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Old 05-06-2019, 07:56
MikhailLF MikhailLF is offline
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Default Re: Forex News Analysis by LiteForex

Morning Market Review
2019-06-05 08:50 (GMT+2)

EUR rose significantly against the US dollar on Tuesday, updating local highs of April 18. The growth of the euro is still promoted by the correction factors of the US dollar, which appeared after the new threats of Donald Trump to introduce import duties against Mexico. Analysts have again spoken about the risks to the US economy that these and similar restrictive measures bear. Also, USD is under pressure from the Fed policy, which may return to lower interest rates in the event of further deterioration in economic indicators. At the same time, the market is characterized by a rather low investor interest in risk. Published on Tuesday, macroeconomic statistics from the euro area prevented the emergence of a more confident uptrend in the instrument. CPI slowed down in May from +1.7% YoY to +1.2% YoY, which turned out to be worse than expectations. Core CPI for the same period corrected from +1.3% YoY to +0.8% YoY with the forecast of +0.9% YoY.


GBP maintains an upward trend paired with USD, noting the new local highs of May 27. Published on Tuesday, the macroeconomic statistics from the UK was negative, but there was no significant pressure on the pound. The UK Construction PMI fell sharply in May from 50.5 to 48.6 points, while the forecast did not suggest any changes in the indicator. BRC Retail Sales Monitor in May also showed a decline of 3.0% YoY after rising by 3.7% YoY last month. Analysts expected an increase of +0.9% YoY. GBP is under additional pressure by the deadlock around Brexit. Teresa May did not manage to reach an agreement within the Parliament, which forced her to resign from the post of the Conservative Party leader. Perhaps the new Prime Minister will be able to find other ways for dialogue, but investors fear that the process may be delayed. Only the selection of a new party leader can take more than a month.


AUD continues to grow moderately against AUD, updating the highs of 10 May. The growth of the instrument proceeds against the background of the publication of not the most confident macroeconomic statistics from Australia, as well as yesterday's decision of the RBA to lower the interest rate to 1.25% for the first time in 3 years. However, the decision of the regulator was quite predictable, and therefore the pressure on the Australian dollar was moderate. In the follow-up statement, the RBA noted that it is trying to maintain employment and inflation levels that remain below target levels. Moreover, RBA officials did not rule out further steps to ease monetary policy. Investors today are focused on the preliminary statistics on Australia's GDP for Q1 2019. On a quarterly basis, the economy accelerated from +0.2% QoQ to +0.4% QoQ, which was slightly below the forecast of +0.5% QoQ. YoY, the growth of the index slowed down from +2.3% to +1.8%.


USD is consolidating against JPY after active decline at the end of the last trading week. The yen is supported by a low investor interest in risk, as well as corrective sentiment on the US currency. However, the activity on the instrument remains quite low. Nikkei Services PMI exerts some pressure on JPY on Wednesday. In May, according to preliminary estimates, the figure dropped from 51.8 to 51.7 points, with a forecast of growth to 51.9 points. On Thursday, markets are expecting the speech of the head of the Bank of Japan, Haruhiko Kuroda, who may reveal the regulatorís plans for monetary policy in the near future.


Oil prices are correcting after a steady decline at the end of the last trading week. The growth of quotations is largely technical in nature, while negative factors only intensify. In particular, it became known that Russia opposes further restrictions on oil production under the OPEC+ deal. The report of the American Petroleum Institute reflected the growth of oil reserves for the week as of May 31 by 3.545 million barrels after a decrease of 5.265 million barrels for the previous period. On Wednesday, investors expect to publish similar statistics from the US Department of Energy.
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