Whether will be oil after Doha?
Waiting for results of negotiations in Doha (Qatar), the market has slowed down just in case. Week has passed in usual dynamics, where earthquakes in Japan and Ecuador, and the next Chinese devaluation became the main force majeure. Everything will be much more interesting since Monday.
Meeting of «oil sharks» in Qatar - that exceptional case when practically all experts were right. Result of two-month efforts: the manufacturing countries of oil haven't agreed about "freezing" of production level and the negotiations lasting more than 12 hours on Sunday have ended with standard public statements. That is all have parted to think and consult on houses, and the market. Yes he also so not bad feels. The opinion is expressed that fundamental indicators of the market of energy carriers improve and that «now it looks healthier, than in September».
Actually, negotiations have been stopped right after opening because of a hard line of Saudi Arabia concerning Iran by of only «refusenik» among members of OPEC. Iran the representatives hasn't sent though in comments of I didn't limit. The first option in the draft agreement assumed freezing of oil production at the level of January of the current year for a period of up to October and creation of special committee for monitoring. The document accepted as a result provides obligatory participation of all members of OPEC and rigid execution of some key conditions. Prices of oil will continue falling anyway as all expectations from negotiations are already fulfilled. We wait for reaction practically on all assets - we look for a new bottom. On this background indefinite strike of workers in Kuwait with her result, unexpected for investors, in the form of reduction of oil production for 60% looks a rare positive. The next meeting in the same format is expected in June.
Forthcoming week the fresh episode of series "Regulators Promise" of a meeting of Council of European Central Bank, and next week one more - FOMC is necessary. The arsenal of instruments of the European regulation is almost settled, stated purposes are on the run corrected, but even in medium-term expectations of a positive isn't expected. The European financial system suffers as it is from negative real rates therefore in real sector there are no incentives to be put (overproduction), and profitability on real securities of minus.
It is possible, of course, to increase purchase of assets to $100 billion a month, but then will be necessary to lower strongly mortgage requirements and to buy up any "garbage". And all the same money will hardly reach the end user. Apparently, now the ECB will put on hold with introduction of the new softening incentives, but the rhetoric will keep aggressive. And if Draghi couldn't offer the world more, then euro have no choice but to grow. However, not long.
From other news should be noted:
- Creditors of Greece discuss extension of debt repayment periods for 10-20 years, fixing of interest rates at the superlow level and transfer of a debt to the EU/IMF to ESM fund. And though stated goals under the budget are called unreal by analysts, the IMF won't stop the program of financial aid of Greece, but the form of participation can vary depending on Greece results and opinion of the European partners. The country doesn't cope with tasks of the third program of rescue yet.
- Yellen has carried out soft verbal intervention in the form of exclusive interview to the Time magazine, but no new ideas are heard yet. Classical phrases about risks of volatility in US economy at further increase of interest rates, danger of decision-making without assessment of all details, lack of correlation between various assets looks usual intelligence before a meeting on April 27.
- PBC obviously strive to support exporters and has chosen successful time for itself again for devaluation of yuan, the currency rate is lowered by 0.46% at once - the maximum falling in the current year. It becomes dangerous to trust any Chinese data: a release of controversial data of the foreign trade statistics (in a year the Chinese import from Hong Kong has grown by 116%) looks like bad masking of capital outflow. The current situation supports unexpected mitigation of a monetary policy from the CB of Singapore. Yuan exchange rate artificially decreases in relation to a basket of currencies of the countries which are the main trade partners of China (yen and euro).
- Speaking in Columbia University in New York, Kuroda has again declared that the Bank of Japan is ready to expand the program of purchase of bonds and to reduce interest rates (where is even lower?!). The meeting of BOJ will take place on April 27-28 and except a political decision, quarterly assumptions of increase in prices and economy have to be submitted to the market.
- According to analysts of Deutsche Bank since FRS has started the QE program (2008), the non-financial American companies have added nearly $2 trillion a debt on the balances. Employment growth level is in advance of the economic growth, productivity growth is negative, that against inability of FRS to shut off a source of "cheap money" provokes a risk of defaults in the corporate sphere. Not for nothing fresh data on CPI in the USA have temporarily interrupted dollar exchange adjustments (the assumption was guided by acceleration of prices rate growth to 0.2% of m/m (1.1% of y/y)) – in the forefront of sales euro has joyfully grown almost by 0.4%.
EUR/USD: strong resistance 110.32/109.94/109.22/108.75; strong supports: 108.26/107.75/107.43/106.90. The movement is still left reaction of prices of oil and a reason for a turn up isn't present. After the short period of consolidation and correction to 108.75, further falling - is more probable.
USD/JPY: strong supports: (1.1260-1.1250) - (1.1231-1.1222) - (1.1190-1.1173), and also protection of market makers against breakthrough of a mark 1.1111 and level 1.1100 down: (1.1142-1.1105). Strong resistance: (1.1295-1.1310) - (1.1361-1.1371) - (1.1400-1.1420). In medium-term prospect it will be important, above or below of an area (1.1407-1.1412) there is a price. While couple remains squeezed in range and only a strong impulse from the base or market makers can give the direction. If bidders tighten the price to dangerous line 1.1440 till Thursday, then on neutral decisions of ECB the price can break through this level, but so far such incentives aren't visible. Fight for a trend continues.
