EUR/USD: the pair is moving within the 1.0350–1.0000 channelThe quotes of the EUR/USD pair are in the correction phase, trading around the 1.0305 mark against the background of the weakening of the US currency. After a poor start to the year, the euro is regaining its position, receiving support from the publication of macroeconomic data.Today, key eurozone countries continue to provide information on inflation. In December, the consumer price index in France was 1.3%, remaining at the level of the previous month and coinciding with analysts' expectations. In Spain, inflation accelerated to 2.8% from the previous 2.4%. The consolidated indicator for the eurozone is projected to grow by 0.4% month-on-month and reach 2.4% year-on-year, exceeding the November level of 2.2%. At the same time, the base index, which excludes the cost of food and energy resources, is likely to be fixed at 0.5%. Increased inflationary pressures may adjust the policy of the European Central Bank (ECB), forcing it to reconsider plans to lower interest rates or slow down the pace of their reduction.Support levels: 1.0230, 1.0030.Resistance levels: 1.0350, 1.0530.NZD/USD: New Zealand and the UAE have signed a partnership agreementThe New Zealand dollar is aiming to stay above the 0.5600 level during Asian trading on January 15. The national currency is supported by statistics on the business confidence index provided by the New Zealand Institute of Economic Research (NZIER). According to the report, the indicator for the fourth quarter increased by 16.0%, offsetting the previous decrease by -1.0%.Earlier, the strengthening of the New Zealand currency was driven by positive data from the construction sector and China's foreign trade. The number of building permits in New Zealand increased by 5.3%, which fully offset the 5.2% decrease a month earlier. Meanwhile, exports from China grew by 10.7% year-on-year after the previous growth of 6.7%, significantly exceeding analysts' forecasts of 7.3%. Imports increased by 1.0% after falling by 3.9%, which contributed to an increase in the trade surplus from $97.44 billion to $104.84 billion, against expectations of $99.8 billion.In addition, representatives of New Zealand and the UAE signed a comprehensive economic partnership agreement aimed at increasing trade and investment flows. According to forecasts, the deal will allow to reach a trading volume of 5.0 billion dollars by 2032, providing an annual average of 1.5 billion dollars. At the same time, in the first nine months of last year, the non-oil trade turnover between the two countries amounted to 642.0 million dollars, which is 8.0% higher than the same period in 2023.Resistance levels: 0.5607, 0.5641, 0.5672, 0.5700.Support levels: 0.5571, 0.5540, 0.5511, 0.5467.USDX: dollar loses ground ahead of inflation reportThe US dollar index (USDX) shows mixed sentiment, being near the 109.00 mark and testing it for a breakdown down. Yesterday, the index showed a moderate decline, continuing to adjust from the highs reached earlier in the week. The main driver of the "bearish" dynamics was weak statistics from the United States, which increased doubts about today's inflation data and lowered expectations of new changes in the Fed's monetary policy in 2025. In particular, the producer price index for the month fell from 0.4% to 0.2%, although it was predicted to remain at the same level, and year-on-year the indicator increased from 3.0% to 3.3%, but was lower than the expected 3.5%. At the same time, the base value decreased to 0.0% from the previous 0.2%, maintaining the annual dynamics at 3.5%.Forecasts for consumer inflation suggest that the monthly rate will increase from 0.3% to 0.4%, and the annual rate from 2.7% to 2.9%, while the base value is likely to remain between 0.3% and 3.3%. Such data may signal a slowdown in the pace of the Fed's dovish policy. Central forecasts with a 97.3% probability assume that the interest rate will remain in the current range of 4.25%-4.50%, especially given Donald Trump's policy of reforming import duties, reducing the tax burden and tightening immigration rules, which may increase inflationary pressures.In addition, the monthly economic review of the US Federal Reserve "Beige Book" will be released today at 21:00 (GMT+2). The document covers 12 federal districts, providing up-to-date information on the state of industry, agriculture, corporate and consumer spending, the real estate market and other sectors of the economy.Resistance levels: 109.50, 109.97, 110.40, 111.00.Support levels: 109.00, 108.50, 108.00, 107.50.Crude Oil market analysisBrent Crude Oil prices continue to move within the framework of the local uptrend, remaining above $ 79.0 per barrel during the Asian session. The market is gradually recovering, but participants remain concerned about the possible consequences of new US sanctions that could affect Russian oil supplies to China and India, as well as the overall supply level on the global energy market.The quotes support the latest forecasts of the Energy Information Administration of the U.S. Department of Energy (EIA), according to which global oil production could reach 104.36 million barrels per day in 2025 and increase to 105.89 million barrels in 2026. At the same time, global demand is expected to decrease to 104.1 million barrels per day in 2025 and to 105.15 million in 2026, which will create an oversupply of 260 thousand barrels and 740 thousand barrels, respectively. This will be in contrast to the deficit of 170,000 barrels recorded in 2024. According to experts, the main increase in production is expected in non-OPEC+ countries such as the United States, Canada, Brazil and Guyana.Support levels: 78.30, 74.80.Resistance levels: 80.70, ...
