IN THE SPOTLIGHT:
Investment package in the United States
Macrostatistics
OPEC + Meeting
Yesterday, US treasury yields declined and are now at 1.67% per annum for ten-year securities. US stock indexes rose yesterday – the S&P500 rose by 1.2% and updated the historical high, the Dow Jones added 0.5%, and the NASDAQ soared by 1.75%. At the same time, today is a public holiday in the United States and Europe, and activity in the markets will be reduced.
Yesterday was not marked by any new significant events in the United States, and the most discussed topic continues to be Joe Biden's plan for infrastructure investments. Yesterday, another Fed official - San Francisco Fed President Mary Daly-voiced support for the proposed investment. Thus, she noted that she positively assesses the investments under consideration, as they are able to strengthen the potential volume of production. In addition, M. Daly also voiced the usual statements of the regulator about the long-term maintenance of soft conditions and that inflation this year will be short-term. It is worth noting that yesterday, the chairman of the House Committee on Ways and Means (Budget Committee), Richard Neal, announced plans to include bonds in the ways of financing an investment project. At the same time, he has already received approval from the head of the US Treasury for such actions, and the market will wait for further details of these plans. In addition, there is increasing criticism of the proposed measures, both from Republicans and from some Democrats, which further casts doubt on the prospects for passing the bill. In this regard, the approval of investments may be delayed until the fall, when it will again be possible to use the "budget reconciliation" tool.
Yesterday, data on the number of applications for unemployment benefits in the United States were published. So, during the week, the number of applicants increased from annual lows of 658 thousand and now stands at 719 thousand. The market, although waiting for the growth of applications, but in a much smaller amount – the consensus forecast was 680 thousand. Today, the report on the state of the labor market in March from the US Bureau of Labor Statistics will continue to publish data. As we wrote earlier, the high pace of the labor market recovery may increase fears of an imminent tightening of monetary policy, even despite the assurances of the Fed representatives to the contrary. This, in turn, will push yields higher, so the market will pay special attention to today's statistics.
Also yesterday, the data of the industrial index of business activity ISM PMI in the United States were published – for March, the indicator reached 64.7 p, which is the highest value since 1983. At the same time, the market expected much more modest results of 61.5 p. As we wrote earlier, the positive situation in the industry is also observed in most other countries, and the industrial PMI index in Germany and the UK also updated multi-year highs. At the same time, the ISM report noted problems with the supply of materials and rising prices for resources, which supports the inflationary fears of the market. It is also worth noting that the largest growth in the components of the index occurred in the ISM employment indicator, and therefore today's data on the labor market can be quite strong.
Contrary to market expectations, OPEC+ agreed on a gradual increase in oil production – in May and June by 350 thousand barrels per day, and in July by 400-450 thousand barrels per day. In addition, Saudi Arabia plans to gradually abandon its voluntary production cuts, as a result, the kingdom will increase production by 250 thousand barrels per day in May, 350 thousand barrels per day in June and 400 thousand barrels per day in July. At the same time, oil prices have so far reacted positively to the news from the meeting, Brent crude futures rose 3% during the day and stopped at a level above $64.5 per barrel. At the same time, the situation on the demand side remains negative, and further deterioration of the epidemiological situation, coupled with an increase in supply, may return prices to levels of about $60 per barrel. Yesterday's data from Baker Hughes showed another fairly strong increase in the number of active drilling rigs in the United States – for the week, the number of rigs increased from 324 units to 337 units. The increase in production from the United States will put additional pressure on the global oil supply, which is negative for quotations.
