Forex News Analysis by LiteForex

LiteForex analitics. Morning Market Review

EUR/USD

EUR shows ambiguous dynamics against the US dollar, remaining close to the local highs, updated in the middle of last week. Macroeconomic statistics from Europe, published on Friday, failed to support the euro, so investors retained their correction attitude. Investors were focused on data on consumer inflation in the Eurozone in January, as well as on statistics from Germany, which recently shows a weakening of economic growth. The Eurozone consumer price index in January fell by 1.0% MoM after zero dynamics last month. Analysts were expecting a decline of 1.1% MoM. German statistics reflected the preservation of the previous GDP growth rates in 4Q2018: by 0.0% QoQ and 0.6% YoY. Investors were disappointed by the Ifo business data. The February index of business optimism fell from 99.3 to 98.5 points, below the market expectations of 99.0 points. The index of economic expectations for the same period fell from 94.2 to 93.8 points, with a constant forecast.

GBP/USD

The pound is trading in different directions, being close to local maxima, updated on February 20. Moods in the market remain extremely changeable, as investors await the resolution of the Brexit issue. There's little more than a month until the UK should leave the EU, and there is still no noticeable progress in the negotiations between British Prime Minister Theresa May and Brussels. May’s failure to negotiate only heightens internal tensions in the Parliament, which can adversely affect later. However, May's team is still optimistic. She intends to return to Brussels again on Tuesday, which will shift the date of the next voting in the Parliament by March 12. On February 25, investors will follow the speech of the head of the Bank of England Mark Carney.

AUD/USD

During the Asian session, the Australian dollar is trading within an uptrend against the US one. The instrument is moderately supported by corrective sentiment on the US dollar since investors have no intention to open new positions before the meeting of US President Donald Trump and Chinese President Xi Jinping. Earlier, Trump has already met with the leader of the PRC and noted the productivity of the negotiations, which has improved market sentiment. Also, the market is waiting for Trump to meet with DPRK leader Kim Jong-un. The main issue of the meeting is the further denuclearization of North Korea.

USD/JPY

The US dollar continues to trade against the yen without a clear trend, playing out the contradictory news. The Japanese currency is in demand due to low investor interest in risk, while the dollar is awaiting resolution of the US-China trade dispute. Moderate support for USD is provided by the further growth of US government bonds, but the macroeconomic background remains generally ambiguous. On Monday, investors expect the publication of the Chicago Fed national activity index and Manufacturing business index from the Dallas Fed. In Japan, December statistics on leading and coincident indices will be released.

Oil

Oil prices once again demonstrate a tendency to grow, but market activity remains low. The main support factors for quotes remain hopes for a resolution of the US-China trade conflict and the continued decline in oil supplies from OPEC. On Friday, additional support for quotes was provided by Baker Hughes report on active oil platforms in the USA. For the week of January 18, the number of active oil rigs in the United States decreased from 857 to 853 units, which was the third decline in a row. Despite the reduction, the overall crude oil production in the United States continues to grow. Last week, the US Department of Energy reported an increase in production to 12 million barrels per day, which is a new recor

LiteForex analitics. Morning Market Review

EUR/USD

At the beginning of the week, the euro showed growth against the US dollar returning to the local maxima of February 6. The reason for the emergence of positive dynamics was the general growth of optimism in the market after US President Donald Trump announced the postponement of the introduction of new duties on Chinese goods on March 1. Trump explained his decision with notable progress in the negotiations, and also declared his readiness to meet again with PRC leader Xi Jinping. The upward trend is also supported by the expectation of a large two-day speech by Fed Chairman Jerome Powell in the US Congress with the regular semi-annual monetary policy report. Powell's speech may clarify the planned timing of reducing the balance of the Fed, as well as the resumption of the policy of gradual rate increases. On February 26, investors are also waiting for a speech of the ECB representative Yves Mersch.

