Forex-novosti i prognoze od 24-03-2021

According to FXStreet, the cut to Nornickel’s production guidance will support a higher price for palladium but ultimately, demand-side factors are why economists at Capital Economics think it will outperform platinum. They expect the palladium price to rise a touch, but the platinum price to drop back. 

“Supply of both PGMs is still expected to recover this year, but we now expect the rebound in palladium supply to be slower. We think that production of both precious metals will return to around 93% of 2019 levels this year.”

“Given that we now expect production of both metals to recover at roughly the same rate, we doubt that supply will have a major influence on the relative prices of platinum and palladium over the next year or so.”

“We expect investment demand for platinum to ease back. We expect investment demand for both gold and industrial metals to fall over the course of this year. Accordingly, platinum is unlikely to benefit from investor buying, with negative implications for its price. In contrast, investors’ holdings of palladium are already negligible, so any changes are unlikely to have much of an impact on its price.”

“The price of palladium will rise to $2,700 per ounce (from $2,630 currently) by end-2021 and $2,800 by end-2022. In contrast, we expect the price of platinum to fall to $900 per ounce (from $1,180 currently) by end-2021 and $800 by end-2022.”

• Economic recovery depends on getting pandemic under control; vaccines are critical to that
• Direct payments are providing support to families
• Financial institutions look healthier than before; banks should have ability to make returns to shareholders
• Time may have come to modernize the unemployment system, to tie it to local conditions or put automatic stabilizers in place
• My views on U.S. fiscal space have changed since 2017
• Budget should be on sustainable path in long run
• More fiscal space doesn't mean that anything goes
• Longer run, we need to raise revenue to support outlays

• We expect upward pressure on prices to be transitory and temporary
• It will be a very, very strong year in the most likely case
• We don't expect too-high inflation but we have to tools to address it if necessary
• Fiscal support from Congress has been at the heart of recovery
• Fed's unemployment forecast reflects expectation for labour force participation to rise

The European Commission (EC) said on Wednesday its flash estimate showed the consumer confidence indicator for the Eurozone rose by 4.0 points to -10.8 in February from an unrevised -14.8 in the previous month. That was the highest reading since February 2020.

Economists had expected the index to increase to -14.5.

Considering the European Union (EU) as a whole, consumer sentiment improved by 3.6 points to -12.1.

Given this month’s gains, both indicators are approaching their long-term averages of -11.1 (Eurozone) and -10.6 (EU).

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories rose by 1.912 million barrels in the week ended March 19, following a build of 2.396 million barrels in the previous week. Economists had forecast a drop of 0.272 million barrels.

At the same time, gasoline stocks increased by 0.203 million barrels, while analysts had expected a gain of 1.186 million barrels. Distillate stocks climbed by 3.806 million barrels, while analysts had forecast a decrease of 0.122 million barrels.

Meanwhile, oil production in the U.S. grew by 100,000 barrels a day to 11.000 million barrels a day.

U.S. crude oil imports averaged 5.6 million barrels per day last week, up by 0.3 million barrels per day from the previous week.

Preliminary data released by IHS Markit on Wednesday revealed that U.S. private sector business activity recorded its second-fastest upturn for six years in March.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 59.0 in March, up from 58.6 in February. Economists had expected the reading to increase to 59.3. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. The improvement in operating conditions was the second-quickest since April 2010 amid stronger client demand, but data also highlighted the most severe supply chain disruption on record, the report notes. Nevertheless, the upturn in new business accelerated to the sharpest since June 2014, with new export orders growing solidly. Meanwhile, the pace of job creation slowed slightly as many manufacturers highlighted struggles finding suitable candidates to fill vacancies.

The Markit flash services purchasing manager's index (PMI) rose to 60.0 in March, up from 59.8 in the previous month. Economists had expected the reading to grow to 60.0. The rate of expansion was the steepest since July 2014, supported by a stronger increase in new orders amid improved client demand and the loosening of coronavirus restrictions in some states. Moreover, the advance in total new sales was underpinned by a renewed growth in new export orders.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 59.1 in March, down slightly from 59.5 in February, signaling the second-fastest private sector upturn for six years.

