Weekly review of the GBP/USD from June 9, 2018

Trading 10 juin 2018 Commentaire »

Pound, like its continental neighbor, was able to improve its position somewhat, though not so noticeably. In general, the past week was characterized by almost complete absence of any serious macroeconomic data. That is not surprising on the eve of the meetings of the Federal Open Market Committee and the ECB's board on monetary policy. It is necessary to recognize that the British statistics was ambiguous. On one hand, the index of business activity in the services sector increased from 52.8 to 54.0, while in the construction sector it remained unchanged. However, the growth rate of housing prices slowed from 2.2% to 1.9%, which, apparently, was the reason for such a result in the index of business activity in the construction sector. True, statistics from the United States had a much more pronounced negative character. The only thing that can be regarded as positive news is the increase in the number of open vacancies from 6 633 thousand to 6 698 thousand. This news allowed to smooth out the negative impact caused by the increase in the number of applications for unemployment benefits by 20, 000. The growth in the number of open vacancies, which significantly exceeds the growth in the number of applications for unemployment benefits, makes it possible not to worry about the possible increase in unemployment. Those who lost their jobs for one reason or another will soon find a new one. However, the decrease in production orders by 0.8% is a strong cause for concern. Especially against the backdrop of the continuing growth of inventories in warehouses of wholesale trade for five consecutive months. In April, they grew by another 0.1%. So fears about the proliferation of the crisis of overproduction in the US are not so crazy.

Naturally, the main event of the week will be the results of the meeting of the Federal Open Market Committee. The Federal Reserve is expected to raise the refinancing rate from 1.75% to 2.00%, which has long been included in the value of the dollar. Hysteria will happen only if the Fed postpones the increase in the refinancing rate. But no one believes in this, since the probability of such a development of events tends to zero. Given the rather serious and continued strengthening of the dollar, it is quite obvious that after it becomes known about the increase in the refinancing rate, the market will not react with the further growth of the US currency. The fact that there is no doubt about the predictability of the Federal Commission's decision on open market operations is related to inflation data and producer prices, which will be published just before the announcement of the results of the meeting. Inflation should accelerate from 2.5% to 2.6%, and the rate of growth in producer prices from 2.6% to 2.7%. In conditions of inflation, it is quite logical to raise the refinancing rate. However, taking into account the fact that this development of events has long been incorporated in the value of the dollar and will not lead to its further growth, it will become its weakening already at the end of the week. The fact is that the dollar is so heavily overbought that the market needs only an excuse for weakening it, and there will be two such reasons. And very serious. After the policy meeting of the Federal Open Market Committee, data on retail sales will be published, whose growth rates should slow from 4.6% to 4.4%, as well as in industrial production. Lately, quite a few leading indicators quite seriously point to the risk of a crisis of overproduction in the American economy. So, together with production orders and stocks, the growth rate of industrial production should slow from 3.5% to 2.7%, which obviously will not add optimism to investors.

In addition to American statistics, one should not forget about the British ones, which will be much more positive. The main thing is inflation, which can grow from 2.4% to 2.5%, which will force the Bank of England once again to think about the possibility of raising the refinancing rate. Data on the labor market, which, at first glance, may seem neutral, should also be positive. Although the unemployment rate and the growth rate of the average hourly wage should remain unchanged, the number of applications for unemployment benefits is likely to decrease from 31.2 thousand to 29.5 thousand. In addition, it is predicted that the growth rate of retail sales will accelerate from 1.4% to 2.4%. The only thing that will cloud the mood of market participants, so this is industrial production, the growth rate of which should slow from 2.9% to 2.7%. Fortunately, they come out at the very beginning of the week, and all the rest of the time we are waiting for exceptionally positive data from the UK.

So, despite the expected increase in the refinancing rate in the US, the pound is likely to end the week at 1.3500.


The material has been provided by InstaForex Company - www.instaforex.com

Weekly review of the EUR/USD dated June 9, 2018

Trading 10 juin 2018 Commentaire »

