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Market Review May 1, 2014

May 1, 2014

Expected data on April inflation in Europe has allowed Draghi to feel relieved. The index has increased from 0.5% to 0.7%. That enables the ECB not to undertake any further stimulating measures, whether its downgrading of the rate or securities purchase. The fact that statistics have been expected to be at 0.8% the current number might satisfy the ECB.

 

Earlier Draghi’s stated that regulator was ready for actions but only in case of further deterioration of situation with inflation. If in coming months the figure is not going to continue growth and for instance will pull back to 0.6% and also to 0.5%, then the ECB will have to undertake countermeasures. But currently all that is just an assumption.

        So if on the next ECB meeting the monetary policy is not going to be modified, then the Euro will get a good impulse at least for local growth. Bulls have received an additional support after publication of data on downgrade in Spain from 13% to 12.7%. Besides positive dynamics of French consumer spending also has became one of the drivers of current growth.

But Germany is still the most stable supplier of good news. On Wednesday it was found out that the unemployment in the state is reducing 5th month in a row. It is now at historical minimum of 5.1%. It is more than twice as lower as in the rest of Europe with an average figure of  11.9%.

 TECHNICAL ANALYSIS

EUR/USD

The Euro is approaching resistance at 1.3900. This level is crucial in determination of further trend. If the level is not crossed, then the retracement in the long run will extend as far as 1.3784.

USD/JPY

The pair still looks bullish. It is now near support at around 102. Most likely it will withhold as we already can see some consolidation and probably a trend reversal from above levels.

GBP/USD

The ascent of the Pound is quite impressive. There are no serious obstacles seen in its way. Current levels are higher than in any given moment since 2011.

ECONOMIC CALENDAR

 

All Day     Holiday  France – Labor Day

All Day     Holiday  Germany – Labor Day

All Day     Holiday  Hong Kong – Labor Day

All Day     Holiday  Mexico – Labor Day

All Day     Holiday  Italy – Labor Day

All Day     Holiday  Brazil – Labor Day

All Day     Holiday  Indonesia – May day

All Day     Holiday  Norway – Labor Day

All Day     Holiday  Switzerland – Labor Day

All Day     Holiday  Spain – First of May

All Day     Holiday  India – Maharashtra Day

All Day     Holiday  South Africa – Workers Day

All Day     Holiday  South Korea – Labor Day

All Day     Holiday  Singapore – Labor Day

All Day     Holiday  China – Labor Day

01:00    CNY  Chinese Manufacturing PMI   

06:00    GBP  Nationwide HPI (YoY) 

06:00    GBP  Nationwide HPI (MoM) 

08:30    GBP  Manufacturing PMI      

12:30    USD  Core PCE Price Index (MoM)    

12:30    USD  Fed Chair Yellen Speaks           

12:30    USD  Initial Jobless Claims    

12:30    USD  Personal Spending (MoM) 

14:00    USD  ISM Manufacturing Employment 

14:00    USD  ISM Manufacturing PMI      

17:30    GBP  MPC Member Cunliffe Speaks            

23:30    JPY  Household Spending (YoY)