The Asian capital markets have gained ground on the base that Japan is recovering from recession as it posted the Preliminary GDP at 0.6%, the Preliminary GDP Price Index increased to 2.3% and the Revised Industrial Production decreased to 0.8%. Even if the 0.6% growth signaled the exit from the recession, the data is still missing the expectations of at least 0.9%. The weak yen finally drove up the external demand as export rose by 0.2%, while private consumption rose by 0.3% and business spending grew 0.1%. Bank of Japan is due to release on Wednesday its monetary policy statement and it is expected to maintain the monetary base at an annual pace of 80 trillion yen.
Meanwhile the Eurogroup Finance Ministers are planning to meet today and resume the discussions about the Greek debt. After Greece released its GDP, which contracted by 0.2%, while the unemployment rate touched levels tougher than in the US during the depression, the Eurogroup may watch the problem with other eyes and be more forgiving.
EURUSD is currently trading above the 1.1400 support level while awaiting a compromise to be reached in Greece. A disappointing message in this regard could shoot down the euro, possibly close to 1.1300 or even lower, while good news may be helpful in reaching the 1.1500 resistance level. US banks will be closed today in observance of Presidents’ Day so that the market opening could bring an avalanche of emotions which will rearrange the areas of support and resistance.
Oil quotations were animated by a drop in the number of rigs drilling in the United States, but optimism was tempered by Japan reporting lower than expected GDP data. Even if we are tempted to believe that prices are dragged down by significant oversupply in oil markets while demand is relatively low, the prices refuses to follow the normal logic. Quotations are constantly going up, making us think about a serious episode of a trend reversal.
The Australian and New Zeeland dollar have been gaining ground lately as the oil prices are recovering. RBA’s Governor Stevens is confident that it won’t be necessary to lower the interest rate at levels close to 0 in order to regain economic growth while in New Zeeland the quarterly Retail Sales rose to 1.7% and the Core Retail Sales advanced to 1.5%. The NZDUSD is trying to stabilize above the 0.7500 support level (after a breakout of the 0.7334-0.7435 range) and if it succeeds then the 0.7600 area is an easy target. The AUDUSD is still caught in the 0.7624-0.7845 lateral movement currently moving towards the superior area.