Over the past week, the single European currency was able to win back part of the decline, which it experienced the previous seven weeks. Almost a two-month depreciation stopped and was replaced by a hint of correction. It is curious that all this took place against the backdrop of an almost empty macroeconomic calendar, and with European data being mostly not positive. Thus, the final data on GDP for the first quarter confirmed the fact of a slowdown in economic growth from 2.8% to 2.5%, which fully coincided with preliminary estimates. The rate of growth in producer prices slowed from 2.1% to 2.0%. Only retail sales could please investors, as their growth rates accelerated from 1.5% to 1.7%. Thus, the only thing that could justify the growth of the single European currency is the weak US statistics. But there were no significant data from the USA either. The same ones that came out were of a completely versatile nature. In particular, the number of open vacancies increased from 6 633 thousand to 6 698 thousand. At the same time, the number of applications for unemployment benefits increased by 20 thousand, which, however, is less than the growth in the number of open vacancies. So there is no reason to fear because of the possible increase in unemployment. However, production orders decreased by 0.8%, and commodity stocks in wholesale warehouses grew by 0.1%. Given that the last time the inventories were reduced only in November of last year, their growth, coupled with a reduction in orders, increasingly points to the risks of the crisis of overproduction. So we can conclude that, in spite of the general negative nature of the data coming out, the dollar is already so significantly overbought that investors are much more inclined to strengthen the single European currency.

Let's be honest, the main events of the week will be the results of the meetings of the Federal Open Market Committee of the Federal Reserve, as well as the ECB Monetary Policy Board. The Fed is expected to raise the refinancing rate from 1.75% to 2.00%. In fact, this should justify the almost two-month growth of the dollar, and no rapid growth of the dollar after this will follow. The market will not accept any other result. More precisely, it will respond to it by the rapid decline of the dollar. But this is extremely unlikely, since something extraordinary must happen to the Fed to abandon its plans to tighten monetary policy. So from the Fed, no one is waiting for surprises, unlike the ECB, which can really surprise the market. The fact is that the European Central Bank is waiting for confirmation of speculations that after September the program of quantitative easing will continue to operate. But the question is that the preliminary data showed the acceleration of inflation from 1.2% to 1.9%, and under such conditions it is already possible to safely stop the program and think about the future increase in the refinancing rate. The problem is that the final data on inflation will not come until the day after the ECB board meeting, and it is possible that the regulator will remain cautious. Most likely, there will be no sharp statements that against the backdrop of a virtually confirmed increase in inflation will be regarded as a weakness. So, despite the good expectations for inflation, the results of the ECB meeting will rather have a negative impact on the single European currency.

But not only the meetings provide good news during the upcoming week. The topic of macroeconomic statistics should never be forgotten. As already mentioned, Europe is waiting for an actual confirmation of inflation, which, naturally, will help the single European currency, but only at the very end of the week. In addition, in Europe, it is forecasted a slowdown in industrial production growth from 3.0% to 2.9%, which, on the eve of the ECB meeting, could have a significant negative impact on the single European currency. In the US, inflation is also expected to accelerate, however, from 2.5% to 2.6%. And the growth rates of producer prices should accelerate from 2.6% to 2.7%. Given that these data will come just before the meeting of the Federal Open Market Committee, we can safely wait for the growth of the dollar. However, if in Europe good data comes after the ECB board meeting, then in the US it's the other way around. Quite weak data is expected just after the announcement of the results of the meeting of the Federal Commission for Open Market Operations. It's about retail sales and industrial production. The growth rate of retail sales should slow from 4.6% to 4.4%, and industrial production from 3.5% to 2.7%.

Most likely, most of the week the single European currency will lose its positions, but at its very end it will be able to improve its position. So it may end the week at the level of 1.1800.


The material has been provided by InstaForex Company - www.instaforex.com

Trump and the Big Seven: Did not reach an agreement

Trading 10 juin 2018 Commentaire »

Trump and the Big Seven: They did not reach an agreement.

On Friday and Saturday, June 8-9, Canada hosted the G-7 summit. Despite the large number of issues on the agenda, the issue is really only one, it's the main one: the new fees that Trump introduces against the US trade partners - against China and Mexico - and against the US allies - Canada and European countries.

The outcome of the first day of the summit is short: they did not agree. There are no joyful media reports about a "breakthrough" in the main issue. All the efforts of the participating countries turned out to somehow sign the final text - it must be signed before the middle of the Saturday, June 9, as Trump announced in advance that he would fly early to Hong Kong for a meeting with the head of North Korea.

All media write that everything could have ended even worse-the refusal of countries to sign the final text - and this is actually a complete collapse of the group of seven.

Let's note an interesting turn of the plot around Russia. Trump, even before the summit, to all the other leaders of the Seven, unexpectedly said that it was necessary to return Russia to the Seven (that is, to the G8, respectively). Trump's proposals were quickly rejected by the leaders of Germany and Britain, but Italy supported it. Very quickly, literally within one or two hours, Putin's spokesman Peskov said that the Kremlin (read - Putin) is not interested in returning to the G8 - "we are more interested in developing other formats." (On this day, Putin met with the leader of China, Xi Jinping).

