› MARKET REVIEW MARCH 25 - 29

MARKET REVIEW MARCH 25 - 29

EUR/USD

The main pair remains under pressure. Contrary to expectations based on lower forecasts and expectations of the Fed, which should have led to a weakening of the USA dollar, greenback quickly "lick the wounds". There are several reasons for this, but they are all from Europe. Steadily slowing business activity in the EU for the third month in a row, call into question the rapid recovery with the subsequent growth of the Euroblock economy. Britain received a short delay in the deadline for exit from the EU. So the risk of Brexit without a deal only increased.

This week we expect no less interesting and volatile news. Today, Germany will report on the indices of business expectations, business climate, and assessment of the current situation in the country. On Tuesday, the US reports to the real estate sector, including the number of issued building permits and the volume of the building of new houses. Later, the CB consumer confidence index will be released in March.

Wednesday will begin with a marathon of speeches by ECB board members. During the day, almost all the members of the ECB's governing bodies will speak. The head of the ECB, Mario Draghi open the day, continues Sabine Lautenschläger, Ewald Nowotny, Peter Praet, and Yves Mersch. This day is expected to be a strong excitement in the European markets. The States will report a modest volume of import/export and balance of trade. On Thursday, the main release of the day will be the USA GDP. According to consensus forecasts, a further slowdown in US GDP is expected, given the weak labor market report at the beginning of the month, expectations are quite justified.

At the end of the trading five-day period, attention will be focused on Europe. At the beginning of the day, Germany will report the retail sales, changes in the number of unemployed in the country and the unemployment rate. Afternoon, the EU will publish an inflation release, which will set the pace for the beginning of next week. The US will tell about the basic price index of spending on personal consumption, and the spending of individuals. We'll also learn about Chicago's business activity indices, and the University of Michigan will publish consumer expectations and sentiment indices.

MARKET REVIEW MARCH 25 - 29


GBP/USD

The quite heated situation around Brexit is gaining new momentum. British Prime Minister Theresa May received a postponement on the date of Britain's exit from the EU. For the pound, it did not become easier. This Saturday, after the EU summit in Brussels, where Theresa May received a delay, there was a March demonstration demanding to hold a second referendum on Brexit. People who came from all over the country to London, there were more than a million. A petition on the website of Parliament demanding the abolition of "Brexit" has already gained more than five million signatures.

At the same time, increasing pressure on the Theresa May. From various sources in the British government (sources Reuters and Euronews) comes information, that about half of the Cabinet members intend to achieve her resignation and the appointment of the interim Prime Minister.

On the other hand, Chancellor of the Exchequer Philip Hammond denies this information, supposedly, the Ministers intend to remove the Prime Minister from the post. "Now is not the time for selfish talk about a change of government. We have to decide what to do next. What Brexit? Without a deal, what would be a disaster for us? In turn, the abolition of the exit will undermine confidence in our political system. Will the deal proposed by the Prime Minister be accepted, and if not, will we get the version of the agreement that will be approved by the Parliament", - Hammond said.

On Sunday, Theresa May gathered at her residence "rebel legislators" such as Boris Johnson, Jacob Rees Mogg, and Steve Baker, as well as Ministers David Lidington and Michael GOV. Both Ministers denied rumors that they were being prepared as a possible interim Prime Minister. "On the meeting discussed a number of issues, including whether there is enough support in the House of Commons to return this week a meaningful vote," said Ledington after the meeting. The entire week, the political background will determine the movement of the pound sterling and only on Friday the release of Britain's GDP will be able to make adjustments.

MARKET REVIEW MARCH 25 - 29


OIL

Black gold is retreating, although the US meeting with the Chinese delegation in Beijing on trade issues was supposed to give optimism to the market. The danger came from there, where not strongly waited for it. Inversion of the yield curves of the US debt bonds agitate the markets. Today in the morning, the US monthly bonds are the most profitable, and ten-year-olds are inferior even to a bond with a maturity in the one year.

Fears of a possible recession in the US arose last Friday, when ten-year Exchequer yields fell below the three-month rate, for the first time since 2007. Historically, an inverted yield curve – where long-term rates fall below short-term rates-signals an impending recession. In addition to fears of a global economic downturn, data on production in Germany, Europe's first economy, reduced for the third month in a row. Growth and profit estimates are declining significantly in all major regions. These risks are much stronger than decline production by OPEC member countries and their allies, belonging to OPEC+. Stronger than any sanctions against Venezuela and Iran.

MARKET REVIEW MARCH 25 - 29


Read also

You have successfully registered

You can choose the needed type of account at any time!