America is "rising from it’s knees". Fundamental analysis for 16.05.2014
16.05.2014
On Thursday an impressive block of data on the United States was published. Perhaps the most significant was the reduction of the number of applications for unemployment benefits to a seven-year low. In contrast to the inflation rate, which is calculated in relative terms, depending on the level of participation, the application for the grant, as well as new jobs are quantitative indicators that directly reflect the current situation in the labour market.
So, the weekly rate of applications for unemployment benefits last week fell by 24k to 297k, which was significantly better than expected. Earlier, it has also become known that by the results of April, 288k jobs were created which was the maximum monthly growth over the past 4 years. If the coming weeks will bring no surprises, then the May statistics may withdraw to 250k or even a bit higher.
Moreover, positive data on inflation was published, which shows the monthly growth of 0.2% instead of the expected 0.1%. Since the Fed now reduces QE3 at every meeting, the statistics on inflation riveted attention. The current growth rate allows the controller to continue to exit the program (if the situation with inflation worsened, the Fed would have to suspend withdrawal from QE3).
The fly in the ointment was the data on industrial production, which unexpectedly dipped by 0.6%. However, last month’s data has been revised positively. Consequently, the current correction in the Eurodollar is likely short lived. It is unlikely that we will see any significant increase in the currency pair amid expectations of the ECB relaxing its policies at the next meeting.
Yesterday extremely alarming data on European GDP was revealed. If we leave Germany in the brackets, the whole euro zone economy would be in a deep loss. France and Italy, the largest economies after Germany, stand on the brink of a new recession. And about such positive statistics on the labour market, which is now published in the States, Europeans can only dream of.
Yesterday evening two of the three transactions on sale trigged my stop losses. One trade I left in place in case of the downward movement resuming, and when the price starts to unfold, I plan to open new shorts. The Euro “bears” are also supported by the statistics on the trade balance of the euro zone, which dipped to 15.2 billion Euros. Consequently, the current correction may be very short lived.
RoboForex Analytical Department
So, the weekly rate of applications for unemployment benefits last week fell by 24k to 297k, which was significantly better than expected. Earlier, it has also become known that by the results of April, 288k jobs were created which was the maximum monthly growth over the past 4 years. If the coming weeks will bring no surprises, then the May statistics may withdraw to 250k or even a bit higher.
Moreover, positive data on inflation was published, which shows the monthly growth of 0.2% instead of the expected 0.1%. Since the Fed now reduces QE3 at every meeting, the statistics on inflation riveted attention. The current growth rate allows the controller to continue to exit the program (if the situation with inflation worsened, the Fed would have to suspend withdrawal from QE3).
The fly in the ointment was the data on industrial production, which unexpectedly dipped by 0.6%. However, last month’s data has been revised positively. Consequently, the current correction in the Eurodollar is likely short lived. It is unlikely that we will see any significant increase in the currency pair amid expectations of the ECB relaxing its policies at the next meeting.
Yesterday extremely alarming data on European GDP was revealed. If we leave Germany in the brackets, the whole euro zone economy would be in a deep loss. France and Italy, the largest economies after Germany, stand on the brink of a new recession. And about such positive statistics on the labour market, which is now published in the States, Europeans can only dream of.
Yesterday evening two of the three transactions on sale trigged my stop losses. One trade I left in place in case of the downward movement resuming, and when the price starts to unfold, I plan to open new shorts. The Euro “bears” are also supported by the statistics on the trade balance of the euro zone, which dipped to 15.2 billion Euros. Consequently, the current correction may be very short lived.
RoboForex Analytical Department
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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.