Forex News Analysis by LiteForex

Morning Market Review
2019-10-15 08:44 (GMT+2)
EUR/USD

The European currency showed ambiguous dynamics against the US dollar on Monday, recording a slight decrease following the session. Pressure was exerted by contradictory macroeconomic statistics from the euro area, as well as increased skepticism regarding the Brexit negotiation process. The media got information that Brussels is not entirely satisfied with Boris Johnson's plan on the Irish border. Nevertheless, the parties continue active negotiations and hope to reach a compromise by October 31. Macroeconomic statistics showed the growth of Industrial Production in the euro area in August by 0.4% MoM after a decline of 0.4% MoM a month earlier. The indicator was stronger than the forecast of 0.3% MoM. However, in annual terms, Production continued to decline. In August, the indicator reached –2.8% YoY after a decrease of 2.1% YoY in July. Experts expected a decrease of 2.5% YoY.

GBP/USD

The British pound began the new week trading in both directions against the US dollar. The optimism regarding Brexit, which increased markedly at the end of last week, is gradually clouded by investor doubts, as it seems that Boris Johnson’s plan does not find support in Brussels. Today, GBP is trading with a slight increase. Investors are focused on the UK labor market report and the publication of the financial stability report from the Bank of England. It is expected that data on the labor market will indicate a slight slowdown in Average Earnings growth and maintaining Unemployment Rate at the previous level of 3.8%

AUD/USD

The Australian dollar fell against the US currency on Monday, starting a new week with correctional dynamics after strong growth last Friday. The decrease was largely technical in nature, since few new drivers appeared on the market. At the same time, the pressure on the pair was exerted by the deteriorating prospects for concluding an agreement between the UK and the EU within the framework of Brexit and not the most optimistic macroeconomic statistics from China. Chinese exports went down by 3.2% YoY in September after the decline by 1.0% YoY in the previous month. Analysts had expected decline by 3.0% YoY. Imports for the same period collapsed by 8.5% YoY after a decline of 5.6% YoY in August. The indicator also came out worse than its forecasts (–5.2% YoY).

USD/JPY

The US dollar showed ambiguous dynamics against the Japanese yen on Monday, halting the development of an uptrend in the short term, which brought the instrument to local highs of August 1. Japanese exchanges were closed yesterday due to the Health and Sports Day, so market activity remained fairly low. During today's Asian session, the instrument is trading in both directions, reacting to the publication of macroeconomic statistics from Japan. Industrial Production in August showed a decrease of 1.2% MoM and 4.7% YoY, which coincided with the forecasts and the pace of decline in July. At the same time, the Capacity Utilization indicator in August collapsed by 2.9% after an increase of 1.1% a month earlier. Analysts expected the appearance of negative dynamics, but expected a slight decrease of –0.2%. Tertiary Industry Index in August grew by 0.4% MoM after declining by 0.1% MoM in the previous month. The index turned out significantly better than its forecasts of –0.2% MoM.

Oil

Oil prices fell on Monday, departing from local highs, updated at the end of last week. Despite some progress in negotiations between the United States and China, investors are still skeptical about the conclusion of a full-scale trade agreement between the countries. In addition, the current increased tariffs on Chinese imports remain in force, as well as Huawei remains on the black list. Additional pressure on quotes is also exerted by the Baker Hughes Oil Rig Count report published at the end of the last trading week. For the first time in the last 2 months, the report indicated an increase in the number of rigs from 710 to 712 units.

Morning Market Review
2019-10-16 08:43 (GMT+2)
EUR/USD

The European currency showed ambiguous dynamics of trading against the US dollar on Tuesday, ending the session with a slight increase. During the day, the instrument mainly declined, which was caused by the reaction of the market to the deteriorating prospects of concluding a preliminary trade agreement between the United States and China. Despite significant success in the new round of negotiations, the Chinese side is hesitant to sign the agreement, insisting on the cancellation of the planned increase in import duties in December. Donald Trump is unlikely to do this, because the US sees the December tariff increase as an additional guarantee of compliance with all conditions by Beijing. Macroeconomic statistics from ZEW had a contradictory effect on the euro. German ZEW Economic Sentiments in October showed a decrease from –22.5 to –22.8 points, which, however, turned out to be better than market expectations of –27.0 points. ZEW Economic Sentiment in the euro area fell to –23.5 points from previous –22.4 in October. Investors counted at –33.0 points.

