Forex-novosti i prognoze od 11-05-2021

According to FXStreet, there are three options for greening road transportation, namely full or partial electrification, more efficient fuel combustion and the rollout of fuel cell infrastructure. Every option will lead to the scarcity of some metals and a geopolitical dependency but a combination of these options would ease the scarcity and criticality of these metals. Strategists at ABN Amro think demand and prices will rise substantially for lithium, some rare earth metals and platinum group metals.

“We think that demand for electric vehicles will increase considerably from this very low level. This will lead to higher demand for lithium and rare earth elements. With this Australia, Chile and China will increase their strong supplier power.” 

“We think that battery technology will result in lower cobalt demand going forward so the DR Congo should slowly but surely lose its supplier power.”

“In the coming years, demand for platinum, palladium and rhodium will also increase. The more stringent emission regulations for internal combustion engines will demand higher loadings of these platinum group metals.” 

“Vehicles with internal combustion engines are still needed for longer distance travel as long as the fuel cell infrastructure is not rolled out. Demand for fuel cell vehicles will also result in higher demand for platinum. There is already a supply shortage in these metals, and this will only increase resulting in higher prices.”

• Says April jobs report was disappointing but outlook is still bright
• Says childcare and vaccinations are main issues with the labor supply rather than unemployment benefits
• I don't think benefits are main issue but it helps to put people in a position to make the decision to stay home and look after the kids or wait for the vaccine
• Says she wants to see more and broader progress
• No doubt we are in recovery but will see some ups and downs
• Says she wants to see more strength in labor market and expecting that this year
• Supply chain issues are affecting certain products and commodities "very much so in their pricing"
• My expectation is that we'll end the year above 2% inflation but when that unwinds, we'll see it fall again in 2022
• I'm particularly focused on inflation expectations - I'll be looking at surveys and market-based measures - to see them rising and at what pace they're rising above 2%
• Says financial stability risks overall are moderate
• Volatility in markets is only a problem when it is coupled with high degrees of leverage

The Job Openings and Labor Turnover Survey (JOLTS) published by the Labor Department on Tuesday revealed a 7.9 percent m-o-m surge in the U.S. job openings in March after a revised 6.0 percent m-o-m advance in February (originally a 3.8 percent m-o-m gain).

According to the report, employers posted 8.123 million job openings in March compared to the February figure of 7.526 million (revised from 7.367 million in the original estimate) and economists’ expectations of 7.500 million. This was the highest reading since the series began in December 2000. The job openings rate was 5.3 percent in March, up from a revised 5.0 percent in the prior month (originally 4.9 percent). The report showed that the number of job openings rose in a number of industries with the largest increases in accommodation and food services (+185,000 jobs), state and local government education (+155,000), and arts, entertainment, and recreation (+81,000), but declined in health care and social assistance (-218,000).

Meanwhile, the number of hires increased 3.7 percent m-o-m to 6.009 million in March from a revised 5.794 million in February (originally 5.738 million). The hiring rate was 4.2 percent in March, up from an unrevised 4.0 percent in the prior month. Hires went up in state and local government education (+62,000), educational services (+31,000), and mining and logging (+17,000).

The separation rate in March was 5.322 million or 3.7 percent, compared to 5.429 million or 3.8 percent in February. Within separations, the quits rate was 2.4 percent (flat m-o-m), and the layoffs rate was 1.0 percent (-0.2 p.p. m-o-m).

FXStreet reports that economists at Danske Bank expect U.S. rates and yields to continue to tick up over the next 3-6 months as the U.S. recovery gains speed, inflation expectations and real interest rates continue to rise and markets really begin to discuss the timing of Fed QE tapering.

“We estimate the increases in commodity prices already seen will come to have a significant impact on the current rate of inflation, especially in the US.”

“We would not be surprised if by June the dots would begin to indicate a majority of the 19 FOMC members contributing dots targeting higher interest rates in 2023. Seven members currently say 2023 and three 2022... We expect the Fed to officially kick off discussions about tapering QE at its September meeting.”

