Forex-novosti i prognoze od 27-04-2021

By eFXdata reports that analysts at Credit Suisse discuss GBP/USD technical outlook and highlight the importance of the 1.3809 level, and the 1.3950 level for near-term directional bias.

"Below 1.3810/09 though remains needed to see this fully negated in our view to reinforce the broader sideways range again, albeit with an immediate downside bias. Support would then be seen next at the recent “reversal day” low at 1.3717, below which can clear the way for a retest of the lower end of the sideways range at 1.3670/69."

"Above 1.3950 remains needed to reassert an upward bias and clear the way for a retest on the top of the range at 1.4001/17."

FXStreet reports that economist at UOB Group Lee Sue Ann sees the Federal Reserve to keep its monetary conditions unchanged at its meeting on Wednesday.

“The Fed is willing to look past transient inflation impact and not react pre-emptively.”

“We expect no policy changes in this meeting and the Fed’s taper discussion will likely only start in late 2021/early 2022.”

“Policy rate will stay at 0-0.25% till 2023.”

The Conference Board announced on Tuesday its U.S. consumer confidence climbed 12.7 points to 121.7 in April from 109.0 in March. This was the highest reading since February 2020.

Economists had expected consumer confidence to come in at 113.0.

March’s consumer confidence reading was revised down from the originally estimated 109.7.

The survey showed that the present situation index surged from 110.1 in March to 139.6 this month. Meanwhile, the expectations index increased from 108.3 last month to 109.8 in April.

“Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” noted Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks. Short-term inflation expectations held steady in April, but remain elevated. Vacation intentions posted a healthy increase, likely boosted by the accelerating vaccine rollout and further loosening of pandemic restrictions.”

S&P reported on Tuesday its Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan areas, jumped 11.9 percent y-o-y in February, following an unrevised 11.1 percent y-o-y surge in January. This was the biggest annual gain in house prices since March 2014.

Economists had expected a climb of 11.7 percent y-o-y.

Phoenix (+17.4 percent y-o-y), San Diego (+17.0 percent y-o-y) and Seattle (+15.4 percent y-o-y) recorded the highest y-o-y advances among the 20 cities in February. Overall, 19 of the 20 cities reported greater price gains in the year ending February 2021 versus the year ending January 2021.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, surged 12.0 percent y-o-y in February, following an 11.2 percent y-o-y jump in the previous month. This was the biggest annual advance on record.

“The National Composite’s 12.0% gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance” noted Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “These data remain consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years. Alternatively, there may have been a secular change in preferences, leading to a permanent shift in the demand curve for housing. Future data will be required to analyze this question.”

U.S. stock-index futures edged up on Tuesday, as investors assessed a big batch of Q1 earnings reports while awaiting the beginning of the U.S. Federal Reserve's monetary policy meeting later today.

Global Stocks:

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

Uber (UBER) initiated with a Buy at Needham; target $77

Verizon (VZ) downgraded to Neutral from Buy at MoffettNathanson; target lowered to $57

JPMorgan Chase (JPM) downgraded to Neutral from Overweight at Atlantic Equities; target $150

Dow (DOW) upgraded to Buy from Hold at Argus; target $69

FXStreet reports that following a spectacular rebound from pandemic-induced lows, economists at Capital Economics continue to expect that most commodity prices will be falling again by end-2021. Although growth in demand should be strong as the global economic recovery gathers pace, the recent price gains will incentivise supply. This is particularly the case for agricultural commodities, where output can respond quickly to prices.

“The rise in prices over the last year will lead to an increase in both planting and harvesting over the next eighteen months, which should boost the supply of most agriculturals, particularly the major grains. Accordingly, we forecast that most agricultural prices will decline over the next few years.”

“Although global demand for animal feed is likely to hold up strongly in the near term, we think that the price of soybeans will be much lower by end-2022 for two key reasons. First, we anticipate that demand growth will slow considerably in top-consumer China. Second, as La Niña conditions dissipate and high prices incentivise planting, we expect that the supply of soybeans will continue to grow in 2021-23. Putting all this together, we forecast that the global soybean market will swing into a surplus soon, which would give a lift to global stocks.”

