Slide and stumble

In the last day of March USD fell to a five-month low against the euro and is about to mark the most strong losses against other major currencies on a quarterly basis in five years. The greenback remains under pressure for the third consecutive day of trading after Yellen’s cautious message.

Meanwhile the dollar index decreased by 0.2% to a fresh five-month low at 94.555 points and is on track to record the biggest monthly decline since April 2015 and the most solid quarterly depreciation by nearly 4.3% from the first quarter of 2011 onwards.

The overall weakness of the US dollar pushed the euro towards five-month high at 1.1398. The single currency found some support from the rising core inflation in EU and mixed CPI numbers. A potential more stable break above 1.1400 level may deepen the upward movement of the euro towards 1.1460/1.1500 area. 

Today the greenback remains under pressure against the yen at 112.00 and is about to end with quarterly losses of nearly 7%.

Stolen dance

The court in Rio de Janeiro has blocked the  funding from the state bank Caixa Economica Federal for the consortium that is building the Olympic sports complex "Deodoro", where in August should be held competitions of 11 sports.

The announce of the frozen funds is around 128.5 million BRL (35 million dollars).

Prosecutors in Rio de Janeiro claimed to have found evidence of fraud in services for excavation of the complex. "Deodoro" is the second largest complex for the summer Olympics in Rio de Janeiro, which will be held from 5 to 21 August.

Brazil is stoned in corruption scandals that grow uncontrollably in recent months. The procedure for the impeachment of President Dilma Rousseff became more than real since her main ally in the government won't do the boogie any more.

This wicked game will not fetch back the time they have stolen from the country.

Under pressure

The US dollar remains under pressure for a second straight day of trading after the surprisingly cautious speech by Fed president Janet Yellen on further increases in US interest rates this year.

Earlier today, the euro rose to 1.1338 dollars - slightly below its highs for the year around 1.1342 / 76 area before stabilizing around the 1.1300 level. And it was just beaten after the another report, showing how funky strong is the job growth in the US for March.

The British pound rose to a 10-day high of 1.4451 dollars glancing  4-week high of 1.4513 dollars, struck on 18 March, despite the bell rings inside UK, that’s challenging the doors of Brexit.
Meanwhile, the dollar fell to nearly 10-day low of 112.02 yen, but the good risk-appetite of global capital markets cut the appreciation of the Japanese currency since it lost its safe heaven status.

Stock markets boosted by Yellen’s dovish speech

US stock markets registered an increase on Tuesday, completely erasing the losses from the beginning of the session. S&P 500 and Dow industrials reached the highest levels for 2016.

The growth was realized after the chairman of the US Federal Reserve Janet Yellen confirmed the doubts that an increase in interest rates will be very prudent because of the trembling stability of local and international economy.

The Standard & Poor's 500 index closed with a gain of 0.88% at 2,055.04 points. Among the other indices  Dow Jones added 0.56% to finish at 17,633.18 points, while the Nasdaq Composite gained 1.67% to end at 4,846.63 points.

European stocks finished trading on Tuesday at the higher levels, recording the first victory in five sessions onwards after the US Federal Reserve calmed investors that the next steps will be very cautious. Major indexes recovered positions, the German DAX 30 registered a growth of 0.4% to 9 887.94, while the French CAC 40 increased by 0.9%, reaching 4 336.67.

The British FTSE 100 index closed at almost neutral territory by losing only 0.1%.

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Asian indexes ended mostly with declines

Most Asian indexes recorded declines on Thursday.

Japan's Nikkei 225 index fell 0.64 percent, while South Korean Kospi erased 0.46 percent. Hang Seng registered a decrease of 1.26%.

Shanghai Composite fell by 0.67%, while the smaller Shenzhen Composite added 0.18% to its value.

ASX 200 recorded a decline of 1.13%, pushed by the heavily-weighed banking sector, where the decrease was 2.5 percent.

Banks in Australia finished with sharp declines, shares of ANZ fell 5.21%, those of Commonwealth Bank of Australia fell 2.45%, Westpac wiped 4.58%, while shares of NAB fell 3 , 53%.

Japanese yen is trading  at 112.87 yen againts the US dollar. Despite the slight appreciation of the Japanese currency, the leading exporters closed the session with declines. Toyota wiped 1.56% of its share price, Nissan reported a decrease of 0.98 percent, while Honda declined with 1.6%.

Stong weekly growth

The US dollar continued its strong performance, reaching a weekly high. Greenback managed to erase some of the losses after the Fed's decision last week.

