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Data on NFP, Brexit and negotiations between US and ChinaData on NFP, Brexit and negotiations between the United States and China Bank of India lowered the rate yesterday, what provoked the sale of the Indian rupee in the foreign exchange market. So those of our readers who followed yesterday's recommendation to buy USDINR should have made good money. The US and China continue to generate positive news about progress in trade negotiations. The president of China announced significant progress. But there is no final version of the contract. Brexit news. From the progress can be noted just the next vote in the Parliament of Great Britain, against the exit without a deal. We look forward to the progress of May, which should consist in requesting a delay from the EU and the duration of this delay. In addition, we observe how the cooperation with the opposition leader Corbyn will end. New idea of May to hold a referendum on the conditions of Brexit still does not find support in the Cabinet of Ministers, but this is another option that needs to be borne in mind. Our trading tactics are unchanged - we buy a pound on descents. Yesterday’s data from the Eurozone was not pleasing unlike Wednesday. We are talking about statistics on production orders in Germany. The indicator literally fell by 8.4% (y / y), which is the strongest fall since 2009. No wonder the optimism of euro buyers has abruptly subsided. But today the EURUSD can receive an upward impulse not because of data from the Eurozone, but from the USA. Today will be published one of the most important statistics on the United States for the month - statistics on the labor market. After the failure figures on the NFP last month (+ 20K with the forecast of + 180K), the indicator is expected to be rehabilitated this month (forecast + 175K). If the data again comes out weak, it will be possible to talk about the trend, and it is extremely alarming and negative for the United States. In general, the chances of achieving the forecast indicators are quite high (if only because the forecast corresponds to the monthly average NFP numbers over the last couple of years). Nevertheless, ADP data published on Wednesday, alarming (the smallest number of jobs in 18 months). And the United States recently could not boast with data (retail sales this week are worse than forecasts and in the negative zone, GDP is revised downwards, etc.). As a result, we are committed to selling the dollar today. But ideally, of course, wait for the numbers on the NFP. Because the data is better than the forecast and may well trigger a growth in demand for the dollar. At the same time, weak data will most likely trigger dollar sales. Recall that the case is not only in the state of the US economy as such, but also in the monetary policy of the Fed. Weak data will be a clear signal not only about the unreasonableness of raising rates in the foreseeable future, but will also signal the Central Bank in favor of lowering the rate to boost economic activity.
Short
by Trade24Fx
Data from ADP is alarming and the Bank of India The Financial Times reported that the United States and China settled most of the issues that prevented the conclusion of an agreement. Myron Brilliant, executive vice president and head of International Affairs at the U.S. Chamber of Commerce, said: “The deal was agreed on by 90%.” So the end of the trade wars is getting closer. Such news is extremely positively perceived by emerging markets, as well as raw materials markets. In addition, the medium was remembered by a rather extensive block of macroeconomic statistics. Business activity index in Germany, and the Eurozone were better than expected above 50. In addition, retail sales in the Eurozone were better than forecasts (+ 0.4% m / m with a forecast of +0.3 m / m). So the growth of the euro in some ways can be considered natural. Especially when you consider that it was happening against the background of rather weak data from ADP on employment in the US private sector. Instead of the expected + 175K, was only + 129K. Recall that on Friday we are waiting for official statistics on the US labor market. So on the eve of the NFP, these figures are alarming and the dollar was under pressure yesterday. But more about the data on the NFP, we will talk tomorrow. Today we are going to look for points for selling dollar. Despite the rather weak statistics from the UK, the PMI in the services sector was much worse than expected below 50 (means that activity is declining), the pound was growing yesterday. The reason is - Brexit and some progress that has been noted in it. It is about Theresa May's negotiation with the Labor Party. Laborites support for a customs union with the EU. This option of Brexit can be attributed to the most lenient, therefore the pound was growing yesterday, despite the weak data. Our position is unchanged - we buy a pound. In the oil market, the fundamental background generally contributes to short-term purchases: OPEC + restricts supply, but as for demand, news of the progress in negotiations between the United States and China definitely plays into the hands of buyers. We cannot but note that the latest data from the US Department of Energy showed a sharp increase in US oil reserves (more than 7 million barrels), and also recorded the fact of a new record of US oil production - 12.2 million barrels. So there is a risk of a change in sentiment in the oil market to bearish. But for now, the “bulls” are in control. Therefore, our intraday recommendation without changes is. We look for points for buying oil on the intraday basis. Today may be a day of respite before the statistics on the US labor market. We recommend paying attention to the Indian rupee. If the Bank of India lowers the rate, the USDINR may go up. Considering how much it has decreased over the past six months, the USDINR medium-term purchases may well bring in several hundred points of profit. We also recall the feasibility of sales of the Russian ruble. The news background for this is favorable. This refers to the information that Senator Chris Van Hollen (Democrat) and Rubio (Republican) submitted to the lower house of Congress a draft of new sanctions against Russia (this is the so-called "bill from hell", which radically restricts Russia's access to external markets for financial resources).
Long
by Trade24Fx
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