20 April, 2018
The light news flow and a break in US-Chinese trade rhetoric give the equity markets a positive momentum amid so far positive reporting season in the US. USD dollar is under slight pressure, the dollar index remains practically within previous trading levels. Earlier today, the general Asian index of MSCI Asia Pacific grew by 0.5%.
Yesterday, the Fed's beige book basically confirmed what the market already knows. The economy is developing at a moderate pace, and many are optimistic about short-term prospects. Trade issues have become more visible. Tariffs already increase steel prices. The labor market is getting tougher, and while some employers are increasing their salaries, others are looking for ways for automation that are not contribution in inflation.
Today, the US market opened negatively, amid a sharp decline in the technology sector and, above all, in the Apple stocks. Markets are falling amid the backdrop of information from the world's largest chip maker (Taiwan Semiconductor) and Apple supplier, that reduced demand for smartphones caused a drop in chip stocks.
Oil price continue to gain and now looks like it is the favorable instrument of the whole market. Futures for Brent reached the maximum levels in the last 3.5 years. Today, growth continued, as the price was observed in the region of $ 74.40.
The oil market now benefit from an unexpected drop in US crude oil inventories last week and expectations that the main oil producers will continue to respect the pact regarding the limitation of production facilitated this.
This week, a meeting of the OPEC observation committee will take place. At its last meeting, the committee said that the agreement to reduce production in December last year was fulfilled by 129%.
As for the FOREX currency market, the distinguishing feature of today's trading session is the lowest trading activity. This is interesting as the FX markets looks to be in balance for many FX instruments. This is a kind of very rare situation in FX market history. We will see what will be the next.
The main pair of FX market EUR / USD is trading today within very tight limits – just four points of daily volatility - 1.2372-1.2374. Maybe the volatility will come in the American trading session.
The dollar entered the top part of its two-month range against the Japanese yen. Resistance is observed in the zone JPY107.60-JPY107.80. This is last Friday high.
The move above JPY108 corresponds to 38.2% retracement of Fibo from the last USD decline since January 8 from JPY113.40.
Sterling was under pressure amid somewhat weaker than expected inflation data. This week, the British currency updated the highs of 2018. At the start of the US trading, GBP / USD is trading around the levels at 1.4225.
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