Chris Williamson, Chief Business Economist at HIS Markit noted: “Another impressive expansion of business activity in March ended the economy’s strongest quarter since 2014. The vaccine roll-out, the reopening of the economy and an additional $1.9 trillion of stimulus all helped lift demand to an extent not seen for over six years, buoying growth of orders for both goods and services to multi-year highs.”

U.S. stock-index futures traded rose on Wednesday, as Intel’s (INTC) shares climbed on plans to expand chip-making capacities, while investors awaited U.S. PMI readings for March and another day of testimonies from Fed Chair Powell and Treasury Secretary Yellen.

Global Stocks:

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

The U.S. Commerce Department reported on Wednesday that the durable goods orders fell 1.1 percent m-o-m in February, following a revised 3.5 percent m-o-m climb in January (originally a 3.4 percent m-o-m surge). This represented the first decline in durable goods orders since April 2020.

Economists had forecast a 0.8 percent m-o-m advance.

According to the report, a 1.6 percent m-o-m drop in orders for transportation equipment was the major contributor to the February decrease. Meanwhile, orders for durable goods excluding transportation fell 0.9 percent m-o-m in February, following a revised 1.6 percent m-o-m advance in January (originally a 1.4 percent m-o-m gain), also missing economists’ forecast of 0.6 percent m-o-m rise.

Elsewhere, orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, decreased 0.8 percent m-o-m in February after a revised 0.6 percent growth m-o-m in January. Economists had called for a 0.5 percent m-o-m advance in core capital goods orders in February.

Shipments of these core capital goods declined 1.0 percent m-o-m in February after a revised 1.9 percent m-o-m jump in the prior month.

Freeport-McMoRan (FCX) downgraded to Equal-Weight from Overweight at Morgan Stanley

Alcoa (AA) upgraded to Overweight from Equal-Weight at Morgan Stanley; target $43

GBP fell against its major counterparts in the European session on Wednesday as better-than-expected flash manufacturing and services PMI readings from the UK were not enough to offset worries about a potential ban of the COVID-19 vaccine exports by the EU, which could slow the UK's vaccination program.

The flash survey data from IHS Markit and the Chartered Institute of Procurement & Supply (CIPS) revealed that the UK's manufacturing PMI improved to 57.9 this month from 55.1 in the previous month. The reading pointed to the strongest growth in the country's factory activity since November of 2017. Economists had forecast the index to climb to 55.0. According to the report, production growth reached its strongest since the end of 2020. New orders also rose at the fastest pace for three months, despite another relatively subdued rise in export sales. At the same time, Britain's services PMI surged to 56.8 in early March from 49.5 in February. The latest reading pointed to the first expansion in the services sector since October 2020. Economists had forecast the indicator to come in at 51.0.

In addition, market participants assessed the data from the Office for National Statistics (ONS), which showed that the UK's consumer price inflation slowed unexpectedly in February. According to the data, consumer price annual inflation decelerated to 0.4 percent y/y from 0.7 percent y/y in January. The rate was expected to increase to 0.8 percent y/y. Core inflation rate also slowed to 0.9 percent y/y from 1.4 percent y/y.

FXStreet reports that the Credit Suisse analyst team notes that the EUR/GBP pair is expected to see a clear break above 0.8641 to confirm a near-term base and a deeper recovery to the 55-day average at 0.8732/38.

“A sustained move above the high of last week at 0.8641 should confirm for a deeper recovery to 0.8659/69 initially, then back to what we see as tougher resistance from the late February high and 55-day average at 0.8732/38. We would look for a fresh cap here and a resumption of the broader downmove.” 

“Near-term support moves to 0.8597. Below 0.8574/69 is needed to clear the way for a fresh look at 0.8535/20.”

• Says Easter pause was a mistake because it wasn't implementable
• We must break and reverse the third wave of the pandemic
• The road is hard and rocky but we will beat the virus

• Current expectation is that won't happen until 2024
• If we hadn't provided the stimulus, we'd have had a much higher currency

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. dropped 2.5 percent in the week ended March 19, following a 2.2 percent decrease in the previous week.