In recent days some members of the US central bank expressed the opinion that the institution needs to look more seriously at the possibility of increasing interest rates. Chicago Fed president Charles Evans said he expects two increases in interest rates this year. Patrick Harker, president of the Philadelphia Fed said on Tuesday that expects three increases by the end of the year.

As a result, the dollar rose against the Japanese yen, reaching a weekly high. USD rose 0.3% to 112.69 yen.

The US currency rose one percent against the Australian and Canadian dollar. Commodity currencies declined along with fall in oil prices.

US dollar index rose by 0.5% to 96,090 points.

Unforgiven

An awful sound ruined Europe’s heart today, leaving 34 people dead and over 200 wounded. 
And fear towered over  Brussels. 
The terrorism is going on with brainwashed pride, performed by souls with no fill.
The hate they’re breeding and the fear they’re feeding is escalating furthermore.
The world is not a human grocery store and this failure of communication must stop crashing into human rights. 
The harm is done and the words are very unnecessary.

I pray for those who died. I pray for the faith and fortitude for us all!

EUR/USD

Notwithstanding Fed’s announcement from last Wednesday, the long term fundamentals still are in favour of USD. Some of the reasons are the better performing US economy compared to that in the Euro zone, the increasing interest rate differential and the difference in monetary policies. Not to forget the indebtedness of peripheral countries of the Euro zone and refugee crisis.

In this respect EUR/USD has settled within wide range, close to the upper boundary of side movement, which is visible on the weekly chart.

The first resistance might be seen at level of 1.1374. Closing above it on the daily chart will show that the bulls prevail. The next resistance is on the upper boundary of the side movement in the area of 1.1500. If price close above it on the daily chart, we will have a clearer idea that side movement ends. In cases like this, we can see an important level of resistance becoming support. Such development provides better chance for increase. 

On the other hand, if the price meets those levels of resistance and can not close above in the daily chart, we can expect that it will remain in the range. Then we may expect test of 1.1060 level and the middle Bollinger band.

Positive mood on Wall Street

The leading indices on Wall Street finished the last session for the week with gains. Dow Jones and S&P 500 improved their performance from Thursday and closed the week with new highest levels for 2016. 

The blue chip index ended sixth consecutive session of gains, which is the longest positive run from October 2015 onwards.

During the Friday session, Fed’s meeting outcome dragged the positive tunes out into the light and rocked the beat on stock markets. Dow Jones increased with 113 points or 0.69% to 17 602.3 points, S&P 500 rose with 0.44% to 2 049.56 points.

Nasdaq was stuck for a while within the negative field, after the declines of Microsoft and Amazon. Microsoft shares closed the session with a price of $53.49 a share or a decrease of 2.14%. For Amazon the decrease was within 1.32% to $552.08 a share.

The best supporter to the technological index, however, it turned out Adobe, with shares increase of 3.85% to $93.42, after the release of better than expected financial results for the fourth quarter. For a short company's shares walked on the street of dreams with the historic high of $98 a share.

So Nasdaq ended the session with a growth of 0.43% to 4 795.65 points.

Crude oil blessed

Over the past week crude oil snatched gains and the price rocketed to highest level in 2016, while the US dollar continued to depreciate against the basket of major currencies.

US light crude were seen at $38.50 per barrel, which is the fifth consecutive weekly gain. And this is based on the hopes that the major oil producers will achieve agreement on production freeze. The weakened dollar also supported the "black gold", which peaked at $40.54 per barrel. OPEC leader Saudi Arabia and other countries of the organization, along with Russia will meet in Qatar on April 17 to discuss the floating idea of production freeze. 

The positive mood on the potential agreement strongly supported oil prices, but cutting the output could not neutralize the glut. However, this is seen as a good start in trying to stabilize the oil market, which gives impulse to the crude oil. Brent was also inspired and reached its highest value since early December at $41.60 per  barrel. Oil prices recovered with over 50% as quotes fell to 12-year lows under $26 for WTI and $27 for Brent.

It was a picturesque rally. But if we witness just cutting output along with shadows over r the neutralization of the glut, the possibility of renewing the depreciation remains in place.

Falling

The US dollar depreciated sharply against other major currencies after Fed has indicated more restrained than initial estimates tightening of US interest rates this year. After yesterday's meeting  Federal Reserve presented new forecasts of central bankers, according to which the US base rate will probably be increased only twice by the end of 2016 against the previous forecast in December for an expected fourfold lifting of the interest rates.

This resulted in aggressive sales of "greenback" as only within the trading today the US dollar index fell about 1.5 percent to its lowest level since October 2015.

