EBÈNE, MAURITIUS--(Marketwire - Feb. 19, 2013) - In his Market Brief of The Week for 18 February, leading global foreign exchange trader, educator and author Mario Sant Singh, focuses on the risk market and a series of key upcoming economic events.
Said Mario Sant Singh - whose views are widely sought after in the Forex industry, "The risk market held quite well last week -with long holidays for the Chinese Spring Festival in some Asia countries and little movement before the Group of Twenty Finance Ministers and Central Bank Governors' (G20) meeting.
"The Yen strengthened against its crosses as it moved into the spotlight before the G20," said Mario. "However the JPY may face less upside risk since the G20 pointed at no-one for manipulating currencies for competitive advantage at this stage. The EUR also retraced lower from its peak at 1.3520 against the Greenback and closed at 1.3358 before the weekend," he added. "Other risk currencies, such as the AUD and NZD, turned higher last week, signalling that some risk sentiment gained ground."
Next week the Euro Area will release manufacturing PMI and the market will focus on the aggregate, German and French print. "Market consensus expects the region's manufacturing activities to continue recovering," said Mario. "This especially goes for Germany, where a penetration above the 50 line could signal that the country's activities still hold well. However, the single currency will face headwind if the result is downbeat this round," he added.
"European Central Bank (ECB) related events could add some confusion to data risk when President Mario Draghi conducts a quarterly address to the European Parliament on Monday," said Mario. "The ECB will also announce the long-term refinancing operation (LTRO) repayment amount this Friday. The repayment amount might be around EUR100 to 130 billion, and the single currency will extremely correlate to the amount announced," he said.
"Meanwhile, the German ZEW and Ifo are due on Tuesday and Friday," added Mario. "I expect the releases should continue edging higher from the previous 31.5 and 100.5," he said.
"January's FOMC minutes are due this week and the market might pay attention to any discussions on the QE program in 2013. Key words such as "continued" or "ending" will be sought.
"The FOMC announced that the stimulus would continue as long as there is a substantial improvement in the labor market, thus, investors will look for any guidance. I do not expect any major changes compared to its last statement and an early QE withdrawal will drag economic development. With that said, the chance of turbulence from an "attitude" change is extremely slim at this moment," said Mario.
"Other data risks will be less influential such as Consumer Price Index (CPI), house figures, and the Philadelphia Fed Index. I expect the FOMC statement to dominate U.S. denominated assets in the second half of the week, and the likelihood of an unchanged statement could spur risk sentiment. However, non-U.S. events, such as data in the Euro Zone could largely affect the entire market as well.
"Besides that, China's market will be open this week. The index gained more than 20% since early December of last year, when the government adopted ultra monetary policy and huge funds flowed into the domestic equity market. The extension of gain plays a key role for the rest of the global assets, especially the Aussie and Kiwi Dollar," said Mario.
The EUR and JPY reversed the previous trend last week, reflecting the cautious momentum increase before the G20.
"However, short of obvious accusations from the G20 last week, it may suggest that the trend of different major currencies earlier this year might resume, until the next events and data support a different view," said Mario. "Under this approach, I expect the upward momentum for the EUR and downward momentum for the JPY to be the core theme in the near run, as long as the Euro Zone PMI and LTRO repayment meet earlier estimations from the market."
ABOUT MARIO SANT SINGH
Mario Singh is the Director of Training & Education at global retail Forex brokerage FXPRIMUS. He has appeared as a guest expert on CNBC more than 35 times to talk about foreign exchange markets, and is a regular contributor to top investment publications and online portals. Known as a brilliant and intense communicator with a unique ability to 'keep Forex simple' and a mission to help every man-in-the-street to trade profitably and responsibly in the Forex market, more than 20,000 people have attended his Forex trading programs. He is the only Forex trader in Asia invited to train Julius Baer Private Bankers - the third largest Swiss Bank, and ICBC, China's largest commercial bank. Mario is also author of the best-selling book, 17 Proven Currency Trading Strategies: How to Profit in the Forex Market. (Wiley Publishing).
FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security and an industry-leading trader toolset that includes free access to powerful trader tools and personal coaching via FXPRIMUS Coach FXPRIMUS truly is The Safest Place To Trade.