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06/11/2019

EUR/USD

EUR showed a slight decrease against USD on Monday, correcting after a strong growth of the instrument at the end of last week, when the euro updated local highs of March 22. The development of the "bearish" dynamics was due to the strengthening of USD in response to progress in the US-Mexico trade negotiations. Under the influence of a rather tough ultimatum on the part of Donald Trump, Mexico announced a number of measures against illegal migration, which ultimately made it possible to avoid an increase in import duties. Analysts are optimistic about this news, because they extrapolate this experience with Mexico to a situation with China, where a compromise has not yet been reached. Earlier, Donald Trump noted that he plans to discuss trade relations with Xi Jinping at the sites of the G20 Summit, which will be held on June 28 in Osaka.

GBP/USD

GBP showed active decline against USD on Monday, almost completely offsetting the strong growth of the end of last week. Significant pressure on GBP was put by weak macroeconomic statistics from the UK. Industrial production in April decreased sharply by 2.7% MoM and 1.0% YoY after the increase by 0.7% MoM and 1.3% YoY. Analysts counted on –0.7% MoM and +1.0% YoY. During the same period, Manufacturing Production decreased by 3.9% MoM and 0.8% YoY, which also turned out to be significantly worse than forecasts (–1.1% MoM and +2.2% YoY). Index of Services in April showed an increase of 0.2% QoQ, slowing down from the previous +0.3% QoQ. GDP in April showed a sharp decline of 0.4% MoM after a decrease of 0.1% MoM in March. During the Asian session on June 11, the instrument shows flat trading, and investors are awaiting publication of data on the UK labor market.

AUD/USD

AUD dropped significantly against USD at the beginning of this week, departing from its local highs. Australian markets were closed on Monday due to the national holiday, so the focus was on the optimistic news about the signing of an agreement between the US and Mexico, which allowed to avoid a new trade war. Some support for AUD on Monday is provided by news from China. Exports in May showed an increase of 1.1% YoY after a decrease of 2.7% YoY last month. Analysts counted on aggravating negative dynamics and reducing the index by 3.8% YoY. Imports, in contrast, fell sharply by 8.5% YoY after rising by 4.0% YoY in April. All this led to a sharp increase in the trade surplus, which reached USD 41.65 billion in May against the previous value of USD 13.84 billion.

USD/JPY

USD showed ambiguous dynamics against JPY on Monday, ending the day session with almost zero result. The dollar was supported by optimistic news about the signing of an agreement between the USA and Mexico, which made it possible to avoid imposing import duties on Mexican goods from June 10. Investors also hoped that the US would be able to make some progress in trade negotiations with China. In turn, the yen received strong support from macroeconomic publications from Japan. Japan's GDP in Q1 2019 showed an increase of 0.6% QoQ after a growth of 0.5% QoQ over the previous period. In annual terms, the growth of the Japanese economy in Q1 2019 reached +2.2% YoY after rising by 2.1% YoY in the previous period.

Oil

Oil prices returned to decline on Monday, retreating from the new local highs of the beginning of the month. Pressure on the instrument is exerted by Russia's uncertain position on the issue of extending the current OPEC+ deal, which ends at the end of the month. A negative factor is still the low demand for petroleum products against the backdrop of a slowdown in the global economy. Trade tensions between the US and China have not gone away, and after the G20 Summit at the end of the month, a new round of increase in duties is quite possible if the parties do not reach any agreement. Today, investors are focused on API Weekly Crude Oil Stock. The previous report reflected increase in volumes of 3.545M barrels.

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