According to the report, refinance applications fell 5.1 percent, while applications to purchase a home rose 2.6 percent.

Meanwhile, the average fixed 30-year mortgage rate climbed from 3.28 percent to 3.36 percent, the highest since the week ended June 5.

“Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S. economy continues to improve amidst the faster vaccine rollout and states easing pandemic-related restrictions,” noted Joel Kan, MBA’s associate vice president of economic and industry forecasting. 

FXStreet reports that economists at Standard Chartered said that GBP/USD could see further gains whilst EUR/USD could remain under downward pressure.

“The Fed confirmed it expects a hot economy and prefers a “chilled” monetary policy, even as longer-term yields rise. In the near-term, this cocktail is likely to temporarily support the USD.”

“EURUSD will likely drift below 1.18 as vaccination execution delays keep ECB very dovish. A USD rally is also likely to lead the low-yielding CHF and JPY to rally towards 0.94 and 110, respectively. However, #USD strength is unlikely to dominate entirely over a 1-3 month horizon.”

“We expect USD/CAD to continue to slide towards 1.22 and GBPUSD to push towards 1.42 as US economic expansion and vaccinations allow respective central banks to move towards policy normalisation.”

“On a longer 6-12m horizon, though, we continue to expect the USD to weaken. Rising inflation is likely to follow today’s rising yields, resulting in an eventual fall in real (net of-inflation) yields, especially relative to other major currencies. This would be bearish for the USD medium-term.”

Reuters reports that Chancellor Angela Merkel’s cabinet approved a debt-financed supplementary budget of 60 billion euros ($71 billion) which will lift annual new borrowing to a record high of more than 240 billion euros this year, a government official said.

Finance Minister Olaf Scholz also suggested a draft budget for next year with additional net new debt of 81.5 billion euros for which parliament will have to suspend a constitutional debt brake for a third year in a row, the official added.

The revised budget plans mean that Germany’s overall pandemic-related net new debt could exceed 450 billions euros from 2020 to 2022.

According to the report from the Office for National Statistics, UK average house prices increased by 7.5% over the year to January 2021, down from 8.0% in December 2020. 

The average UK house price was £249,000 in January 2021; this is £17,000 higher than in January 2020.

On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.5% between December 2020 and January 2021, compared with an increase of 0.1% in the same period a year ago.

On a seasonally adjusted basis, average house prices in the UK were unchanged between December 2020 and January 2021, following an increase of 1.0% in the previous month.

Average house prices increased over the year in England to £267,000 (7.5%), in Wales to £179,000 (9.6%), in Scotland to £164,000 (6.9%) and in Northern Ireland to £148,000 (5.3%).

The North West was the English region which saw the highest annual growth in average house prices (12.0%), while the West Midlands saw the lowest (4.7%).

FXStreet reports that Commerzbank discusses XAU/USD prospects.

“The market is bouncing just ahead of the $1670 June low and the $1675 2019-2021 uptrend. However, rallies are indicated to be corrective only AND initial resistance is offered by the $1760/65 band, which is the May high and November low blocks the way higher.” 

“A close above $1760/65 is needed in order to alleviate downside pressure and signal a deeper recovery to the $1800-$1820 band, but various Elliott wave counts suggest that this should be it on the topside. 

“Above the $1800-$1820 band lies $1861.35, the 200-day ma and $1906, the 21st December high, and the top of the channel at $1918. This guards the November and September highs at $1965.84/$1973.8 and the 78.6% retracement at 2006.”

According to the report from IHS Markit / CIPS, business activity across the UK private sector increased in March and the rate of expansion was the fastest for seven months. This was fuelled by a rise in new orders for the first time since September 2020, which survey respondents attributed to a rebound in sales ahead of easing lockdown measures, alongside stronger consumer confidence and a surge in demand for residential property services.

The headline seasonally adjusted Flash UK Composite Output Index registered 56.6 in March, up sharply from 49.6 in February and above the crucial 50.0 no-change mark for the first time in three months. The latest reading signalled a strong rate of private sector output growth and the speed of recovery was the fastest since August 2020. For the first time since the start of the pandemic, service sector activity (index at 56.8) outpaced manufacturing production growth (55.6).

