Japan keeps the rate at -0.1

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Japan Yen

Yesterday, the AUD/USD bulls managed to keep up the pace although the tide was against them, the probability of further monetary easing in the case of low inflation growing after the RBA (Reserve Bank of Australia) minutes release. Although concerns exist, the main message of the minutes was that there is no need to act in the present for what regards the previous matter, members maintaining their initial positive prospect for the economic growth. The release also explained how the previous downtrend in the Aussie helped in rebalancing non-mining activities. For further reference, the bank will closely monitor the activity, further, growth may be pushing an earlier than expected intervention. Fed and ECB (European Central Bank) will be key reference points in the changes, taking into consideration the Aussie’s reaction to previous ECB data.

In what regards the USD/JPY major, BOJ (Bank of Japan) Kuroda’s statement acted as leverage for the pair by declaring negative rates as long as it will be needed for the inflation to reach its goal.

At yesterday’s meeting, BOJ left untouched the monetary policy rates as per expectations, reinforcing the negative rates presence as long as it is needed to reach the targeted inflation. The YEN lost its advance, but the sign of equity markets risk-off is keeping it afloat.

In the US, latest data shows a significant drop in February’s retail sales, signaling the fact that global headwinds and stock-market volatility have a certain amount of influence over spending. The headline figure was estimated at -0.2%, but the actual came out at 0.1% while January’s number was revised lower to -0.4% from the initial estimation of 0.2%. The core retail sales did not change since the last reading in January, the initial 0.6% value being revised downwards to 0.2%. Retail sales add up almost 25% of the consumer spending in the United States, but they still represent a significant drag backwards.

Other results worth mentioning are the New York Empire State Index, which posted over the estimated 0.62 in March, and the Produce Price Index, which came in line with forecasts at 0.2% on a monthly basis in February.

Today the gold was traded between $1,226, in the Asia session (lowest level since March 2, 2016) and $1,238. At the end of the day, the gold managed to close in the area of yesterday close at $1,232. Since last week, after it reached 1-year highs at $1,282.90 (March 11, 2016), the yellow metal was on free fall and dropped to 3% in the last three days.

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Technical Strategist, CMT level 2 (MTA). Looking for good opportunities in the market, wherever they are, since 2009.

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