Focus of attention: the first week of the Trump presidencyMarkets continue to closely monitor the actions of Donald Trump in his first week as president of the United States. He is expected to sign a number of decrees, strengthening the political dynamics. These events continue to dominate the news agenda, leaving investors and world leaders to analyze the consequences of the 47th president's decisions.President Trump spoke for the first time about the conflict in Ukraine, calling on Russian President Vladimir Putin to reach an agreement, threatening to increase sanctions. Trump also suspended the financing of "green" infrastructure worth more than $ 300 billion and announced plans to attract $ 500 billion in private investment in the development of artificial intelligence. In addition, he announced possible 10% customs duties on Chinese imports and new tariffs for the EU, citing an "alarming" trade surplus of $350 billion.Key economic dataEurozoneConsumer confidence data for January will be released on Thursday. After two years of growth, this indicator decreased in November and December. Given that private consumption is the main driver of economic growth in the Eurozone in 2025, the state of consumer sentiment will be an important factor for economic forecasts.NorwayNorges Bank is expected to keep the key rate at 4.5%, with a hint of a reduction in March. Core inflation figures for December, which showed a decrease after the November jump, are likely to ease pressure on the Central Bank. However, global interest rates, the Norwegian krone (NOK) exchange rate and oil prices pose risks of a change in the December interest rate forecast. In the short term, Norges Bank is likely to take a cautious stance.JapanOn Thursday night, data on inflation (CPI) and business activity (PMI) for December will be released. Statistics are released on the eve of the Bank of Japan (BoJ) meeting. Preliminary information from Tokyo shows that inflationary pressures decreased in December. The economic recovery continues, and inflation is close to the target level. The BoJ is expected to raise the rate by 25 bps, which is already partially embedded in investors' expectations.Stock marketsDespite analysts' warnings about volatility during the inauguration, global stock indexes showed growth.The MSCI World Index has reached a new all-time high, marking a seven-day rally. Investors who reduced their risks before the inauguration could have missed out on a 4% gain, which is equivalent to a six-month return.• The Dow Jones rose 0.3%.• The S&P 500 gained 0.6%.• Nasdaq rose 1.3%.• The Russell 2000 declined 0.6%.There is a mixed trend in Asia this morning. Chinese stocks initially rose on the back of statements of market support, but later this effect weakened. Futures for the US and European indices also show a slight pullback.Debt marketThe movement in global bond yields was modest. In the US, yields on 2-year and 10-year bonds rose by several basis points. In Europe, yields on German 10-year Bunds have also slightly increased, while the spread between German and Italian bonds is approaching 100 bps, and French securities have stabilized around 70 bps.The foreign exchange marketAmid expectations of the decisions of Norges Bank and BoJ, NOK strengthened, while JPY weakened. The EUR/USD pair remains stable and is trading just above the 1.04 mark.Conclusions1. Focus on the United States: President Trump's political actions continue to have an impact on markets, especially on the currencies of countries with high trade turnover with the United States.2. Europe: Declining consumer confidence in the Eurozone may weaken the euro in the short term.3. Japan and Norway: The monetary policy of these countries will be a key driver for the movement of NOK and ...
