We have almost completed a relatively important week in terms of political bickering and economic data. Fed President Yellen testified before Congress that new monetary policy directions have not been announced. Greece's list has been approved by the EU Commission and the Deutsche Bundesbank. Greece is off the hook for now - just wondering when. Further reviews of the reform proposals are due in April. The DAX climbed one all-time high after another as new aid was granted. The index future is currently listed at 11,380 points.
Economy and monetary policy
EU: Consumer prices have been published from the EU. As expected, the consumer price index fell compared to the previous month. However, this remained unchanged at -0.6% on an annual basis. The German and important Ifo business climate index rose less than expected in February. The business expectations index was also surprisingly disappointing. However, German GDP grew better than expected in the fourth quarter and compared to the previous year. Compared to the previous quarter, GDP continued to grow by 0.7%. The German GRP consumer climate for March was positive. There have also been positive developments in GDP growth from the periphery, such as Spain. As expected, Spain's GDP grew by 0.7% compared to the previous quarter.
In addition, German data on the labor market was published. The unemployment rate remained at 6.5% in February, but the number of unemployed fell by 20,000, while only 10.00 was expected.
The money supply and lending within the EU also developed positively. The M3 money supply rose by an average of 3.6% in January. Compared to the previous year, there was an increase of 4.1%.
USA: The consumer price indices were also on the agenda in the USA. The development of prices was positive in January. The indices rose by 0.2% compared to the previous month and 1.6% compared to the previous year. However, inflation data had declined - by - 0.7% on the previous month and by -0.1% on the previous year.
Orders for consumer goods rose, however, which can be described as positive. Orders for core consumer goods were also positive after the disappointing data in the previous month. However, applications for unemployment benefits rose more than expected.
The existing home sales from the real estate sector were worse than expected. A negative value of - 4.9% in January. However, apartment sales were positive in January.
Monetary Policy: Monetary policy decisions were not made this week. Fed chair Yellen testified before Congress. There was not really much news from the Fed about the further course of monetary policy measures. For this reason, market participants do not expect any rate hike in the middle of the year. Whether this is really the case will only be seen in March. The Fed should then prepare market participants for the rate hike at the latest.
Technical assessment of the markets:
EUR / USD: According to the positive CPI indices from the The US dollar has regained its strength against the euro and other currencies. The technical sideways phase, which has now held between 1.1260-1.1530 US dollars per euro for several weeks, has been dissolved downwards. There is therefore still downside potential, initially back towards 1.10 US dollars per euro.
GBP / USD: After the British economy has developed better than expected in recent months, they expect Market participants are now taking an interest rate move that should come earlier. The GBP / USD currency pair has bottomed out in recent weeks, reaching resistance at $ 1.5550 per pound. Currently, however, the US dollar is still strong, so the currency pair is correcting towards the 20s moving average.
Gold: The gold price has been rather weak in recent weeks. The well-performing stock markets are also putting pressure. The gold price briefly found support in the $ 1,200 per troy ounce range. A sustained break in support should lead to further downside potential. The target would then be in the range between 1,170-1,150 US dollars per ounce.
DAX: The DAX currently has no upper limits. However, it would only be advisable to start after a correction.
S&P 500: The US indices perform somewhat worse in anticipation of rising interest rates. On a 4-hour basis, either a long entry from a level at 2,100 points or a short entry in the event of a sustained break below 2,100 points would be considered.
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