Daily Market Review — 07/04/2016
The central bankers’ show: markets are waiting for today’s Mario Draghi and Janet Yellen statements
At yesterday’s session the pair tested the 1.4050 support level, but wasn’t being able to break through it, went up.
The dynamics of the GBP/USD is still under the pressure due to the looming Brexit. The poll’s results showed that the number of Britons who want to say good bye to Brussels is growing. A month ago, most citizens were for staying in the EU, now the number of Euro-optimists and pessimists equaled – 39% and 38%, respectively.
However, after the publication of FOMC meeting minutes the pair changed bear’s trend and moved higher.
FOMC minutes again confirmed the concerns of market participants about the excessive caution of the Committee members and their unwillingness to risk raising interest rates.
Today, market participants are waiting for ECB President Mario Draghi and his US Fed colleague, Janet Yellen, to say their piece at 14:00 (GMT) and 21:30 (GMT), respectively.
The main traders’ question yesterday about USD/JPY was: how long will the pair continue to fall? The answer came from overseas: American financiers believe that a rate hike was premature, and the risks didn’t disappear.
Due to the sharp pair’s fall, some investors believe that today should be at least a partial correction. In addition, by the end of the week investors will try to fix the profits. This will lead to USD/JPY pair’s growth.
By the way, what about the pair EUR/JPY? Many participants put on its growth in the medium term also.
The world’s largest drug company Pfizer called off its $160 billion deal with Allergan PLC. Despite the fact that the agreement provides for a fine of up to $400 million, in case of failure, the breakup fee will be much lower.
Investors perceived such step positively, and specifically due to US tax authorities’ position about this deal.
In addition, Pfizer stocks’ growth went with the overall major US stock markets’ growth trend: Dow rose by 0,64%, S&P 500 added 1.05%, while the NASDAQ − 1.59%.
It should also be noted that markets are preparing for the start of the quarterly reporting season, which starts on Monday.
Just after the American Petroleum Institute data, The Energy Information Administration released statistics on crude oil inventory levels. In spite of analysts’ forecast, they fell by almost 5 million barrels. Therefore, the fate of quotations of the “black gold” was predetermined: the up and up again.
After reaching the level of $37.50, the WTI price took a short pause. But only in order to take the height of $38.00.