At the very meeting of the Group of Seven, Trump did not raise the topic of Russia's accession to the Group of Eight. At the same time, it was stated that "all European countries in the Group of Seven are against the return of Russia - until the conflict is settled in Ukraine" (that is, Italy was promptly "persuaded"). Still, we note that Germany and Sweden and Finland agreed to the construction of the Nord Stream 2 gas pipeline - which was opposed by Trump ... (this is not about the Group of Seven, but important for the overall picture).

The result is this: the General Statement of the Group of Seven will most likely be signed - but there is no main text in the text - a decision on the trade dispute over the new Trump duties. At the same time, the EU is preparing an introduction in July of reciprocal duties on goods from the United States. The last attempt to agree - Merkel's proposal to convene a "forum" specifically on the issue of trade conflicts.

How will this affect the markets? I do not think that we will have a noticeable gap at the opening on Monday. But I do not see any reason for rapid growth.

EURUSD - closing day and week.


The material has been provided by InstaForex Company - www.instaforex.com

World Cup 2018 Betting Odds: Who Is Favored To Win The Soccer Championship?

Trading 10 juin 2018 Commentaire »
The 2018 World Cup in Russia is just days away with all of the international friendlies having been played, leaving many to wonder how the 32-nation tournament will play out. According to Las Vegas oddsmakers, many of the usual suspects will be favored.

‘Sense8’ Series Finale: What’s Next For The Cast After Netflix Special?

Trading 10 juin 2018 Commentaire »
For the second time, “Sense8” is officially over. However, the actors who helped make the Netflix drama a hit aren’t going anywhere. It seems like they’re keeping busy after the series finale, and fans can follow their work on the big and small screens.

Tony Awards 2018: Ceremony And Red Carpet Live Stream Info, Nominees Refresher

Trading 10 juin 2018 Commentaire »
It’s the one time Broadway fans can enjoy performances from the comfort of their couch, so expect all the theater fans to be watching the Tony Awards on Sunday night. However, they might not be watching on TV. The Tony Awards air on TV Sunday at 8 p.m. EDT on CBS. The east coast will get to see Josh Groban and Sara Bareilles host the event live from Radio City Music Hall in New York City. The west coast will have to wait until 8 p.m. PDT to watch the tape-delayed show. The show will last until 11 p.m., so be sure to have enough popcorn ready.

VIDEO Rafael Nadal French Open Highlights: King Of Clay Cruises To 11th Title Over Dominic Thiem

Trading 10 juin 2018 Commentaire »
World No. 1 Rafael Nadal steamrolled past Dominic Thiem as he did the rest of competition this year and for over a decade, capturing an unprecedented 11th French Open title Sunday in Paris, 6-4 6-3 6-2. The victory at Roland Garros raised Nadal's Grand Slam total to 17, just three behind Roger Federer's 20. The win also means Nadal will remain the top-ranked player in the world.

NBA Finals 2019 Betting Odds: Warriors The Early Favorites? Rockets, Sixers, Lakers In The Mix?

Trading 10 juin 2018 Commentaire »
The impending NBA free-agent market offers plenty of opportunities for the balance of power to shift. LeBron James, Kevin Durant, Chris Paul and Paul George are just some of the names that will be available this summer, presenting countless hypothetical maneuverings that could create a championship-contending club. 

Why Was Vince Vaughn Arrested?

Trading 10 juin 2018 Commentaire »
Actor Vince Vaughn was arrested early Sunday morning. Authorities have confirmed that the actor is being charged with driving while under the influence and resisting arrest. The “Wedding Crashers” actor was driving in Hermosa Beach, California, when he was stopped at a DUI checkpoint, the Manhattan Beach Police Department confirmed to The Hollywood Reporter. Vaughn was arrested around 1 a.m. PDT. 

‘Basketball Wives’ Season 7 Spoilers: 3 Things To Know About Episode 5

Trading 10 juin 2018 Commentaire »
Between Evelyn and Jackie’s ongoing feud and the addition of several new cast members, the ladies of “Basketball Wives” Season 7 have yet to attend an event that didn’t result in an argument. When episode 5 of the VH1 show airs, the ladies will continue their streak of hurling insults and threats at one another while dealing with personal issues. Here are 3 things you should know before you tune into “Basketball Wives” Season 7, episode 5: 1. Evelyn Discusses The Future Of Her Embryos