“We forecast that the price of wheat will tumble from 725 US cents per bushel currently to 475 by end-2022.”

“We are also positive on the outlook for demand of the more ‘luxury’ agriculturals, such as coffee and cocoa, as the global economic recovery gains momentum. That said, prices have already risen sharply and we think the scope for further gains is fairly limited.”

USD appreciated against most of its major rivals in the European session on Tuesday, supported by a rise in the U.S. treasury yields, as investors shifted their focus towards the U.S. Federal Reserve's monetary policy meeting. The benchmark 10-year Treasury yield increased one basis point to 1.584% early Tuesday. The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.04% to 90.84.

The Fed's two-day meeting is to begin later today. Market participants do not expect the U.S. central bank to make any changes to its monetary policy stance at the meeting, leaving interest rates and asset purchases unchanged to bolster the economy. However, close attention is expected to be paid to the signals of when the Fed might start to reduce its QE program and its inflation outlook.

FXStreet notes that aside from rising supply, commodity prices face a number of other headwinds over the next year including the prospect of a stronger U.S. dollar and higher US Treasury yields. Against this backdrop, strategists at Capital Economics expect that the price of gold will fall.

“We have become more negative on the outlook for the price of gold. The gold price has already fallen a long way from its 2020 peak in tandem with higher real yields in the US.” 

“Given the rapid progress on vaccinations, large fiscal stimulus, and the Fed’s apparent willingness to accept higher long-term interest rates, we doubt it will be long before real yields start to rise again.” 

“We expect the price of gold to trend lower over the next couple of years.”

FXStreet suggests that with commodities surging and completing a long-term base, high beta and particularly the commodity currencies should benefit. The USD/CAD pair fell sharply yesterday, finally picking up downside momentum after the recent cross lower in daily MACD. Economists at Credit Suisse look for a break below support at the 2021 low at 1.2365, which should open up a move to the 2018 corrective low at 1.2258/51.

“USD/CAD finally saw an acceleration of downside momentum yesterday, in line with its large bearish ‘outside day’ and recent cross lower in daily MACD momentum.” 

“We stay bearish, with the next important support seen at the current year low at 1.2365, where we would expect to see another temporary pause. Post this pause, the next major support below here is seen at a major corrective price low at 1.2265/51, which is similarly expected to prove a tough initial barrier. Nevertheless, with a major long-term top in place, we still see scope for an eventual move to 1.2062, the 2017 low.” 

Raytheon Technologies (RTX) reported Q1 FY 2021 earnings of $0.90 per share (versus $1.78 per share in Q1 FY 2020), beating analysts’ consensus estimate of $0.73 per share.

The company’s quarterly revenues amounted to $15.251 bln (+34.3% y/y), roughly in line with analysts’ consensus estimate of $15.266 bln.

The company also issued downside guidance for FY 2021, projecting EPS of $3.50-3.70 versus analysts’ consensus estimate of $3.72 and revenues of $63.90-65.40 bln versus analysts’ consensus estimate of $65.48 bln.

For Q2 FY 2021, the company forecast EPS of $0.90-0.95 versus analysts’ consensus estimate of $0.82 and revenues of $15.50-16.00 bln versus analysts’ consensus estimate of $15.76 bln.

RTX rose to $82.01 (+1.25%) in pre-market trading.

FXStreet reports that strategists at Capital Economics expect oil prices to rise a little further over the next couple of quarters. A rebound in demand at a time when supply is set to remain relatively constrained should widen the deficit in the global oil market and push the price of Brent up to $75 per barrel by Q3 2021. However, they think prices will then begin to drop back as increasing supply shifts the market into a surplus. 

“As vaccines are rolled out and restrictions are lifted, we anticipate a surge in oil consumption. In particular, we think pen-tup demand for travel will mean that oil consumption will exceed pre-pandemic levels in Q3 this year, which underpins our forecast that the price of Brent Oil will peak at this time at around $75 per barrel.”

