Market Review

Key releases

United States of America

USD is weakening today against its main competitors: the EUR, GBP, and JPY.

US investors are focused on the new comments by US President Donald Trump regarding the Fed and data from the US-China trade negotiations. Over the weekend, Trump criticized the actions of the American regulator again. This time, he accused the Fed of slowing down the stock market, noting that if it were not for the tightening of monetary policy by the regulator, the shares would have grown by an additional 5–10K points and GDP would be more than 4.0%. Recently, a serious political struggle has begun around the US Federal Reserve System, which irritated investors. In particular, Trump is trying to promote into the leadership of the regulator his henchmen Stephen Moore and Herman Cain, against which members of the Democratic Party are actively opposing. As for the US-China trade negotiations, according to the latest data, the American negotiators abandoned the requirement for China to reduce the subsidies to strategic areas of the economy, finding that it is impossible to fulfill this requirement. Mitigation of the US position may bring the signing of a broad trading deal closer.

Eurozone

EUR is strengthening against USD, weakening against GBP, and moving horizontally against JPY.

Due to a lack of significant economic releases, EUR is supported by investors' hopes for an early conclusion of a trade agreement between the United States and China, which can positively affect the growth in global demand. Also, the market is preparing for tomorrow's publication of an index of economic sentiment for Germany and the EU from ZEW. For the first time since last spring, indicators are predicted to go into a positive zone, and the number of optimists in European business will exceed the number of pessimists. In April, the indicator for Germany may rise from –3.6 to 0.8 points, and for the EU, from –2.5 to 1.2 points. In general, the European business hopes for the completion of the US-China trade conflict and for the fact that during the six-month postponement period, the British parliamentarians will be able to agree and approve the Brexit deal.

United Kingdom

GBP today is strengthening against the main competitors: JPY, USD, and EUR.

British investors continue to monitor Brexit and wait for the publication of new economic data. Today, British Foreign Secretary Jeremy Hunt confirmed that the priority for the British government is to ensure that the country leaves the EU before the European Parliament elections on May 23. Otherwise, society will be disappointed, which is fraught with negative consequences for the Conservative Party. On Tuesday, the market is waiting for the publication of the February data from the British labor market. In general, they are expected to be positive. Unemployment will remain at the same level of 3.9%, Claimant Count Change will decrease from 27.0 to 20.0K, and the average wage growth rate, including bonuses, will increase from 3.4% to 3.5%.

Japan

JPY today moves horizontally against the EUR, strengthens against USD and weakens against GBP.

Today, the Japanese investors are focused on the negotiations of the Japanese authorities with representatives of the UK and China. Prime Minister Shinzo Abe met with British Foreign Secretary Jeremy Hunt and welcomed the determination of the British government to avoid withdrawing the country from the EU without a deal, expressing the hope that Brexit will have minimal impact on Japanese companies and the global economy as a whole. Meanwhile, Japanese Foreign Ministers Taro Kono and Chinese Foreign Minister Wang Yi met in Beijing, where they discussed further economic relations between the countries.

Australia

AUD today is strengthening against its main competitors: the EUR, USD, GBP, and JPY.

Due to a lack of significant economic releases, the movement of AUD is technical in nature. Investors are waiting for the RBA Meeting Minutes publication on Tuesday. The market will look for hints about a possible change in the interest rate.

Oil

Today, oil prices are being corrected downwards.

Oil prices are under pressure from the continuing increase in the number of oil rigs in the United States. According to the latest Baker Hughes report, its number has increased from 831 to 833 units. Also, uncertainty to the market is added by the expectation of a meeting of OPEC representatives and allied countries. On Wednesday and Thursday, the ministers will meet in Vienna to decide on an oil production policy for the next six months. It is likely that a specific decision on whether to extend the agreement on limiting production will be postponed. Saudi Arabia argues that such an extension is still necessary, while Russia has not yet decided on its position.

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