Análisis de mercado diario

There are no real surprises that the Bank of England (BoE) left interest rates unchanged at the conclusion of its latest monetary policy meeting today, but the most interesting twist that occurred included the BoE following the lead of the Federal Reserve overnight and the ECB the day prior, by appearing downbeat on the economic outlook.

This results in yet another contrast and twist from a central banker when you consider that BoE Governor Carney, made optimistic comments on the potential for higher interest rates in the United Kingdom just one week ago!

Overall the main action in the FX markets is investors shorting the USD in the aftermath of the Federal Reserve indicating that it is preparing to lower US interest rates. The USD has dropped across the board during trading on Thursday as expected, including against all of the G10, most emerging and Asian currencies with Gold remaining close to a five-year high above $1390.  

Source : Bloomberg Terminal

Source : Bloomberg Terminal

Source : Bloomberg Terminal

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Asian shares were depressed on Monday morning, as investors remained guarded amid lingering concerns over U.S. tax reforms.

The caution from Asia is likely to rollover into European markets which are currently tussling with renewed political uncertainty, after German Chancellor Angela Merkel’s failure to form a new government over the weekend. With uncertainty over U.S. tax reforms and political risk in Europe eroding appetite for riskier assets, Wall Street could come under further selling pressure this afternoon.

Central Bankers in the limelight 

We could see some fireworks across markets this week as central bank heavyweights such as European Central Bank President Mario Draghi, Bank of England Governor Carney and Fed Chair Janet Yellen take the spotlight. ECB Draghi will be testifying on the economy and monetary policy before the European Parliament in Brussels on Monday, while Mark Carney is set to testify on inflation and the economic outlook before the Treasury Select Committee on Tuesday. With Janet Yellen also due to participate at a panel discussion in New York this week, investors will be on alert to glean fresh insights into monetary policy if they are on the table.

Euro gripped by political uncertainty

The Euro was vulnerable to heavy losses on Monday after German Chancellor Angela Merkel was unable to form a new government on Sunday night.

With this bombshell development heightening concerns over political instability in Europe’s largest economy and sparking speculation of fresh elections, the Euro may be in store for further punishment. Although Europe’s encouraging macro fundamentals may offer some background support to the Euro long term, political risk has the ability to trigger further selloffs in the shorter term.

Taking a look at the technical picture, the EURUSD remains bearish below 1.1850. A breakdown and solid daily close below 1.1730 may encourage a further decline back towards 1.1680 and 1.1600, respectively.

Sterling steady against Dollar... but for how long?

There is a growing suspicion that Sterling’s abrupt appreciation last week Friday had nothing to do with a change of sentiment towards the currency but rather Dollar weakness.

This could be a volatile trading session for the currency with the Inflation report parliamentary hearing, Autumn Forecast Statement and second reading of the third quarter GDP all in focus. With inflation still hovering around the highest level in over five years at 3%, it will be interesting to hear Carney’s thoughts at the inflation report hearing on Tuesday. In regards to GDP data released later in the week, Sterling could shed more tears if GDP prints below market estimates.

From a technical standpoint, the GBPUSD punched above the 1.3230 level last week, on the back of Dollar weakness. Bulls have a shot at 1.3300 if prices can keep above the 1.3150 level. Alternatively, sustained weakness below 1.3230 may encourage a further decline back towards 1.3150.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Central bankers didn't seem to have learned the lesson from the former Fed Chair, Ben Bernanke, when he first mentioned the idea of tapering the amount of money being pumped into the economy in May 2013.

Back then, the news sent risk assets south, and the volatility index surged 63% in less than a month, while U.S. 10-year Treasury yields climbed 25%.

Both, ECB’s Mario Draghi, and BoE’s Mark Carney sent a message to investors from Sintra, Portugal that the era of cheap money is closer to an end. This time the reaction was mainly felt in fixed income and currency markets.

Draghi’s comments were intended to signal more confidence in the economic recovery and not an immediate call to withdraw stimulus; however, bonds were sold heavily, and the Euro marched above 1.14, a new 52-weeks high. Similarly, Carney’s remarks, sent the Pound to 1.2972, recovering all losses prior to PM failure to win a majority, as he indicated the possibility of raising rates. I think going forward central bankers will be more careful and cautious when passing on similar messages. In other words, they should be uninteresting not to disrupt financial markets.

Although I’m bullish on the Euro on the longer run, I think the market’s reaction is a bit too exaggerated. I would rather wait for hard data to confirm the hawkish stance, especially inflation, because with the recent slide in oil prices inflation may remain low for a prolonged period. If Eurozone’s headline and core CPI disappoints on Friday, there’s a high chance that traders will book some profits.

Financial stocks are the biggest beneficiaries from the surging yields and the Fed’s upbeat assessment on the U.S. banking sector. The biggest U.S. banks are now able to boost shares buybacks and dividend payouts by almost 50% compared to 2016. This would likely lead to the continued rotation from bond proxies such as utilities to financials.

