Qiu Jun: The US refers to the yin

Market news

The Bank of Indonesia announced on Thursday (July 20) that it will maintain its benchmark interest rate for the ninth consecutive policy meeting, but said that economic growth in the second quarter may be slower than expected. The Indonesian central bank kept the benchmark 7-day reverse repo rate unchanged at 4.75%, which has remained at that level since October last year. The 17 analysts interviewed by foreign media have expected this result. Indonesian central bank officials said the longer meeting time was due to the Council's comprehensive assessment of global and domestic risks.

The Indonesian central bank said in a statement after the meeting that “the Indonesian domestic economic recovery process continues, but it is not as strong as we initially expected, due to weak consumption. On the other hand, investment has increased.” Indonesian central bank economic and monetary policy director Dody Budi Waluyo said that the economy in the April-June quarter is expected to grow "about 5.1%."

Royal Bank of Canada analyst Helima Croft said in a report on Thursday that with the increase in production in Libya and Nigeria and the unexpected withdrawal of Ecuador, the Organization of Petroleum Exporting Countries (OPEC) production reduction agreement is facing greater uncertainty. In addition, US shale oil production may be more than OPEC's production cuts, so the estimate of crude oil prices this year and next is lowered. OPEC will hold a joint ministerial oversight committee meeting next Monday (July 24). Due to the recent announcement of Ecuador's withdrawal from production cuts and the continued increase in production in Libya and Nigeria, this meeting will demonstrate the organization's determination to handle additional crude oil production.

In terms of crude oil prices, the Royal Bank of Canada lowered its 2017 WTI crude oil price forecast from US$54.5/barrel to US$48.47/barrel due to market emphasis on US shale oil production, and lowered it from US$60/barrel to US$50 in 2018. /barrel. At the same time, the bank lowered its 2017 Brent crude oil price from US$57.27/barrel to US$51.19/barrel and in 2018 from US$63.38/barrel to US$53.19/barrel.

US Treasury yields remained unchanged on Thursday, with the index 10-year US Treasury yield falling 0.2 basis points to 2.266%. Reuters data showed that the yield hit a three-week low of 2.243%, falling below its 50-day moving average.

US stocks closed slightly unchanged on Thursday. The Dow Jones Industrial Average closed down 28.97 points, or 0.13%, to 21,611.78 points. The S&P 500 index fell 0.38 points, or 0.02%, to 2,473.45 points; Nasdaq The index rose 4.96 points, or 0.08%, to 6,390.00 points.

EUR/USD

Basic analysis:

On Thursday, according to foreign media quoted informed officials in the euro zone, the European Central Bank may not make a decision on the prospects of the bond purchase plan until October. According to officials who did not disclose their names, although members of the management committee are expected to begin discussions on gradual reductions at the next policy meeting on September 7, they believe there is reason to doubt whether they can reach a conclusion. A spokesman for the European Central Bank declined to comment.

Officials said they need to consider a wide range of issues, including the pace of quantitative easing, the wording of forward-looking guidance, and new economic forecasts, so it may not be possible to make a decision at the meeting. The ECB will also hold policy meetings on October 26th and December 14th.

The EU and the UK did not make any concessions in the first round of full-scale Brexit negotiations that ended on Thursday. The outside world worried that British officials were preparing to leave the European Union without any agreement, which dragged down the pound. At the European Commission, negotiators stated the initial positions of the parties during the four-day negotiations that achieved some consensus.

On Friday, Nordic Bank conducted a brief analysis of the latest ECB interest rate resolutions and statements. At this meeting, Draghi tried not to release any information that might cause market concerns, but at the same time did not make any commitments. At the same time, the European Central Bank did not discuss the exit strategy this time. We reiterated the previous view that the European Central Bank may announce a change in the quantitative easing program at its next meeting on September 7.

Germany's 10-year bond yields climbed 2 basis points on Thursday, up 0.56% from the previous day. In late European markets, 10-year German bond yields were flat at 0.54%. The possibility that the euro zone currency market has digested by 10 basis points before July next year is about 70%, and the probability of digesting a week ago is 100%. The probability of raising interest rates in October is 100%.

European stock markets closed lower on Thursday, the pan-European STOXX 600 index closed down 0.4%, the British stock FTSE 100 index closed up 0.77%, the German stock DAX index fell 0.04%, the French stock CAC-40 index fell 0.32%.

technical analysis:

The exchange rate of the euro overnight was once again rising upwards and closing at Yangzhu. During the day, the exchange rate continued to rise in the upward channel, and the exchange rate continued to break the new high for many years; the short-term exchange rate or continuous long-term shocks, vigilant against the high technical callback risk. The multi-day moving averages are in the same direction, and the interval is continuously widened. The MACD indicator is glued and differentiated on the zero line of the two lines, and the interval is slightly increased. The red kinetic energy column is continuously increased in small increments.

GBP/USD

Basic analysis:

On Thursday, the ECB president said that the policy adjustments will be discussed in the fall, the GBP/EUR exchange rate fell to an eight-month low, and the EUR/GBP rose 1.5%, hitting 0.8971, the highest level since early November. GBP/USD fell below 1.30, fearing that the British ministers had no agreement to leave the European Union. Concerns about uncertainty overshadowed slightly better-than-expected retail sales data.

