Daily Analytics from Fibo Group

Market Watch
Pending interest rate cuts

In most countries, they continue to discuss steps to phase out quarantine, while at the same time talking about the difficulties for the rapid recovery of the global economy. So, during today's speech, the head of the Bank of Japan announced that the monetary policy will be adaptive and, as a result, the regulator can quickly and without hesitation implement easing policies. In this case, we are talking about the fact that the interest rates of the Bank of Japan may decrease as the rapidly increasing volumes of bond purchases.

The expansion of the quantitative easing policy in the form of active bond repurchases supports Japanese stock indices. At the same time, JPY's trading activity remains moderate, once again indicating a clear market uncertainty.

Goldman Sachs analysts say there is the prospect of a further reduction in the Fed's main interest rate. According to their forecast, in June we will see a decrease of 0.5%. Let me remind you that this week the Fed will hold a meeting on interest rates and monetary policy in general. As a result, the appearance of any information about the regulator’s readiness to make changes to the current policy will be accompanied by a surge in US dollar trading activity.

I will draw your attention to the moderate volatility for trading in the US dollar paired with most currencies. In addition, with the opening of the American trading session, the situation is unlikely to change very much due to the lack of news to hit the market. Also, on Tuesday, the economic calendar will be virtually empty. Only a report on changes in consumer confidence in the United States will be able to influence investor sentiment - the forecast is pessimistic.

Now let's move on to the oil market. After an abnormal collapse last week, all traders and investors are closely watching the oil price. During the Asian trading session, the price of oil declined markedly. But by the opening of markets in the United States, the situation had stabilized somewhat. Nevertheless, there is still no reason for obvious optimism, as a result, active purchases remain a substantial risk.

The nearest strong technical level of support remains around the mark of $15 per barrel of US-grade WTI oil.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
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Trade with the Fibo Group!


#MarketWatch
 
Economic calendar for the week

Marathon for meetings of the leading Central Banks of the World: Large central banks generous with incentives will again think about how to support the economy in the context of the coronavirus pandemic. OPEC+ countries will begin to reduce oil production on May 1 - a day off for many countries of the world.
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Weekly calendar:
04/27/2020, Monday
- Bank of Japan rate; Haruhiko Kuroda's press conference.
04/29/2020, Wednesday
- Fed rate, forecast - unchanged; Powell's press conference;
- US GDP for the first quarter, forecast -3.9% q/q.
04/30/2020, Thursday
- ECB rates, forecast - unchanged; Lagarde's press conference;
- Eurozone GDP for the first quarter.
05/01/2020, Friday
- Most European countries, Russia, a number of Asian and Latin American countries celebrate Labour Day.
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Fed cuts QE 6 times

In mid-March, the financial system was on the verge of collapse, debt markets ceased to function, and the Fed had no choice but to turn on the printing press at full capacity and literally flood the fire with money.
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Now the situation is more or less stabilized, and the US regulator is reducing the quantitative easing program.
- Initially, the printing press has been giving out $75 billion a day, and subsequently this figure decreased.
- Three weeks ago, the Fed announced a decline to $50 billion,
- and then up to $30 billion,
- $15 billion,
- and now only $10 billion a day.
But even these figures are two orders of magnitude different from the volumes that were before the epic with the coronavirus.
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As of April 22, the Fed’s balance sheet totaled a record $6.57 trillion, $205 billion more than the previous week and $2.664 trillion more than a year earlier. These are just fantastic numbers, which in theory should mean a colossal depreciation of the dollar.
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3 weeks left before the collapse of the oil market

The global oil market is racing at full speed to a logistical collapse.
A reverse report has been launched for mining and trading in 'black gold' companies, which quickly run out of all possible places where excess raw materials can be stored.

All available oil storage tanks in the world may be exhausted in the next 3-4 weeks. We are talking about both land-based storage facilities and tankers that drift in dozens off the coast of the United States, Europe and Asia without being able to unload:
- There are more than 30 tankers in a traffic jam off the coast of North-Western Europe.
- More than 100 (!!!) ships near the port of Singapore in the same traffic jam.
- Oil supplies to Germany, France, Italy, Spain and the UK exceed demand by 50 million barrels per week. These volumes go to commercial storage facilities, which are already packed to capacity.
- In India refineries have already used 95% of their storage capacity.
- Nigeria has announced that it is forced to cut production because there is no one to sell oil and no place to store.
- Russian oil companies are considering the possibility of burning extracted oil.

We are approaching the denouement in a few weeks!
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Market Watch
US Fed Rate

I'll start by mentioning the unexpectedly strong increase in the consumer price index in Australia. The annual rate increased by 0.4% to 2.2% with a projected growth of up to 2%. The indicator for the first quarter of this year was also better than analysts’ expectations, which provided quite strong support for AUD.