Markets continue to closely monitor the first steps of Donald Trump in his debut week. It is expected that the US president will sign a number of decrees, which will preserve the dominant position of news from the United States for market participants. Country leaders and investors will have to reflect on the consequences of these decisions.In the United States, President Trump suspended funding for more than $300 billion worth of green infrastructure, paving the way for private investment in $500 billion worth of artificial intelligence infrastructure. He also said that the administration is discussing the introduction of a 10% tariff on goods from China, and the EU expects new customs tariffs due to the "alarming" trade surplus with the United States.Economic and market newsThe President of the United States continued to sign executive orders, including a freeze on hiring for federal positions, with the exception of the army and immigration services. He also announced the introduction of 25% tariffs on imports from Canada and Mexico from February 1, threatening the EU with tariffs due to the US trade deficit with Europe, suggesting either new tariffs or an expansion of oil purchases from the US by European partners as a possible solution.The leaders of the EU, Germany, Canada, China and Mexico called on Trump to exercise caution, pointing to possible retaliatory measures in the event of tariffs or other sanctions.In Germany, the ZEW index for January showed mixed results. The assessment of the current situation rose to -90.4 (forecast: -93.1), reaching a maximum in three months, which may indicate stabilization after a six-month recession. However, business expectations dropped to 10.3 (forecast: 15.1), indicating a decline in optimism about future growth. These data are unlikely to have a significant impact on the ECB's rate decisions in January and March.In the UK, the November/December labor market report was in line with expectations. The unemployment rate rose to 4.4% (previous: 4.3%), and the number of vacancies continues to decline, indicating a slowdown in the labor market. Wage growth remained high at 5.6% year-on-year for three months (forecast: 5.5%, previous: 5.2%). Most likely, the Bank of England will adhere to a gradual easing of monetary policy with another rate cut of 25 basis points in February.Stock marketAfter the inauguration of Donald Trump, global stock markets went up, which supported risky assets through currency correlation. Limited macroeconomic data and earnings reports also supported the positive sentiment. Investors perceived Trump's statements and about 50 executive orders signed by him as less negative than expected, leading to a rally amid reduced uncertainty that could continue if the 47th president refrains from further threats, especially regarding tariffs against China and Europe.In the US, the Dow index rose by 1.2%, the S&P 500 by 0.9%, the Nasdaq by 0.6%, and the Russell 2000 by 1.9%. Asian markets are mostly growing, especially in Japan, but Chinese markets are reacting negatively to Trump's statements about tariffs. US and European stock futures are trading in the black this morning.BondsEuropean rates ended the day with a slight decrease, with German 10-year bonds trading at 2.51%. This reversal could be due to the fact that Donald Trump did not announce a massive tariff plan during the inauguration.The foreign exchange marketYesterday, the US dollar remained under pressure amid a lack of immediate action from Trump on key issues, including import tariffs. SEK and GBP showed growth along with EUR. The EUR/USD pair ended the day above 1.04, which indicates the potential for further growth, while EUR/SEK closed the day below ...