“The strong increase in oil demand this year will keep the market in a deficit. But rising prices will inevitably incentivise higher supply.”

“Our end-year forecasts for Brent are $70, $60 and $55 per barrel for 2021, 2022 and 2023 respectively.”

UPS (UPS) reported Q1 FY 2021 earnings of $2.77 per share (versus $1.15 per share in Q1 FY 2020), beating analysts’ consensus estimate of $1.72 per share.

The company’s quarterly revenues amounted to $22.908 bln (+27.0% y/y), beating analysts’ consensus estimate of $20.616 bln.

UPS rose to $188.00 (+6.93%) in pre-market trading.

General Electric (GE) reported Q1 FY 2021 earnings of $0.03 per share (versus -$0.05 per share in Q1 FY 2020), beating analysts’ consensus estimate of $0.01 per share.

The company’s quarterly revenues amounted to $17.117 bln (-16.6% y/y), missing analysts’ consensus estimate of $17.656 bln.

The company also issued in-line guidance for FY 2021, projecting EPS of $0.15-0.25 versus analysts’ consensus estimate of $0.24.

GE fell to $13.20 (-2.73%) in pre-market trading.

FXStreet reports that the Credit Suisse analyst team notes that the AUD/USD pair pushed strongly higher within its range, with a break above key resistance at 0.7838/49 needed to set a base and reassert the uptrend.

“AUD/USD remains capped below its recent highs at 0.7815/16, as well as the more important 0.7838/49 high. A break above here would resolve the aforementioned range to the upside by triggering an irregular basing structure, confirming a resumption of the broader bull trend, suggesting a quick move to 0.7900/05 and then the 2021 high at 0.8000/07.” 

“A sustained move below 0.7700/7691 would turn the risks lower within the range and complete an intraday ‘double top’, with the next support just below here at 0.7680/74.”

3M (MMM) reported Q1 FY 2021 earnings of $2.77 per share (versus $2.16 per share in Q1 FY 2020), beating analysts’ consensus estimate of $2.29 per share.

The company’s quarterly revenues amounted to $8.851 bln (+9.6% y/y), beating analysts’ consensus estimate of $8.432 bln.

The company also issued in-line guidance for FY 2021, projecting EPS of $9.20-9.70 versus analysts’ consensus estimate of $9.59 and revenues growth of 5-8%, which translates to $33.79-34.76 bln versus analysts’ consensus estimate of $34.33 bln.

MMM rose to $200.63 (+0.50%) in pre-market trading.

The Confederation of British Industry (CBI) reported on Tuesday its latest survey of retailers showed retail sales volume balance surged to +20 in the year to April from -45 in March, being well above seasonal norms in part due to base effects as sales volumes recorded a steep decline in April 2020 because of the first national lockdown in the UK. This was the highest reading since September 2018 as well.

Economist had forecast the reading to improve to -5.

Retail sales volumes were expected to remain above seasonal norms in the year to May (+10), with non-essential retail stores across the UK able to re-open by late-April, but the pace of their growth will slow.

The report also revealed that the retail orders balance was broadly flat in the year to April (-1, up from -33 in March) and were seen to drop in the year to May (-8).

In other survey results, stock levels in relation to expected sales was seen as broadly adequate (balance of 0 from +9), but this was the lowest survey balance since 2009, and were forecast to remain so next month (-1).

“Springtime has brought some relief to the retail sector, with non-essential stores in England and Wales re-opening earlier this month, and retailers in Scotland and Northern Ireland following suit in the final week of April,” noted Ben Jones, Principal Economist at the CBI. “Despite progress along the roadmap, the impact of Covid-19 restrictions are still biting hard. The improvement in retail sales this month was driven by sectors that have performed relatively well during the pandemic, with little immediate rebound expected for more embattled sectors such as clothing, footwear and department stores."