GBP/USD

The British pound again showed strong growth against the US dollar on Tuesday, updating local highs of May 21. The reason for the next upsurge of "bullish" sentiments was media reports that the UK and the EU were close to concluding an agreement, and its final text could be published on October 16. However, this has not happened yet, and the leader of the Democratic Unionist Party of Northern Ireland hastened to comment on the situation, noting that some disagreements still persist. The UK labor market report, published on Tuesday, was left without due attention. Average Earnings ex Bonus in August showed a slowdown from +3.9% 3MoY to +3.8% 3MoY, which turned out to be slightly better than market expectations of +3.7% 3MoY. At the same time, the Unemployment Rate for 3 months increased from 3.8% to 3.9% with a forecast of 3.8%.

AUD/USD

The Australian dollar showed an active decline against the US currency on Tuesday, continuing the development of the "bearish" impulse formed earlier this week. Pressure on the instrument is exerted by the actions of the Chinese delegation in the trade negotiations between the USA and China. Beijing is hesitant to sign the elaborated interim trade agreement, continuing to insist on the complete abolition of the planned December tariff increase. Meanwhile, macroeconomic statistics from China released on Tuesday were able to slightly support the falling market sentiment. Consumer Price Index in September accelerated from the previous +0.7% MoM to +0.9% MoM, which turned out to be better than expectations. In annual terms, the figure reached 3.0% YoY, while analysts had expected growth to only 2.9% YoY.

USD/JPY

The US dollar rose significantly against the Japanese yen on Tuesday, updating local highs of August 1. The development of the uptrend is facilitated by weak macroeconomic statistics from Japan. Industrial Production in August showed a decrease of –1.2% MoM and –4.7% YoY, which coincided with the forecasts. Capacity Utilization fell by a record 2.9% after rising 1.1% in the previous month. Analysts expected a slight negative trend at the level of –0.2%. In addition, the markets reacted to the speech of the Bank of Japan Governor Haruhiko Kuroda, who again complained about the growing external pressure on the Japanese economy and emphasized that the regulator is ready for new stimulation measures if necessary.

Oil

Oil prices showed a moderate decrease on Tuesday, continuing the development of a negative trend, formed at the beginning of the week. Nevertheless, closer to the end of the afternoon session, quotes managed to rise slightly, which was caused by favorable comments by OPEC representatives who confirmed their intentions to stabilize markets after 2020. A more confident growth of the instrument was hindered by the tense situation after a new round of trade negotiations between the United States and China. Despite significant progress compared to previous negotiations, markets fear that the next stage will also come to a standstill, and the US will return to an increase in import duties on Chinese goods.

Morning Market Review
2019-10-17 08:52 (GMT+2)
EUR/USD

The European currency rose significantly against the US dollar on Wednesday, updating local highs of September 16. EUR was supported by the macroeconomic statistics from the euro area. Core Consumer Price Index in September rose by 0.4% MoM and 1.0% YoY, which was slightly better than in the previous month (+0.4% MoM and +0.9% YoY). The euro area Trade Balance surplus in August rose from EUR 17.5 to 20.3 billion, exceeding forecasts of EUR 18.9 billion. Additional support for the instrument was provided by the newly improved prospects for a deal between the EU and the UK at today's summit. The EU representatives noted that all the differences were overcome and, theoretically, nothing prevents to conclude a deal before the end of this week. This Saturday, a vote on the final version of the deal is planned in the parliament.