Higher levels of business activity were often linked to the prospect of looser restrictions on trade due to the coronavirus disease 2019 (COVID-19) pandemic. Moreover, the government roadmap for fewer stringency measures in the coming months contributed to the strongest rise in total new work since August 2020. Service providers noted forward bookings from domestic consumers, while some manufacturers cited advanced orders from hospitality businesses and high-street retailers. Export sales remained relatively subdued, however, with total new orders from abroad falling for the third month running. A strong degree of pent-up domestic demand led to a renewed increase in unfinished work in March. Although only modest, the rate of backlog accumulation was the fastest since June 2018. 

Latest data indicated that expectations for the year ahead picked up for the third month running and were the strongest since this index began in July 2012.

According to the report from IHS Markit, Eurozone business activity returned to growth in March, fueled by a survey record increase in manufacturing output as global demand continued to revive from the pandemic. The service sector was again hit by virus-related restrictions, though even here the decline was the weakest since last August. Hiring picked up as firms boosted capacity in line with fuller order books and optimism about the year ahead. Sentiment was tarnished, however, by concerns over rising virus infection rates. March also saw firms’ costs rise at the fastest rate for a decade, pushing prices charged for both goods and services higher during the month. Goods prices rose especially markedly, posting the largest rise for almost ten years, often linked to suppliers hiking prices amid record supply chain delays as shortages worsened.

The headline Eurozone Composite PMI rose from 48.8 in February to 52.5 in March. By rising above 50.0, the latest reading indicated the first increase in business activity since last September, with the current expansion the largest recorded since last July and the second-steepest seen over the past 28 months.

While manufacturing output growth accelerated sharply to the highest since data were first available in 1997, the service sector continued to be constrained by the coronavirus disease 2019 (COVID-19) pandemic, with social distancing restrictions leading to a seventh successive monthly fall in business activity. The rate of contraction in the service sector nevertheless moderated to the slowest seen over this period, thanks to spill-over benefits from strong manufacturing growth, a modest easing of virus containment measures and encouraging prospects for the year ahead.

According to the report from IHS Markit, Germany’s private sector economy had a strong finish to the opening quarter of the year, with business activity rising steeply on the back of record growth in manufacturing and a mini revival in the service sector as coronavirus disease 2019 (COVID19) lockdown measures were partially eased.

The headline Flash Germany PMI Composite Output Index sprang to a 37-month high of 56.8 in March, up from 51.1 in February. The result was driven by improved performances across both manufacturing and services. The survey’s Manufacturing Output Index registered at a record high of 68.5, reflecting widespread reports of production levels being ramped up in line with growing order books. The Services Business Activity Index meanwhile moved into growth territory for the first time since last September, registering 50.8, helped by the easing of some lockdown restrictions during the month.

Overall new business showed the steepest rise for six months in March. New work at service providers moved closer to stabilisation, falling at the slowest rate in the current six-month sequence of decline, but continued to be undermined by a lack of demand from international clients. This was in stark contrast to the picture in manufacturing, where firms reported rising sales to Asia (particularly China), Europe and the US leading to record growth in goods export orders.

Elsewhere, March’s survey highlighted increasing inflationary pressures across the German private sector, stemming from rising commodity prices and transport costs. Average input prices faced by businesses showed the steepest increase in a decade, with rates of cost inflation at 14- and 121- month highs for services firms and manufacturers respectively.

Still, manufacturers remained strongly upbeat about the year-ahead outlook for output. The degree of optimism was down slightly since February but still the third-highest on record (since July 2012). Service providers meanwhile raised their expectations for future activity, recording their highest level of confidence since March 2018. 

During today's Asian trading, the euro fell against the US dollar, reaching its lowest level since November amid concerns about a jump in the incidence of coronavirus in Europe.

