U.S. Construction Spending Jumps Much More Than Expected In January

Trading 02 mar 2020 Commentaire »

Construction spending in the U.S. jumped by much more than expected in the month of January, according to a report released by the Commerce Department on Monday.

The Commerce Department said construction spending surged up by 1.8 percent to an annual rate of $1.369 trillion in January after inching up by 0.2 percent to a revised rate of $1.346 trillion in December.

Economists had expected construction spending to climb by 0.7 percent compared to the 0.2 percent dip originally reported for the previous month.

The bigger than expected spike in construction spending reflected sharp increases in both private and public construction spending.

Spending on private construction shot up by 1.5 percent to an annual rate of $1.023 trillion, as spending on residential construction soared by 2.1 percent and spending on non-residential construction increased by 0.8 percent.

The report said spending on public construction also jumped by 2.6 percent to an annual rate of $346.5 billion, with spending on highway construction skyrocketing by 5.4 percent.

The Commerce Department said total construction spending in January was up by 6.8 percent compared to the same month a year ago.


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U.S. Manufacturing Index Indicates Slight Expansion In February

Trading 02 mar 2020 Commentaire »

A report released by the Institute for Supply Management on Monday showed U.S. manufacturing activity saw a slight expansion in the month of February.

The ISM said its purchasing managers index edged down to 50.1 in February from 50.9 in January, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 50.5.

"Global supply chains are impacting most, if not all, of the manufacturing industry sectors," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. "Overall, sentiment this month is marginally positive regarding near-term growth."

The modest decrease by the headline index came as the new orders index fell to 49.8 in February from 52.0 in January, indicating a slight decrease in new orders.

The production index also slid to 50.3 in February from 54.3 in January, while the employment index inched up to 46.9 from 46.6 but still indicates a drop in manufacturing jobs.

The report also said the prices index tumbled to 45.9 in February from 53.3 in January, pointing to a decrease in prices.

On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of February. The non-manufacturing index is expected to slip to 54.9 in February from 55.5 in January.


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*U.S. Construction Spending Jumps 1.8% In January

Trading 02 mar 2020 Commentaire »

U.S. Construction Spending Jumps 1.8% In January


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*ISM U.S. Purchasing Managers Index Dips To 50.1 In February

Trading 02 mar 2020 Commentaire »

ISM U.S. Purchasing Managers Index Dips To 50.1 In February


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Dollar Drops On Fed Rate Cut Hopes

Trading 02 mar 2020 Commentaire »

The U.S. dollar came under pressure against its most major rivals in the European trading session on Monday, as investors are pricing in a Fed rate cut at March policy meeting to contain the economic fallout from the virus outbreak.

Expectations of a rate cut intensified following Fed Chairman Jerome Powell's statement that the central bank would "act as appropriate" to support the economy.

"The coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy," Powell said on Friday.

The market is now pricing in a rate cut at the next Fed meeting on March 18.

Investors cheered indications from other global central banks to support their economies in response to the coronavirus scare.

The Bank of Japan signaled today that it will make every effort to ensure stability in financial markets roiled by the coronavirus outbreak.

The Bank of England said it would take all necessary steps to maintain market stability.

The greenback fell to 1.1165 against the euro, its weakest since January 16. The currency is poised to challenge support around the 1.13 mark.

Final survey data from IHS Markit showed that Eurozone manufacturing activity contracted only marginally and at the slowest pace for the past year in February.

The factory Purchasing Managers' Index rose to 49.2 in February from 47.9 in January. This was slightly above the flash score of 49.1.

The greenback dropped back to 107.52 against the yen, not far from near a 5-month low of 107.36 seen in the Asian session. The greenback is seen finding support around the 106.00 mark.

Bank of Japan Governor Haruhiko Kuroda said the bank will ensure stability in the financial markets via asset purchases.

"The Bank of Japan will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases," he said in a statement.

The greenback declined to 0.9546 against the franc, a level unseen since September 2018. Next key support for the greenback is likely seen around the 0.94 level.

The greenback edged down to 0.6279 against the kiwi and 0.6568 against the aussie and held steady thereafter. The greenback is likely to face support around 0.645 against the kiwi and 0.70 against the aussie.

In contrast, the greenback rose to 1.2746 against the pound from last week's closing value of 1.2823. The next possible resistance for the greenback is seen around the 1.24 level.

Survey data from IHS Markit showed that the UK manufacturing sector expanded at the fastest pace in ten months in February as domestic demand continued to recover on the back of reduced political uncertainty.

The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 51.7 in February from 50.0 in January. However, this was below the earlier flash estimate of 51.9.

The greenback recovered to 1.3390 against the loonie, from a 5-day low of 1.3315 hit at 3:30 am ET. The currency is likely to face resistance around the 1.35 region, if it gains again.

The U.S. ISM manufacturing index for February and construction spending for January are set for release in the New York session.


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Brazil Manufacturing Growth Strongest In 3 Months

Trading 02 mar 2020 Commentaire »

Brazil's manufacturing sector expanded at the fastest pace in three months as both output and demand improved, survey data from IHS Markit showed on Monday.

The IHS Markit Brazil Manufacturing Purchasing Managers' Index rose to 52.3 in February from 51 in January. A reading above 50 suggests growth in the sector.

The PMI pointed to the strongest improvement in the health of the sector since last November, IHS Markit said.

Consumer and intermediate goods manufacturers logged faster expansions, while the capital goods makers recorded the steepest downturn for over three years.

Production and sales grew at the fastest rate in three month and job creation climbed to a five-month high.

