Technical Analytics Report

Fundamental Analysis - Morning Market Review 06 May 2021

 Morning Market Review:


EUR is flat against USD during today’s Asian session, consolidating close to the strong psychological support at 1.2000. USD reacts with growth to hints of a possible increase in interest rates in the US in the foreseeable future, while the macroeconomic statistics released in Europe could not support the buying sentiment for EUR yesterday. Markit Services PMI in Germany in April declined from 50.1 to 49.9 points, which turned out to be worse than the neutral forecast. Markit Composite PMI in Germany for the same period corrected from 56 to 55.8 points. In general, in the eurozone, indicators retain weak upward dynamics: in the service sector, the Markit index rose from 50.3 to 50.5 points, and the Composite PMI increased from 53.7 to 53.8 points. 


GBP is trading with ambiguous dynamics during today’s morning session, consolidating near 1.3900 and waiting for new drivers to appear on the market. Market participants are focused on today’s Bank of England meeting on the interest rate. Despite the fact that no changes in the vector of monetary policy are expected, it will be important for investors to hear updated forecasts from the British regulator. In addition, the Bank of England is expected to estimate the timing of the start of monetary tightening, as the epidemiological situation seems to be under control. Markit Services PMI for April is due in the UK today. Market forecasts suggest that the indicator will remain at 60.1 points. 


AUD declines against USD in Asian trading, developing flat dynamics that have settled in the short term. The drop in quotations replaced no less active growth the day before, despite the publication of strong macroeconomic statistics from the United States. ADP private sector employment report showed an increase in April from 565K to 742K, slightly below market expectations of an increase to 800K. Markit PMIs for April also supported USD. The Services PMI rose from 63.1 to 64.7 points, while the Composite PMI rose from 62.2 to 63.5 points. In turn, AUD received support amid positive data from Australia on the dynamics of building permits issued. In March, the indicator increased by 47.4% YoY after rising by 20.1% YoY in February. 


USD is trading upwards against JPY during today’s Asian session, waiting for new drivers to emerge on the market. The ADP report on employment in the US private sector published yesterday did not particularly affect the dynamics of the instrument, as investors expect the publication of data on the US labor market on Friday. Some of the stabilization of the situation in the market was also facilitated by the statements of the representatives of the US Fed on Wednesday. Officials tried to reassure investors after a speech by US Treasury Secretary Janet Yellen, who spoke in favor of raising interest rates, as well as a gradual tightening of monetary policy to prevent overheating of the economy. 


Gold prices are trading near zero during today’s Asian session, consolidating after moderate gains the day before, which were again driven by the depreciation of USD. In turn, the uptrend was limited by the resumption of the rise in US Treasury yields, as the US Fed officials rushed to calm the markets worried by the recent speech of the head of the US Treasury Department Janet Yellen. However, the official herself tried to correct her words on Tuesday, noting that inflationary risks in the country remain under complete control. Now traders are awaiting the publication of the US labor market report for April on Friday.


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