Tesla (TSLA) reported Q1 FY 2021 earnings of $0.93 per share (versus $1.24 per share in Q1 FY 2020), beating analysts’ consensus estimate of $0.73 per share.

The company’s quarterly revenues amounted to $10.389 bln (+73.6% y/y), beating analysts’ consensus estimate of $9.887 bln.

TSLA fell to $717.00 (-2.87%) in pre-market trading.

FXStreet reports that in the view of economists at HSBC, the combination of a less dovish BoC and fiscal stimulus should be CAD positive over the near term.

“The BoC left its policy rate unchanged at 0.25%, while it announced that it will reduce its weekly net purchases of Government of Canada bonds to a target of CAD3 B a week. The more impactful revelation was the BoC’s guidance around the likely timing of a move on interest rates. Based on the BoC’s latest projections, economic slack will be absorbed with inflation sustainably at the 2% target in 2H22, rather than the previous guidance of ‘into 2023’.”

“On the fiscal front, Canada’s federal government is committed to stimulus even as the domestic economy is set to rebound strongly in 2H21. While the recovery in some nations has been delayed by fresh waves of COVID-19 and slower vaccine roll-out, these are likely to be temporary setbacks. A patient Fed is also likely to see the USD weakening over the next few months. Overall, we expect the CAD to strengthen modestly against the USD over the next few months.”

According to the report from Istat, in April 2021, the consumer confidence index increased from 100.9 to 102.3. The improvement in confidence was spread across all its components. More specifically, the economic climate bettered from 90.2 to 91.6, the personal one from 104.5 to 105.9, the current one from 96.7 to 97.4 and, finally, the future one from 107.1 to 109.6.

As for the business confidence climate, the index (IESI, Istat Economic Sentiment Indicator) grew from 94.2 to 97.3.

The confidence index in manufacturing further extended its upward path rising from 101.9 to 105.4. Both the assessments on order book current trend and the expectations on future production developments improved (the balances increased from -13.2 to -6.6 and 5.4 to 8.3, respectively). The confidence index in construction went up from 147.9 to 148.5. The market services confidence index got on from 85.4 to 87.1. The retail trade confidence index increased from 91.2 to 95.8. The improvement in confidence characterized both distribution channels. The index improved from 95.8 to 101.2 in the large scale distribution and from 81.8 to 82.7 in the small and medium scale one.

Reuters reports that EU lawmakers kicked off a last debate on Tuesday on the post-Brexit trade agreement between the European Union and Britain, ahead of a vote that is expected to give the accord overwhelming approval.

That vote will be the final step towards ratification of the EU-UK trade and cooperation agreement, struck in December after more than four years of acrimonious negotiations and lingering mistrust as Britain ended 47 years of EU membership.

The accord crafted in the last days of 2020 only entered force on a provisional basis until the end of April, pending approval from the European Parliament. Lawmakers will vote late on Tuesday, with the outcome made public on Wednesday morning.

There is no doubt that they will back the deal, after assembly committees earlier cleared it by 108 votes to 1. If they did not, EU-UK ties would fall back to basic World Trade Organization terms, with quotas and tariffs.

CNBC reports that according to two economists, India’s economy may shrink in the current quarter as Covid-19 cases surge, but the country could recover in the next one.

On Tuesday, India reported another 323,144 cases, bringing the country’s cumulative infections to more than 17.6 million. That comes after the country reported five straight days of record new daily cases.

Sonal Varma, India chief economist at Nomura, said the country is “clearly going to see a sequential growth hit” in its first quarter. India’s fiscal year begins in April and ends in March the following year.

She predicts that gross domestic product will shrink around 1.5% in the current quarter, which ends in June. Varma added there is “downside risk” to this estimate.

Compared with the fiscal first quarter of 2020, however, the economy could grow more than 25%, she said. That’s because India’s GDP contracted nearly 24% in the same period last year.

Radhika Rao, an economist at DBS, similarly expects a contraction from last quarter, but “quite buoyant” numbers compared with last year.