In commodity markets, gold recovered most of Monday’s losses to trade above $1,250 as the U.S. currency continued to weaken against its major counterparts. Meanwhile, crude prices were higher on both sides of the Atlantic despite U.S. inventories unexpectedly rose 118,000 barrels last week. The supporting piece of news from EIA was the 100,000 barrels decline in production last week, but it’s too early to jump to conclusions at this stage as it's likely to reverse in the weeks ahead.  

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

After a muted trading session on Monday due to the U.S. holiday, the USD is finally showing signs of strength in early Asian trade as investors await economic data, speeches from several Fed Presidents, and minutes of the latest FOMC meeting.

U.S. treasury yields moved up across the curve after declining for two consecutive days, albeit slightly, it still managed to provide the dollar a minor push.

The narrow trading ranges indicate that traders are reluctant to take big bets until they get a detailed plan on U.S. tax, trade, and spending plans. Some Ttweets from Trump related to such policies will create some noise, but I believe the sideway trading will resume until February 28 when the President addresses a joint session of in Congress.  This will pProbably this will provide a major indication on where the USD is headed, given that monetary policy seems to have lost much influence lately.

European political risks can’t be ignored either. The mounting nervousness over the outcome of France’s Presidential election is clearly reflecting in fixed income markets. The spreads between the French and German yields rose to post Eurozone crisis highs in 2012 after polls yesterday showed far-right candidate Marine Le Pen narrowing the gap with her opponents.

The positive news in Europe came from Brussels, as the gridlock between the European Union and the IMF over releasing a new tranche of financial aid somehow eased. However, it’s too early to rule out that an agreement could be reached. Greece will most likely refuse the implementations of new austerity measures, the IMF will keep pushing for debt reliefs, meanwhile Germans insist on IMF involvement.

PMI readings for the manufacturing and services sectors from France and Germany are anticipated expected to show that economic activity remained healthy during the month of February, but expect little impact on the Euro given the scale of political risks.

Traders will have the chance to hear from Mark Carney today when he testifies before the U.K. parliament’s Treasury Committee. What’s going to be interesting is that his testimony comes after Bank of England upgraded its growth forecast in February 2, and since then signs of weakness in the economy emerged. Markets are currently seeing less probability of BoE tightening this year, but if Carney indicates that higher interest rates are still on the table during U.K.’s negotiation period, sterling may find some support.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Monetary policy guidance, and strong U.S. data failed to provide another push higher for the greenback last week. Fed Chair Janet Yellen made a blunt statement in her testimony before Congress that it would be unwise to wait too long to tighten monetary policy, and several of her colleagues followed by similar rhetoric, specifically from Boston Fed President, Eric Rosengren, who even suggested that the fed may raise rates by more than three times in 2017.

On the data front consumer prices increased to highest levels in nearly four years, and retail sales came in well ahead of expectations. Overall, most of the economic data releases were positive, and still, the U.S. dollar did not perform well.

The fall in U.S. treasury yields on Thursday which eventually narrowed the spreads between U.S. bond yields and their counterparts may explain partially why the U.S. dollar couldn’t resume its two-week uptrend. But dollar bulls seemed reluctant to push the currency higher without President Trump providing a clear agenda on tax and trade policy, and may not get one until he addresses the joint session of Congress on February 28.

The FOMC minutes due to release on Wednesday may reverberate recent hawkish remarks made by Fed officials, but without providing a solid indication on the path of interest rates, the impact on the dollar will likely be minor. Another aspect of interest will be a discussion of scaling down the central bank’s balance sheet, any sort of such discussion will likely support the dollar. Apart from FOMC minutes and Fed officials scheduled speeches there’s no tier one data on the shortened trading week.

The cable also challenged fundamentals last week. A terrible retail sales report, below than expected inflation, and drop in wage growth all failed to break the 200 pips trading range for GBPUSD. Traders will have the chance to hear from Mark Caney on Tuesday when he testifies before the UK parliament’s Treasury Committee. What’s going to be interesting is that his testimony comes after Bank of England upgraded its growth forecast in February 2, and since then signs of weakness in the economy emerged. Markets are currently seeing less probability of BoE tightening this year, but if Carney indicates that higher interest rates are still on the table during UK’s negotiation period, sterling may find some support.

EUR traders will be braced for some volatility on Monday when Euro area finance ministers gather to discuss Greece bailout, and “Grexit” term will probably show again if talks between Athens and its creditors get more complicated. Greece has about €7.5 EUR of debt due by July, and it’s unlikely to manage to pay back without securing another tranche of the bailout. This comes at a time where the Eurozone faces several elections with anti-euro politicians on the rise. On the data front, PMI’s reports, consumer confidence, and inflation data are scheduled for release.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.