“Unsurprisingly, inflation expectations in the markets have ticked up in 2021, with 10-year inflation expectations in the US rising by around 0.5 percentage points this year to now stand at 2.5%.”

“10Y US yields look set to hit 2.0% on a 6M horizon and 2.2% 12 months from now.”

U.S. stock-index futures plunged on Tuesday, as investors continued to dump technology-related stocks with lofty valuations amid growing anxiety over the prospects of acceleration in inflation amid the post-pandemic recovery.

Global Stocks:

FXStreet notes that aluminium (LME) trades in three-year highs at 2603.00. Axel Rudolph, the Senior FICC Technical Analyst at Commerzbank, expects the metal to surpass the 2661.00/2710.00-region and extend its advance.

“Last week, aluminium surged higher and sliced straight through the 2008-2021 resistance line at 2508.62 to then advance to its current May high at 2603.00. Above it, the February 2006 and November 2007 highs can be found at 2661.00/2678.10.” 

“If the  2661.00/2678.10 area is exceeded, the July 2006 high and April 2018 peak at 2710.00/2718.00 would be next in line. Further up lies the May 2011 peak at 2803.00.” 

“Immediate upside pressure should be maintained while the contract remains above the one-month support line at 2463.64 and the late April low at 2392.50."

(company / ticker / price / change ($/%) / volume)

Dow (DOW) downgraded to Neutral from Buy at Goldman; target lowered to $64

NIKE (NKE) upgraded to Buy from Hold at Jefferies; target raised to $192

DuPont (DD) upgraded to Buy from Neutral at Goldman; target $102

FXStreet reports that S&P 500 has again rejected trend resistance from mid-April, seen at 4243 today and with a triple-daily RSI momentum divergence in place here also analysts at Credit Suisse maintain the base case of not chasing strength for now. Instead, the market is looking for a consolidation phase.

“The S&P 500 has seen a fresh rejection of trend resistance from mid-April, today seen at 4243 and the subsequent sharp retreat has seen the market back below the price gap from Friday morning and also puts the market back below our Q2 objective of 4200.”

“With daily RSI momentum continuing to trend lower and holding a triple divergence this is seen adding weight to our base case that a broader consolidation phase is underway.”

“A close below support from the 13-day exponential average at 4181 is needed to add further weight to this view with support then seen next at the uptrend from early march at 4150/47.” 

“Resistance moves to 4208 initially, then 4220, above which is needed to clear the way for a retest of the 4236/43 highs/trend resistance.” 

• We will keep prudent monetary policy flexible, targeted and appropriate
• We will keep liquidity reasonably ample

USD weakened against most of its major rivals in the European session on Tuesday amid renewed investors' anxiety over the prospects of acceleration in inflation amid the post-pandemic recovery.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.16% to 90.07, its lowest level in two-and-a-half months.

The fear among market participants is that higher price pressures will prompt the U.S. central bank to hike its interest rates and start tapering monthly asset purchases sooner than expected. The U.S. Federal Reserve representatives, however, have tried to assure markets that any spike in inflation would be transitory. 

Investors are looking for the Consumer Price Index (CPI) for April, set to be released on Wednesday, to see whether inflationary pressure was building. It is expected that CPI will show a y-o-y climb of 3.6%, due to a low base from pandemic-depressed prices.

FXStreet reports that the Credit Suisse analyst team notes that USD/CAD continued lower again on Monday, in contrast to other commodity currencies. The pair is honing in on key long-term support at 1.2062/48, below which would complete a major long-term “double top”.

“With a major medium-term top in place and medium-term momentum reaccelerating, we still see scope for a move to 1.2062/48, the 2017 low and 50% retracement of the rise from 2011."

“Whilst we expect the 1.2062/48 region to be a tough initial barrier, it’s worth highlighting that a weekly close below here would complete a multi-year ‘double top’ to dramatically reinforce our medium-term bearish outlook.”