She said there are “significant base effects,” and there will be a “natural bump up anywhere between 20% to 23%” in the quarter ending in June.

eFXdata reports that NAB Research discusses USD/JPY outlook.

"We continue to see current fair value in USD/JPY around ¥108 with price action on the pair expected to be largely contained in a ¥105 to ¥110 range over coming months. Later in H2-21 USD/JPY should gradually move towards a higher trading of ¥107 - ¥112 with an expected renewed rise in 10y UST yields a key factor for our end of the year forecast of ¥110. Our rate strategists expect 10y UST yields to end the year at 2.25%," NAB adds. 

Reuters reports that ratings agency Fitch said that the lingering impact of the COVID-19 pandemic and last year's sharp drop in oil prices will leave most governments in the Gulf with deficits this year.

"We expect only Abu Dhabi and Qatar to eke out fiscal surpluses," Fitch said in a report.

"High fiscal break-even oil prices illustrate the scale of the public finance reform challenge and mostly remain well above current or forecast oil prices."

Fitch expects average Brent oil prices of $58 a barrel this year but its long-term forecast is $53.

Bahrain would need a price of nearly $100 a barrel to balance its budget in 2021-2022, Kuwait more than $80, and Saudi Arabia and Oman around $70, Fitch estimated.

Besides oil revenues, the coronavirus continues to weigh on Gulf states' coffers, with some countries recently re-imposing restrictions on economic activity.

"Renewed waves of infections continue to hamper external receipts, public finances, employment and GDP growth," said Fitch.

FXStreet reports that strategists at OCBC Bank discuss Brent Oil prospects.

“We view last week’s 1% decline in Brent as profit-taking, especially after how the same benchmark rose 6% in the prior week. The time-spread on Brent has stayed largely stable as have crack spreads on both gasoline and diesel.” 

“This week’s OPEC+ meeting is unlikely to focus much on production. The biggest risk to our upside call now looks like that of the virus outbreak in India, a big importer and consumer of oil. PM Modi has so far pushed back against a nationwide lockdown but time is probably running out. A full lockdown from such a vital oil consumer could likely knock back Brent into the $60-$65 trading range.”

During today's Asian trading, the US dollar strengthened against the euro and the yen before the start of the two-day meeting of the Federal Reserve System (Fed).

Experts interviewed by Bloomberg expect that the Fed will confirm its readiness to continue buying assets in the same volumes until "significant progress is made" in moving towards the goals of maximum employment and price stability.

At the same time, 45% of respondents believe that before the end of this year, the Fed will announce plans to gradually reduce the monthly volume of asset repurchases, as the US economy is rapidly recovering from the crisis caused by the coronavirus pandemic. In March, the Fed said it would continue to buy back $120 billion worth of assets each month, including $80 billion worth of US Treasuries and $40 billion worth of mortgage bonds. Experts expect an increase in the base interest rate, which is currently in the range from 0% to 0.25% per annum, no earlier than 2023.

Investors ' attention on Wednesday will be focused on the press conference of Fed Chairman Jerome Powell, from whom they are waiting for signals about when the Fed may start reducing stimulus.

Meanwhile, the Bank of Japan kept unchanged the key parameters of monetary policy - the short-term interest rate on deposits of commercial banks in the Central Bank at -0.1% per annum, the target yield of ten-year government bonds of Japan-about zero.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.17%.

FXStreet reports that economists at Capital Economics discuss USD/TRY prospects.

“With inflation close to a peak and pressure from President Erdogan for looser monetary policy, we expect the one-week repo rate to be cut by 500bp, to 14.00%, by year-end. The rise in Turkey’s risk premia since the sacking probably has further to run which, combined with growing concerns about the inflation outlook, will keep the lira under pressure – our forecast is for the currency to weaken from 8.30/$ now to 9.50/$ by end-2021 and to 10.50/$ by end-2022. Sharp falls in the lira and high inflation will probably force the central bank to reverse course and tighten monetary policy next year.” 

