U.S. Service Sector Growth Slows More Than Expected In March

Trading 03 avr 2019 Commentaire »

Service sector growth in the U.S. cooled off in March after a significant acceleration in the previous month, according to a report released by the Institute for Supply Management on Wednesday.

The ISM said its non-manufacturing index slid to 56.1 in March after jumping to 59.7 in February, although reading above 50 still indicates growth in the service sector.

Economists had expected the index to show a more modest pullback, with forecasts calling for the index to dip to 58.0.

"Respondents remain mostly optimistic about overall business conditions and the economy," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee. "They still have underlying concerns about employment resources and capacity constraints."

The bigger than expected decrease by the headline index came as the business activity index tumbled to 57.4 in March from 64.7 in February and the new orders index slumped to 59.0 from 65.2.

On the other hand, the report said the employment index inched up to 55.9 in March from 55.2 in February, indicating a modest acceleration in the pace of job growth in the service sector.

The prices index also jumped to 58.7 in March after falling to 54.4 in the previous month, pointing to a significant reacceleration in the pace of price growth.

A separate report released by the ISM on Monday unexpected showed a faster rate of growth in U.S. manufacturing activity in the month of March.

The ISM said its purchasing managers index rose to 55.3 in March after falling to 54.2 in February, while economists had expected the index to come in unchanged.


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Dollar Falls Vs Most Majors Following ISM Non-manufacturing Composite Index

Trading 03 avr 2019 Commentaire »

After the release of U.S. ISM non-manufacturing composite index for March at 10:00 am ET Friday, the greenback traded mixed against its major rivals. While the greenback dropped against the euro, the franc and the yen, it changed little against the pound.

The greenback was trading at 111.38 against the yen, 0.9958 against the franc, 1.1237 against the euro and 1.3135 against the pound around 10:02 am ET.


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*ISM U.S. Non-Manufacturing Index Drops To 56.1 In March

Trading 03 avr 2019 Commentaire »

ISM U.S. Non-Manufacturing Index Drops To 56.1 In March


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UK Service Sector Contracts For First Time In Over 2-1/2 Years

Trading 03 avr 2019 Commentaire »

UK service sector shrunk for the first time in over two-and-a-half years in March as domestic political uncertainty damped demand amid labor shortages, survey data from IHS Markit showed on Wednesday.

The services purchasing managers' index, or PMI fell to 48.9 in March from 51.3 in February. Economists had expected a score of 51.

A reading below 50 suggests contraction in the sector. The services PMI reading fell below 50 for the first time since July 2016.

Aside from the brief dip seen after the EU referendum, the latest reading was the joint weakest seen over the past decade and equaled the previous low point recorded in December 2012, IHS Markit said.

The composite PMI dropped to 50 in March from 51.4 in February. Economists were looking for a score of 51.2.

In March, manufacturing witnessed an upturn due to continued stockpiling by businesses ahead of Brexit, while services and construction sectors logged weaker levels of activity.

In the service sector, clients chose to wait for some clarity on Brexit before committing to new projects. New orders declined for a third successive month, marking the longest stretch of falling sales volumes since the first half of 2009. Export demand continued to weaken.

Backlogs fell for a sixth month in a row, which was the longest run of declines since early-2013.

However, employment rose slightly in March after falling in the previous months. That said, firms continued to report that shortages of labor had limited the scope for hiring.

Operating costs rose in March, pushed up by higher staff wages, transport costs and energy prices. Input price inflation was largely unchanged from February's nine-month low.

Selling prices rose marginally and the rate of output price inflation was the weakest since June 2017. Subdued demand led to squeezed margins and pressure to match discounting by competitors.

Business expectations remained subdued and the degree of optimism rose to its highest level since last October. Some firms hoped for greater clarity about the path to Brexit.

"A drop in service sector activity indicates that UK GDP contracted in March, with the economy stalling over the first quarter as a whole and at risk of sliding into a deepening downturn in coming months," IHS Markit Chief Business Economist Chris Williamson said.

A stalling of the economy in the first quarter will therefore likely turn into a downturn in the second quarter unless demand revives suddenly which seems highly improbable, given the recent escalation of Brexit uncertainty, the economist said.

Hence, the current consensus forecast for the UK economy to grow 1.3 percent this year looks far too optimistic, he added.

"IHS Markit currently expects to see just 0.8 percent growth in 2019, and even this modest performance is perhaps somewhat hopeful given the recent lack of any Brexit developments," Williamson said.


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Bitcoin analysis for April 03, 2019

Trading 03 avr 2019 Commentaire »

BTC has been trading upward. The price re-visited the resistance at $5.070 and BTC got rejected. Seems like buyers lost power and that most of buyers exited their positions.

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According to the H1 time-frame, we found very high reading at 48 on the ADX indicator, which is sign that trend and momentum are still strong. Anyway, because of the climatic actions in the background and the re-test of the high at $5.070 buying looks very risky. In our opinion it is better to play for potential downside correction in case that you see the breakout of the upward trendline. Downward target is set at $4.641. Watch for buying opportunities only if you see breakout of the $5.070 and successful re-test.

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

Sunny day for the dollar seems to be nearing sunset

Trading 03 avr 2019 Commentaire »

Over the past year, the greenback has been strengthened mainly due to the divergence in the economic growth of the United States and the rest of the world, as well as trade conflicts, and the monetary tightening of the Fed.

However, the upward trend in the USD index may be questionable when neither the Fed nor the White House is against the weakening of the US currency.