FXStreet reports that economists at HSBC suggest that the European Central Bank (ECB) will decide on whether to progress to launching a formal investigation of a digital EUR around mid-2021. The central bank has pledged not to use the digital EUR to enforce deeply negative interest rates. Assuming the go-ahead transpires, its rollout would take time, but this may still put the ECB ahead of many of its G10 peers.

“The ECB will decide on whether to progress to launching a formal investigation of the digital EUR around the middle of 2021.”

“Many have raised concerns that a digital EUR could be used to enforce deeply negative interest rates. However, the ECB has pledged this will not be the case, and in other trials around the world central bank digital currencies (CBDCs) have not been interest bearing.” 

“Should the digital EUR project be given the green light, then a two-year investigative phase will begin, which would aim to come up with at least one design that meets the requirements of the public. Thereafter, assuming the project was given the go-ahead, it would likely take another two to three years to develop, test, and eventually roll out the digital EUR.” 

“We are unlikely to see a digital EUR until 2025, but this may still put the ECB significantly ahead of many of its G10 peers.”

FXStreet reports that GBP/USD maintains its base above the March highs at 1.4001/17 and economists at Credit Suisse look a move back to 1.4238, then to the first core upside target of 1.4302/77.

“We stay directly bullish and look for a move back to 1.4182 initially, then the 1.4238 high, ahead of our first core upside target of 1.4302/77 – the 2018 highs and 50% retracement of the 2014/2020 bear trend.” 

“Whilst we would expect to see a fresh phase of consolidation from the 1.4302/77 area, we continue to look for an eventual clear break for our 1.49/1.51 ultimate objective.”

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that EUR/JPY is in new highs for the year and has the highs from April 2018 and September 2018 at 133.13/48 in its sights.

“EUR/JPY continues to inch higher and is poised to reach 133.13/48, these are the highs from April 2018 and September 2018 and they may provoke some profit-taking.” 

“Our longer-term target is the 137.51 2018 high.”

FXStreet reports that according to UOB Group’s FX Strategists, USD/CNH faces extra downside in the short-term horizon.

24-hour view: “For today, USD is more likely to consolidate and trade between 6.4100 and 6.4360.”

Next 1-3 weeks: “We continue to hold the same view as from yesterday (10 May, spot at 6.4220). As highlighted, the risk for USD is still clearly on the downside but in view of the deeply oversold shorter-term conditions, the year-to-date low near 6.3980 may not come into the picture so soon. The downside risk is deemed intact as long as USD does not move above 6.4640 (no change in ‘strong resistance’ level).”

Reuters reports that the Organisation for Economic Cooperation and Development (OECD) said that governments hungry for extra revenue as they emerge from the coronavirus crisis should revisit their inheritance and estate tax.

Exemptions, carve-outs and generous lifetime donations mean inheritance and estate tax is a minor source of revenue in most countries and often make inequality worse, the OECD said.

Among the worst offenders is the United States, where only 0.2% of estates pay inheritance tax while nearly 80% of the wealth is in the hands of the top 10% richest households.

Inheritance or estate tax make up only 0.5% of overall tax revenues on average across the 24 countries in the OECD group of mostly developed countries that have such levies.

While there was room for a bigger contribution to government finances strained by the pandemic, stiff opposition to changes in what critics sometimes call a "death tax" could be expected.

"It's the middle class that opposes a tax that the middle class doesn't pay," OECD director of tax policy and administration Pascal Saint-Amans told.

FXStreet reports that Credit Suisse analyst team discusses EUR/USD prospects.

“We stay biased higher for a test of resistance next at the 78.6% retracement of the Q1 fall at 1.2212, with scope for the 1.2243 February high. For now, we look for strength to ideally fail here for a fresh pullback into the broader sideways range that has been in place since early January. A direct breach of the 1.2243 February high can see strength extend to test 1.2325/50 – the 2021 high and potential downtrend from 2018. Support moves to 1.2125 initially, then 1.2105/02, which we look to try and hold. Below can see a deeper setback to 1.2058/52, with better buying expected here.”

According to the report from ZEW, the Indicator of Economic Sentiment for Germany increased in the current May 2021 survey, climbing 13.7 points to a new reading of 84.4 points. This is the highest value so far since the beginning of the COVID-19 pandemic. The last time the indicator had reached a higher level was in February 2000.