Since yesterday, the euro rose nearly 3 cents to 5-week high of $ 1.1342 with a view to its important 4-month high of $ 1.1376 nailed on 11 February, while the British pound reached a new 4-week high of $ 1.4501.

Meanwhile, the US currency fell nearly 2% to a 17-month low at 110.67 yen (the lowest level since November 2014) before it bounced back to 112.00 level, after rumors that the Bank of Japan has conducted a disguised intervention in the currency market through several local banks intending to restrict the appreciation of the national currency. This seems to suggest that the area around 111.00  is perhaps the strongest level of the Japanese currency, which can not be tolerated from BoJ.

Falling of US currency is a fact despite today’s series of stronger US economic data. 

But is this a shaft of light that shows the way of US economy’s recovery? 

Wall Street ahead of the FOMC meeting

Trading on Wall Street began furtively on Wednesday as investors prepare for the statement of the US Federal Reserve, which will be published at 14:00 local time.

The CBOE Volatility (VIX), which is considered as a measure of fear in the markets for a short fell to 15.56 points, the lowest level since December 24.

In the broader index S&P 500 best represent the health and energy sectors, but consumer staples leading six sectors lower. With the appreciation of Apple’ shares, Nasdaq rises.

For the growth of the index of blue-chip Dow Jones Industrial Average at most contributes Goldman Sachs.

US light crude oil WTI is rising by 3.27% to $ 37.53 a barrel, while the European benchmark gained 3.10% and traded in the early hours at $ 39.94 a barrel.

Gold is rising by 0.14% to $ 1 232.70 an ounce.

The dollar is rising by about 0.4 percent, the euro is near $ 1,106 and yen is 123.69 yen per dollar.

Shall we expect positive comments from the central bank about the state of the economy and intentions three times instead of four tightening of monetary policy in 2016? This will be known quite soon.

No surpises from BoJ

Bank of Japan did not undertake any changes to its monetary policy after a two-day meeting that ended on Tuesday morning.

The result coincided with forecasts of analysts, who point out that the institution would hardly accept  additional incentives without cautiously estimating the impact of the January reduction of interest rates on some deposits in negative territory. However, investors do not exclude the central bank to decide further actions to support the economy in July.

In its observations the regulators emphasize that will not hesitate to vote new relief of monetary policy, if necessary, to be achieved target inflation rate of 2%.

The central bank also said that carefully monitor the recent volatility in financial markets and its possible impact on business confidence. The institution estimated growth of exports and the industry as a slow and revise downward inflationary expectations.

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Markets rally after ECB meeting

Investors' attention on Thursday was focused on the meeting of the European Central Bank, which would make clear what will be the monetary policy of the Bank in the coming months. The institution reduced by 10 basis points to minus 0.4 interest rates on deposits, a decision that coincided with market expectations. Moreover, the monthly volume of purchases by quantitative easing program was increased from 60 billion to 80 billion Euros. Another important decision that surprised the markets was the reduction of the basic interest rate from 0.05% to 0.00%.

Following the publication of the data the euro fell to 1.0820. During the press conference Mario Draghi said that a further reduction of interest rates on deposits "will not be necessary." This led to a a strong rise of the single currency, as EUR/USD climbed to 1.1217 - a movement of almost four figures.

The dollar index, showing the performance of the greenback fell 1.24 percent to 96.07 after the greenback retreated against most of the currencies included in the basket.

Greenback recorded a good performance against commodity currencies that were under pressure due to the fall in oil prices. The dollar managed to advance against the Canadian dollar by 0.6 percent. The Australian dollar retreated against the dollar by 0.3 percent to 0.7460. Only New Zealand dollar performed well after it managed to rise against the US money by 0.4%.

Mario Draghi’s speech overwhelmed the markets

The euro erased its initial losses after European Central Bank (ECB) President Mario Draghi hinted that it is not expected a further reduction of key interest rates in the eurozone.

Surprisingly the massive new stimulus measures taken by the European Central Bank at today's meeting led for a short time to a drop in the euro to 5-week lows at 1.0822 dollars and 0.7652 pounds. The single currency managed to hit a weekly low at 1.0891 swiss franks and dropped to hourly day low at 123.65 Japanese yen.

But the following  comments by ECB governor Mario Draghi that he does not expect a further reduction in key interest rates led to a sharp rebound of the single currency to a two-week high of 1.1115 dollars. Meanwhile, the euro rose to a one week high of 0.7797 pounds to three-week high of 126.24 Japanese yen.

The initial euphoria of the European stock markets caused by today's decision of the ECB to undertake a series of aggressive stimulus measures is fading away. It looks like investors began to realize that today's fall in deposit interest rates of ECB to -0.4% is a "double-edged sword," especially with regard to commercial banks and their profits that form the largest part of the ongoing credit policies.