GBP/USD

The British pound showed growth against the US dollar on Wednesday, updating local highs of May 15. The pound is supported by good prospects for a deal between the EU and the UK at today’s summit. The summit Chairman Donald Tusk noted that the agreement is ready and it is likely to be signed by all 27 participating countries. Optimistic news also came from the UK, where DUP leaders said they agreed with the Brexit proposals and were ready to support them on Saturday’s vote. Meanwhile, the UK macroeconomic statistics put pressure on the pound. Retail Price Index fell by 0.2% MoM in September after rising by 0.8% MoM a month earlier. Analysts had expected decline by 0.1% MoM. Consumer Price Index in September showed an increase of 0.1% MoM and 1.7% YoY, which turned out to be worse than forecasts of +0.2% MoM and +1.8% YoY.

AUD/USD

The Australian dollar showed ambiguous dynamics against the US currency on Wednesday, but is again growing rapidly during today’s Asian session. Some support for the instrument was provided by improved prospects for concluding an agreement between the EU and the UK. In turn, an attempt by US lawmakers to review Hong Kong’s special trade status threatens with new problems in relations with China and a breakdown in the results of trade negotiations. Today, investors are focused on the September statistics on the Australian labor market. Employment Change in September grew by 14.7K against 37.9K a month earlier. Analysts had expected an increase of 15K. At the same time, Full Time Employment increased by 26.2K after a decrease of 13.2K last month, and Part Time Employment decreased by 11.4K after an increase of 51.1K in August. Unemployment Rate in September decreased unexpectedly from 5.3% to 5.2%.

USD/JPY

The US dollar fell slightly against the Japanese yen on Wednesday, reversing near its local highs of August 1. The pressure on the US currency, in addition to a number of technical factors, was exerted by weak statistics on the dynamics of US retail sales. Retail Sales in September showed a decrease of 0.3% MoM after an increase of 0.6% MoM a month earlier. Analysts had expected positive dynamics to remain at +0.3% MoM. Retail Sales Ex Autos MoM also declined in September by 0.1% MoM after growth by 0.2% MoM and with the forecast of +0.2%.

Oil

Oil prices showed a slight increase on Wednesday, responding to corrective sentiment in the US currency and optimistic signals from OPEC that the agreement on limiting oil supplies could be extended in December. The next meeting of the cartel is scheduled for December 5-6 and should be held in Vienna. Pressure on quotes was exerted by API Weekly Crude Oil Stock Report. For the week as of October 11, the indicator increased sharply by 10.50 million barrels after an increase of 4.13 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

Morning Market Review
2019-10-18 08:44 (GMT+2)
EUR/USD

EUR rose against USD on Thursday, updating local highs of August 26. EUR was supported by Brexit deal consummation between the EU and Britain. The day before, the head of the European Commission, Jean-Claude Juncker, said that the parties managed to reach a compromise and form an agreement. Later, Prime Minister of Great Britain Boris Johnson announced the same. However, the detailed text of the agreement was not published. Its final version will probably be made public after the signing by all participants of the EU summit, which will end today. The development of "bullish" trend in the instrument was also facilitated by weak macroeconomic statistics from the USA on industrial production. Industrial Production in September fell by 0.4% MoM after rising by 0.8% MoM a month earlier. Analysts expected a decline of 0.1% MoM. Capacity Utilization for the same period fell from 77.9% to 77.5%, which also turned out to be worse than market expectations of 77.7%.

GBP/USD

The British pound showed strong growth against the US dollar on Thursday, updating local highs of May 13. The new impetus for the growth of GBP was due to the achievement of a joint agreement between the UK and the EU on Brexit. The UK has a new chance to avoid a no-deal Brexit, while the compromise reached seems to be really beneficial to all participants in the process. However, there are still some obstacles. On Thursday, the DUP leaders said they did not support the new customs rules, which are provided by a new version of the agreement. In addition, the party insists on preliminary approval of the agreement by Stormont (the autonomous parliament of Northern Ireland), although there is not enough time for that. The ratification of the agreement in the British Parliament is scheduled for Saturday, October 19.