The assessment of the economic situation in Germany improved by 8.7 points compared to the previous month, and currently stands at minus 40.1 points. The assessment of the economic situation in Germany thus improved very significantly in May.

“The slowing down of the third COVID-19 wave has made financial market experts even more optimistic. The ZEW Indicator of Economic Sentiment in the May survey has reached its highest level in more than 20 years. The assessment of the economic situation has also improved noticeably. The experts expect a significant economic upswing in the coming six months. The economic outlook for the euro area and the United States has improved considerably as well,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also increased sharply in May, bringing the indicator to a current level of 84.0 points, 17.7 points higher than in the previous month. The indicator for the current economic situation in the eurozone climbed 14.1 points to a level of minus 51.4 points compared to April. The outlook for economic development in the euro area has thus improved very significantly.

Bloomberg reports that according to veteran investor Mark Mobius, the world’s largest money managers may be underestimating the durability of inflation after a record wave of money printing to combat the Covid-19 pandemic.

This will pose a particular problem in the U.S., where a rising inflation rate will weigh on the global reserve currency, said Mobius. At the same time, the quickening price growth is likely to support a rally in raw materials, even as the Bloomberg Commodity Index already hovers near its highest since July 2015, he said.

Such a backdrop favors emerging markets, which will grow faster than their developed-nation peers in the years ahead, Mobius said. Chinese and Indian equities, recently beaten down by a rout in technology shares as well as the latest Covid-19 crisis, look particularly attractive, he said. Yet he voiced caution about fully rotating into value stocks.

According to the report from Istat, in March 2021 the seasonally adjusted industrial production index decreased by 0.1% compared with the previous month. The growth in the first quarter 2021 with respect to the previous one was +0.9%.

The index measures the monthly evolution of the volume of industrial production (excluding construction). With effect from January 2018 the indices are calculated with reference to the base year 2015 using the Ateco 2007 classification (Italian edition of Nace Rev. 2).

The calendar adjusted industrial production index increased by 37.7% compared with March 2020 (calendar working days being 23 versus 22 days in March 2020).

The unadjusted industrial production index increased by 40.9% compared with March 2020.

Reuters reports that ECB policymaker Francois Villeroy de Galhau said that suggestions that the European Central Bank (ECB) could begin winding down exceptional bond purchases early are "purely speculative".

Villeroy pushed back against recent comments by more hawkish members of the ECB who have suggested it could decide to slow bond purchases soon.

Those comments have come even though the ECB has committed to maintain its Pandemic Emergency Purchase Programme (PEPP) - aimed to help economies deal with the COVID-19 crisis - until at least March 2022.

"Any suggestion of a reduction in our purchases before then - what is sometimes called by the technical term tapering or phasing-out - is purely speculative," Villeroy said.

Villeroy said that even if the ECB was to ease back on PEPP, the ECB's broader monetary policy would remain accommodative.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the AUD/USD to surge above the 0.80 level.

“AUD/USD is attempting to erode the recent highs at 0.7815/49, it has not quite managed to clear this zone and will need a second close above here to confirm the break. For now, we will maintain a positive bias and allow for gains to the end of February high at 0.8007.” 

“Longer term, the 0.8135 2018 high is in play. The 200-month ma lies at 0.8263.”

During today's Asian trading, the US dollar rose against the yen and the pound, but fell against the euro and the australian dollar.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.10%.

The focus of the foreign exchange market this week is the April data on the dynamics of consumer prices in the United States, which will be released by the Labor Department on Wednesday at 12:30 GMT. The consensus forecast of experts provides for an acceleration of inflation in the United States in April to 3.6% in annual terms, compared with 2.6% in March.

Several factors point to an increase in inflation, including wage growth, budget incentives and higher commodity prices, experts say. The Federal Reserve Bank of New York's inflation expectations indicator rose to 3.4% in April, the highest since September 2013, from 3.2% in March.