Some European countries, including Germany and France, have previously extended quarantine measures to contain the spread of COVID-19. Tensions with China are also weighing on investor sentiment. The EU Foreign Affairs Council earlier decided to introduce restrictive measures under the sanctions regime for human rights violations, including against China. In response, the Chinese Foreign Ministry decided to apply restrictive measures against a number of EU representatives.

The ICE index, which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose by 0.23%.

The Federal Reserve expects inflation to accelerate this year on the back of the economic recovery, said the head of the US Fed Jerome Powell at a hearing in the House of Representatives Financial Services Committee.

The pound fell significantly against the US dollar on the back of UK inflation data. According to the report from Office for National Statistics, the Consumer Prices Index (CPI) rose by 0.4% in the 12 months to February 2021, down from 0.7% to January 2020. Economists had expected a 0.8% increase. On a monthly basis, CPI rose by 0.1% in February 2021, compared with a 0.4% rise in February 2020. Economists had expected a 0.5% increase.

FXStreet reports that ANZ Bank discusses NZD/USD prospects.

“Selling in the wake of Tuesday’s government housing policy announcements continued. The move has been decent and some might call it an over-reaction. However, given the role housing plays in shaping the growth outlook, the immediacy of the changes and the surprise removal of tax deductibility on interest, the adjustment seen is warranted given the implications for the OCR. We think a further downward adjustment in OCR expectations is likely over coming days.” 

“A break of 0.70 is a bad sign technically – the next support level below 0.70 is miles away.”

Reuters reports that a report by Britain’s upper house of parliament said that the City of London may be better off staying out of the EU’s financial services market as it would have to sacrifice autonomy over setting rules to win full access.

The European Union has yet to grant Britain direct financial market access after it left the bloc on Dec. 31.

Brussels will consider whether to grant full access, known as equivalence, once it has agreed a memorandum of understanding with Britain on a new forum for cooperating on financial rules, an agreement that is due by the end of March.

“We agree that broad positive equivalence determinations would best meet the needs of practitioners in both the UK and the EU, but recognise that in many areas the EU is unlikely to grant these without the UK sacrificing more decision-making autonomy than equivalence is worth,” the lawmaker’s report said.

The Bank of England has warned that Britain’s financial services industry, which accounts for 7% of the country’s economic output, should not be forced to accept EU rules.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2019 (741)

$1.1982 (900)

$1.1950 (1145)

Price at time of writing this review: $1.1836

Support levels (open interest**, contracts):

$1.1797 (2801)

$1.1765 (4624)

$1.1728 (4686)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date April, 9 is 66520 contracts (according to data from March, 23) with the maximum number of contracts with strike price $1,1900 (5094);

GBP/USD

$1.3938 (868)

$1.3904 (109)

$1.3828 (676)

Price at time of writing this review: $1.3678

Support levels (open interest**, contracts):

$1.3634 (1186)

$1.3600 (321)

$1.3563 (504)

Comments:

- Overall open interest on the CALL options with the expiration date April, 9 is 9355 contracts, with the maximum number of contracts with strike price $1,4100 (1180);

- Overall open interest on the PUT options with the expiration date April, 9 is 20011 contracts, with the maximum number of contracts with strike price $1,3200 (5598);

- The ratio of PUT/CALL was 2.14 versus 2.12 from the previous trading day according to data from March, 23

* - 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.

According to the report from Office for National Statistics, the Consumer Prices Index (CPI) rose by 0.4% in the 12 months to February 2021, down from 0.7% to January 2020. Economists had expected a 0.8% increase. On a monthly basis, CPI rose by 0.1% in February 2021, compared with a 0.4% rise in February 2020. Economists had expected a 0.5% increase.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 0.7% in the 12 months to February 2021, down from 0.9% to January.

The largest upward contribution to the CPIH 12-month inflation rate came from transport (0.30 percentage points).

Falling prices for clothing, second-hand cars, and games, toys and hobbies resulted in the largest downward contributions to the change in the CPIH 12-month inflation rate between January and February 2021. These were partially offset by large upward contributions from rising prices for motor fuels, and housing and household services overall.

On a monthly basis, the CPIH rose by 0.1% in February 2021, compared with a larger rise of 0.3% in February 2020.