After an initial rise in the main European stock indices by between 2.5% and 3.0% at the end of trading today they wiped out a large part of their profits. Now the common European Stoxx Europe 600 index rose by a modest 0.83 percent, Germany's DAX rose 1.37%, while the French index CAC40 - by 1.49%. Passing the initial euphoria is due largely to the sharp appreciation of the euro, which is potentially negative for export-oriented companies in the eurozone.

Asian markets in the red today,only China closed with gains

Most Asian markets are coloured in red today, except China.

Japan's benchmark Nikkei 225 index closed with 128.17 points, or 0.76%, down to 16 911.32 points, continuing its decline from 0.6% on Monday.

In South Korea, the main Kospi index also closed with a decline of 11.75 points, or 0.60%, to 1957.87 points. 

Hong Kong’s Hang Seng Index registered a decrease of 0.61%.

Australia's benchmark S&P/ASX 200 followed the trend and ended in the red by 34.81 points, or 0.68%, down to 5108 points, mainly due to losses in the energy and financial sectors and commodities. Those sectors recorded decreases of respectively 1.11%, 1.02% and 0.82%.

Chinese markets ended with growth, as Shanghai composite index closed with 2.57 points, or 0.1%, up to 2897.34 points. The smaller Shenzhen composite also passed the green with an increase of 8.89 points, or 0.51%, to 1741.65 points.

The major mining companies in Australia failed to hold the initial gains. Shares of Rio Tinto fell 2.60%,  BHP Billiton are down with 1.83%, while Fortescue tumbled 9.42% after Monday jumped 24%. The decline in share prices in the mining sector comes despite recent increases in commodity prices. The price of iron ore rose from 52.40 dollars to 62.60 dollars for only one day.

Companies extracting gold recorded a good session. Shares of Newcrest rose 1.30%, and those of Alacer Gold - by 0.72%. Spot gold is trading with an increase to about $1269.57 per ounce, which is less than the peak of $1279.60 on Friday, its highest level since February 3, 2015.

The Japanese carmaker Suzuki Motor closed with a decline of 3.76% after the news, posted by Nikkei daily , that the company will issue convertible zero coupon bonds for 200 billion  Yen and will use most part of the revenues to expand its operations in India.

Shares of Japan's Softbank rose 1.69% after the company announced its plans for reorganization, as a result of which will separate domestic from international business, meanwhile appointing different executives.

Most Japanese exporters experienced difficulties because of the appreciation of the yen. Shares of Toyota fell 2.63%, while those of Honda - with 0.95%.

Energy players traded mixed. The share price of Oil Search closed up with 0.27%, but Woodside Petroleum was 0.33% down. Shares of Japanese Inpex fell 0.72%, while those of Japan Petroleum rose 0.29%. The Chinese mainland market Sinopec surged share of 2.91% and Petrochina - a decline of 0.51%.

GDP up by 0.3% in the euro area and by 0.4% in the EU28

GDP in the euro area keeps its pace of growth of 0.3% in the four quarter of 2015 compared with the period from July to September, revealed the Eurostat estimate published today. The result did not surprise the analysts who did not expect a correction in the preliminary calculations.

The seasonally adjusted GDP has increased with 0.3% in the euro area (EA19) and by 0.4% in the EU28 during the last quarter of 2015. Comparing with the same quarter of the previous year, seasonally adjusted GDP has increased with 1.6% in the euro area and by 1.8% in the EU28 in the fourth quarter of 2015, after +1.6% and +1.9% respectively in the previous quarter. 

GDP growth by Member State for which data are available for the last quarter of 2015, Sweden (+1.3%), Estonia (+1.2%), Poland and Romania (both +1.1%), Hungary and Slovakia (both +1.0%) recorded the highest growth compared with the previous quarter. Decreases were registered in Croatia (-0.5%) and Latvia (-0.3%) while GDP in the Czech Republic remained stable.

The household consumption expenditure rose by 0.2% in the euro area and by 0.4% in the EU28 (after +0.5% and +0.6% respectively in the previous quarter).
Exports increased by 0.2% in the euro area and by 0.5% in the EU28 (after +0.2% in both zones). Imports rose by 0.9% in the euro area and by 1.1% in the EU28 (after +1.2% and +1.3%).

For the whole year 2015, GDP grew by 1.6% in the euro area and by 1.9% in the EU28, compared with 0.9% and 1.4% respectively in 2014.

