Fundamental Analysis Morning Market Review 11 March 2021

Mar 11, 2021


 EUR is trading ambiguously against USD during today’s Asian session, consolidating near 1.1930 and small local highs since March 5, which were achieved due to the corrective growth of the instrument since Tuesday. Not the most confident macroeconomic statistics from the US put pressure on USD. In addition, investors are reacting to the downward correction in US bond yields, which, however, are holding close to annual highs. The Consumer Price Index Excluding Food & Energy in the US in February rose by only 0.1% MoM after the zero dynamics in January. Experts expected a growth of 0.2% MoM. In annual terms, the indicator corrected downward from +1.4% YoY to +1.3% YoY. Today, European investors are focused on the decision of the European Central Bank (ECB) on interest and deposit rates, as well as a press conference of the European regulator.


 GBP is trading ambiguously against USD during today’s morning session, maintaining weak upward momentum since the start of the week. Investors are buying GBP against the background of some stabilization of the yields on American bonds, as well as the depreciation of USD after the release of rather weak statistics on inflation in the United States. The market remains very optimistic about the outlook for the UK vaccination campaign, with the expectation that the government may soon lift most of the restrictions. This contrasts especially strongly with the vaccination campaign in Europe, where only a few countries can boast of some success and the threat of the formation of a “third wave” of the epidemic is still present. GBP was slightly supported today by the RICS Housing Price Balance survey. In February, the figure rose from 49% to 52%, while analysts expected it to decline further to 45%.


 NZD is strengthening against USD during today’s Asian session, testing 0.7200 for a breakout. The instrument took advantage of a slight decrease in the yield of US bonds, which provoked the appearance of corrective dynamics for USD across almost the entire spectrum of the market. Additional support for the instrument was provided by weak macroeconomic statistics on consumer inflation from the US. The Monthly Budget Statement was also disappointing. In February 2021, the US budget deficit widened and reached $ 311B against $ 163B in the previous period. Analysts expected deterioration in dynamics, but hoped for a deficit of $ 265B. Traders are focused on macroeconomic statistics from the US on the dynamics of jobless claims. It is expected that the number of initial jobless claims for the week ending March 5 will again decrease from 745K to 725K, which will provide USD with moderate support.


 After a short period of corrective dynamics, USD is returning to growth against JPY, trading near the level of 108.60. USD is recovering after the correction in the yield of US Treasury bonds, which in the last few days has become one of the main drivers in the market. In turn, the recovery of USD is hampered by weak macroeconomic statistics on inflation, as well as expectations of the entry into force of a new $ 1.9T stimulus package. The bill has passed the final approval in the US Congress, and President Joe Biden plans to sign it on Friday.


 Gold prices continue to rise during today’s Asian session, developing the “bullish” trend that formed on Tuesday. In addition to technical factors, the instrument is supported by some stabilization in the yield of US Treasury bonds, as well as not the strongest macroeconomic statistics on the dynamics of consumer prices in the US. However, analysts agree that moderately low inflation in the country can now be a positive factor, given the upcoming entry into force of the $ 1.9T stimulus package bill, which President Joe Biden plans to sign on Friday.