Chicago Business Barometer Rebounds Much More Than Expected In February

Trading 28 fév 2019 Commentaire »

Indicating temporary factors were at play in January's slowdown, MNI Indicators released a report on Friday showing a substantial reacceleration in the pace of growth in Chicago-area business activity in the month of February.

MNI Indicators said its Chicago business barometer spiked to 64.7 in February after plunging to 56.7 in January, with a reading above 50 indicating growth. Economists had expected the barometer to inch up to 57.0.

The Chicago business barometer recorded its biggest monthly jump since February of 2017 to reach its highest level since December of 2017.

"The sharp pick-up in the Barometer to a level not seen in over a year, underpinned by the growth in demand and production, showcases a healthy image of the U.S. economy," said Shaily Mittal, Senior Economist at MNI Indicators.

She added, "With the Fed's cautious approach towards monetary tightening along with soft inflation, firms remain optimistic about their business activity."

The much bigger than expected rebound by the Chicago business barometer was largely due to a pick-up in demand, with the new orders index recording its largest monthly increase since January of 2016.

The report said the production index also surged up to a six-month high, while the order backlogs index offset January's steep drop.

Meanwhile, MNI Indicators said supplier delivery times continued to subside in February, showing the fourth consecutive decline and hitting the lowest level since June of 2017.

The employment index rose to its highest level since July of 2018, although MNI Indicators noted firms remain concerned about finding the right fit of employees to meet their needs.

On the inflation front, the prices paid indicator showed its first increase in seven months, easing the downward pressure seen on prices through the second half of the last year.


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Technical analysis for EUR/USD for February 28, 2019

Trading 28 fév 2019 Commentaire »

EUR/USD reached our second target and major resistance area. Price got rejected and has given an important bearish signal. Has the upward correction ended? Are we starting the next leg down targeting below 1.13? As long as we trade below 1.1425 I remain bearish.

analytics5c77fd38af759.png

Red line - major resistance trend line

Green line - support trend line

Blue line - short-term support trend line

Black line - RSI support trend line

Blue rectangle - second target area

EUR/USD has broken the blue upward sloping support trend line. EUR/USD has reached my target area and got rejected. The RSI is breaking below support trend line. All these bearish signs imply a pull back at least. Support is found at 1.1350 and at 1.13. Breaking below 1.13 will open the way for a move towards 1.11. I'm bearish as long as we trade below today's highs.

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Dollar Rebounds As U.S. Economic Growth Slows Less Than Expected

Trading 28 fév 2019 Commentaire »

The U.S. dollar reclaimed some of its lost ground against its major counterparts in the European session on Thursday, as a data showed that the U.S. economic growth slowed less than forecast in the fourth quarter of 2018.

Data from the Commerce Department showed that economic growth in the U.S. slowed in the fourth quarter of 2018, although the pace of growth still exceeded analyst estimates.

The report said real gross domestic product climbed by 2.6 percent in the fourth quarter compared to the 3.4 percent jump in the third quarter. Economists had expected GDP to increase by 2.3 percent.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits rose more than expected in the week ended February 23.

The report said initial jobless claims climbed to 225,000, an increase of 8,000 from the previous week's revised level of 217,000.

Economists had expected jobless claims to edge up to 220,000 from the 216,000 originally reported for the previous week.

Caution prevailed in global markets due to fading optimism about U.S.-China trade talks, the abrupt end to talks between the U.S. and North Korean leaders and mounting geopolitical tensions.

The summit between Trump and Kim ended with no agreement after North Korea reportedly wanted all sanctions on it lifted in exchange, something the U.S. was not prepared to do.

The greenback traded mixed against its major counterparts in the Asian session. While it fell against the franc and the yen, it held steady against the euro. Against the pound, it rose.

The greenback climbed to a 3-day high of 111.09 against the yen from yesterday's closing value of 110.99. The greenback is poised to challenge resistance around the 113.00 level.