On the cost front, input price inflation was the highest since October 2018 and output price inflation was the sharpest in one-and-a-half years.

Business confidence remained strong as manufacturers expect investment growth, greater client numbers and product diversification to boost output growth in the year ahead.

Companies reported low stock levels at suppliers and delays in the delivery of materials due to the COVID-19 outbreak.

The deterioration in vendor performance was among the sharpest in the 14-year survey history, while stocks of purchases decreased further, IHS Markit said.


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*U.S. Dollar Drops To 1-1/2-month Low Of 1.1137 Against Euro

Trading 02 mar 2020 Commentaire »

U.S. Dollar Drops To 1-1/2-month Low Of 1.1137 Against Euro


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March 2, 2020, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 02 mar 2020 Commentaire »

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In the period between December 18th - 23rd, bearish breakout below the depicted previous bullish channel followed by quick bearish decline below 1.3000 were demonstrated on the H4 chart.

However, immediate bullish recovery (around 1.2900) brought the pair back above 1.3000.

Bullish breakout above 1.3000 allowed the mentioned Intraday bullish pullback to pursue towards 1.3250 (the backside of the broken channel) where the current wide-ranged movement channel was established between (1.3200-1.2980).

Since January 13, progressive bearish pressure has been built over the price zone of 1.2980-1.3000 until February 5.

On February 6, recent bearish breakdown below 1.2980 enhanced further bearish decline towards 1.2890 (the lower limit of the movement channel) where two episodes of bullish rejection were manifested on February 10th and 20th.

This was followed by the recent bullish pullback towards the price zone of 1.2980-1.3000 which has offered considerable bearish rejection.

On the other hand, the lower limit of the channel around 1.2850 has failed to provide enough bullish Support for the pair.

That's why, a quick bearish decline was expressed towards the nearest DEMAND level around 1.2780 where significant bullish rejections is being demonstrated.

Bullish recovery is expected to pursue towards 1.2980 provided that bullish breakout is achieved above 1.2850 once again.

On the other hand, bearish persistence below 1.2780 enhances the bearish side of the market probably towards lower bearish targets (1.2650).

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OECD Cuts Global Outlook On Severe Impact From Covid-19 Outbreak

Trading 02 mar 2020 Commentaire »

The Organisation for Economic Co-operation and Development downgraded its global growth outlook on Monday, saying the impact of the Covid-19 outbreak on economic prospects is set to be severe.

The Paris-based think tank lowered the global growth projection for this year by 0.5 percentage points, while prospects for China was revised down markedly, with growth seen slipping below 5 percent this year.

In the Interim Economic Assessment, the OECD said global GDP growth is projected to drop to 2.4 percent in 2020 from an already weak 2.9 percent in 2019. The forecast for 2021 was trimmed to 3.3 percent from 3.6 percent.

The OECD urged governments to act swiftly and forcefully to overcome the coronavirus and its economic impact. If downside risks materialise, and growth appears set to be much weaker for an extended period, then co-ordinated multilateral actions should be taken, the agency added.

China's economy is projected to expand 4.9 percent this year versus the previous forecast of 5.7 percent, before recovering to over 6 percent in 2021.

The adverse impact on confidence, financial markets, the travel sector and disruption to supply chains contributes to the downward revisions in all G20 economies in 2020, particularly ones strongly interconnected to China, such as Japan, Korea and Australia. Although the effects of the coronavirus outbreak on the US and Canada are projected to be relatively mild, the decline in confidence, disruption to supply chains and weaker external demand will moderate growth prospects, the OECD said.

The US GDP is forecast to grow 1.9 percent this year and 2.1 percent next. Canada is expected to expand 1.3 percent in 2020 and 1.9 percent in 2021.

Growth in the 19-nation bloc, the euro area is projected to ease to 0.8 percent this year, before bouncing back to 1.2 percent in 2021. Italy's GDP is seen flat this year and to grow 0.5 percent in 2021.

The UK is forecast to grow 0.8 percent each in 2020 and 2021.

India's growth projection was trimmed sharply by 1.1 percentage points to 5.1 percent this year and the outlook for next year to 5.6 percent.

Growth forecast for Australia was lowered to 1.8 percent this year. The economy is expected to advance 2.6 percent next year.

Japan GDP is expected to grow only 0.2 percent in 2020 and 0.7 percent in 2021.


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March 2, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 02 mar 2020 Commentaire »

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On December 30, a bearish ABC reversal pattern was initiated around 1.1235 (Previous Key-zone) just before another bearish movement could take place towards 1.1100 (In the meanwhile, the EURUSD pair was losing much of its bearish momentum).

One more bullish pullback was executed towards 1.1175 where the depicted key-zone as well as the recently-broken uptrend were located.

Since then, the pair has been down-trending within the depicted bearish channel until two weeks ago, when extensive bearish decline established a new low around 1.0790.

This was where the EUR/USD pair looked oversold after such a long bearish decline.

Hence, Intraday traders were advised to look for signs of bullish recovery around the price levels of (1.0790).

By the end of Last week, recent signs of bullish recovery were manifested around 1.0790 leading to the current bullish movement towards 1.0910, 1.0950 and 1.1000.

The price level of (1.1000) constituted a temporary SUPPLY level in confluence with the upper limit of the current movement channel.

That's why, transient bearish pullback was executed towards 1.0950 where another bullish swing was initiated.

Currently, a quick bullish spike is being expressed above 1.1100 (Previous Key-Level). Further bullish advancement is anticipated towards 1.1175 and probably 1.1235 where price action should be watched cautiously for bearish rejection and a possible bearish pullback at least towards 1.1100.

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