AUD/USD

The Australian dollar rose against the US currency on Thursday, updating monthly local highs. The development of the uptrend in the instrument was facilitated by the fact that the UK and the EU managed to reach a compromise and form a new version of the agreement, which should now be signed by all EU member states and approved during the meeting of the British Parliament on October 19. Slight support for AUD on Thursday was also provided by contradictory data on the Australian labor market for September. Despite weak Employment growth, the report managed to support the markets by unexpected reduction in the Unemployment Rate from 5.3% to 5.2%. Today, the pair is trading in both directions, reacting to the weak data from China. In Q3 2019, China's GDP slowed down from +1.6% QoQ and +6.2% YoY to +1.5% QoQ and +6.0% YoY.

USD/JPY

The US dollar showed a slight decline against the Japanese yen on Thursday, retreating from local highs of early August, updated on the same day. The depreciation of USD was facilitated by the ambiguous macroeconomic statistics from the United States. Industrial Production in September decreased by 0.4% MoM after an increase of 0.8% MoM in August. Philadelphia Fed Manufacturing Index in October fell from 12.0 to 5.6 points, which was worse than market expectations of 8.0 points. Housing Starts fell by 9.4% MoM in September after rising by 15.1% MoM a month earlier. Analysts had expected decline by 8.6% MoM. Today, the pair maintains negative dynamics; however, weak data from Japan hinder the more confident growth of the yen. Japan's National Consumer Price Index in September showed a slowdown from +0.3% to +0.2% YoY, while the forecast assumed an increase to +0.4% YoY.

Oil

Oil prices rose moderately on Thursday, responding to joint statements by the UK and the EU about reaching an agreement on Brexit. In turn, pressure on quotes was exerted by the previously published API report, as well as recent data on oil reserves from the US Department of Energy. For the reporting week as of October 11, Crude Oil Inventories in the US grew by 9.281 million barrels after an increase of 2.927 million barrels over the past period. In turn, Gasoline Inventories decreased by 2.6 million barrels, which exceeded forecasts of –1.2 million barrels. The volume of oil production in the United States did not change and amounted to the previous 12.600 million barrels per day. Today, investors are waiting for Baker Hughes US Oil Rig Count report.

Morning Market Review
2019-10-21 08:46 (GMT+2)
EUR/USD

The European currency showed steady growth against the US dollar last week, updating local highs of August 14. The growth of the euro during the week was promoted by weak macroeconomic statistics from the USA, as well as optimistic news from the UK, where the issue with Brexit was moving ahead at an unprecedented pace. Boris Johnson managed to agree on all the details of the new version of the agreement with the EU, after which the British Parliament was supposed to ratify this agreement on Saturday. Unfortunately, this did not happen, and Parliament ordered Johnson to request a new postponement of the country's exit from the EU until February.

GBP/USD

The British pound rose significantly against the US dollar last week, noting new local highs of May 13. The British currency was supported by Brexit news during the week. Investors were optimistic about the process of working out a new agreement between the UK and the EU, reacting to the positive comments of officials. Today, the instrument shows corrective dynamics, reacting to the results of the meeting of the British Parliament, held on Saturday, October 19. Instead of approving a new version of the agreement, the British Parliament legally ordered Boris Johnson to request a new deferral of Brexit from the EU. The amendment, which was put forward by former conservative Oliver Letwin, gained the support of 322 members of parliament, while 306 voted against it. However, by October 31, Johnson theoretically still has time to resolve the issues that have arisen, but the chances of this are very small.

AUD/USD

The Australian dollar showed moderate growth against the US currency at the end of last trading week. The growth of the instrument can be traced today, but the "bullish" activity is gradually weakening. A more confident growth of the instrument is hindered by the publication of not the strongest macroeconomic statistics from China. Last Friday, data on China's GDP for Q3 2019 reflected a slowdown in the Chinese economy from +6.2% YoY to +6.0% YoY, which turned out to be worse than market expectations at +6.1% YoY. On a quarterly basis, the indicator decreased from +1.6% QoQ to +1.5% QoQ. However, there are still some positive news. In September, Retail Sales in China increased from 7.5% YoY to 7.8% YoY, while Industrial Production growth rates for the same period significantly accelerated from +4.4% YoY to +5.8% YoY with a forecast of +5.0% YoY.