Having dropped to more than a 3-week low of 1.1420 against the euro at 6:45 am ET, the greenback reversed direction and strengthened to 1.1380. The greenback is seen finding resistance around the 1.12 level.

The greenback appreciated to 1.3264 against the pound, from a low of 1.3319 hit at 7:45 pm ET. Next key resistance for the greenback is seen around the 1.31 level.

Survey data from the Nationwide Building Society showed that UK house price inflation accelerated sharply in February, after slowing in the previous two months, and the pace exceeded economists' forecast.

The house price index rose 0.4 percent year-on-year following a 0.1 percent increase in January. Economists had expected a 0.3 percent gain.

Reversing from its early lows of 1.3141 against the loonie, 0.7166 against the aussie and 0.6853 against the kiwi, the greenback firmed to a 2-day high of 1.3207, 6-day highs of 0.7117 and 0.6814, respectively. The next possible resistance for the greenback is seen around 1.34 against the loonie, 0.70 against the aussie and 0.67 against the kiwi.

The greenback recovered slightly to 0.9964 against the franc, from near a 4-week low of 0.9926 seen at 8:00 am ET. The currency had earlier set a session's high of 1.0015 at 5:00 pm ET. If the greenback rises further, 1.02 is possibly seen as its next resistance level.

Data from the Zurich-based KOF Swiss Economic Institute showed that an indicator of Switzerland's future economic performance declined for a fifth consecutive month in February and at a sharp rate, suggesting that the economy is set for some slowdown in the coming months.

The KOF Economic Barometer fell to 92.4 from January's 96.2, which was revised from 95 reported initially. Economists had expected the reading to remain unchanged at 95.


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India GDP Growth Slows To 6.6%

Trading 28 fév 2019 Commentaire »

India's economic growth slowed in the three months to December, figures from the statistics ministry showed on Thursday.

Gross domestic product grew 6.6 percent year-on-year in the October to December quarter, after expanding 7 percent in the previous three months. Economists had forecast growth of around 6.9 percent. Growth was 8 percent in the April to June quarter.

Weaker consumption and investments were to blame for the latest slowdown in growth.

The ministry trimmed the growth estimate for the fiscal year ending March 31 to 7 percent from 7.2 percent. Economists fear India's economic growth could slow if the ongoing political and military tensions with Pakistan escalate. The upcoming general election is also a crucial factor that could determine the direction of the economy.

Despite the slower growth rate, India remained the fastest growing emerging economy in the October-December quarter, outpacing China's 6.4 percent.


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*Chicago Business Barometer Jumps To 64.7 In February

Trading 28 fév 2019 Commentaire »

Chicago Business Barometer Jumps To 64.7 In February


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Spain CPI Inflation Rises For First Time In 4 Months

Trading 28 fév 2019 Commentaire »

Spain consumer price inflation rose in February, after slowing in the previous three months, flash data from the statistical office INE showed on Thursday.

The consumer price index rose 1.1 percent year-on-year in February, following a 1.0 percent rise in January. The inflation rate was in line with the economists' expectation.

The latest rise in inflation was due to rise in price of fuels, which declined in the same month of last year.

On a month-on-month basis, consumer prices rose 0.2 percent in February.

The harmonized index of consumer price, or HICP, which is meant for EU comparison, rose 1.1 percent annually in February. Economists had expected 1.0 percent rise.

On a month-on-month basis, HICP rose 0.2 percent in February.


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U.S. Economic Growth Slows Less Than Expected To 2.6% In Q4

Trading 28 fév 2019 Commentaire »

Economic growth in the U.S. slowed in the fourth quarter of 2018, according to a report released by the Commerce Department on Thursday, although the pace of growth still exceeded analyst estimates.

The Commerce Department said real gross domestic product climbed by 2.6 percent in the fourth quarter compared to the 3.4 percent jump in the third quarter. Economists had expected GDP to increase by 2.3 percent.

