8 February, 2016
Despite that fact that the data on Non-FarmPayRolls was below the forecast (151 000 against the forecast of 190 000 and 262 000 new jobs in December), the USD has grown against the major currencies. The rise was caused by the other data on the US labor market in January.
Unemployment rate fell by 0.1% (4.9% versus the forecast of 5.0% and 5.0% in December), hourly wages rose as well (0.5% versus the forecast of 0.3% and 0% in December).
On Friday, oil prices of crude oil Brent fell below 34.00 USD per barrel. The price of gold went up, reaching last year highs and closing above the level of 1170.00 USD per ounce last Friday.
This Monday, the USD started with the downward correction. However, in the pair with the Yen, the USD continues to rise.
The data on the US labor market along with the inflation rate and GDP are crucial for determining future monetary policy by the US Fed. Despite the decrease of new jobs in January, unemployment rate has dropped and hourly wages have increased as well. Therefore, we cannot say that the state of the labor market has deteriorated.
Last week, the USD fell against the major currencies. The decline in the USD was caused by poor data on business activity index in the USA 5.3.2 in January against the preliminary value and the forecast of 53.7), reaching the lows since October 2013. As the service sector accounts for 90% of the US economy, the market strongly reacted to the poor data.
This week can be important for determining movement direction of the USD until the US Fed meeting in March 16, when the interest rate decision will be adopted. By the end of 2016, the key interest rate shall be increased up to 1.375% as has been announced earlier by the US Fed. Therefore, it is expected that this year the rate will be raised 3-4 times, if the growth rate will be 0.25% at each meeting taking into account that the current rate is 0.5%.
However, du to contradicting statements by the US Fed representatives related to the monetary policy tightening, the plot thickens.
Some speeches by the US Fed officials are scheduled for this week, including the speech by Mrs. Janet Yellen, the head of the US Fed, and Mr.Williams, FOMC member, which may shed light on future planes of the US Fed.
The data on German trade balance and industrial production will become known on Tuesday, 9 February 09-00 GMT+2). Quarterly expectations of the UK GDP rate, as per National Institute of economic and social research (NIESR) will be released on Wednesday, 10 February, at 17-00), and the speech by Glenn Stevens, the head of RBA will be known on Friday, 12 February at 01-30. The data on European GDP in Q4 will be published on Friday 12 February, at 11-00 and the level of retail sales in the USA will be released on Friday 12 February at 15-30.
US stock indices went up on Wednesday after the release of the minutes of the US Fed meeting in January, which was devoted to the US monetary policy. Dow Jones Industrial Average rose by 1.6%, Nasdaq Composite - by 2.2%.
Past week was marked by a two-day speech of Janet Yellen, the head of the US Fed. Mrs. Yellen did not give a straightforward answer regarding the interest rate increase at the US Fed meeting in March...
On Thursday, the price of gold strengthened by 4% and reached its year highs. The price has been growing amid an increase in demand for safe-haven assets, such as gold and the Yen...
Yesterday, US Ministry of Energy announced about unexpected decline of oil and oil products reserves by 754 million barrels over the last week. Spot-price of crude oil Brent has grown over 31.80 USD per barrel...
Over the past 2 weeks the Yen has significantly strengthened its positions against the USD due to the increasing demand for the safe-haven currency. Mixed macro-economic data on the US economy has decreased a chance that the US Fed will tighten monetary policy...
The currency pair is traded at the strong level of 1.0960 –1.1060. In case of maintenance and testing of the level and respective confirmation (for example, a pattern Price Action), we recommend to open long positions. Stop order can be placed below the signal line...
While market participants are waiting for the release of NFPR (Non-Farm PayRolls), oil prices are gradually declining since the opening of the trading day and at the beginning of the European session...
API (American Petroleum Institute) report, released this Tuesday, showed that last week US oil stocks rose by 3.8 million barrels. Obviously, it was a bad news for oil prices, as heavy stocks of oil in the USA creates situation when supply outruns demand in the world market...
Today, the Global Dairy Trade will publish price index for dairy products, reflecting weighted average of the change in price in percentage. For the economy of New Zealand, which is the largest exporter and supplier of the dairy products to the global market, dairy prices are of great importance...