Yesterday the market again started to react to fundamental parameters over the USA after almost two week of neglect of almost all positive news releases in the American economy.
Data on Personal Income and Consumption have caused short-term splash in dollar sales.
According to the report of Bureau of Economic Analysis of the Department of Commerce data showed growth of Americans’ expenses and incomes indicators.
Personal Consumption of Americans in March was up 0.6 % after growth of 0.2 %in February. Incomes were up 0.8 %, maximal since September, after growth of 0.3 % the last month.
Growth of consumer’s incomes promotes rise in sales in shops, supporting high rates of economic growth.
However, despite growth of these indicators the market has regarded these data as dollar-negative as Americans’ consumption showed higher growth in comparison with incomes. As a result the index of personal savings decreased 0,3 %, and Core PCE Deflator was up 0,3 % in March, against growth of 0,1 % in February, and up 2 % against the similar period in 2005.
After the issue of the next block of news 1,5 hours later the dollar was supported and strengthened 100 points to euro on positive releases over the USA.
Business investments into construction showed growth of 0,9 % in April in comparison with March indicators according to the report of Bureau of Economic Analysis of the Department of Commerce. It is below the revised data for March, which showed growth, but, however above the market’s expectations, analysts forecast drop in rates of growth to 0,4 %.
And a major factor of rise became the Institute for Supply Management index.
April value of the index showed unexpected growth, data were better than the previous data and better than the market’s expectations. The index was issued upwardly to 57.3 against a similar parameter 55,2 in March. Analysts expected decline of this parameter to 55,0.
Growth of business sentiment is supported by rise of business investments.
The production index raised up to 60,4, that reflects steady demand and reduction of inventories.
The employment index demonstrated the highest growth since November, 2005 - 55,8 in April against the previous parameter 52,5 in March.
However dollar bears cannot relax the oil market, which was ignored by traders, again becomes the center of attention of stock gamblers in all world platforms, including the world foreign exchange market.
Yesterday quotations of oil futures grew after week downturn. June futures in NYMEX were closed $1,4 upwardly at a mark $ 73,65 for barrel. One more factor of market irritant was added to a problem of Iran and Nigerian oil fields.
News about nationalization of oil and gas development in Bolivia have caused sharp splash in demand for oil futures.
According to the Argentina telechannel "Chronica" the President of Bolivia, adhering the extremely left sights, Evo Marales signed the decree about nationalization of the transnational oil and gas companies in day of Workers’ Solidarity - on May, 1st.
After that all large oil- refining factories were taken under the control of military divisions of Bolivia. Moreover, Evo Marales became the initiator of creation of anti-American left political block in South America together with Venezuela and Cuba. Thus, Bolivia became the second oil-producing country of South America after Venezuela, which declared openly the anti-American sights.
But the Iranian problem is reaching a deadlock. Today there is the summit of constant participants of UN Security council on this problem at a level of deputies of heads of foreign policy departments: the USA, France, Great Britain, Russia, China and Germany. As the press-service of the US State Department informed the purpose of negotiations is discussion of "urgent need of the significant response from Security council of the United Nations on the decision of Iran to accelerate its researches of uranium enrichment".
The USA adheres to the most irreconcilable position on this problem to apply sanction up to military intervention, Great Britain also agree with the USA, Russia and China adhere to a hard line, but they are for peaceful decision of this question. France has a special position - France is ready to support economic sanctions up to blockade, but abstains from military intervention.
Technical picture.
As well as it was supposed a little ?????????? uptrend on the European currencies has defined technical correction. However the potential of growth remains rather strong.
Yesterday’s recommendations remain without the changes, opened long-term longs on euro with the purpose should be kept, stop at 1,2510.