USD/JPY

The US dollar fell against the Japanese yen last Friday, continuing to develop the correctional impulse that formed in the middle of last trading week. The growth of the yen was not prevented by weak macroeconomic statistics from Japan. In September, the National Consumer Price Index fell from +0.3% YoY to +0.2% YoY, which turned out to be half the expectations of investors. Corporate Services Price Index slowed down from +0.6% YoY to +0.5% YoY with a forecast of +0.6% YoY. Today the instrument is trading in both directions. Pressure on the yen, in addition to the technical factors of the dollar correction, is put by weak statistics from Japan on exports. In September, export volumes decreased by 5.2% YoY after a decrease of 8.2% YoY last month. Analysts had expected decline by 4.0% YoY only.

Oil

Oil prices showed a decline by the end of the session on Friday, despite the fact that during the day quotations rose moderately. Ambiguous macroeconomic publications from China, which may signal a further slowdown in the global economy, contributed to the development of the "bearish" trend of the instrument. In addition, investors are still disappointed with the results of a new round of trade negotiations between the United States and China. Last week, US Treasury Secretary Steven Mnuchin said the parties will continue joint negotiations to sign a final agreement next month. Baker Hughes Oil Rig Count Report published on Friday also contributed to the development of the "bearish" trend of the instrument. For the week as of October 11, the number of active rigs increased from 712 to 713 units.

Morning Market Review
2019-10-22 08:41 (GMT+2)
EUR/USD

The European currency showed ambiguous trading against the US dollar on Monday. At the same time, the euro was increasing during the day, which allowed the instrument to update the local highs of August 14. The development of flat trading yesterday was facilitated by the correctional sentiment in USD, which was significantly reduced last week. In addition, Monday's macroeconomic background remained half empty, so investors again focused on Brexit issues and the conclusion of a trade agreement between China and the United States, which did not add support to the instrument. Meanwhile, the German Producer Price Index in September showed an increase of 0.1% MoM after a decline of 0.5% MoM last month. Analysts had expected negative dynamics to remain at –0.1% MoM. In annual terms, the indicator fell by 0.1% YoY after rising by 0.3% YoY in August. Experts expected a decrease of 0.3% YoY.

GBP/USD

The British pound showed ambiguous dynamics against the US dollar on Monday, maintaining a "bullish" momentum by the end of the afternoon session. Pressure on the pound is still exerted by the uncertain situation around Brexit. After the failure of the urgent vote in the British Parliament last Saturday, the probability of Britain leaving the EU before October 31 significantly decreased, but Boris Johnson continues to insist on his plan. The parliament ordered Johnson to request a new deferment from the EU until January 31, 2020, which was done. Nevertheless, the British Prime Minister expects to resolve internal contradictions in parliament and ratify the agreement. Otherwise, Johnson insists that Britain leave the EU on October 31 without a deal, which could threaten him with problems with the law.

AUD/USD

The Australian dollar showed moderate growth against the US currency on Monday, updating local highs of September 16. Despite the attempt of correction of the US dollar, the position of the Australian currency remains quite stable. The instrument is supported by the market's anticipation of a preliminary trade agreement between the US and China in mid-November. Last Friday, Donald Trump expressed hope for a deal at a meeting with Chinese President Xi Jinping, which will be held in Chile in November.

USD/JPY

The US dollar rose against the Japanese yen on Monday, recovering from the "bearish" end of last week. The growth of the American currency was promoted by technical factors, as well as the publication of ambiguous macroeconomic statistics from Japan. Export volumes in September showed a decrease of 5.2% YoY after falling by 8.2% YoY in August. Analysts expected a decline of 4.0% YoY. Imports for the same period decreased by only 1.5% YoY after the collapse of 11.9% YoY last month. The indicator turned out better than its forecasts of –2.8% YoY. Trade Balance in September amounted to –123.0 billion Japanese yen, which turned out to be significantly worse than market expectations of +54.0 billion yen. In August, Trade Balance was –143.5 billion yen.