Upcoming events for the week of January 21-25, 2025This week, the economic calendar is relatively calm, and key events are scheduled for Friday, when data on the US PMI and sales in the secondary housing market will be published. These reports may give an idea of the state of the United States economy, but they are unlikely to disperse the volatility of currency pairs. At the same time, the Bank of Japan is expected to raise the interest rate from 0.25% to 0.50%, which is likely to cause significant fluctuations in the exchange rate of the yen and the Nikkei index.The main focus of the market will be on Donald Trump's first actions as president. Although the expected tightening of immigration policy is likely to have a limited impact on the market, any tariff announcements could significantly affect investor sentiment. If his comments hint at a trade war, it could raise concerns about global trade and negatively affect market stability. Traders will closely monitor his statements to determine the possible direction of the market movement.Trading Ideas this week• USD/JPY: it is recommended to consider selling opportunities, especially if the price breaks through the key support level at 155.00, which may pave the way for further decline. Special attention should be paid to the Bank of Japan's decisions, as any rate changes may increase volatility.• Bitcoin: the uptrend is gaining momentum, and bullish sentiment is returning after Trump's inauguration. A possible test of the $110,000 level and above is expected as traders seek new highs. Purchases near key support levels can offer profitable entry points for those who are set for further growth.• Crude Oil: the recent truce between Israel and Gaza, as well as Trump's rise to power, are reducing tensions in the Middle East. The weakening of geopolitical risks, combined with expectations of higher production in the United States, may contribute to lower oil prices. Traders should consider selling when prices rise, focusing on lower levels in the short term.• S&P 500: the index may continue to rise this week, fueled by the beginning of the Trump presidency and his "America First" policy. It is recommended to consider buying on pullbacks, as optimism around Trump's policy may continue to support the ...
The annual compensation of CEOs in the United States is breaking records, despite a shortage of workers and inflation. According to MyLogIQ (a provider of analytical products of the U.S. Securities and Exchange Commission), the median salary of executives from the S&P 500 companies reached $14.2 million last year. The salary growth of the majority of company executives was at least 11%.Half of the companies also said that the salary of ordinary employees increased by 3.1% last year, and a third of the companies reported that employee compensation, on the contrary, decreased between 2020 and ...
The past year ended very successfully for the American market: the S&P 500 rose by 26.9%, although initially a more modest increase was expected. So, our optimistic (!) scenario included an increase in the broad market index to only 10%. However, the US stock markets got off to a good start and remained on top with the support of the adoption of infrastructure reform. The economic recovery also turned out to be more active than we expected, and this helped companies to increase revenue and profit more intensively. At the same time, the development of all these trends contributed to the acceleration of inflation, which went far beyond the expectations of the Fed, the market and our forecasts. It was inflation that became the most discussed topic last year and will absolutely remain at the top of the agenda in the first half of 2022.To bring inflation under control, the Fed thought about reducing the balance sheet only at the beginning of this year: even in December 2021, there was no talk about it. The reduction of the balance sheet, combined with a sharper than originally planned increase in rates, can act as a reliable way to curb inflation expectations. These expectations are formed mainly on stock exchanges, which excludes their negative impact on the economy in general and on the labor market in particular. A steady positive trend in the labor market is indicated by data for October, when the number of open vacancies reached a record 11.03 million, 1.5 times exceeding the number of applicants. This ratio was last observed 50 years ago. Together with an increase in logistics efficiency, the restoration of production capacities and the gradual opening of the economy, this will lead to a gradual decrease in inflation. Of course, we have repeatedly talked about the upcoming opening of the economy after the pandemic during the second half of 2021, but this event is delayed due to the appearance of new COVID-19 strains. And yet, the longer the pandemic continues, the closer its end is.After a negative start to the year for most securities in the technology sector and a general correction, investors should consider closing hedging positions that I advised opening at the end of last year. Now is the time to buy a wide range of stocks with a focus on "value" and "quality" companies. The intensive growth of the economy serves as the basis for optimistic expectations regarding revenue and profit. That is why the upcoming reporting season is the strongest driver of the growth of quotations of representatives of the real sector of the economy. Of course, there is also a trend to reduce the cash flows of companies, since there is no effect of a low base and economic growth begins to slow down. However, it is predicted that the S&P 500 companies will increase sales by almost 15%, and their earnings per share will increase by 21.5%. Among the leaders will be the energy, raw materials and industrial sectors, as well as the segment of secondary necessities. The momentum for an upward movement in their quotes will be provided by strong results for the fourth quarter and optimistic forecasts for January-March. Separately, I would like to note the financial sector, which will not be able to demonstrate a record increase in revenue and profit, but industry forecasts for 2022 may become one of the most optimistic, taking into account the plans of the Federal Reserve to actively raise the key ...
