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Daily analysis 14.02.2013

, Autor:

Marcin Lipka

Weaker data from Japanese economy and comments from the potential BOJ candidate Kazumasa Iwata put again pressure on JPY. The euro is also weaker after worse-than-expected GDP report from France and Germany. George Soros has made $1 billion paper profits on yen (WSJE)? In Poland the Ministry of Economy expects production to slide by 3.5% y/y and inflation around 2.% y/y. Interesting Marek Belka interview for “Obserwartor Finansowy”. The zloty is waiting for the Friday's official inflation data.

Macro data (CET- Central European Time):

  • 07.30 CET: GDP from France (survey minus 0.2% q/q; acutal data minus 0.3 q/q)
  • 08.00 CET: GDP from Germany (survey minus 0.5% q/q; actual data minus 0.6% q/q)
  • 11.00 CET: GDP from the Euro Zone (survey minus 0.4% q/q)
  • 14.30 CET: U.S jobless claims (survey 360k)

Japan, yen and Soros.

Suddenly after the weaker-then-expected GDP from Japan (survey + 0.4%, actual minus 0.4%) USD/JPY fall around 20 pips. However, after less then a hour it came back to the levels before the publication and then in the consequence of a statement form the former BOJ deputy governor and potential candidate for the manager of Central Bank, yen depreciated significantly. Kazumusa Iwata claims that rate between 90 and 100 per USD is a return to market equilibrium. He also thinks that there are “lots of different ways to use monetary policy to boost the economy which include purchasing longer term governments debt and riskier assets” (does he mean stocks?). Commenting the Iwata's stance, cited by Bloomberg, Yoshiko Takayasu from Tokio based National Australia Bank Ltd. says that:” There are expectations that the yen would weaken towards 100 per dollar amid hopes there will be further monetary stimulus”. Staying still in Japan today's The Wall Street Journal reports that George Soros has around 1 billion USD paper profits on yen. If the Journal report is valid the main message can be:“paper profit”. Does it mean that he expects further weakening or he wants to provoke some further moves or maybe ha has already booked the profits (the leak is dated) and now he is on the other side of the trade? The market will probably figure it out sooner then later. Yesterday's short lived rally over 1.3500 and the closing under 1.34500 has already put pressure on today's opening. Additionally the weaker-then-expected GDP data from France and Germany caused that we are currently testing 1.3400 levels. However, if the G20 stance turns out to be mild (widely expected) and political pressure in Italy decreases (10-year yields closed under 4.4000% yesterday), we can expect some appetite for stronger euro next week.

Ministry of Economy expectations and the interview with MPC governor Marek Belka.

Since 4th of February EUR/PLN has been closing each day within the range of 4.15-4.18. It seems then the pair does not have a “clear idea” which direction to choose and is waiting for a stronger impulse. It is worth to notice that the Ministry of Economy published yesterday its estimates on inflation and industrial production. The CPI seems to be in the range of economist survey (+2.0% y/y), but the latter is far below the Bloomberg median survey (minus 3.5% y/y vs minus 2.8%). It is puzzling that there was no reaction on the Polish pairs after the data even though it brings MPC members closer to the rate cut in March. It is also wroth to mention an interesting (not only from the market point of view) interview with Marek Belka for “Obserwator Finansowy” http://www.obserwatorfinansowy.pl/tematyka/finanse-publiczne/wazne-aby-nie-tylko-wejsc-ale-i-utrzymac-sie-w-strefie-euro/). He clearly defines more precisely his stance on joining the Euro Zone and sounds quite optimistic on Polish economy. Regarding the rate cut we can expect (after this interview and the last MPC conference) that if RPP lowers the benchmark it will be the last move for the next several months.

Expected levels of PLN according to the EUR/USD value:

EUR/USD 1.3350-1.3450 1.3450-1.3550 1.3250-1.3350
EUR/PLN 4.1400-4.1800 4.1400-4.1800 4.1400-4.1800
USD/PLN 3.0800-3.1200 3.0500-3.0900 3.1000-3.1400
CHF/PLN 3.3600-3.4000 3.3600-3.4000 3.3600-3.4000

Technical analysis EUR/USD: yesterday's brief move over 1.3500 was false and already has consequences in today's move toward 1.3400. In the longer term the situation has not changed much. The closing over 1.3500 should favor longs and the move under 1.3000 will spur the selling side with the next target around 1.3260-1.3240 (50 DMA and December 2012 consolidation). The next support level is around 1.3070 (38.2% Fibonacci retracement level).

Wykres

Technical analysis EUR/PLN: moving toward 4.1800 shows that bulls are getting stronger. However, only the move above 4.1800 will signal to close the shorts and consider opening longs with the fist target at 4.2100 and second at 4.2500. If the 4.1800 resistance holds it is expected that EUR/PLN will move under 4.1500 toward 4.12-4.08 levels.

Wykres

Technical analysis USD/PLN: no changes are still visible on USD/PLN. The bulls will have push USD/PLN above resistance level (50 DMA - 3.1150) and then over resistance at 3.1400. The breakout of 3.14000 should change the trend and spur move toward 3.25-3.27. We should remember however, that the trend is still bearish and until 3.1400 is broken any level should be used for opening short positions.

Wykres

Technical analysis CHF/PLN: again nothing changes on CHF/PLN. Bears should be waiting until the CHF/PLN moves under 3.3300. Such a slide will initiate the sell signal with the target around recent lows (3.27). The longs are set to open buy positions above 3.41 and wait until 3.4800 is reached (50% Fibonacci retracement level).

Wykres

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