“The government may provide a bit more fiscal support and there will be pressure on state banks to ramp up lending, as happened last year. Overall, though, the recovery will struggle to make headway. Our forecasts are for GDP growth of 4.8% this year and 3.3-3.8% in 2022-23.”

Reuters reports that in a joint interview in Zeit Online the finance ministers of France and Germany support the idea of a 21% minimum corporate tax rate, as suggested by the U.S. government.

"I, personally, have nothing against the U.S. proposal," Germany's Olaf Scholz was quoted as saying. "If that is the result of negotiations, we would also be agreed," France's Bruno Le Maire said.

U.S. Treasury Secretary Janet Yellen said this month she was working with G20 countries to agree on a global corporate minimum tax rate, and put forward a figure of 21%.

A rate of 12.5% for multinationals had been under discussion for new rules being negotiated at the Organisation for Economic Cooperation and Development.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2180 (1213)

$1.2152 (1598)

$1.2131 (1362)

Price at time of writing this review: $1.2070

Support levels (open interest**, contracts):

$1.2023 (1363)

$1.1986 (1398)

$1.1943 (1123)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 7 is 53990 contracts (according to data from April, 26) with the maximum number of contracts with strike price $1,2000 (3327);

GBP/USD

$1.4033 (1140)

$1.4001 (777)

$1.3954 (902)

Price at time of writing this review: $1.3891

Support levels (open interest**, contracts):

$1.3834 (685)

$1.3770 (419)

$1.3730 (1922)

Comments:

- Overall open interest on the CALL options with the expiration date May, 7 is 12244 contracts, with the maximum number of contracts with strike price $1,4200 (2933);

- Overall open interest on the PUT options with the expiration date May, 7 is 18395 contracts, with the maximum number of contracts with strike price $1,3750 (1922);

- The ratio of PUT/CALL was 1.50 versus 1.50 from the previous trading day according to data from April, 26

* - 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.

CGTN.com reports that data from the National Bureau of Statistics (NBS) showed that China's industrial profits soared 137 percent year on year during the January-March period to about 1.83 trillion yuan ($281.3 billion), as demand for raw materials surged along with the continued economic recovery. 

In March, profits of China's major industrial firms rose to 711.18 billion yuan with an increase of 92.3 percent from the same period a year earlier, when the economy was hit hard by the COVID-19 epidemic. Major industrial firms in the country refer to those that have an annual business turnover of at least 20 million yuan from their main operations. 

The sharp growth of industrial profits in the first quarter was mainly driven by skyrocketing profits generated in raw material manufacturing sector, according to Zhu Hong, a senior statistician from the NBS.

As prices for bulk commodities climbed and demand picked up, margins in raw material manufacturing industry saw a year-on-year growth rate of 434 percent, contributing to 51.5 percentage points of the overall industrial profit growth in the first quarter.

Among the 41 industrial sectors under the NBS measurement, 39 sectors saw at least double-digit growth in terms of profits for the first three months, and 16 sectors encountered a 100-percent uptrend in profits.

RTTNews reports that the Bank of Japan maintained its monetary stimulus unchanged, as widely expected. The bank downgraded its near-term inflation forecast and raised its growth projections despite the restrictions related to COVID-19 pandemic.

The board voted 8-1 to hold the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

According to the quarterly Outlook for Economic Activity and Prices report, the economy will recover, with the impact of the novel coronavirus waning gradually and supported by an increase in external demand, accommodative financial conditions, and the government's economic measures.

For the fiscal 2021, the bank expects 4 percent real growth instead of 3.9 percent estimated in January.

Citing stronger domestic and external demand, the growth projection for the fiscal 2022 was raised to 2.4 percent from 1.8 percent. Thereafter, growth is seen easing to 1.3 percent in the fiscal 2023.

The bank lowered its inflation forecast for the fiscal 2021 to 0.1 percent from 0.5 percent but lifted its outlook for the fiscal 2022 to 0.8 percent from 0.7 percent. Consumer prices are forecast to rise 1 percent in the fiscal 2023.