As a result of AUD strengthening, the AUD/USD currency pair reached a technical resistance level at 0.6540, while the EUR/AUD pair is at a key technical level and, as a result, the psychological level of 1.6600. During the European trading session, demand for the Australian dollar has declined markedly, which may present an opportunity for a better bargain.

I also draw attention to the upcoming publication of a report on changes in inflation in Germany. This is a preliminary estimate of the April CPI. Economists expect a significant deterioration, which is negative for EUR. As a result, if these expectations are confirmed about the inflation rate, will contribute to the weakening of the EUR.

Now let's move on to the oil market. Russian Energy Minister Alexander Novak announced that Russian oil companies will reduce production by 19% compared to February of this year. Thus confirming the readiness to fully implement the reached OPEC+ agreement. But as we see, optimism in the oil market has not particularly increased.

Prior to the opening of the American trading session, WTI crude oil was trading below $14 per barrel. At the same time, the next return of oil quotes below $13.3 may provoke a more powerful wave of sales. Let me remind you that today the US Department of Energy will report on changes in oil reserves. At this moment I expect an increase in trading activity.

Some other significant news is the latest interest rate decision from the US Federal Reserve and rates are expected to remain on hold. All attention will be focused on the comments about this decision. Any hints of a willingness to lower the basic interest rate in June may put quite strong pressure on the US dollar. As a result, today, trading activity in the US dollar may increase.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
=========
Trade with the Fibo Group!


#MarketWatch
 
Economic sentiment in the Eurozone - a record collapse

Eurozone statistics released today recorded the expected deterioration in economic sentiment in all areas. The most pessimistic mood prevails in the services sector, which was also clear from the PMI indices published earlier.
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Consumer sentiment is close to the lows that were observed in 2009 and at the peak of the European debt crisis at the end of 2012.
Amid weakening of quarantine restrictions that have already begun in European countries, perhaps in May we will see a recovery in consumer sentiment and business. These indices partly characterize the willingness of households to spend, and companies - to invest.
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US GDP: The collapse of the economy began in the 1st quarter

- In the first quarter, GDP in America fell by 4.8% (which is more than the predicted values and this figure may actually be even greater, because there will be corrections within a month).
- A quarterly decline in US GDP occurred for the first time in more than 5 years (2014 was a 1.1% drop), although not as bad as in the 2008 mortgage crisis (a drop of 8, 4% in the fourth quarter).
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We believe that current data is not an absolute anti-record and the main collapse is yet to come.
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#fibogroup #forex #forexnews #economy #finance #trader #US #GDP
 
Fed: interest rate unchanged

The regulator kept the base rate after it unscheduled twice in March to the level of 0-0.25% per annum. The rate was previously at this level in the period from December 2008 to December 2015.
The Fed has decided to lower rates in response to the dire economic consequences of an outbreak of coronavirus.

The press release also says that the Fed will continue to buy back mortgage and treasury bonds in the amount necessary to support the market (we recall that despite such statements, QE volume decreased by 6 times. Check our previous posts).

The decision coincided with the forecasts of most analysts. The dollar did not make significant fluctuations.
======
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Market Watch
When all is well

This week, as well as the month as a whole, began with clear optimism for the oil market. Let me remind you that on May 1, the OPEC+ deal to reduce oil production came into force. In addition, most countries have already begun to relax restrictive measures, which helps to increase the physical demand for petroleum products. As a result, we simultaneously received two strong bullish fundamental factors: a decrease in production and an increase in demand.

Against this background, the price of oil of the American grade WTI reached $26 per barrel. In addition, I draw attention to the fact that over the past five trading days, the oil price doubled without a visible correction. As a result, the risk of a short-term decline continues to increase. Thus, active market purchases remain in a high-risk area.

And now let's move on to the publication of data on changes in the level of business activity in the eurozone services sector. Actual data turned out to be better than expected, but this publication did not support EUR.

In the first half of the European trading session and immediately after the publication of this report, we observed a weakening of the EUR/USD currency pair. The closest strong technical support level and target for sellers is still at 1.0775.

I will also draw your attention to the general strengthening of JPY. For example, the EUR/JPY currency pair has had higher lows since April 2017, while GBP/JPY has fallen by more than 150 points over the past couple of days. All this indicates a decrease in interest in risk, because European currencies are risky assets, while JPY is a safe haven currency.

We conclude today's review with an analysis of upcoming reports during the American trading session. First of all, I will draw your attention to the data on the employment market. A sharp decrease in the negative value may support the USD, while the release of weaker data in comparison with the forecast will contribute to a moderate weakening of the US dollar.