GBP/USD

The British pound showed strong growth on Monday, updating local highs of February 20. Active "bullish" dynamics is also observed during the Asian session today, which brings the pound to the highest levels since January 31. The instrument was supported by Donald Trump’s intention to postpone the deadline for concluding a trade agreement with China. The market confidence in the deal has noticeably increased, so the risk appetite has also increased. In addition, investors are optimistic about the news that the European Union is considering the possibility of postponing the Brexit date for another 21 months. This will adversely affect the internal political situation in the UK and may undermine the confidence in Teresa May in Parliament, but it will help develop a more detailed plan, which ultimately will avoid the "tough" Brexit.

AUD/USD

The Australian dollar rose against the US one on Monday but returned to ambiguous dynamics during the Asian session today. Progress in the US-China trade negotiations provided some support for the instrument, but very quickly investor sentiment began to deteriorate, and they returned to profit taking. The growth of AUD was largely caused by the non-confirmation of the fact that China introduced any bans on the import of Australian coal. According to updated data, delays in the trading ports of China were caused only by legal problems after the adjustment of the legislation.

USD/JPY

The US dollar rose against the Japanese yen on Monday, updating local highs of December 27. The growth of the instrument was facilitated by a noticeable decrease in investors' interest in "safe haven" currencies after Donald Trump announced the postponement of the introduction of new import duties on Chinese goods. Additional pressure on the yen on Monday was caused by published data from Japan. Thus, the index of leading indicators in December fell from 97.9 to 97.5 points, with a constant forecast. The index of coincident indicators dropped from 102.3 to 101.8 points.

Oil

Oil prices declined significantly on February 25, responding to Donald Trump’s statements regarding OPEC. The US president noted that prices are gradually becoming "too high" and urged the cartel to "calm down". This is not the first accusation of OPEC by Trump, while the US continues to steadily increase its own production volumes, reaching new record levels. In addition to the efforts of OPEC, the US sanctions on Iran and Venezuela also contribute to higher prices. Also, according to the latest data, the largest Lybian oil field, El Sharara, is still closed due to the presence of militants.

LiteForex analitics. Morning Market Review

EUR/USD

Yesterday, EUR against USD rose steadily, renewing local highs since February 6. The macroeconomic background remains controversial. Investors are focused on the protracted Brexit negotiation process and fear that the UK release date will still be rescheduled. Yesterday’s speech of the ECB representative Yves Mersch also did not have a significant impact on EUR position. Mersch confirmed that the regulator, as before, intends to promote its own instant payment system TIPS, which allows Europeans and legal entities to make instant transfers regardless of the mode of operation of their local banks.

GBP/USD

GBP against USD rose significantly, renewing its record highs since September 20, 2018. Such a significant increase was due to the speech of British Prime Minister Theresa May, which gave the British parliament the right to postpone Brexit if the necessary changes to the final agreement are not made. Until March 12, which is scheduled for the next parliamentary vote, May will try to hold a series of meetings with European Commission and to achieve a solution to controversial issues on the Irish border. In case of failure, on March 13, a vote to leave the country according to a “hard” scenario will be held. If the parliamentarians will again be against it, then on March 14, there will be the third vote for the postponement of the final UK exit from the EU.

AUD/USD

Today, during the Asian session, AUD is slightly rising, trading around weekly highs with moderate support from poor US dollar positions. In addition, investors expect a positive resolution of the trade conflict between the United States and China. Meanwhile, the macroeconomic background of Australia remains ambiguous. Wednesday’s 2018 Q4 Construction Work Done release declined by 3.1% QoQ after a decline by 2.8% QoQ in the previous period. Investors were counting on a positive trend of +0.4% QoQ.

USD/JPY

Yesterday, USD fell against the JPY, departing from local highs, renewed at the beginning of the week. The emergence of negative dynamics on the dollar was due to the ambiguous macroeconomic statistics from the United States. Thus, December Housing Starts index decreased from 1.214 million to 1.078 million houses, which was significantly lower than analysts' forecasts of 1.250 million. In percentage terms, the decline was more than 11%. At the same time, the December housing price index from S&P/CaseShiller increased by 4.2% YoY, slowing down against the previous +4.6% YoY. Analysts predicted a growth rate of +4.5% YoY.