The year 2022 on world markets will largely be determined by the tightening of monetary policy in the United States, and the first week of the new year confirmed this. The minutes of the Fed's December meeting published last week showed a significant tightening of the position of the regulator's representatives – Fed members believe that the rate can be raised as early as March, and also see a faster reduction in the balance sheet as appropriate. Representatives of the regulator believe that the current economic conditions are already in many ways conducive to tightening the labor market, some even noted the recovery of the labor market already sufficient for such actions, although the majority still expects further improvement in the labor situation. Against this background, it is worth noting the publication of December labor data in the United States, which came out ambiguous. On the one hand, employment in December increased by only 200 thousand. The Bloomberg consensus forecast assumed an employment growth of 450 thousand, and the actual growth rate of the indicator was the lowest since the beginning of 2021. Nevertheless, in many respects such weak employment growth is explained by seasonal adjustment, and the unemployment rate in December fell more than expected. Thus, the indicator has updated the next lows since the beginning of the pandemic, dropping to 3.90% against the expected 4.10%. The unemployment rate continues to approach a historic low of 3.40%, and labor statistics have further increased fears in the market of an imminent tightening of the PREP in the United States. As a result, on Friday, the yields of ten-year US treasuries at the moment exceeded 1.80% per annum - the maximum since the beginning of the pandemic. Today they have returned to these levels again.This week, the dynamics in the market will continue to be determined by expectations for the actions of regulators - investors will follow the statements of representatives of the Fed and the ECB, as well as the publication of price data in the United States for December. Statistics published last week showed an increase in inflation in the EU to 5.00% YoY. As a result, the topics of price growth in December updated the historical maximum, while analysts expected a slight slowdown in price growth. The situation on the supply side also has high inflation in the United States. The December business activity indices indicated a slight easing of logistical problems, however, the further deterioration of the epidemiological situation again intensified disruptions in logistics chains, which does not lead to a significant slowdown in price growth. The FAO World Food Price index fell in December for the first time since July, but food inflation remains at elevated levels. Against this background, US inflation data is likely to continue to bring the Fed rate hike closer, intensifying the negative in the markets.The main event for the oil market in early 2022 was the OPEC+ meeting. However, as expected, it was decided to stick to the current plan to increase production. Nevertheless, the cartel lowered its forecasts for a surplus in the oil market, which allowed Brent crude futures to exceed the level of $80/bbl. Moreover, against the background of interruptions in the supply of black gold from Kazakhstan and Libya, quotations were close to $83/bbl. However, at the end of the week they declined from these levels, today Brent futures are growing by 0.35% and are trading around $82.05/bbl. The main negative for oil this week may be related to the potential strengthening of the dollar amid expectations of a tightening of the PREP in the United States. However, in the absence of a significant strengthening of the dollar, Brent futures may still exceed the levels of $83/bbl– - the quotes may be supported by another weekly decline in oil ...
The German Statistical Office published the final data on the dynamics of consumer prices in October in accordance with European reporting standards. They indicate an acceleration of inflation to 4.6%. The indicator is calculated in relation to the prices that were fixed a year earlier. In monthly terms, consumer prices showed an increase of 0.5%. For comparison: in September, inflation in annual and monthly terms was 4.1% and 0.3%, respectively. The calculation of indicators according to German standards showed an increase in the inflation rate in Germany to a maximum for the period since 1993. It amounted to 4.5% in annual terms. Compared to September, prices rose by 0.5%. Both indicators correspond to the forecasts of the surveyed analysts. By the end of September, inflation was 4.1% compared to the same month last year. In monthly terms, it showed zero dynamics. The largest contribution to the growth of October inflation was made by energy carriers. They have risen in price by 18.6%. The cost of food increased by 4.4%. Prices for services increased by ...