Morning Market Review

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02/24/2020

EUR/USD

EUR shows ambiguous dynamics of trading against USD during today's Asian session, correcting after an active growth of the instrument last Friday. The reason for the appearance of active uptrend, in addition to a number of technical factors, was good data on the euro area's business activity for February. Markit Manufacturing PMI rose from 47.9 to 49.1 points with a forecast of a decline to 47.5 points. Markit Services PMI for the same period strengthened from 52.5 to 52.8 points, which also turned out to be better than market expectations. Composite Manufacturing PMI in February rose from 51.3 to 51.6 points with a forecast of 51 points. German data turned out to be positive as well. Markit Manufacturing PMI rose sharply from 45.3 to 47.8 points, while the market expected a decline to 44.8 points. On Monday, traders expect the publication of IFO statistics on business optimism in Germany for February. Otherwise, given the rather meager economic calendar, a rather quiet start to the new week is expected.

GBP/USD

GBP is trading near zero during today's Asian session, consolidating near local highs, updated at the end of last week, when it managed to show corrective growth. Macroeconomic statistics published on Friday from the UK and the US turned out to be mixed, but only strengthened the technical factors for the oversold pound. Markit Services PMI in the UK declined from 53.9 to 53.3 points in February, which was 0.1 points worse than expectations. At the same time, Manufacturing PMI over the same period unexpectedly increased from 50 to 51.9 points with a negative forecast of a decrease to 49.7 points. As for American statistics, it turned out to be noticeably worse. Markit Manufacturing PMI fell in February from 51.9 to 50.8 points, while the same indicator in the services sector fell from 53.4 to 49.4 points, breaking the 50-point barrier.

NZD/USD

NZD shows a slight increase against USD during today's Asian session, retreating from new local lows updated at the end of last week. The instrument opened with a negative gap, and so far only technical factors serve as a reason for its short-term growth, while macroeconomic statistics from New Zealand leave much to be desired. In Q4 2019, Retail Sales in New Zealand slowed from 1.7% QoQ to 0.7% QoQ. Retail Sales ex Autos for the same period increased by 0.5% QoQ after an increase of 1.9% QoQ in the previous period. Credit Card Spending in January increased slightly from 3.5% YoY to 3.7% YoY, but did not reach the expected values of 5.1% YoY. During the day, investors expect publication of Chinese statistics on the dynamics of industrial production and retail sales for January.

USD/JPY

USD is again trading higher against JPY during today's Asian session. USD wins back part of the positions lost at the opening and is preparing to consolidate above 111.60–111.70. Investors assess the prospects for the Bank of Japan to make changes in monetary policy amid the spread of coronavirus outside of China and the release of disappointing statistics on the state of the Japanese economy. Last Sunday, the head of the Japanese regulator, Haruhiko Kuroda, again noted the readiness of the Bank of Japan for the most decisive action in order to offset the consequences of the epidemic for the Japanese economy.

XAU/USD

Gold prices show steady growth during today's Asian session, updating record highs of February 2013. The reason for maintaining the positive dynamics on the instrument is the previous fears regarding the further spread of the coronavirus epidemic. Investors are worried about a new outbreak outside of China, particularly in South Korea. Traders also evaluate the prospects for lowering rates and other monetary changes that leading regulators can make. First of all, the focus is on the People's Bank of China, the Bank of Japan and the ECB.

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