EUR/USD

The European currency ended the week ambiguously, correcting from local highs of February 5, updated on Thursday. On Friday, a large amount of interesting macroeconomic statistics from Europe and the USA was published. However, most of the data turned out to be below analysts' expectations, so there were no particular records. According to preliminary estimates, the core consumer price index in the Eurozone in February slowed from 1.1% YoY to 1.0% YoY. The consumer price index for the same period expectedly to accelerated from 1.4 to 1.5% YoY, which is still significantly below the target level of the ECB. Slightly pleasing were data on unemployment, which remained unchanged at 7.8% in January, and the Manufacturing PMI, which showed a decline from 50.5 to 49.3 points (0.1 points above the market expectations). On March 4, the euro is trading in a downward direction. Investors play on Friday statistics and expect the appearance of new drivers. On Monday, the March Sentix indicator of the Eurozone investor confidence is to be released, as well as February statistics on the manufacturers' price index.

GBP/USD

The pound fell markedly against the US dollar on Friday, continuing the development of the correction impulse formed the day before. Technical factors contributed to the development of the "bearish" dynamics, while the published macroeconomic statistics from the UK turned out to be ambiguous. Investors welcomed the increase in consumer lending in January from 0.683 billion to 1.095 billion pounds, which significantly exceeded analysts' forecasts of 0.800 billion. The number of approved mortgage applications in January also increased from 64.468 to 66.766K. Analysts expected to see a decrease to 63.400K. American statistics, published on Friday, was very weak. Only data on personal income in December was positive (1.0% MoM against the previous 0.3% MoM), while the rest of the figures were significantly worse than experts' forecasts. The ISM Manufacturing index in February fell from 56.6 to 54.2 points, while the forecast was 55.5 points.

AUD/USD

The Australian dollar ended the past week with a confident decline, which led to an update of the local minima of February 12. On March 1, a downward trend was still observed, despite the publication of a large block of weak statistics from the United States. However, in the first half of the day, the Australian dollar was trading in an upward channel, helped by strong data from Australia and China. Thus, the RBA raw materials prices index in February showed a steady growth of 9.1% YoY after rising 6.5% YoY last month. Analysts were expecting the growth of 7.4% YoY. Chinese data reflected a steady growth in the Caixin Manufacturing PMI. In February, the figure rose from 48.3 to 49.9 points, while experts predicted 48.5 points. On March 4, the pair is also trading in downwards, despite the positive gap at the opening. Moderate support for the instrument is provided by published data on the dynamics of building permits. In January, the figure rose by 2.5% MoM after falling by 8.4% MoM in the previous month. In annual terms, the growth was an impressive 28.6% after a decline of 22.5% YoY last month. At the same time, traders reacted negatively to a slowdown in the growth of profits from the main activities of Australian companies. In 4Q2018, profits rose only by 0.8% QoQ after rising by 1.9% QoQ and expected dynamics of 3.0% QoQ.

USD/JPY

The US dollar rose against the Japanese yen on Friday, updating local highs of December 20. Macroeconomic statistics published on March 1 turned out to be ambiguous, however, investors trusted the dollar more, and interest in risk practically did not decline. The Japanese data indicated a moderate increase in the consumer price index in the Tokyo region, but also signaled a decrease in the consumer confidence index in February from 41.9 to 41.5 points, while the forecast was 41.6 points. The Manufacturing PMI in February rose from 48.3 to 49.9 points, which was significantly better than the forecast of 48.5 points.

Oil

Oil prices dropped markedly on March 1, retreating to local minima of February 26. The decline was due to continued growth in US production, as well as increased risks of global economic growth, which directly affects demand. OPEC’s efforts to reduce production, and new US sanctions against Venezuela, which is also a member of OPEC, are hindering a more confident decline in prices. Additional support on Friday was provided by the Baker Hughes report, which again indicated a reduction in active drilling rigs from 853 to 843 units per week.

Morning Market Review

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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