Meanwhile, the president of the Federal Reserve Bank of Chicago, Charles Evans, said yesterday that the rate of inflation, as well as the level of employment in the United States, is far from the indicators at which the Fed could think about changing monetary policy.

CNBC reports that JPMorgan Asset Management is bullish on Chinese technology stocks even though regulators are cracking down on internet giants in the mainland.

Shares of major Chinese tech companies such as Alibaba, JD.com and Meituan have tumbled this year as Beijing moved to rein in monopolistic behavior among internet giants.   

Howard Wang, head of Greater China equities at JPMorgan Asset Management, said the regulatory clampdown poses uncertainties in the near term. But in the longer term, Chinese tech companies still have the potential to grow, he said.  

Wang said price declines in Chinese tech shares — due to the regulatory risks or investors rotating out of growth stocks — appear overdone. That has resulted in “pretty decent value” in some Chinese tech stocks, he added.

Without naming specific stocks, Wang said he likes large tech companies given their beaten down valuation and potential for earnings to grow.

RTTNews reports that data released by Destatis showed that Germany's wholesale prices grew at the fastest pace in a decade in April.

Wholesale prices rose 7.2 percent year-on-year in April, following a 4.4 percent rise in March. This was the biggest growth since March 2011, when prices were up 8.4 percent. Wholesale petroleum product prices surged 34.1 percent in April and prices of scrap and residual materials climbed sharply by 83.6 percent.

On a monthly basis, wholesale prices gained 1.1 percent but slower than the 1.7 percent increase posted in March.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2253 (3407)

$1.2225 (2428)

$1.2203 (2755)

Price at time of writing this review: $1.2135

Support levels (open interest**, contracts):

$1.2101 (312)

$1.2079 (713)

$1.2051 (808)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 4 is 57513 contracts (according to data from May, 10) with the maximum number of contracts with strike price $1,2200 (3407);

GBP/USD

$1.4247 (956)

$1.4223 (2692)

$1.4187 (1082)

Price at time of writing this review: $1.4115

Support levels (open interest**, contracts):

$1.4038 (124)

$1.4012 (203)

$1.3982 (289)

Comments:

- Overall open interest on the CALL options with the expiration date June, 4 is 22104 contracts, with the maximum number of contracts with strike price $1,5000 (2696);

- Overall open interest on the PUT options with the expiration date June, 4 is 18634 contracts, with the maximum number of contracts with strike price $1,3100 (3731);

- The ratio of PUT/CALL was 0.84 versus 0.79 from the previous trading day according to data from May, 10

* - 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.

Reuters reports that one of Washington's top liberal think tanks said that the U.S. Federal Reserve should force banks to hold more cash to guard against potential losses due to climate change and possible steps to fight it.

The plan, published by the Center for American Progress, is likely to inform a looming debate about exactly how far bank regulators should go in policing climate change as the Biden administration looks to tackle the issue on all fronts.

The paper argues that the Fed could move quickly to bolster banks' capital cushions by establishing several new safeguards, including a new capital surcharge directly tied to how much pollution banks directly finance and heightened stress tests of big banks that incorporate climate risks.

Several of the changes are likely to be strongly opposed by Wall Street, and the Fed itself has taken a much more deliberate approach to climate than sought by progressive Democrats.

RTTNews reports that according to the report from the National Bureau of Statistics, China's consumer price inflation rose moderately at a slower-than-expected pace in April, while producer prices grew at the fastest pace in more than three years driven by higher commodity prices.

Consumer price inflation rose to 0.9 percent in April from 0.4 percent in March. Nonetheless, the rate was slightly below economists' forecast of 1 percent.

Core inflation that excludes volatile energy and food prices picked up to 0.7 percent from 0.3 percent.

Food prices dropped 0.7 percent, while non-food prices advanced 1.3 percent. The consumer price growth rate was capped by pork prices which were very high last year.

Producer price inflation surged to 6.8 percent in April from 4.4 percent in March. This was the highest since October 2017 and well above economists' forecast of 6.5 percent.

Month-on-month, producer prices grew 0.9 percent.