Oil

Yesterday, oil prices resumed their growth and rebounded slightly after a significant decline the day before, caused by Donald Trump's appeal to OPEC, in which he asked not to hurry with price increases. Growth was due to API the report on energy reserves, reflecting a sharp decline in stocks by 4.20 million barrels by February 22. Last time, the figure increased by 1.26 million barrels. In turn, the risks of resuming the operation of El-Sharara, the largest oil field in Libya, prevented further strengthening.

LiteForex analitics. Morning Market Review

EUR/USD

The euro is consolidating against the US dollar, remaining close to its local highs, updated on February 27. Yesterday, EUR showed a decline in view of the generally negative mood of investors. However, macroeconomic indicators from the Eurozone turned out to be quite good. The services sentiment index in February rose from 11.0 to 12.1 points, which turned out to be above market expectations. The business climate indicator for the same period remained at 0.69 points, against the forecasts of a decline to 0.60 points. The updated comments of the European Commission were also positive, although investors left them without proper attention. The analysis revealed that the level of employment continues to be at record levels, while unemployment rates are steadily declining. The EC called on the countries to increase investment activity and implement the necessary budgetary reforms.

GBP/USD

The British pound once again showed strong growth against the US dollar on Wednesday, updating record highs of July 9. The pound continues to be supported by improved prospects for Brexit after British Prime Minister Theresa May promised the voting on the extension of the country's withdrawal from the EU if the parliament won't approve withdrawal without a deal. However, the postponement may have a number of negative aspects related primarily to the growth of political tensions within the country. However, in the situation of the current impasse, such a scenario is perhaps more preferable. It is not excluded that, in the case of postponement, a second referendum may be held, following which the country may not leave the EU.

AUD/USD

The Australian dollar fell remarkably against the US dollar on February 27, partially offsetting the results of the moderate growth at the beginning of the week. Some pressure was exerted on the instrument by weak macroeconomic indicators from Australia. The volume of completed construction in 4Q2018 collapsed by 3.1% QoQ after declining by 2.8% QoQ in the previous period. Analysts expected positive trends of 0.4% QoQ. Today, the pair is trading again in an upward trend, ignoring weak statistics from China. Australian data, in turn, provide moderate support. The volume of private capital expenditures for 4Q2018 increased by 2.0% QoQ after zero growth last quarter. Analysts expected a growth rate of 0.5% QoQ. Private sector lending in January remained at 0.2% MoM and 4.3% YoY, which turned out to be somewhat worse than market expectations.

USD/JPY

The US dollar rose against the Japanese yen on February 27, recovering fully from a decline on Tuesday. The US currency was supported by good data from the US on the dynamics of unfinished housing sales, as well as a number of positive comments from the speech of Fed Chairman Jerome Powell in Congress. In January, the number of sales increased by 4.6% MoM after declining by 2.3% MoM in December. Investors predicted a growth of 0.4% MoM. During the Asian session today, the pair is trading in both directions. Investors are playing on ambiguous macroeconomic statistics from Japan. According to preliminary estimates, industrial production in January decreased by 3.7% MoM after declining by 0.1% MoM in December. Investors counted on -2.5% MoM. Retail sales in January showed a decline of 2.3% MoM after rising by 0.9% MoM last month. YoY, the index slowed down from 1.3% to 0.6%.

Oil

Oil prices continued to rise on Wednesday and reached the same local highs, updated at the beginning of the week. Quotes were strongly supported by the report of the US Department of Energy on the dynamics of oil reserves. According to the report, as of February 18, oil and petroleum products in US warehouses decreased by 8.647 million barrels, after rising by 3.672 million over the previous period. Analysts expected growth of 2.842 million barrels. In addition, investors were optimistic about the statements of Saudi Minister of Energy Khalid Al-Falih, who, commenting on the recent tweet of US President Donald Trump, noted that OPEC is primarily interested in the stability of the market.

