Novosti i prognoe: devizno tržište od 23-03-2018

• May 1 deadline for tariff exemption talks is not very realistic

General merchandise stores were the largest contributors to the increase.

Sales were up in 7 of 11 subsectors, representing 63% of retail trade. Excluding sales at motor vehicle and parts dealers, retail sales increased 0.9%.

After removing the effects of price changes, retail sales in volume terms rose 0.1% in January.

Sales at general merchandise stores were up 2.3% in January, following a decline in December.

Electronics and appliance (+4.0%), clothing and clothing accessories (+2.1%) and furniture and home furnishings (+3.4%) stores also contributed to the increase in January, following declines in all three subsectors in December.

Sales at motor vehicle and parts dealers were down 1.2%, largely due to lower sales in British Columbia and Quebec. Results were mixed among store types, as sales at new car dealers (-1.6%) and used car dealers (-3.0%) fell, while sales at other motor vehicle dealers (+1.7%) and automotive parts, accessories and tire stores (+3.2%) increased.

The Consumer Price Index (CPI) rose 2.2% on a year-over-year basis in February, following a 1.7% increase in January.

All eight major components increased year over year in February.

Energy costs were 5.3% higher compared with February 2017, after increasing 2.4% year over year in January. Year-over-year gains in gasoline (+12.6%) and natural gas (+0.8%) were larger in February than in January.

Prices for durable goods were up 0.6%, led by the purchase of passenger vehicles index (+2.5%), mainly due to lower rebates on 2018 model-year vehicles.

Higher prices for services also contributed to the increase in the CPI. In February, consumers paid more on a year-over-year basis for travel tours (+2.2%) and Internet access services (+5.2%). The mortgage interest cost index rose 2.3%, reflecting, in part, recent interest rate increases. These gains in service prices were moderated by lower traveller accommodation (-4.8%) costs.

New orders for manufactured durable goods in February increased $7.4 billion or 3.1 percent to $247.7 billion, the U.S. Census Bureau announced today. This increase, up three of the last four months, followed a 3.5 percent January decrease. Excluding transportation, new orders increased 1.2 percent. Excluding defense, new orders increased 2.5 percent. Transportation equipment, also up three of the last four months, led the increase, $5.5 billion or 7.1 percent to $83.5 billion.

Shipments of manufactured durable goods in February, up nine of the last ten months, increased $2.2 billion or 0.9 percent to $249.7 billion. This followed a 0.5 percent January increase. Machinery, up six of the last seven months, led the increase, $0.6 billion or 1.8 percent to $33.4 billion.

• In this environment the bank of Russia will continue to reduce the key rate and will complete the transition to neutral monetary policy in 2018

• The bank of Russia will also monitor risks posed by external factors, considering the episodes of increased volatility in the global markets

• Slowdown of annual inflation may continue in the first half of 2018

• The bank of Russia will pay particular attention to the situation in the labour market

• Economic growth resumed in early 2018, following the decline due to temporary headwinds in late 2017

• Broader U.S. tariffs could have sizeable impact on China's economy, would have knock-on effects for supply chain across rest of Asia

• China's measured response so far & U.S. indications of openness to negotiation suggest trade war should still be avoided

• Bigger risk is that the U.S. eventually imposes across-the-board tariffs on China

EUR/USD

Resistance levels (open interest**, contracts)

$1.2459 (4399)

$1.2418 (2431)

$1.2388 (843)

Price at time of writing this review: $1.2339

Support levels (open interest**, contracts):

$1.2301 (3222)

$1.2268 (5246)

$1.2230 (3934)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date April, 6 is 105939 contracts (according to data from March, 22) with the maximum number of contracts with strike price $1,2150 (6624);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4265 (2792)

$1.4217 (2149)

$1.4189 (2503)

Price at time of writing this review: $1.4109

Support levels (open interest**, contracts):

$1.4044 (758)

$1.4010 (892)

$1.3972 (1310)

Comments:

- Overall open interest on the CALL options with the expiration date April, 6 is 31021 contracts, with the maximum number of contracts with strike price $1,4200 (2792);

- Overall open interest on the PUT options with the expiration date April, 6 is 30162 contracts, with the maximum number of contracts with strike price $1,3800 (3595);

- The ratio of PUT/CALL was 0.97 versus 0.96 from the previous trading day according to data from March, 22

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

• Fx stability is important

• Think U.S trade measures likely affecting forex

• Extremely regrettable if U.S tariffs on steel apply to Japan