14, December 2015

Fundamental analysis

Fundamental analysis

The Germany and the US government bond yields has been growing already a week increasing the investments’ attractiveness into the US assets supporting the US dollar. The US pleased traders with the November retail sales positive data. The employment and average earnings grew to the level of 91.3 in November while this indicator was at the levels of 88.8 and 75.1 respectively in November 2014 and 2013. The Michigan University consumer confidence report confirms the positive trend. In this context the retail sales data output was expected better than the consensus forecast. However, in fact the data came out at the level of 0,2% that is less then the forecasted 0,3%. The pair euro/dollar slightly increased by the end of the trades.

The Bank of England in its Monetary Policy summary pointed out to the low prices negative impact on the inflation expectations. The monetary authorities do not expect the economic growth acceleration. According to Mark Carney, the fourth quarter GDP may show an increase by 0.5%. The UK trade deficit growth cannot be ignored. The October release went out much worse than the market expectations. The negative net exports amounted to 103.8 billion pounds for the first ten months of the year which is 4.46% more than the same period in 2014. By the end of the trades the pound strengthened against the American dollar.

The pair USD/JPY is at the 4-week low. The US Treasury two-year bond yields are kept steadily at the five-year maximum which is a positive factor for the dollar indicating the Fed monetary policy tightening.