Oil

Oil prices showed ambiguous trading dynamics on Monday. Pressure on quotes is provided by the uncertain prospect of a trade agreement between the United States and China. Last Friday, US President Donald Trump expressed hope that an agreement could be signed at his meeting with Chinese President Xi Jinping in mid-November in Chile, but analysts are very skeptical about such statements. An additional uncertainty factor for the oil market remains the situation around Brexit. Everything is pointing to a new postponement, which, given Boris Johnson’s inflexibility, could turn into an aggravation of the domestic political crisis in Great Britain.

Morning Market Review
2019-10-23 08:41 (GMT+2)
EUR/USD

EUR showed a decline against USD on Tuesday, continuing the development of a correctional impetus formed the day before. The pair is trading under the influence of technical factors, while the fundamental background and macroeconomic statistics remain ambiguous. Some support for the euro is provided by the situation around Brexit. The British parliament approved a new version of the agreement, but this does not mean that Britain is ready to leave the EU. Now the parliamentarians need to consider all the amendments put forward earlier, and then the European Commission should ratify the agreement. Today, the pair is declining again. Today's macroeconomic background is rather poor; therefore, the instrument's motion vector is not expected to change much. Analysts expect the release of statistics on German 10-Year Bund Auction and preliminary data on Consumer Confidence in October from the euro area.

GBP/USD

After a confident rally which lasted a week and a half, GBP showed a correctional decline against USD on Tuesday. The development of negative dynamics in the instrument was facilitated by technical factors, as well as a marked decrease in optimism regarding Brexit before the current deadline, which is scheduled for October 31. The night before, it became known that the British Parliament expressed fundamental consent with the new version of the deal with the EU, but this cannot be called a full-fledged victory. Boris Johnson urges the Parliament to consider all additional amendments to the agreement within three days to close this issue before the end of the week. Parliament disagreed with Johnson’s schedule, which is likely to lead to a postponement of Brexit deadlines once again with EU consent.

AUD/USD

AUD fell against USD on Tuesday, retreating from updated local highs of September 16. The decrease in the instrument is largely due to the technical factors of USD correction and the semi-empty macroeconomic background of the beginning of the week. Meanwhile, moderate support for AUD is provided by optimism regarding the conclusion of a trade agreement between the United States and China. Donald Trump is still betting on the APEC summit, which will be held in November in Chile. The Chinese side is also optimistic, noting that negotiations are ongoing at the moment.

USD/JPY

USD fell slightly against JPY on Tuesday, correcting after weak growth earlier this week. Japanese markets were closed on Tuesday due to the national holiday, so statistics from the United States were in the spotlight. Existing Home Sales in September decreased by 2.2% MoM after growth of 1.5% MoM a month earlier. Analysts expected a decline of 0.7% MoM. At the same time, Richmond Manufacturing Index in October unexpectedly increased from –9 to 8 points with a forecast of –7 points.

Oil

Oil prices showed moderate growth on Tuesday, responding to optimistic signals on the process of trade negotiations between the US and China. This time, the Chinese side made positive statements. China's Vice Foreign Minister Le Yucheng noted that the parties managed to achieve significant progress in the negotiations and expressed hope for concluding the agreement soon. More confident growth in quotes yesterday was hampered by the publication of API Weekly Crude Oil Stock report. For the week as of October 18, the indicator increased again by 4.45 million barrels after an increase of 10.50 million barrels over the past period. Today, investors are awaiting the publication of the EIA Crude Oil Inventories.

Morning Market Review
2019-10-24 08:42 (GMT+2)
EUR/USD

EUR showed a slight increase against USD on Wednesday, despite the fact that during the day the instrument mainly declined. Some pressure on EUR was exerted by macroeconomic statistics released on Wednesday. According to preliminary estimates, the level of Consumer Confidence in the euro area in October fell from –6.5 to –7.6 points, which turned out to be worse than market expectations of –6.7 points. Today, the pair is strengthening again. Investors are waiting for statistics on business activity from Markit in the euro area in October, as well as the publication of the ECB decision on deposit and interest rates, followed by a press conference. It is expected that the European regulator will not change the basic parameters of monetary policy, but may resort to additional support measures before the end of the year.

