EUR / USD, GBP / USD.
Yesterday, the spotlight for the Forex market was the British pound sterling. According to the Bank of England's statement about a possible more aggressive adjustment of the monetary policy due to inflation and positive changes in the Brexit by the end of the year, the pound shot up 190 points in the moment. The Bank of England raised its forecast for GDP for the current year from 1.6% to 1.8%. But very soon, the pound started the reverse movement. In part, this return was influenced by the statement of the Minister for Brexit, D. Davis, about the threat of the EU in relation to a transitional deal that is not in "goodwill". Fed representatives U. Dadli, N.Kashkari and P.Harker expressed general conclusion that three rate increases this year are the most acceptable option, and one should wait for a significant increase in salaries before raising rates, changing the rate of reducing the balance of the Fed is not necessary. As a result, the pound closed the day up by 31 points. The euro fell by 16 points, Germany's trade balance in December fell from 22.3 billion euros to 21.4 billion, while waiting for 21.5 billion.
But even more serious was the stock market. Correction unexpectedly continued with even greater force, the S & P500 collapsed by 3.75%, Dow Jones by -4.15%. The reasons for such a significant fall are not clear until this morning. The number of initial applications for unemployment benefits amounted to 221 thousand against the forecast of 236 thousand. The fall of the stock market strengthened the dollar to all currencies.
Today, the pound sterling may again be in the spotlight. The volume of industrial production in the UK in December is expected to decrease by 0.9% against the November growth of 0.4%. The production in the manufacturing industry is projected to grow by 0.3%. The production in the construction sector (Construction Output) is expected with zero growth. The commodity trade balance of the UK for December is projected with a slight improvement from -12.2 billion pounds to -11.6 billion pounds.
In the euro area, there may be little optimism; industrial production in Italy for December is expected to increase by 0.7%, industrial production in France by 0.1%. According to the US, the final estimate of wholesale stocks for December is a forecast of 0.2%, without change.
As a result, we do not expect GBP / USD pair coming out of the 1.3840-1.3980 range in the near future, it is more likely to decline to the lower end of the range, and we expect a slight increase in the euro to 1.2295.
USD / JPY.
Yesterday, on the crushing decline of the US stock market, the Japanese yen lost 58 points. Today, Asian market indexes also fall significantly, but the yen shows a 25-point increase, which suggests taking the currency under control from the side, probably the Central Bank. Earlier, we expressed concern, seeing the indifference of the regulator in the fall of the yen below 110.00. Probably, the Bank of Japan took this decline as acceptable. The Japanese index Nikkei225 today loses 2.91%, Chinese China A50 -5.07%, South Korean Kospi SEU -1.72%.
The support of the largest players in the Japanese currency looks more significant against the background of yesterday's failed data on Japan's balance of payments. Current Account for December, seasonally adjusted, fell from 1.70 trillion yen to 1.48 trillion yen, while it was expected to be 1.66 trillion yen. Excluding seasonal fluctuations, Current Account was 0.797 trillion vs. expectations of 1.018 trillion and 1.347 trillion a month earlier. The index of the assessment of the current economic situation of Eco Watchers for the last month fell from 53.9 to 49.9.
Today negative inflation indicators in China came out. The consumer price index in January added 0.6% against the expectations of 0.7% and on an annualized basis dropped from 1.8% to 1.5% y / y. Producer prices slowed from 4.9% y / y to 4.3% y / y. The index of business activity in the service sector of Japan fell by 0.2% in December against the expectation of growth of 0.2%.
We are waiting for the continuation of the positive development of the yen with the target of 109.75 / 90.