It is also important to pay attention to the report on changes in reserves and oil production in the United States. A further slowdown in reserves growth and a decrease in production volumes may provide additional support for oil quotes at the time of release.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
=========
Trade with the Fibo Group!


#MarketWatch
 
Economic calendar for the week

As part of the new trading week, world leaders will hold a virtual meeting to accelerate vaccine development and stop the pandemic. While Chinese scientists speculate on the 'wave' return of #covid19 Warren Buffett continues to sit in the cache.
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Weekly calendar:
05/05/2020, Tuesday
- Reserve Bank of Australia rate;
- UK #PMI for April.
05/06/2020, Wednesday
- New Zealand #unemployment for the 1st quarter of 2020;
- US Crude Oil Reserves.
05/07/2020, Thursday
- Bank of England rate;
- Protocol of the meeting of the Committee on the PrEP of England;
- Bank of England Inflation Report.
05/08/2020, Friday
- #NonFarmPayroll US Labour Market Data Block for April;
- Canada #unemployment for April.
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Oil price in a corkscrew: US oil storage facilities are full

The collapse of oil quotes in Europe and the United States began around 14.00 Moscow time after the European Commission published an updated macro forecast. In it the EC estimated the decline in the economy of the euro area at 7.75% for the year with a recovery of 6.5% in 2021.

ADP later reported that in April, the US economy lost 20 million jobs, having lost all of the labour market growth over the past 12 years in a month.

The 'last straw' was data from the Energy Information Administration. Over the past week, in the States, crude oil reserves in storage increased by 4.6 million barrels, including by 2 million barrels in a hub in Cushing.
==========
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Bank of England: saved the rate unchanged and prepared for recession

- Like other central banks around the world, the Bank of England intervened sharply in an attempt to stop the effects of the coronavirus.
The bank lowered it's numbers to it's current record low at two emergency meetings in early March. The bank also increased it's quantitative easing (QE) program by £200 billion. Today, the regulator left the basic interest rate unchanged (0.1%).
- The Bank of England said the UK economy could contract by 14 percent in 2020, and then rebound sharply in 2021, as it keeps interest rates at a record low.
- As coronavirus destroys the economy and oil prices, inflation is expected to fall below one percent in the coming months. It will remain low and recover only to a two percent target in 2022.
=====
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#fibogroup #forex #forexnews #economy #finance #trader #BoE #rates #coronavirus
 
ADP Report: US economy lost 20 million jobs

The coronavirus outbreak has closed offices, factories, schools, construction sites and shops that promote the US economy. On Wednesday, ADP's payroll report showed the depth and magnitude of job losses that did not leave indifferent any part of the world's largest economy. American businesses have shrunk by an unprecedented 20.2 million jobs, a major collapse.
This report is two days ahead of an official monthly US labour market data. We believe that today's report will show that US unemployment will reach 16 percent, compared with 4.4 percent in March. That will give rise to the strongest volatility and strengthening of the dollar across the entire spectrum of the market.
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#fibogroup #forex #forexnews #economy #finance #trader #labour #market #report
 
Market Watch
25 million unemployed in the USA

With the opening of the European trading session on Thursday, news was released that the Bank of England left interest rates on hold and asset purchases unchanged.The lack of monetary easing provided only short-term support for the GBP so there will need to be more good news for the pound to strengthen further.

I note another very important publication, which took place on Thursday – The report in the number of applications for unemployment benefits in the United States. Data came in well below expectations which put pressure on the US dollar against major currencies.

For example, the GBP/USD currency pair after hitting a session low at 1.2265 rose by more than 140 points. There may be further growth when the next report on the US labor market is released.

Today, during the American trading session, the latest unemployment rate and non-farm payrolls data will be released, and the news is expected to be dissapointing. Economists expect job numbers to fall by 22 million and an increase in unemployment to a record level of 16%. If analysts are correct or the figures are even worse, the USD may come under further pressure.

And now let's move on to the oil market, where we are witnessing some sort of stabilization. Yes, trading volatility remains elevated on the third trading day, and the price of the American WTI crude oil remains between $ 23 and $ 26 per barrel. This is where the opinions of traders and investors diverge: some say that by June the existing oversupply will be eliminated, while others are much more pessimistic. As a result, we are witnessing a phase of uncertainty, which is expected to last until more news hits the market.

We will complete the review with a deal to sell the USD/CAD currency pair from the technical resistance level of 1.4150. The Stop Loss order was placed 30 points above the transaction opening price, and the Take Profit order at the nearest support level 1.4020. The Profit on this transaction amounted to $930. Total risk remained below $220, which allowed for a risk to profit ratio of more than 1 to 4.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
=========
Trade with the Fibo Group!


