the macroeconomic background remained neutral. On Monday, a speech was made by the economic adviser to the head of the RBA, Lucy Ellis, which had no noticeable influence on the rate. Ellis's speech was devoted to household issues and in many respects repeated the main position of the regulator but she emphasized strong growth in the labor market. Over the past year, the employment rate has increased by more than 2%, while the unemployment rate has fallen below 5% for the first time in a long time (since 2011).

USD/JPY

Yesterday, USD was trading ambiguously against the JPY, renewing its lows since February 8. The uncertain dynamics was due to the lack of significant macroeconomic publications at the beginning of the week. In addition, investors are concerned about the process of negotiations between the US and China on trade issues. Despite the assurances of Donald Trump that negotiations are proceeding well, the market fears a repetition of the North Korean scenario. A new round is due this week. Today, during the Asian session, USD is growing uncertainly. The instrument is supported by a document published on the eve of by Special Prosecutor Robert Muller, in which it is noted that a special commission did not find evidence of Donald Trump’s collusion with the Russian authorities during the 2016 election period.

Oil

Yesterday, oil prices rose moderately, partially balancing the active decline at the end of last week. More confident gain is hampered by concerns about a slowdown in the global economy. In particular, investors fear that the negotiations between the US and China on a trade dispute may end in failure, which will have a negative impact on the Chinese economy. In addition, the markets were afraid of a possible recession in the US, as the yield on 10-year Treasury bonds continues to decline steadily. On Tuesday, investors are focused on US Housing Starts data the dynamics of Retail Sales, and also on the report of the American Petroleum Institute on oil reserves in the United States.

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR fell against USD, retreating to its lows since March 12, under pressure from technical factors and a further decline in investor interest in risk amid growing uncertainty in the market. In particular, traders have ambiguously reacted to the situation with Brexit in the UK after the British parliament adopted the amendment and took control of the country's exit from the EU. It is expected that today, in the parliament a vote on a number of issues with a discussion of possible options for the development of the situation will be held. Meanwhile, April GfK German Consumer Climate fell from 10.7 to 10.4 points against the forecasts of growth to 10.8 points, which was the lowest level since May 2017. During the Asian session on March 27, EUR is also weakening. Today, the investors are focused on the speech of the ECB President Mario Draghi and a number of other regulator’s representatives, such as Peter Praet, Sabine Lautenschlager, Yves Mersch, and Luis de Guindos.

GBP/USD

GBP continues to trade ambiguously, sharply reacting to any changes around Brexit. Earlier this week, British parliamentarians adopted an amendment to the law, which allowed parliament to take control of the Brexit process (previously it was held by the government of Theresa May). Now the parliament can feel lighter and discuss the most varied exit scenarios. However, this can only help to clarify the preferences of parliamentarians, while there is no time and possibilities left to coordinate new changes with the EU. The UK must approve a version of the agreement by the end of the week; otherwise, on April 12 it will have to leave the EU without a deal.

AUD/USD

Yesterday, AUD rose steadily against USD, renewing its lows since March 21, after the publication of poor US macroeconomic statistics. Thus, Building Permits decreased by 1.6% MoM in February after decreasing by 0.7% MoM last month. Analysts had expected a slight improvement in the indicator to –0.6% MoM. Housing Starts index also fell from 1.273 million to 1.162 million in February, which was worse than the forecast of 1.213 million. March Richmond Manufacturing Index decreased from 16 to 10 points, while the forecast was 12 points. However, today during the Asian session, AUD is weakening, quickly losing positions gained yesterday. The instrument is under pressure from statistics from China, indicating a sharp decline in profits of a number of large Chinese enterprises in January-February by 14%. The profit of large industrial enterprises decreased by 24.2% over the same period.

USD/JPY

Yesterday, USD rose steadily against the JPY, partially balancing a sharp decline at the end of last week. The emergence of poor US macroeconomic statistics and the overall low level of traders’ interest in risk did not support JPY. Instead, investors focused on a summary of updated forecasts from the Bank of Japan. The document is of a generalizing nature and is published once a year after the next meeting of the regulator on interest rate issues. The Bank reaffirmed its commitment to a target inflation rate of 2%, which is one of the key parameters in choosing the vector of monetary policy. At the same time, the regulator devoted a significant part of the report to external economic risks, noting the slowdown in China’s economy and the uncertainty of the UK’s exit from the EU.

Oil

This week, oil prices are rising and approaching local highs, renewed a week ago, supported by market uncertainty, as well as interruptions in oil supplies from Iran, Venezuela, and several other countries. Yesterday’s weekly report of the American Institute of oil reserves in the United States reflected the growth of reserves by 1.927 million barrels at March 22. The previous report indicated a reduction in reserves by 2.133 million barrels. Today, investors are awaiting the publication of a report on energy reserves from the US Department of Energy. If the official statistic confirms the growth of the indicator, the quotes may be slightly corrected downwards.