GBP/USD

GBP strengthened against USD yesterday, recovering from a steady decline on Tuesday. The focus of investors remains on the situation with Brexit. Optimism from the approval by the British parliament of the agreement with the EU quickly gave way to negative sentiment, since Boris Johnson's initial plans do not seem to come true. The UK is again forced to ask for a postponement, which threatens with another delay and the further development of the internal political crisis.

AUD/USD

AUD showed flat dynamics on Wednesday, ending the daily session with almost no result. There are practically no interesting macroeconomic statistics at the market, therefore the movement of the instrument is mainly of a technical nature. In addition, the same factors remain in the focus of attention: trade negotiations between China and the United States and the situation around Brexit. Today, the instrument is trading with a slight decrease. Pressure on AUD is exerted by ambiguous macroeconomic statistics from Australia on business activity. The Commonwealth Bank Services PMI in October showed a decrease from 52.4 to 50.8 points with a forecast of 52.2 points. At the same time, Manufacturing PMI over the same period decreased from 50.3 to 50.1 points, which was significantly better than market forecasts of 49.0 points.

USD/JPY

USD showed moderate growth against JPY yesterday, but again returned to decline during the Asian session on October 24. The growth of USD is facilitated by a number of technical factors, while the macroeconomic background of the instrument remains ambiguous. Additional pressure on the yen is exerted by the expectation of the Bank of Japan meeting, which will be held next week. Given the latest macroeconomic statistics from Japan, it is likely that the regulator can take additional measures to stimulate the economy and lower interest rates. Today, JPY is growing, despite the publication of weak macroeconomic statistics from Japan. Jibun Bank Manufacturing PMI in October fell from 48.9 to 48.5 points, which turned out to be worse than market expectations of 48.8 points.

Oil

Oil prices rose significantly on Wednesday, receiving support from a report from the US Department of Energy, according to which US oil inventories unexpectedly fell by 1.699 million barrels over the week as of October 18, after rising by 9.281 million barrels over the past period. Analysts had expected positive dynamics to remain at 2.232 million barrels. US oil production remained unchanged at 12.600 million barrels per day, while refining capacity grew by 2.1% to 85.2%, which exceeded market forecasts of +0.9%.

Morning Market Review
2019-10-28 08:51 (GMT+2)
EUR/USD

EUR showed a moderate decline against USD last Friday, updating local lows of October 17. The development of negative dynamics in the instrument at the end of last week was contributed by uncertain macroeconomic statistics from Germany. GfK German Consumer Climate index in October showed a decrease from 9.8 to 9.6 points against a forecast of 9.8 points. Ifo Current Conditions in October fell from 98.6 to 97.8 points, while analysts expected a decrease to 98.0 points. At the same time Ifo Expectations index for the same period rose from 90.9 to 91.5 points with a forecast of 91.0 points. German Business Expectations index in October remained at the previous level of 94.6 points, contrary to expectations of a slight decrease to 94.5 points. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. On Monday, investors expect one of the last speeches by the ECB President Mario Draghi who will soon be replaced by Christine Lagarde.

GBP/USD

GBP is mainly falling, retreating from local highs, updated on October 22. The focus of investors remains on the situation with Brexit. At the end of last week, EU members agreed on a new postponement for the UK, which did not manage to ratify the new version of the agreement on the country's exit from the EU. The deadline for the new postponement has not yet been approved. European Council President Donald Tusk still insists on a postponement until January 31, 2020, but not all EU members agree. France takes the toughest stance on this issue. Meanwhile, Boris Johnson continues to insist on holding early elections to the British parliament, but is not expected to receive unanimous support in this matter.

AUD/USD

AUD showed a slight correctional growth against USD at the end of last week, recovering after a steady decline of October 24. Technical factors contributed to the development of the "bullish" trend in the instrument, while the fundamental picture remained the same. The macroeconomic statistics from the US published on Friday was contradictory. Michigan Consumer Sentiment in October fell from 96.0 to 95.5 points with a forecast of 96.0 points. In turn, Monthly Budget Statement in September indicated a surplus of 83B dollars against the deficit of –200B dollars a month earlier.