LiteForex analitics. Morning Market Review

EUR/USD

On Thursday, the euro showed ambiguous dynamics against the US dollar. In the first half of the day, EUR was trading in an upward trend and managed to update local highs since February 5. With the opening of the European session, quotes went down actively, which was a market reaction to the publication of ambiguous macroeconomic statistics and a sharp deterioration in the prospects for resolving the US-China trade conflict. Yesterday, US Trade Representative Robert Lighthizer said that the differences are still very serious and promises and positive intentions are not enough for their resolution. It also became known that the negotiations between the United States and the DPRK also ended in vain, which only increased the overall level of uncertainty.

GBP/USD

On Thursday, the British pound showed a decline against the US dollar, departing from its local highs, updated on Wednesday. The overall decline in investor sentiment contributed to a decrease in the instrument. In particular, the market negatively met the news about the failure of the US-DPRK negotiations since, as many analysts believe, this could be an additional negative signal for the process of trade negotiations between the US and China. The pound is also pressured by ambiguous macroeconomic statistics from the UK. Published yesterday, the consumer confidence indicator showed a slight increase in February from -14 to -13 points, still reflecting the predominance of negative sentiment among British consumers. On March 1, investors will focus on the statistics on consumer lending and the Markit Manufacturing PMI in February.

AUD/USD

The Australian dollar is developing a downward trend against the US one, retreating to the last week lows. The instrument is pressured by deteriorating prospects for resolving the US-China trade dispute after the US trade representative once again highlighted the seriousness of the existing differences. Published yesterday, the statistics from the United States also contributed to the development of "bearish" dynamics in the instrument. According to preliminary estimates, the US GDP in 4Q2018 grew by 2.6% YoY after rising by 3.4% YoY in Q3. Despite a significant slowdown in economic growth, the figure was still significantly above the forecasts of 2.3% YoY.

USD/JPY

The US dollar is noticeably strengthening against the Japanese yen, updating local highs since December 20. The reason for the "bullish" dynamics is ambiguous macroeconomic statistics from Japan, as well as the continuing uncertainty of the US-China trade negotiations. Statistics released on Friday showed a rise in the consumer price index in the Tokyo region in February by 0.6% YoY, after the growth of 0.4% YoY last month. The consumer inflation excluding fresh food rose by 1.1% YoY in February, which coincided with January data. At the same time, the January unemployment rate unexpectedly strengthened from 2.4% to 2.5%. In turn, Nikkei Manufacturing PMI in February showed steady growth from 48.5 to 48.9 points, which turned out to be better than analysts' forecasts. However, the figure is still below the psychological level of 50 points.

Oil

On Thursday, oil prices consolidated after moderate growth the day before, which was triggered by a sharp decline in stocks of petroleum products in the US warehouses. The development of corrective sentiment was caused by the weak macroeconomic indicators from China, which once again reminded the market of the risks of slowing global economy. The instrument is also pressured by continued tensions between the United States and China. On March 1, investors are awaiting the publication of the Baker Hughes report on active oil platforms in the United States. The last reports have indicated a reduction in their number, which, however, does not prevent the United States from increasing production rates to record levels.

LiteForex analitics. Morning Market Review

EUR/USD

The European currency ended the week ambiguously, correcting from local highs of February 5, updated on Thursday. On Friday, a large amount of interesting macroeconomic statistics from Europe and the USA was published. However, most of the data turned out to be below analysts' expectations, so there were no particular records. According to preliminary estimates, the core consumer price index in the Eurozone in February slowed from 1.1% YoY to 1.0% YoY. The consumer price index for the same period expectedly to accelerated from 1.4 to 1.5% YoY, which is still significantly below the target level of the ECB. Slightly pleasing were data on unemployment, which remained unchanged at 7.8% in January, and the Manufacturing PMI, which showed a decline from 50.5 to 49.3 points (0.1 points above the market expectations). On March 4, the euro is trading in a downward direction. Investors play on Friday statistics and expect the appearance of new drivers. On Monday, the March Sentix indicator of the Eurozone investor confidence is to be released, as well as February statistics on the manufacturers' price index.