The bigger than expected increase in GDP came as consumer spending growth slowed but continued to make a strong contribution to the economy.

Consumer spending jumped by 2.8 percent in the fourth quarter after surging up by 3.5 percent in the third quarter.

The report also showed positive contributions from non-residential fixed investment, exports, private inventory investment, and federal government spending.

However, negative contributions from residential fixed investment and state and local government spending limited the upside.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the details of the report show "better-than-forecast contributions from domestic consumption and business investment."

"Nevertheless, as a result of the already-reported weakness in retail sales and exports in the final month of last year, we expect first-quarter GDP growth to be a more disappointing 1.5% annualized," he added.

The Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth accelerated to 1.7 percent in the fourth quarter from 1.6 percent in the third quarter.


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*India Trims 2018-19 Growth Advance Estimate To 7% From 7.2%

Trading 28 fév 2019 Commentaire »

India Trims 2018-19 Growth Advance Estimate To 7% From 7.2%


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*India Oct-Dec GDP Y/Y Growth Slows To 6.6% From 7% In Jul-September

Trading 28 fév 2019 Commentaire »

India Oct-Dec GDP Y/Y Growth Slows To 6.6% From 7% In Jul-September


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EURUSD: Results of the meeting of leaders of the USA and North Korea. Just a little time left before TLTRO launch

Trading 28 fév 2019 Commentaire »

The results of the second summit devoted to the winding down of the North Korean nuclear program have become known today. As the White House said, US President Donald Trump and North Korean leader Kim Jong Un failed to reach a general agreement. All the statements made by Trump the day before that the two leaders managed to build excellent relations remained unheard by the leader of North Korea.

In his twitter, Trump wrote that the meeting with Kim Jong-un was productive, but for the time being, it would be wrong to sign anything. Trump also noted that he is committed to long, but productive negotiations, which, ultimately, will lead to the signing of a joint agreement that suits both parties.

The main obstacle at the end of the negotiations was trading sanctions, which the United States maintains against North Korea. However, one of the advantages is the fact that the North Korean leader Kim Jong-un is ready to give up nuclear weapons.

As for the next meeting, there are currently no arrangements for additional summits with North Korea.

Meanwhile, the European currency continues to strengthen its position, despite the fact that many economists expect the European Central Bank at the next meeting to be held next Thursday, will announce the start of a new round of long-term targeted refinancing operations TLTRO. This will mitigate concerns about the need to refinance cheap loans, as well as preserve the soft lending conditions, which many investors and traders fear.

Given the risks of trade and political conflicts, along with weak macroeconomic statistics, the slowdown in the economic growth of the eurozone and its recession seems more real than before.

All this suggests that the ECB may even postpone the increase in interest rates for the next year, which in the medium term will weaken the position of the European currency or limit the upward correction in a pair with a weaker, for almost the same reasons, US dollar.

Today, data came out that showed that consumer spending in France in January of this year increased by 1.2% compared with December 2018, and by 1.0% compared with the same period last year. Economists had forecast growth in consumer spending by 0.5% and 0.1%, respectively.

Inflation in France is not so good. According to preliminary data, the consumer price index in February remained unchanged compared with January and grew by 1.3% year on year. France's preliminary CPI in February was forecast at 0.4%.

The preliminary consumer price index in Italy in February rose by only 0.2% and 1.1% per annum, which fully coincided with economists' forecasts.

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In the afternoon, reports are expected on inflation in Germany, as well as the US GDP for the 4th quarter of 2018, which could significantly affect the EURUSD pair. If inflation in Germany remains stable, and US GDP turns out to be worse than forecast, then the demand for risky assets may increase substantially, which will lead the trading tool to update the highs of 1.1440 and 1.1460.

With a scenario of good performance in the growth rate of the American economy, and initially, they will be worse than in the 3rd quarter, the demand for the dollar may return, which will pull the EURUSD pair down to support levels of 1.1380 and 1.1340.

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