British Trade Minister Liam Fox said in an interview with the radio that Britain can survive even without a Brexit agreement. However, economists have long warned that this result may weaken business activities. When Fox said this, the pound fell, and the retail sales data only made the pound regain lost ground.

Neil Jones, head of foreign exchange sales at the Mizuho Bank in London, said: This morning's official commentary said that the UK can survive without a Brexit agreement, and this remark is likely to fuel the downward trend of the pound.

With the dollar falling across the board and investors betting on the Bank of England to raise interest rates, the GBP/USD exchange rate broke through 1.31 earlier this week to a 10-month high.

But policymakers at the Bank of England have made it clear that any monetary tightening policy will depend on data. Retail sales data released on Thursday showed that retail sales in June increased by 2.9% year-on-year and 0.6% quarter-on-quarter, both better than the Reuters survey.

According to the IMRG Capgemini online sales index released on Thursday, UK shoppers reduced their online shopping in June as the election dragged down consumer sentiment. Online sales for the month only increased by 9.5% year-on-year, the second lowest since 2001. The election is the biggest drag factor. In the week of the June 8 general election, online sales increased by only 3.4% year-on-year.

technical analysis

The pound exchange rate was continuously short-selling overnight and closed with a small Yin column. During the day, the exchange rate continued to retreat in part of the range of increase, and the short-term exchange rate may continue to fluctuate in a short period, alerting the market to continuous downside risks. The multi-day moving averages were headed for the same direction, the 10-day moving averages were slightly adjusted, and the moving averages were slightly closed. The MACD indicator is again glued smoothly on the zero line of the two lines, and the red kinetic energy column is slightly reduced.

USD/JPY

Basic analysis:

The yen continued to be hit by the dollar on Thursday. The dovish stance of the Bank of Japan and the speech of the central bank governor Kuroda Toshihiko at the press conference kept the yen under pressure. The Bank of Japan did not adjust its monetary policy, but the sixth time it lowered its CPI target, suggesting that the era of ultra-loose monetary policy will continue for some time.

The Japanese stock market Nikkei index rose on Thursday morning and was supported by a record high in the US stock market, but was limited by the cautious sentiment before the outcome of the Bank of Japan meeting. The Nikkei index closed up 0.36% in early trading to 20,092.14 points. The TSE Stock Price Index rose 0.6% to 1,631.26 points. The JPX-Nikkei 400 Index also rose 0.6% to 14,501.95 points.

The Bank of Japan has just announced that it will maintain monetary policy unchanged and postpone the time to achieve the 2% inflation target. Japan’s exports in June, driven by cars and electronics, grew for the seventh consecutive month, indicating that external demand continued to support a gradual economic recovery and supported the central bank’s optimistic economic view.

technical analysis:

The yen exchange rate fluctuated continuously in the low range overnight, and the closing trend was toward the cross star. During the day, the exchange rate continued to be sorted out in the uptrend channel, and the intraday trading range was expanded; short-term exchange rate or continuous short-term consolidation, vigilant against the market's heavy volume to break down the downside risk. The multi-day moving averages were slightly down; the moving averages continued to narrow. The differentiation of the MACD indicator on the zero line of the two lines is continuous and the interval is gradually opened. The blue kinetic energy column is smoothly increased in small increments.

AUD/USD

Basic analysis:

On Thursday, the AUD/USD is at around 0.7925, and the NZD/USD is at around 0.7335. On the trading day, the Australian dollar/US dollar rose further to a two-year high of 0.7989. The Australian employment data released earlier in the day was generally better, raising the speculation that the Reserve Bank of Australia is closer to raising interest rates. At the same time, the NZD/USD has fallen, but the overall position remains stable near the 5-month high.

However, the AUD/USD encountered strong technical resistance at the 0.80 mark, and the exchange rate has risen 1.4% since this week. So far this month, the Australian dollar continued to appreciate, mainly due to strong domestic economic data and the broad weakness of the US dollar.

According to data released by the Australian Bureau of Statistics in the day, Australia's seasonally adjusted employment population increased by 14,000 in June, and the unemployment rate remained stable at 5.6% after seasonal adjustment. The data also shows that the number of full-time employment in Australia has increased by 115,400 in the past two months, the strongest consecutive February growth in 29 years. This prompted some market participants to bet that the Reserve Bank of Australia may raise interest rates before the beginning of 2018.

For the intraday AUD/USD trend, a trader in the Asia-Pacific region pointed out that the intraday AUD/USD twisted down, mainly due to the Australian employment data released after the Australian dollar was released. Traders pointed out that investors are adjusting positions before the speech of RBA Vice President Debel on Friday. At the same time, some exporters' buying is located near 0.7920. On Friday, the Reserve Bank of Australia Vice President Debel will speak at the CEDA/Adelaide University luncheon on the impact of domestic monetary policy on the world.

technical analysis:

The Australian dollar exchange rate rebounded at a high level overnight, closing the small Yinzhu. During the day, the exchange rate continued to be high and the bulls fluctuated, and the market fell slightly. The short-term exchange rate or continued high level rested, alerting the market to a high technical callback risk. The multi-day moving averages are vertically continuous, and the moving average interval is continuously opened. The MACD indicator double-line differentiation is continuous, and the fast line is near the overbought area. The red kinetic energy column is stable and small.