GBP/USD

The pound fell markedly against the US dollar on Friday, continuing the development of the correction impulse formed the day before. Technical factors contributed to the development of the "bearish" dynamics, while the published macroeconomic statistics from the UK turned out to be ambiguous. Investors welcomed the increase in consumer lending in January from 0.683 billion to 1.095 billion pounds, which significantly exceeded analysts' forecasts of 0.800 billion. The number of approved mortgage applications in January also increased from 64.468 to 66.766K. Analysts expected to see a decrease to 63.400K. American statistics, published on Friday, was very weak. Only data on personal income in December was positive (1.0% MoM against the previous 0.3% MoM), while the rest of the figures were significantly worse than experts' forecasts. The ISM Manufacturing index in February fell from 56.6 to 54.2 points, while the forecast was 55.5 points.

AUD/USD

The Australian dollar ended the past week with a confident decline, which led to an update of the local minima of February 12. On March 1, a downward trend was still observed, despite the publication of a large block of weak statistics from the United States. However, in the first half of the day, the Australian dollar was trading in an upward channel, helped by strong data from Australia and China. Thus, the RBA raw materials prices index in February showed a steady growth of 9.1% YoY after rising 6.5% YoY last month. Analysts were expecting the growth of 7.4% YoY. Chinese data reflected a steady growth in the Caixin Manufacturing PMI. In February, the figure rose from 48.3 to 49.9 points, while experts predicted 48.5 points. On March 4, the pair is also trading in downwards, despite the positive gap at the opening. Moderate support for the instrument is provided by published data on the dynamics of building permits. In January, the figure rose by 2.5% MoM after falling by 8.4% MoM in the previous month. In annual terms, the growth was an impressive 28.6% after a decline of 22.5% YoY last month. At the same time, traders reacted negatively to a slowdown in the growth of profits from the main activities of Australian companies. In 4Q2018, profits rose only by 0.8% QoQ after rising by 1.9% QoQ and expected dynamics of 3.0% QoQ.

USD/JPY

The US dollar rose against the Japanese yen on Friday, updating local highs of December 20. Macroeconomic statistics published on March 1 turned out to be ambiguous, however, investors trusted the dollar more, and interest in risk practically did not decline. The Japanese data indicated a moderate increase in the consumer price index in the Tokyo region, but also signaled a decrease in the consumer confidence index in February from 41.9 to 41.5 points, while the forecast was 41.6 points. The Manufacturing PMI in February rose from 48.3 to 49.9 points, which was significantly better than the forecast of 48.5 points.

Oil

Oil prices dropped markedly on March 1, retreating to local minima of February 26. The decline was due to continued growth in US production, as well as increased risks of global economic growth, which directly affects demand. OPEC’s efforts to reduce production, and new US sanctions against Venezuela, which is also a member of OPEC, are hindering a more confident decline in prices. Additional support on Friday was provided by the Baker Hughes report, which again indicated a reduction in active drilling rigs from 853 to 843 units per week.

LiteForex analitics. Morning Market Review

EUR/USD

On Monday, the European currency showed a significant decline against the US dollar, returning to local minima of February 19. The reason for the strengthening of the negative dynamics was the news that the US and China are close to concluding a trade agreement after China offered to remove part of its import duties. The final agreement may be signed at the end of March at a special summit. On Monday, moderately optimistic macroeconomic statistics from the Eurozone hampered a more confident decline in the euro. Sentix indicator of investor confidence in March rose from -3.7 to -2.2 points with a forecast of -3.1 points. In February, the producer price index rose by 0.4% MoM and by 3.0% YoY after falling by 0.8% MoM and rising by 3.0% YoY last month. On Tuesday, investors are focused on the statistics on business activity in Europe and the United States, January data on retail sales in the Eurozone, as well as a monthly report on the state of the US budget for January.

