Market Review for April 29

Monday was perky with resurgent demand for riskier assets. As a result, EUR/USD ended the day near 1.3110 and GBP/USD — in the area of ​​1.5490.

EUR/USD opened the week a small gap up due to positive news from Italy with regard to the formation of a new government. However, the mark of 1.31 is not so easy to break, especially in anticipation of monetary policy easing and the output of weak data on consumer confidence and spending. Enrico Letta is a center-left Democratic Party, and nine other ministers. A special role in the current cabinet becomes Deputy Prime Minister — Secretary of the center-right party «People of Freedom» Angelino Alfano, who also took over as Minister of the Interior. Market satisfied even with this outcome, which resulted in the strengthening EUR, and at lower yields on Italian government bonds. The pair opened the day at 1.3047, reached a maximum of 1.3116 and closed trading near that level.

GBP/USD is still under the impression of a recent report by the UK’s GDP in Q1. Even against the background of an empty calendar, she showed slight strengthening. Opening the day at 1.5483, the pair reached the maximum 1.55545 and retraced to 1.5490 at the close.

USD/JPY rebounded slightly in the 98.10 area, but only after rolled to a minimum of 97.33 during the Asian session. There is nothing surprising in the fact that the pair continues to find obstacles on the way up. Yesterday’s U.S. data again disappointed: the rate of growth of consumer income slowed to 0.2% from 1.1% in March, while expenses decreased to 0.2% from 0.7%. It is becoming increasingly clear that the restoration of the first quarter, which gave hope for stability, was only an illusion.

Forecast for Tuesday, April 30, 2013

Whatever the reaction to an imaginary peace in Italy, the reality remains the same — the data from the eurozone continue to talk about the weakening economy, which simply requires at least a placebo in the form of the ECB rate cut. Thus, in addition to all the most important meetings of the central bank, and reports from the U.S., investors this week will be focused on the performance of E-17. Today the attention will draw data from Germany. The labor market can serve as a good indicator of the current state of the corporate sector and the future of consumer spending. Given the sharp increase in the number of unemployed in March, this time you can expect more moderate strengthening — forecasts show growth on 2000. If the rate is exceeded, the attractive mark 1.30 on EUR/USD once again come to the fore.

For GBP/USD calendar for today is not anything interesting. Several reports of minor importance are unlikely to cause a reaction currency. Recent economic data from the UK cheered a couple, but not enough to continue to consolidate above 1.55, which is quite a strong barrier. Most likely, the pair will beat out of the rut series of PMI data for the three sectors of the economy. We do not expect anything positive from the index, so maintain our forecast decline in the area of ​​1.5460 and then to 1.5380.

Did not come until Friday, USD/JPY will keep a low profile, but showing a moderate response to the release of economic data from the U.S.. Today, those may be the consumer confidence index. Growth of the indicator can propel a pair of the area and then 98.20 to 98.50.


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