Let’s start with a summary of what happened last week. During this time, we have met several points on oil, among which reviewed the following:
1.- The forecasts is that Iran will soon increase its production, although it doesn´t affect the market as it would take many years to recover their production level.
2.- Oil managed to recover from some of the falls, despite the rise of the published US inventories.
3.- The market is looking for good news that could indicate the beginning of an increase on the general demand, which could be launched following the agreements of production freeze of the two biggest world exporters, plus some other producers both inside and outside OPEC.
The EURUSD pair has been trading around 1.1000. As a consequence of oil and Stock markets falls so we hope to continue in that direction after correcting the first impulse.
Asian markets have consistently finished in fall last week, despite the rise that took the stock market on Wall Street last Monday. The oil downward trend has an influence over these stocks closing in negative numbers. Yuan devaluations continue to reflect the reality of the economic situation in China.
The sentiment economic in the euro zone has fallen to 103.8 in February, the business sentiment has fallen also from 0.3 from the previous 0.1. Consumer confidence worsened to -9 from the previous -6.3. The service sector sentiment drops to -4 from the previous -3 and the inflation expectation and consumption increases from 2.3 to 3.7.
As for the forecasts, we have that the European Stocks stars with market falls, which is being leading to positions of risk aversion, this is a consequence of last Friday decline in the stock market on Wall Street and also of the red numbers of Asian markets, Japan’s Nikkei ends with a -1% drop, which has driven down the USDJPY from 113.98 to 112.77.
In the currency market, the EURUSD maintains the downward trend, but leaves a 1.0910 support, which for the moment serves as a stop loss for short positions, with the possibility of the pair rebounding to 1.1000.
Today we don’t have a lot of Macro data of interest, only the Eurozone CPI at 11: 00h. But we do have other important facts like retail sales in Germany, which have been above expected and import prices have fallen below expected. This afternoon in the US we will know the Chicago manufacturing index for February.