15, December 2015

Fundamental analysis

 EUR/USD (a 4-hour chart)

Still the US macroeconomic data is encouraging. Despite the commodity market sales, the November PPI was better than the consensus forecast. The retail sales report was in line with the traders’ expectations, still the "control group" indicator which is closely correlated with the PCE index came in at 0.2% higher than the consensus forecast. The indicator had risen to 0.8% for the first two months of the fourth quarter which forms a stable foundation for the quarterly GDP strong data.

The euro is in demand as a funding currency before the FED meeting. The October euro zone industrial production release has come out at the level of 0,6% against the forecasted 0,3%. The manufacturing sector PMI came in within the consensus forecast. The negative factor for the European industry was the euro strengthening by 4.2% in the second and third quarter which caused the products competitiveness decrease. The ECB President Draghi supported the bond purchases program on Monday. In addition, he noted that the regulator was ready to use all the policy instruments to achieve the price stability. The pair euro/dollar increased by the end of the day.

The lack of the US and the UK important macroeconomic statistics drew our attention to the debt and commodity markets. The UK and the US government bond yields showed a moderate reduction. The oil and industrial metals ended the trading week in a red zone. The markets may remain volatile till the FED meeting on December 16th. The pair pound/dollar decreased.

The Japan manufacturing sector is now experiencing some difficulties amid the Chinese economic growth slowdown as well as the new orders reduction. It is impossible to ignore the world leading stock exchanges sales. The pair dollar/yen continued the decrease.