Yesterday, the yields of ten-year US Treasury securities fell by 10.1 bps and closed at 1.34% per annum. During the week, the yields of American treasuries decreased by 13 bps, today the yields of treasury ten-year securities have been growing since the opening and are at the level of 1.39%. US stock indexes declined on Friday – the S&P500 lost 0.84%, the Dow Jones industrial index fell 0.17%, the NASDAQ technology index fell 1.74%.Western markets declined last week, despite a positive start: all major US and European indices closed in the red, with the exception of the British FTSE 100, which added 1.11% by the end of the week. Investors are revising their forecasts due to the deteriorating epidemiological situation in the world, as well as the prospects of an early tightening of monetary policy in the United States. The reason for this was the "hawkish" statements by the head of the US Federal Reserve Jerome Powell at the beginning of last week about the "non-temporary" nature of inflation, as well as subsequent statements and comments by representatives of the US Federal Reserve, characterized by sharply tightened rhetoric. So, on Friday, the president of the St. Louis Federal Reserve, James Ballard, who will become a voting member of the FOMC in 2022, noted that record inflation and the achieved pace of economic recovery require the monetary authorities to abandon the stimulus program, because the possibility of a more rapid curtailment of the quantitative easing program will be considered at the next meetings.Macro statistics in the US actually indicate a moderate economic recovery: The country's GDP has already exceeded the peak reached before the outbreak of the pandemic, and the unemployment rate continues to decline. So, Friday's official data on the unemployment rate turned out to be better than expected (4.2% against the forecast of 4.5%), and the November ISM index of business activity in the US services sector also turned out to be higher than forecast - 69.1 points against the expected 65.0, which, coupled with the positive dynamics of the index of business activity in the manufacturing sector (PMI), released earlier, indicates an increase in confidence and business activity.The past week was also eventful for the oil market. The growth of oil product stocks in the United States, a slight decline in crude oil reserves, uncertainty in the market caused by the new strain of the coronavirus "omicron", as well as the decision of OPEC+ to continue to increase production by 400 thousand barrels. in a month, oil quotes were forced to decline significantly. At the moment, the quotes went below the level of $ 66 / bbl, but by the end of the week they corrected closer to the level of $ 70 per barrel. February Brent crude futures opened today with growth and is trading at $71.58/bbl. We believe that the further dynamics of quotations will continue to be determined by the epidemiological situation, since there is still no unambiguous assessment of the impact of the omicron strain on the healthcare system of countries and the economy as a whole, but at the moment the level is $ 80/bbl. it is a limitation of the strengthening of oil quotes.As a result, it can be noted that the upcoming December meeting of the American regulator, which will be held on December 15, as well as the news background around the new strain of coronavirus, will serve as the main determinants of sentiment in both the stock and commodity markets. In addition, in the coming week, the focus will be on November inflation data in the United States, as well as statements by representatives of the Fed. 
Trading on September 9 on American stock markets again ended in the red. The S&P 500 index fell by 0.46%, to 4,493 points. The Dow Jones lost 0.43%, and the Nasdaq – 0.25%. Weak growth was shown by the financial (+0.25%), energy (+0.12%) and raw materials (+0.07%) sectors. The outsiders were representatives of the real estate sector (-2.12%) and healthcare (-1.17%).Company newsRocket Lab USA (RKLB: +37.3%) announced a deal to launch a group of 25 IoT satellites for the French company Kinéis.Retailer Torrid Holdings (CURV: +32.4%) reported better than analysts' expectations and presented strong forecasts for the next quarter.The quarterly results of the database provider for enterprise applications Couchbase (BASE: -19.3%) disappointed investors: although its revenue was slightly higher than expected, EPS fell short of consensus.We expectToday, global stock markets are showing mixed dynamics.The US stock market continues to be pessimistic. They are mainly caused by concerns about the slowdown in the economy and the prospects of a reduction in QE. In addition, investors are concerned about the upcoming discussions by lawmakers of the new debt ceiling and the $3.5 trillion economic stimulus program.The number of initial applications for unemployment benefits last week updated the minimum of March 2020 and amounted to 310 thousand, with a consensus of 340 thousand. The latest data on the number of open vacancies reflect the high demand for labor. The state of the labor market remains one of the two determining factors for the Fed when deciding on the timing and parameters of QE reduction. The investment community continues to believe that at one of the next FOMC meetings, it will be announced that asset purchases will be reduced by $15 billion per month starting from December of this year or from the first quarter of 2022.Asian stock markets ended trading on September 10 in positive territory. Hong Kong's Hang Seng rose by 1.91%, China's CSI 300 added 0.88%, Japan's Nikkei 225 rose by 1.25%. EuroStoxx 50 is up by 0.44%.Risk appetite is uncertain. The yield on 10-year treasuries fell to 1.30%. The price of Brent futures rises above $72 per barrel. Gold is moving towards $1802 per troy ounce. In our opinion, the S&P 500 will hold the upcoming session in the range of 4460-4510 points.MacrostatisticsThe producer price index for August will be published today. The market expects the growth rate to slow down to 0.6% mom from 1% mom in July.Technical pictureThe S&P 500 continues to move in an uptrend. The MACD line is below the signal line, negatively affecting the mood of buyers. The lower limit of the trend coincides with the 50-day average, which acts as the nearest support level. 