GBP/USD

The British pound began a new week with an active decline, continuing the development of the “bearish” impulse formed at the end of last week. The negative dynamics of the instrument was due to the strengthening of the US currency against the background of improved prospects for resolving the US-China trade conflict in late March. In turn, the pound was weakened by the macroeconomic statistics from the UK published on Monday. Construction PMI in the UK in February fell from 50.6 to 49.5 points, with a forecast of 50.3 points. The index dropped below the psychological level of 50 points for the first time since April 2018. Today, the pound is also trading in a downtrend. Investors have reacted negatively to the publication of the report on retail sales in the UK. In February, the BRC index showed a decline of 0.1% YoY after rising by 1.8% YoY last month. Analysts were expecting the growth of 0.1% YoY.

AUD/USD

The Australian dollar shows a bearish trend, trading near local minima since February 12. Despite a number of good publications from Australia, investors have little interest in buying AUD, especially in view of improved prospects for resolving the US-China trade conflict. Moderate support for the Australian currency on Tuesday is provided by data on the activity index in the service sector, which rose in February from 44.3 to 44.5 points, as well as the trade balance deficit, which fell in Q4 from 10.8 billion to 7.2 billion Australian dollars. The focus of the Asian session is the RBA interest rate decision with the publication of related comments. As expected, the regulator left the rate at 1.5%, noting that current policies continue to support the Australian economy. RBA also kept the previous forecasts. By the end of the year, the Australian economy is expected to grow by 3%. The level of consumer inflation in the current year will be slightly below the target level of 2% and will be able to overcome it only by 2020.

USD/JPY

The US dollar continues to grow moderately against the Japanese yen, trading near local highs updated on March 1. Investors are optimistic about the progress in the US-China trade negotiations and are awaiting the signing of final documents at the end of March. Against this background, there is a growing interest in risk in the market, which, of course, does not contribute to the strengthening of the Japanese currency. In turn, on Tuesday, the published Markit Services PMI supports the yen. In February, the figure rose from 51.6 to 52.3 points, which turned out to be better than analysts' forecasts of an increase to 52.1 points.

Oil

Oil prices showed moderate growth at the beginning of the week, receiving support from the continued decline in production from OPEC, as well as positive comments on the US-China trade negotiations. It became known that China is ready to start a number of structural economic reforms, as well as to cancel the response import tariffs for a number of American goods. The data on the dynamics of active drilling rigs in the USA last week, which fell to the lowest level in the last 9 months, provide moderate support to oil. On Tuesday, investors will focus on the report of the American Petroleum Institute (API) on oil reserves for the week of February 25.

LiteForex analitics. Morning Market Review

EUR/USD

The European currency continues to develop a downtrend against the US dollar, having updated local minima of February 19. Analysts still note a decline in demand for risk amid concerns about global economic growth. Yesterday, the Chinese Prime Minister Li Keqiang, speaking at the annual parliamentary meeting, noted that for the country's economy there are serious risks. The GDP forecast for 2019 was reduced from the previous 6.6% to 6-6.5%. At the same time, the government announced a tax cut, as well as an increase in investment in infrastructure. In turn, support for the euro on Tuesday was provided by strong macroeconomic statistics from the Eurozone. Markit Services PMI in February increased from 51.2 to 52.8 points with a forecast of growth to only 52.3 points. The similar indicator for the manufacturing sector rose from 51.0 to 51.9 points, which also turned out to be better than the forecast of 51.4 points. Retail sales in January increased by 1.3% MoM and by 2.2% YoY, with analysts' forecasts of 1.2% MoM and 1.9% YoY.

GBP/USD

The British pound showed ambiguous dynamics on Tuesday, ending the day with almost zero results but updating the local minima of February 26. Moderate support for the pound was provided by good macroeconomic statistics from the UK. In particular, the Markit Services PMI in February rose from 50.1 to 51.3 points, while the forecast was for a decline to 49.9 points. At the same time, investors were cautious about the publication of the report of the Committee on Financial Policy, which reflected the increased risks for the British economy. The report also noted that the country's financial institutions are preparing for the toughest scenario of Brexit. During the Asian session on March 6, the pound again shows a negative trend. On Wednesday, investors will be focused on presentations by representatives of the Bank of England, Jon Cunliffe and Michael Saunders.

