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Morning Market Review

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  • Morning Market Review


    EUR shows insignificant growth against USD during today's Asian session, consolidating near the level of 1.1800. At the beginning of the week, EUR showed a rather active decline, which led to a short-term renewal of local lows since August 27, but the pair failed to consolidate at new levels. Noticeable pressure on the position of the instrument was exerted yesterday by the speech of the European Central Bank's (ECB) President Christine Lagarde, who failed to clarify the regulator's plans regarding the further reduction of the existing stimuli. Lagarde reiterated that the ECB is closely monitoring the economic situation and is ready, if necessary, to adjust its current course towards a smooth tightening of monetary policy. Today, investors will focus on the US data on the dynamics of consumer inflation for August. Analysts' current forecasts suggest a slight decline in prices, which may provide moderate support to EUR.


    GBP is growing against USD in the morning session, developing a weak "bullish" momentum, which had formed the day before, and again testing the level of 1.3850 for a breakout. Yesterday's trading proceeded with mixed dynamics, which was partly caused by a half-empty macroeconomic calendar and investors' discussion of the prospects for further tightening of monetary conditions by the world's leading regulators. The focus of market participants today will be on the US statistics on consumer inflation, which will help assess the chances of reducing the quantitative easing (QE) program of the US Federal Reserve in the current year. It is likely that in the event of a slowdown in consumer inflation, the regulator will not rush to curtail the existing incentives, taking the usual wait and see attitude.


    AUD has shown a moderate decline against USD during the Asian session, testing 0.7350 for a breakdown. Market activity remains moderate as investors expect a large number of important macroeconomic statistics to arrive during the week. Today, the US will present the August data on the dynamics of consumer inflation, which will be of particular importance in determining the future course of the US Federal Reserve's monetary policy. The regulator is still slow to reduce the volume of the quantitative easing program, although several members of the Federal Open Market Committee spoke in favor of this. Moderate support for the instrument on Tuesday is provided by macroeconomic statistics from Australia. The House Price Index in Q2 2021 increased by 6.7% QoQ after increasing by 5.4% QoQ over the previous period. Analysts had expected an increase of 6% QoQ. In turn, National Australia Bank's Business Conditions in August rose from 10 to 14 points.


    USD is showing moderate gains against JPY in Asian trading, testing strong resistance at the psychological level of 110.00. USD is appreciating ahead of the publication of the August data on the dynamics of consumer inflation, which will help assess the prospects for tightening the monetary policy by the US Federal Reserve until the end of this year. In turn, the data from Japan exert some pressure on JPY's positions. The day before, investors reacted negatively to a sharp slowdown in industrial inflation. In August, the Producer Price Index showed zero dynamics after increasing by 1.1% MoM in July. Analysts had expected increase by 0.2% MoM. The Producer Price Index in annual terms also slowed down from +5.6% to +5.5% YoY.


    Gold prices are holding near 1800.00 during the Asian session, consolidating after moderate gains the day before. On Monday, the asset managed to add insignificantly in value against the background of a decrease in the yield of US Treasury bonds. In addition, many investors continue to be skeptical about the prospect of cutting the current quantitative easing (QE) program from the US Fed until the end of 2021, believing that the regulator will take a wait-and-see attitude against the backdrop of ambiguous macroeconomic statistics. The persisting epidemiological risks force market participants to look for safer assets for investment. As vaccination campaigns expand, the situation is gradually improving, but it remains highly volatile.