Yesterday's macroeconomic indicators in the U.S.A partially compensated each other - 26.3.2014

Yesterday's macroeconomic indicators in the U.S.A partially compensated each other. The Consumer Confidence index in March rose to its highest level since January 2008 and was 82.3 points. While Home Sales fell by 3.3% to its lowest level since September of last year and amounted to 440 000. Today at 13-30 CET, we will see the data on the durable orders. The preliminary forecast is positive for the U.S. Dollar and now its rate rose slightly.

The head of the Bundesbank and the ECB Governing Council member Jens Weidman said negative interest rates and the Quantitative Easing can be used to fight deflation and too high Euro exchange rate (EURUSD). This statement helped the fall of the single European currency.

Etsuro Honda, economic adviser to the Japanese Prime Minister said that the Bank of Japan may consider measures for further easing of monetary policy in mid-May to achieve the inflation of 2%. We believe that this can weaken the Yen (it looks like a growth on the USDJPY chart). Along with the QE, the Bank of Japan has already bought Japanese government bonds worth 50 trn. Yen ($490 billion). Tomorrow night at 0-50 CET we will find out about the amount of purchased securities in Japan. In our opinion, the preliminary forecast is in favor of a little weaker Yen.

The Australian Dollar (AUDUSD) got stronger (growth on the chart) due to the positive statements made by the Reserve Bank of Australia Governor, Glenn Stevens. He said that there are first signs of transformation from a resource, export economic model to a model based on increased domestic demand.

The Soyb prices slowed down in growth after optimistic forecasts. According to experts of the Argentine exchange (Rosario grains exchange), the bean harvest in Argentina this year could increase to 54.7 million tons from 48.3 million tons in 2013. This is higher than the historically maximum soybean production in Argentina, which was observed in 2010 and it amounted to 52.7 million tons.

The Sugar price increased after the International Sugar Organization lowered its forecast for global surplus in the season 2013/14 from 4.7 to 4.2 million tons because of the drought in Brazil. The following season (2014/15) the sugar production is expected to be reduced in Brazil to 575 million tons from 596 million tons. We believe that global demand for sugar will drop. It is considered a harmful product in Western countries and they are trying to replace sugar cane crops worldwide by the cultures for the biofuels production. Accordingly, there is a strong downtrend observed on the Sugar chart that can be used for opening short positions in accordance with technical analysis signals.

The growth of the Copper prices on Tuesday was the highest of the last six months. Thus, market participants reacted to the strengthening of the Yuan. They hope that the government fiscal stimulus measures will support the economic growth in China and the demand for the Copper.

The Cotton price increased due to its lower crop forecast in the United States. The USDA expects the cotton harvest in 2013/14 to be reduced to 4-years minimum and will be amounted to 12.87 million bales 480 pounds each instead of 13.19 million tons as previously predicted. Note that the reduction is due to a decrease in crop acreages. Farmers believe the current prices are too low.

The U.S. Senate Energy Committee considered the possibility of LNG exports, but the final decision is still pending. Senators fear that this could lead to a serious increase in domestic gas prices. In our opinion, it will be so. The Natgas price has increased due to the fact of its export from the United States discussion.