USD and stocks rally on strong payrolls

By GG Analyst in Reviews 0 Comment

EUR/USD

The US employment stats inspired optimism both of the stock and dollar bulls. Employment growth by 236K and decline of unemployment to 7.7% triggered the dollar rally. EURUSD dropped from 1.3130 to 1.2950. The better than expected news ( growth by 170K was forecasted) supported the rally of the stock exchanges, which as a result demonstrated the best week of growth this year. Quite a rare thing – simultaneous growth of the dollar and stock market – has its reasons, but will hardly last for long. Demand for the US assets is also logical as this country’s economy promises to demonstrate more…

Apart in happiness, together in grief

By GG Analyst in Reviews 0 Comment

EUR/USD

The newspapers are still savouring the Dow Jones high and nearly record levels of S&P 500, but in our opinion it’s worth paying attention to the risks now. The divergence between the stock markets and Oil, that we spoke about at the beginning of the week, also exists between the euro and the markets, albeit to a lesser extent. Generally speaking, the stock markets were swelling like a bubble thanks to cheap money from the Fed and CBs of other developed countries. Yet it doesn’t mean that  correction in the stock exchanges will necessarily make the euro grow. Quite the opposite. more…

All ears into Draghi’s speech

By GG Analyst in Reviews 0 Comment

EUR/USD

It seems the markets got stuck at one spot again. Earlier it was the channel between 1.3250 and 1.3400, where EURUSD was trading for a couple of weeks. Now the support is at 1.35 and the resistance is marked at 1.36. Yet, Friday’s upsurge on the payrolls was an exception, but we attribute it to nervousness of the markets. This week began with the return to the lower bound of the channel, i.e. to 1.35. On Tuesday the pair retraced and hit 1.36, while on Wednesday it again travelled down to the bottom of the channel. Now trading is held at more…

Asynchrony of markets

By GG Analyst in Reviews 0 Comment

EUR/USD

The payrolls were somewhat dubious. On the one hand, the January data proved to be worse than expected, but on the other hand the rates of many previous months were revised up. Thus, it turned out that a year ago, in January 2012, the US labour market grew by 311K, while in January 2013 it added just 157K, i.e. twice as little. This growth rate lags behind the natural population growth, so it’s not surprising that the unemployment should rise from 7.8% to 7.9%. The earnings keep growing at a pace slightly higher than the inflation rate, demonstrating 2.1% for earnings more…

Don’t buy into the rumours

By GG Analyst in Reviews 0 Comment

EUR/USD

Almost all the economists surveyed by Bloomberg (48 out of 49) expect expansion of the QE programme. Many believe that this measure will compensate the size of the expiring Operation Twist. It means that the market is now in anticipation of the asset purchase programme being extended from $40bln up to $85bln monthly. This turn of events is quite possible and we spoke about that before (remember our comments after the payrolls), however it has already been built into the rates and therefore is of little interest now. There is one more variant, also worth of considering. A couple of weeks more…