USD/JPY

USD ended last week with a slight increase against JPY, updating local highs of October 17. Macroeconomic statistics from Japan released on Friday showed little or no support to the yen. Foreign Investments in Japanese Stocks for the week as of October 18 slightly increased from 508.2B to 522.3B yen. At the same time, Foreign Bonds Buying for the same period fell sharply from 1,062.2B to 536.1B yen. Today, the pair retains a weak "bullish" advantage, waiting for new drivers to appear on the market. Today, not much interesting macroeconomic statistics are expected, so investors will focus on the data on consumer inflation in Japan which will be published on Tuesday.

Oil

Oil prices showed moderate growth last Friday, continuing the development of the "bullish" momentum formed earlier. Active support for the quotes was provided by a report from the US Department of Energy, which indicated an unexpected reduction in oil reserves by 1.7M barrels. Additional support for the instrument was provided by OPEC comments. Representatives of the organization said that they are considering more significant restrictions on oil production, which will compensate for the low demand, which is expected in 2020. Friday's Baker Hughes report on active oil rigs in the USA also provided moderate support for quotes. For the reporting week, the number of active oil rigs decreased sharply from 713 to 696 units.

Morning Market Review
2019-10-29 08:37 (GMT+2)
EUR/USD

EUR showed moderate growth against USD on Monday, correcting from local lows updated last Friday. In addition to very strong technical factors, the euro was supported by uncertain macroeconomic statistics from the USA. Dallas Fed Manufacturing Business Index in October fell from 1.5 to –5.1 points, which turned out to be significantly worse than market expectations of 1.4 points. Chicago Fed National Activity in September fell from 0.15 to –0.45 points with a forecast of –0.37 points. Today, the euro is trading in both directions again, waiting for the appearance of new drivers at the market. Investors are focused on the data from the US on Redbook Retail Price Index, Pending Home Sales and CB Consumer Confidence.

GBP/USD

GBP rose against USD, having received support from the development of correctional sentiment in the US currency across the entire market. The pound also reacted positively to the formal approval of the Brexit deadline extension until January 31, 2020. Thus, the UK will be able to leave the EU before the end of January next year, as soon as it ratifies the final version of the agreement in parliament. Boris Johnson has not been able to secure the support of the majority yet, so he insists on holding early parliamentary elections in early December. Today, British investors expect publication of data on Consumer Credit for September, Nationwide Housing Price Index, and Mortgage Approvals for September in the UK.

AUD/USD

AUD rose against USD on Monday also maintaining upward momentum during today's Asian session. Moderate support for the instrument is provided by increased prospects for concluding a preliminary trade agreement between the US and China by the end of this year. Participants of the ongoing negotiation process respond very positively to the progress made. The final version of the agreement can be signed at the APEC summit, which will be held on November 16-17 in Chile.

USD/JPY

USD showed growth against JPY on Monday, updating local highs of August 1. An increase in the instrument at the market was promoted by an increase in investor interest in risk amid a decrease in concerns about Brexit. In addition, traders respond positively to preliminary results of the negotiation process between the United States and China and hope that a trade agreement that will avoid escalating the tariff war can be signed in November. Today, the pair is trading in both directions. Investors take a lead from Japanese statistics on Tokyo consumer inflation. October Consumer Price Index remained at the previous level of 0.4% YoY, while forecasts assumed its growth to 0.5% YoY. CPI Tokyo Ex Food and Energy rose from 0.6% YoY to 0.7% YoY, which turned out to be better than the forecast of 0.5% YoY.

Oil

Oil prices returned to decline on Monday, retreating from local highs after a moderate upward rally last week. Investors are optimistic about progress in US-Chinese trade negotiations, but negative macroeconomic statistics and disappointing forecasts of energy demand have a restraining effect. Some support for oil quotes is provided by OPEC+ actions. The organization intends to expand the current agreement on limiting oil production, but the next meeting of the cartel is planned only for December. Today, investors are focused on the American Petroleum Institute Weekly Crude Oil Stock report as of October 25.