#MarketWatch
 
USA: Unemployment 14.7%

Unemployment in the USA is at its maximum since the war. 20.5 million jobs - and the real situation is even worse.

In the last economic cycle, the US economy created 22.7 million new jobs. In March, the economy lost 0.9 million jobs, and in April another 20.5 million. Thus, losses account for 94% of the created over a decade. In May, jobs are likely to continue to decline.
========
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#fibogroup #forex #forexnews #economy #finance #trader #unemployment #USA #jobs
 
📆 Economic calendar for the week 📆

The global economy is bottoming out, with China appearing to have bottomed out in February, and the US has been pulling in since the end of April. The main threat to the global economy is the repeated increase in the number of infections as quarantine measures are weakened.

The optimism associated with lifting restrictions in a number of major countries seems premature to some investors. A new wave of decline may overwhelm the assets of developing countries in the second or third quarter, however, there is a chance that at the same time, stocks, bonds and currencies will still complete the year at levels higher than current.
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Weekly calendar:
05/11/2020, Monday
🇳🇿 ANZ New Zealand Business Confidence Index for May.

05/12/2020, Tuesday
🇺🇸 April Consumer Price Index (MoM);
🇺🇸 Core Consumer Price Index for April (MoM).

05/13/2020, Wednesday
🇳🇿 Interest rate for May;
🇳🇿 RBNZ Monetary Policy Statement;
🇳🇿 New Zealand Interest Rate Decision;
🇬🇧 Preliminary GDP (q/q);
🇺🇸 Fed Chair Powell Speaks.

05/14/2020, Thursday
🇦🇺 April employment change;
🇳🇿 April unemployment rate;
🇳🇿 Annual budget data;
🇬🇧 BOE Gov Bailey Speaks;
🇨🇦 BOC Governor Poloz Speaks.

05/15/2020, Friday
🇪🇺 German GDP (q/q);
🇺🇸 April Core Retail Index;
🇺🇸 Retail Sales (MoM) for April.
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US-China Trade War - Part 2

China stated that both sides should implement the first phase of a trade agreement with equality and mutual respect.

The Chinese Foreign Ministry offers conciliatory tones for a trade deal, because the first phase of a trade deal is beneficial for China, the United States and the whole world.

This is certainly good news for the financial markets, as it reduces risks for the global economy. As a result, we are witnessing a weakening of JPY throughout the entire market, but traders and investors are still reacting with restraint, because a similar response from the United States is needed to strengthen optimism.

The appearance of any additional information on the reconciliation of the parties and their readiness to reach trade agreements will help strengthen stock indices and restore commodity asset prices.
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Stagnation of the UK economy

In March, Britain's GDP fell by 5.8%, with a projected decrease of 7.9%.
As a result, UK GDP for the first quarter of this year fell by 2.0% against the forecast of -2.6%, which led to the appearance of negative values in the annual report of -1.6%. Since the actual data turned out to be noticeably better than predicted, the activity of GBP sellers remains moderate. Moreover, the current report can be perceived as moderately positive, which may support the GBP in the medium term.
We remind you that the quarterly report does not take into account the data for April, so in the second quarter the data may turn out to be much worse than the current ones - a bearish fundamental factor for GBP.
=====
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#fibogroup #forex #forexnews #economy #finance #trader #UK #stagnation #economy
 
The Fed will use the tools "fully"

Fed Chairman Jerome Powell spoke for the Peterson Institute today, saying he was ready to use all the monetary policy tools to the full extent, which put moderate pressure on the USD. Such a statement could put incredibly strong pressure on the USD. But in response to a question about negative rates, the head of the Federal Reserve reassured markets by saying that all FOMC members did not find this tool attractive.
Keeping the main interest rate above the zero mark is a bullish signal for the USD, which may deter it from developing a more powerful decline.
======
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RBNZ: Preparing for negative interest rates

The RBNZ held a meeting on Wednesday morning, and although no significant policy changes were expected, they nevertheless presented a worthy surprise to traders:
- #QE Doubling Asset Buyback Program. An increase in the program for the acquisition of large assets (LSAP-government bonds and local government bonds) to $60 billion from $33 billion.
- The regulator gave a signal of readiness for a further reduction in rates in the area of negative values. A possible decrease to minus 0.5% in November.
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The combination of these factors will put pressure on #NZDUSD in the future. However, if the economy improves, we will see that this scenario is canceled and that will contribute to rapid growth. It is too early to make strategic decisions, we recommend considering a shorter-term trading in this currency pair.
=======
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