High geopolitical risks related to Syria, as well as concerns about trade wars are the main factors that led world markets to an unstable state. On this wave, there is a high level of volatility in the markets, which, it seems, is not going anywhere anytime soon.
Negative external factors continue to weigh on financial markets, which causes crude oil prices to rise, supporting shares of oil and energy companies, but another factor of instability will restrain currency markets due to the same uncertainty.
In the meantime, the markets are waiting with tension for the outcome of the situation around Syria, the published data of economic data from the US and the euro area point to the directly opposite tendencies that may be sustainable this year.
On Thursday, the economic data of the eurozone was released, which continued to confirm the process of slowing economic growth in the region. The volume of industrial production in February fell by 0.8%, with a slight increase in the indicator by 0.1%. In annual terms, the indicator decreased in growth to 2.9% from 3.7%, it was expected, however, that the indicator will still grow to 3.8%.
The following data exactly fits into a number of weak values of economic statistics of the eurozone, which are coming out recently. This situation is clearly beginning to alarm the ECB, which, although at the end of the March meeting, made it clear that we should not expect an increase or extension of the quantitative easing program, but expressed concern about geopolitical tensions, trade wars and the strengthening of the single currency.
In assessing this state of affairs, it can be assumed that the ECB may begin to deliberate between the desire to stop incentive measures in September or extend the program until the end of this year.
As for the situation in the US, the result of the last meeting of the Federal Reserve showed that the regulator can not only increase interest rates three times, but even four against the background of accelerating inflation, which was clearly shown by data released this week.
Forecast of the day:
The EURUSD remains in the side range. Locally, it overcame the 1.2335 mark, which opened the way for it to grow to 1.2395.
The USDJPY has overcome the recent high on the wave of lower geopolitical tensions and expectations of increased pressure in the US, which will help accelerate the process of raising interest rates by the Fed this year. The price increase above the resistance level of 107.45 may lead to an increase in price to 108.50.