Step up

The Candaian GDP growth in Q4 showed more than expected performance and the loonie jumped to a nearly 3-month high against the euro.

Latelety EUR/CAD seems to be weakened, as the Canadian dollar showed off nice skills on the dance battle between G10 currencies on Tuesday.

The Canadian dollar jumped with 1.01% to C$1.4572 against the euro, making the highest level since December 8.

The main boost for the currency came from the quicker-than-expected growth pace in the fourth quarter (Q4). The GDP advanced 0.8% in Q4 on an annualized basis, Statistics Canada said on Tuesday. Market consensus estimated to see a flat expansion of 0.1%.

"All of the inputs came out better than expectations in Q4," Jack Spitz, managing director of foreign exchange at National Bank Financial, told WBP Online. "EUR/CAD trending lower for the past few days, there is some technical support at C$1.45 and even better at C$1.40," Spitz added.

The resource-linked Canadian dollar also showed a break from the direction of oil prices. If this continues, the higher loonie could be a concern for the Bank of Canada (BoC), which is counting on currency weakness to help with domestic export recovery.

"The strength of CAD comes amidst flat trading in crude oil. For the moment there is a disconnection between WTI and CAD dollar. If the CAD strength [persists] amid continued WTI weakness then we can expect to some guidance from the BoC [during its rate announcement on March 9]," Spitz added.

WTI futures fell into red territory, edging down 0.12% to $33.86 per barrel, after reporting early morning gains. Meanwhile, Brent contracts also dropped 0.60% to $36.42 per barrel.

From the European macro perspective, the euro zone’s jobless rate was at a new multi-year low in January, booking 10.3% in January. Economic analysts had expected the rate to remain at 10.4%.

On the other hand, the manufacturing sector in the euro zone roseat the slowest pace in twelve months in February, with the final PurchasingManagers' Index (PMI) dipping to 51.2, down from 52.3 seen in January.

So the Canadian dollar is not dancing to a `Loonie' Tune.

Asia markets mostly higher today

Asian markets traded higher Tuesday, digesting the China's central bank surprising move to cut banks' reserve requirement ratio and shrugging off the weak economic data.

Japan's benchmark Nikkei 225 retraced losses of over 1% and closed with an increase of 58.75 points, or 0.37%, at a level of 16 085.51 points. Markets in South Korea are closed for national holidays.

Chinese markets recorded a volatile session, after the surprise move by Bank of China to reduce the reserve requirement ratio for banks and worse-than-expected manufacturing data. However, they also ended with gains. Shanghai composite index closed with a rise of 45.93 points, or 1.71%, to 2733.91 points, while Shenzhen composite finished with 38.11 points, or 2.32%, up to 1681.47 points.

Hong Kong's benchmark Hang Seng also closed the trading day with a rise of 295.53 points, or 1.55%, up to 19407.46 points.

The Australian index S&P ASX 200 joined the trend and surged by 41.32 points, or 0.85%, to 4922.25 points, with most sectors in green. The financial sector finished with a growth of 1.6% and energy with a growth of 1.81%.

Mining companies also went through a positive session. Shares of Rio Tinto gained 2.66%, Fortescue is up with 6.37%, while BHP Billiton added 2.95%. The gold miner Newcrest closed with a 4.51% rise in shares, while spot gold trading up 0.27% at $1,241.10 an ounce.

Meanwhile, the Reserve Bank of Australia kept the interest rate unchanged at a record low of 2%  on Tuesday. This decision was largely expected by analysts.

The aussie surprisingly remained little changed and was seen 0.15% lower after the news at $0.7130 against $0.7122 earlier.

Europe stocks up on Monday

European stocks closed with gains on Monday after China's central bank  took further measures to cushion its economic slowdown.

Stoxx Europe 600 rose 0.7% to a price of 333.92 points. This happened after the statement of G20, which failed to satisfy the market.

The index trimmed losses during morning trading after the People's Bank of China reduced the level of reserves that banks are required to hold by 0.5%. The move is aimed at strengthening the credit growth of the second largest economy in the world.

US stocks ended Monday with declines. S & P 500 and Nasdaq Composite registered a third consecutive monthly decline for the first time since 2011, while the Dow Industrials bounced from trend and recorded its first monthly increase since November.

The market is selling off in the last two hours of volatile session. Investors took a defensive position, bidding for companies in the utilities sector, while selling off shares in the energy and health care.

S&P 500 ended with a drop of 0.8% to 1,932 points, caused by the decline in health by 1.6% and loss of 1.2% in energy. Utilities sector registered a growth of 0.2% and was the only profit. Index reported a monthly loss of 0.4%, which is the third in a row.