AUD/USD

The Australian dollar is showing a steady downward trend during the Asian session on March 6, updating local lows of January 4. The reason for the emergence of "bearish" dynamics was the publication of disappointing macroeconomic statistics from Australia. In 4Q2018, GDP grew by 0.2% QoQ and 2.3% YoY, which was worse than analysts' expectations of 0.3% QoQ and 2.5% YoY. In Q3, the Australian economy grew by 0.3% QoQ and 2.8% YoY. The speech of the RBA head Philip Lowe, which took place a little earlier than the publication on GDP, did not have a significant impact on the Australian currency since it was mostly devoted to the situation in the housing and construction markets. On Thursday, investors are awaiting the publication of Australian statistics on retail sales, as well as on the dynamics of imports and exports in January.

USD/JPY

The US dollar showed a slight increase against the Japanese yen on Tuesday, updating local highs of December 20. The dollar was supported by good macroeconomic statistics. ISM services PMI in February rose from 56.7 to 59.7 points, while the growth forecast was only 57.3 points. The similar indicator from Markit in February rose from 54.2 to 56.0 points, slightly worse than the forecast of 56.2 points. The IBD/TIPP index of economic optimism in March rose from 50.3 to 55.7 points, against the expectations of growth to 51.2 points. Sales of new houses in the USA in December increased by 3.7% MoM after rising by 9.1% MoM last month. Experts expected to see a negative trend of -8.7% MoM.

Oil

Oil prices have changed little on March 5, as market sentiment temporarily ended up in equilibrium. Quotes are supported by OPEC efforts to limit the supply. Earlier, it became known that Russia will try to accelerate the reduction of oil production in March, as reported by Energy Minister Alexander Novak. In turn, pressure factors are growing US output and fears of a slowdown in the global economy. Published yesterday, the report of the American Petroleum Institute (API) on oil reserves also contributed to the development of negative dynamics. As of February 25, oil reserves rose by 7.29 million barrels, after a decrease of 4.20 million barrels in the previous period.

LiteForex analitics. Morning Market Review

EUR/USD

The European currency is consolidating against the US dollar after a steady decline at the beginning of the week, which led to the renewal of local lows of February 19. On Wednesday, the euro was supported by technical correction factors, as well as by weak macroeconomic statistics from the United States. The ADP Employment Change showed growth by 183K in February after rising by 300K in January (however, the forecast was 189K). The US trade balance deficit increased in December and reached USD -59.8 billion, while analysts counted on USD -57.9 billion. Last month, the deficit was just over USD -50 billion. During the Asian session today, the instrument is trading in both directions, and investors are waiting for new drivers to appear on the market. The focus is on statistics for the Eurozone's GDP for 4Q2018, as well as the ECB decision on the interest rate with the accompanying press conference.

GBP/USD

The British pound shows an ambiguous trend against the US dollar, trying to reverse up after a steady decline, dropping the instrument to its lows of February 26. Uncertain prospects around Brexit continue to pressure the pound, while corrective moods are largely related to the technical factors. Also, investors reacted negatively to the publication of a weak ADP report on employment in the US, suggesting that Friday statistics on the US labor market may be worse than expected. There's no progress on Brexit negotiations. EU negotiator Michel Barnier reported yesterday the "constructive atmosphere", but it does not lead to any decisions.

AUD/USD

The Australian dollar develops a slight increase during the Asian session, correcting after a significant decline yesterday. On Wednesday, the Australian currency was pressured by disappointing data on Australian GDP. The growth of the Australian economy slowed from the previous 2.8% YoY to 2.3% YoY, which turned out to be worse than analysts' expectations of 2.5% YoY. Today, the "Australian" is supported by new statistics, in addition to technical factors. The AiG Construction PMI in February rose from 43.1 to 43.8 points. Retail sales rose 0.1% MoM in January, after declining by 0.4% MoM last month. The trade surplus in January rose sharply from 3.7 billion to 4.5 billion Australian dollars, while analysts expected it to decline to 3 billion. The reason for such rapid growth was the steady increase in exports in January by 5.0% after a decline of 1.2% in December.