The oil market continues to update multi-month lows. At the end of Thursday's trading session, Brent crude oil fell by 1.27%, closing the day at $66.62 per barrel. During the week, oil fell by more than 5%, feeling pressure from concerns about the prospects for global economic growth against the background of another outbreak of COVID-19 in many regions of the world.The number of new cases of COVID-19 infection in the United States on Wednesday rose to 140,893, which is 47% higher compared to the level of 2 weeks ago. At the same time, the average death rate reached 809 people per day, the highest since the beginning of April. It is worth noting that the deterioration of the epidemiological situation in the United States has already affected key macroeconomic indicators, signaling a slowdown in the recovery of the US economy. According to previously published data, retail sales in July sank by 1.1% compared to last month. The consumer sentiment index calculated by the University of Michigan fell in the first half of August to the lowest level since 2011, as many respondents expressed concerns about the spread of the delta strain.On Wednesday, the Energy Information Administration (EIA) of the US Department of Energy reported an increase in gasoline inventories in the US, which also indicates a decrease in demand in the domestic market. Recall that there are still three weeks left before the end of the summer car travel season, but it is already obvious that the expectations of a significant increase in consumer activity have not been met.The number of cases continues to grow in China. Earlier, information appeared on the markets that China closed one of the terminals of the port of Ningbo-Zhoushan, which is the third in the world by cargo turnover, after detecting a case of infection of an employee of COVID-19. Bloomberg experts warn that repeated restrictive measures threaten already fragile supply chains, as well as global trade in general.The strengthening of the dollar continues to exert additional pressure on oil. The US currency index, which tracks the value of the US dollar against a basket of six other currencies, rose 0.5% to 93.56, which corresponds to the highest level since November. The growth of the dollar can negatively affect the quotations of commodities, the value of which is expressed in dollars, as they become more expensive for holders of other currencies. Given the above, the priority remains for oil sales. 
What is driving the bearish trend in EURUSD?In order to prove that the downtrend for EURUSD is based on American exceptionalism and the Fed's monetary policy, you do not need to be a genius in your head. It is enough to look at the dynamics of the stock and commodity markets. While oil, copper, iron ore and other raw materials, spooked by the Delta, the slowdown in China's economy and the Fed's intention to curtail QE, are ready to make August the worst month since the beginning of the pandemic for the Bloomberg commodity index, US stocks are thriving. The USA is an island of calm in the ocean of general panic. Is it worth being surprised by the power of greenback?The fall of iron ore to 8, oil-to a 3-month low indicates investors ' fear for the fate of the global economy. Ambitious plans for its rapid recovery due to the mass introduction of vaccines have to be shelved. More and more countries are talking about the need for booster vaccinations, and manufacturing companies are conducting research on how long the first two doses can protect against COVID-19. The spread of the Delta in the countries of Asia, Australia and Oceania makes us talk about a bumpy path of returning global GDP to the trend.Do the States look better against this background with their twofold increase in the number of infected and hospitalizations since the last FOMC meeting? I don't think so, but due to large-scale incentives, investors are sitting on bags of money, and all this liquidity is ready to jump into an uptrend in the S&P 500 at the slightest pullbacks. The divergence in the dynamics of the stock index and oil, an indicator of the health of the world economy, allows us to talk about American exclusivity, which pushes down the EURUSD quotes.The second driver of the strengthening of the US dollar is the Fed's monetary policy, as evidenced by the dynamics of the yield differential of 30 - and 5-year treasuries. In the first days of recovery, the spread is usually wide, as investors expect that the easy money policy will help stimulate GDP growth and inflation. It then declines as the Fed raises rates to cool the economy. At the beginning of 2021, the difference in bond yields was widening, as Jerome Powell and his colleagues passively watched the warming economy. However, since mid-June, everything has changed.Dynamics of EURUSD and the yield spread of treasuriesLooking at the dynamics of EURUSD and the differential of rates on treasuries, we can assume that the ECB does not participate in the exchange rate formation of the pair at all. In fact, without promising adjustments to monetary policy, he simply handed over the initiative to the Fed. As I noted earlier, Christine Lagarde and her colleagues benefit from the weakening of the euro, so why not pull the chestnuts out of the fire with someone else's hands?Of course, the Fed understands that QE has outlived itself. The central bank would like to have room for maneuver before raising the rate. If his theory about the temporary nature of high inflation is not correct, it will have to be done already in 2022. However, will Delta make any changes to his plans? We'll see. In the meantime, we continue to adhere to the EURUSD sales strategy in the direction of 1.155-1.158. 
