20, April 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The recent risk aversion in the Forex market was caused by the prices collapse. The news that exporters did not come to an agreement in Doha to freeze production at January levels disappointed the energy market. Later the situation was fundamentally changed. Traders’ sentiment was improved by the aggressive correction of the “black gold”, together with the positive comments from the Fed (the regulator was confident that the inflation would return to the target level).

Consumer Spending reports in the United States did not allow us to expect a strong data on the building permits volume. Against the background of a low base from December to February (decreased by 9.19%) the index is expected to display growth within the median forecasts at the level of 1,200M. However the data came in at the level of 1,086M.

Germany and Eurozone published Economic Sentiment for April. Economic Sentiment in Germany came in at 11.2 with the forecast of 8.0. The index in Eurozone came in at 21.5 with the expectations of 13.9. The pair EUR/USD finished the day with a growth.

The UK 10-year government bonds yield grew in the bonds market which increased the attractiveness of the British assets. The pair pound/dollar showed a growth.

Kuroda (the BoJ Governor) in his interview to Wall Street Journal defended the negative interest rates. According to him the Regulator will low the long-term interest rates by 20 basis points. He also hinted that the Bank of Japan might cut the interest rates further. The pair dollar/yen fell by the end of the trades.