› MARKET REVIEW MARCH 18 - 22

MARKET REVIEW MARCH 18 - 22

EUR / USD

The US Dollar finished last week with a decline to all major currencies, as evidenced by a decrease in the dollar index (DXY) by 1%. The index of manufacturing activity in New York fell to a twenty-month minimum, industrial production was weaker than forecast. Although consumer sentiment and expectations, according to indices from the University of Michigan, expressed considerable optimism. It is not surprising when US stock markets grow, then the consumer is usually optimistic.

One of the key events of the week will be the US Federal Reserve monetary policy meeting. Changes in the policy and rhetoric of the US Central Bank is not expected. This year, each meeting of the Federal Reserve is accompanied by a press conference. Therefore, everyone will follow the progress of the speech by the head of US regulator Jerome Powell. No one expects a change in the “patient” position, but the mood of investors will depend on what exactly Powell focuses on. If we are talking about the restored business activity in the services and production sector, market participants may find it necessary to buy an American. However, any hint of weakness, caution in the forecasts of suppressed inflation, will force them to sell the dollar.

Although at the moment, the Federal Reserve is the only one of the largest central banks in the world that can raise the interest rate this year.

If the main day of the week for the USD is Wednesday, then for the single European currency it is Thursday-Friday. On Thursday, the summit of EU leaders will begin, immediately after the next vote in Britain, which we will talk about separately. According to the EU economic releases, the end of the week will be the most volatile. Business activity will attract the attention of investors, because it is a leading indicator of both production and services rendered in March.

In general, the US dollar will remain under pressure this week. As risks and fears in the world decrease, investors are attracted by investments that are more profitable. However, if the President of the United States unleashes a trade war with the EU, then everything can change drastically.

MARKET REVIEW MARCH 18 - 22


GBP / USD

The UK has not yet concluded an agreement on the withdrawal from the EU, but at least we know that Parliament has excluded the Brexit option without a deal. However, against this background, British companies intend to reduce investment largely over the past ten years by 2019, as reported by the entrepreneurs themselves and business owners in the UK.

The British Chamber of Commerce reports that this year business investment will be reduced by a full percentage. Reduced investment leads to lower productivity, which inhibits wage growth and, as a result, affects the overall economy.

WSS CEO Adam Marshall commented on the big picture: "Political inaction has already affected the economy, many firms have been holding back decisions on investment and hiring employees."

“Worse, some companies have postponed plans for investment and growth in preparation for unforeseen circumstances. Some of these investments may never return to the UK at all,” added Marshall.

According to official data, last year investments in the UK business fell every calendar quarter, which is the longest period after the global financial crisis.
Finance Minister Philip Hammond believes that investment growth will be after the conclusion of the Brexit deal.

Economically, the current week is expected to be very volatile. On Tuesday, the UK labor market will report. We expect a weak increase in employment, a slowdown in wage growth, although unemployment will remain at the same level, according to the consensus forecast. On Wednesday, the release of inflation of the United Kingdom. Producer purchase price indices and industrial orders will also see the light of the day. We will talk about the next voting of the British Parliament closer to the equator of the week.

On Thursday, the UK is expected to release retail sales, after which the Bank of England will announce a decision on interest rates. The central bank of Britain will keep the current rate, but the regulator's rhetoric can make a contribution to the auction.

MARKET REVIEW MARCH 18 - 22


OIL

The current week starts indefinitely, fears of a global economic downturn do not release prices above current resistance levels. The slowdown in global GDP may reduce the demand for raw materials. The reduction in deliveries led by the OPEC oil cartel and American sanctions against Iran and Venezuela do not allow pushing the quotes hard.

OPEC leader Saudi Arabia said on Sunday that the balancing of oil markets is far from complete, because the reserves are still large. The Russian Federation supports the allies in the extraction of raw materials, stating that production cuts will continue at least until June.

US production fell for the second month in a row in February, which is a sign of a slowdown in the world's largest economy in the 1st quarter. This also affects the demand for crude oil.

Japan’s exports fall for the third consecutive month in February, which is a sign of growing pressure on raw materials from slowing global demand. On the decline in production in China, we have repeatedly said.

New incoming data will be decisive in the short term.

MARKET REVIEW MARCH 18 - 22


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