Bitcoin fell below $50,000 early Thursday, testing early March lows below $47,000.The fall began on Wednesday amid a decline in stock markets and a rise in Dollar.The decline in the first cryptocurrency was reinforced by news from the electric car manufacturer Tesla.Tesla has abandoned Bitcoin payments, having first started accepting them just two months ago. As the company's founder Elon Musk said on Twitter, the decision is due to concerns about the impact of Bitcoin on the environment."We are concerned about the rapidly increasing use of fossil fuels in Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels," Musk said.Tesla began accepting Bitcoin in March shortly after it revealed its own position in the $1.5 billion cryptocurrency. In the first quarter, the company partially recorded a profit from this position of $272 million."Tesla is not going to sell Bitcoin, and we intend to use it in transactions as soon as mining moves to more sustainable energy sources. We are also looking at other cryptocurrencies that use less than 1% of Bitcoin's mining energy per transaction, " the company said.Earlier this week, Musk conducted a survey among Twitter users on whether the company should accept Dogecoin. 15 minutes after the start, almost half a million people took part in the voting, 78.5% of whom answered positively to the question. 
Доллар ослабевает и трейдеры следят за данными о рабочих местах в США. Падение доллара на рынке Форекс в четверг после недельного восстановления с месячного минимума (вызванного сильными экономическими данными, которые указывали на быстрое восстановление экономики) неоднократно ограничивалось ростом и сгущением дневных облаков.Ежедневные исследования импульса остаются отрицательными, в то время как индикатор Стохастик колеблется вокруг границы территории перекупленности, добавляя сигналы о приостановке восстановления.Свежая слабость давит на важную поддержку 100 DMA, потеря которой ослабит краткосрочную структуру и добавит сигналов об окончании фазы восстановления.Трейдеры сосредоточились на ключевых данных по труду в США, которые могут дать больше информации о том, когда ФРС начнет сокращать денежно-кредитное стимулирование, после того как министр финансов США Джанет Йеллен заявила, что процентные ставки, возможно, потребуется повысить, чтобы предотвратить перегрев экономики, а политики ФРС преуменьшили риски более высокой инфляции. Уровни сопротивления и поддержки для Индекса Доллара Уровни сопротивления: 91.23, 91.41, 91.59, 91.73 USDУровни поддержки: 91.03, 90.93, 90.79, 90.55 USD 
The XRP token fell 8.4% on Tuesday amid new charges by the U.S. Securities and Exchange Commission (SEC) against XRP holders.The regulator accused the token's investors of launching a "crusade" against the agency.XRP on Tuesday briefly fell below $1.35, while at the end of last week it tested two-week highs above $1.65.The US Securities and Exchange Commission (SEC) is trying to prevent XRP holders from participating in the Ripple lawsuit. According to the regulator, the intervention of a third party will delay the trial and require additional resources.SEC also notes that the investors did not present any new arguments on the merits of the case. Instead, they paraphrased the theses of Ripple's lawyers regarding the legal status of XRP, the intended use of the token, and other issues that have already been stated by the participants in the process.In addition, the Commission claims that participants cannot receive any benefits from exchanges that have suspended XRP trading or removed the token from the list, since they are not a party to the lawsuit.Joining the case of a group of investors will open up opportunities for the intervention of thousands of XRP holders, who may have opposing points of view and interests. This, in turn, "will sow chaos in the whole case," the regulator believes.The SEC alleges that XRP holders are attempting to launch a "crusade" against the government agency to expose its alleged corruption.According to the regulator, lawyer John Deaton, who heads the "army" of XRP holders, "is simply trying to increase his influence on social networks."The next closed hearing in the Ripple case will be held on May 6, 2021. The meeting will consider issues related to the initiation or settlement of lawsuits and administrative cases. 
XRP rose more than 30% on Monday on the back of positive news and the overall growth of the crypto market.Foreign regulators have refused to help the U.S. Securities and Exchange Commission (SEC) in the case against XRP. The agency sent appeals after the company did not provide documents on the transfer of XRP tokens abroad.At the end of last week, the fourth cryptocurrency was able to hold above the landmark level of $1, from which there was an upward rebound.SEC has asked nine foreign regulators to obtain documents from 14 trading platforms and five companies. Two agencies refused to help the US authorities, and three forbade disclosing the details of the discussion. The rest rejected the request.The commission has previously analyzed wallet addresses associated with Ripple CEO Brad Garlinghouse and its co-founder Chris Larsen. The SEC found that hundreds of millions of XRP tokens were transferred to the accounts of unregistered crypto exchanges in the United States.Recall, on April 7, Judge Sarah Netburn granted Ripple's request for access to SEC documents revealing the regulator's "interpretation and views" regarding Bitcoin and Ethereum. On April 11, the court rejected the SEC's request to disclose the personal financial statements of the company's top managers. Against the background of these events, XRP reached $1.96.From other news. Last week, institutional investors increased the flow of funds to XRP. According to the weekly CoinShares report, approximately $33 million were invested in XRP.