USD/JPY

The US dollar is correcting against the Japanese currency, retreating from the updated local maximums of December 20. The development of the “bearish” dynamics of the instrument is largely supported by the corrective sentiment on the dollar amid the publication of not very impressive statistics. In addition, the market expects progress in the US-China trade negotiations, which are close to concluding a final deal. On Wednesday, a certain pressure on the yen was made by the representative of the Bank of Japan, Yutaka Harada, who complained about the growing external risks and urged the regulator to additional policy easing if inflation does not reach the target level of 2%. Investors are preparing for Friday when there will be a large amount of interesting macroeconomic releases. In particular, Japan will publish annual GDP data for 4Q2018, the changes in wages, and household spending in January.

Oil

Oil prices continue to show ambiguous dynamics, remaining close to the highs of the beginning of the year. Yesterday, the instrument was pressured by published forecasts from major producers in the United States, reflecting the increase in the dynamics of shale oil. In addition, investors reacted negatively to the report of the US Department of Energy, which confirmed the dynamics of the previously published ADP report, and reflected a sharp increase in oil reserves on February 25 at 7.069 million barrels after declining by 8.647 million barrels over the past reporting week. The overall rate of oil production in the United States remained unchanged at 12.100 million barrels per day.

LiteForex analitics. Morning Market Review

EUR/USD

The euro showed correctional growth against the US dollar on Friday, retreating from local minima, updated the day before. At the end of last week, EUR was pressured by the ECB's revised forecasts for GDP and inflation in the Eurozone. In addition, the regulator announced the launch of the TILRO assistance program for credit institutions in September. There are no talks about raising the ECB rate, but if analysts had previously considered the end of the summer of 2019 as one of the possible options, now no action of tightening monetary policy is expected until the end of the year. On Monday, the euro is trading in both directions, and investors are expecting new drivers. The focus will be on statistics on industrial production and exports/imports in Germany in January. The USA will publish data on retail sales for the same period.

GBP/USD

The British pound remains under pressure and continues to develop a negative trend against the US dollar. There's almost no time left for the UK to make any changes to the agreement with the EU before the meeting of Parliament on March 12. If the parliamentarians reject the next version of the agreement, on March 13, a vote will be held to exit according to the "tough" scenario. If this vote ends in rejection, the Parliament will vote to postpone Brexit. Meanwhile, the domestic political situation in the UK is worsening now. According to British media reports, Theresa May is rapidly losing support among the cabinet ministers, and at present, she is supported by only two members of the government.

AUD/USD

The Australian dollar is trading in both directions, trying to correct after a decline last week. It is moderately supported by macroeconomic statistics from the United States published last Friday. The number of new jobs created by the American economy in February decreased from the previous 311K to 20K, while investors were expecting 180K. The average working week in February decreased from 34.5 to 34.4 hours. At the same time, the unemployment rate in February fell more strongly than forecasts, from 4.0% to 3.8%, and the average hourly wage in February rose by 0.4% MoM and 3.4% YoY with forecasts of 0.3% MoM and 3.3% YoY.

USD/JPY

The US dollar has stopped its decline against the Japanese yen and is trying to develop upward correctional dynamics. The ambiguous report on the US labor market, published on March 8, exerted only short-term pressure on the dollar, while investors are still optimistic about risk. In turn, the yen still receives support from Friday statistics from Japan. Investors were pleasantly surprised by the Japanese GDP for 4Q2018: it amounted to 1.9% YoY versus the previous 1.4% YoY, and household spending dynamics is growing steadily.

Oil

Oil prices showed ambiguous dynamics on Friday, having managed to update local lows of February 14. The reason for the strengthening of the "bearish" sentiment was the disappointing US report on employment, which again reinforced concerns about the slowdown in global economic growth. The pressure was also exerted by weak indicators from China, where exports in February fell by a record 20.7% YoY, which led to a sharp reduction in the trade surplus by almost 10 times. By the end of the Friday trading session, the instrument was able to play back most of its positions, supported by the Baker Hughes report on active oil platforms in the USA. For the week of March 8, the number of active drilling rigs decreased from 843 to 834 units, which is the third decline in a row.