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The picture for the dollar is not entirely rosy in the light of the fact that Washington and Beijing can sign an agreement on ending the trade war. The gradual restoration of European and Chinese GDP will make it possible to count on the dispersal of the global economy.

In addition, it is possible that in order to achieve the goal of raising the country's GDP by 3% under the conditions of the "fading" effect of the tax reform and the Fed will have to at least reduce the federal funds rate.

According to HSBC experts, instead of simply reducing the rate, the regulator can launch a new asset purchase program.

In such conditions, the US currency will be forced to weaken.

"The best days for greenback this year seem to be over," experts at Morgan Stanley said.

According to their estimates, the dollar could drop by 6% by the end of the year against the background of a slowdown in the US economy and a softening of the Fed's position.

"We think that the dollar has peaked in the current cycle and may be cheaper than the market expects. The weakening of the "American", in turn, will help reduce the attractiveness of investments in dollar assets, "representatives of the financial institution said.

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GBP/USD analysis for April 03, 2019

Trading 03 avr 2019 Commentaire »

GBP/USD has been trading upwards. The price tested the level of 1.3194. Anyway, we found that there can be potential trap for buyers and that the bullish movement wasn't strong enough.

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According to the H1 time-frame, we found that there is the fake breakout of the resistance at the price of 1.3147, which is sign that buyers don't have enough power to sustain the breakout. Most recently, there is the down breakout of the 5-hour balance, which is another sign of the GBP weakness. Resistance level is seen at the price of 1.3194 and the support levels are seen at 1.3060 and 1.2980.

Trading recommendation: We sold GBP from 1.3138 with targets at 1.3060 and 1.2980. Protective stop is placed at 1.3205.

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

U.S. Dollar Mixed After ADP Data

Trading 03 avr 2019 Commentaire »

The U.S. dollar came in mixed against its major counterparts in the European session on Wednesday, after a data showed that the economy created fewer private sector jobs than expected in March, cementing chances for a Fed rate hike pause this year.

Data from payroll processor ADP showed that U.S. private sector employment rose by 129,000 jobs in March after jumping by an upwardly revised 197,000 jobs in February.

Economists had expected employment to increase by 170,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

The data serves as a precursor to Friday's jobs data, which includes both public and private sector jobs.

The Labor Department report is expected to show the employment to have climbed by 180,000 jobs in March after inching up by just 20,000 jobs in February. The unemployment rate is expected to hold at 3.8 percent.

Earlier in the European session, the greenback weakened amid safe-haven status as investors cheered encouraging data from China and signs of progress in U.S.-China trade talks.

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

The greenback pulled back to 111.41 against the yen, from a 2-week high of 111.58 hit at 3:00 am ET. The currency had set a 2-day low of 111.21 against the yen in the Asian session. The greenback is seen finding support around the 110.00 level.

The latest survey from Nikkei showed that Japan's services sector continued to expand in March, albeit at a slightly lower pace, with a services PMI score of 52.0.

That's down from 52.3 in February, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The greenback remained lower at 0.9964 against the franc, after having dropped to a 2-day low of 0.9957 at 5:15 am ET. The pair had finished yesterday's trading at 0.9979.

The greenback staged a modest rebound to 1.1231 against the euro, following a 6-day low of 1.1255 touched at 5:45 am ET. Next key resistance for the greenback is likely seen around the 1.10 level.

Preliminary data from Eurostat showed that Eurozone retail sales grew for a second consecutive month and at a faster-than-expected pace in February.

Retail sales rose 0.4 percent month-on-month in February, surpassing economists' expectations for 0.10 percent growth.

After declining to a 6-day low of 1.3196 against the pound at 4:00 am ET, the greenback held steady in subsequent deals. The pair was valued at 1.3133 when it ended deals on Tuesday.

Survey data from IHS Markit showed that UK service sector shrunk for the first time in over two-and-a-half years in March as domestic political uncertainty damped demand amid labor shortages.

The CIPS/IHS Markit services purchasing managers' index, or PMI fell to 48.9 in March from 51.3 in February. Economists had expected a score of 51.

The U.S. ISM non-manufacturing composite index and Markit's services PMI for March will be released shortly.


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Sweden Services Growth Slows, Yet Remains Strong

Trading 03 avr 2019 Commentaire »

Sweden's services sector growth slowed slightly in March, but the momentum was strong, survey data from Swedbank and the logistics association SILF showed Wednesday.

The Purchasing Manager Index, or PMI, for the service sector fell to 55.3 in March from 55.3 in February.

Any reading above 50 indicates expansion in the sector.

Three out of four sub-indices, fell in March with the largest decline in employment, followed by the business volume and new orders, while the sub-index for delivery times remained at the same levels.

The composite PMI fell to 54.6 in March from 54.9 in February.


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USD/JPY analysis for April 03, 2019

Trading 03 avr 2019 Commentaire »

USD/JPY has been trading upwards as we expected. The price tested the level of 111.58. We are still expecting more upside on USD/JPY.

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According to the H4 time-frame, USD/JPY is still in the robust short-term upward trend and our expectation is that price will head towards the resistance levels at 111.70 and 111.90. ADX reading is at 31, which is another sign that trend is strong. Price is also trading above the 20-exponential moving average (yellow line) and most recently we got the breakout of the bullish flag. Support level is seen at the price of 111.20.

Trading recommendation: We are still holding our long position from 110.95 with the secured stop lose on breakeven but we added another smaller long position from 111.40 and with the protective stop at 111.10.

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