German unemployment dropped to record low

The labor market in Germany continues to operate at full speed in March as the unemployment rate surprisingly hit a record low of 5.8% in unexpectedly sharp decline and applications for unemployment benefits.
Applications for unemployment in Germany fell in the third month of the year by 30 000 at the expectations for a more modest decrease by 10,000 after their decline by 17,000 in February.
At the same time the unemployment rate on seasonally adjusted basis fell by 5.9% in February to a new record historic low of 5.8% - the lowest level since the reunification of Germany at the end of 1990. The number of Germans out of work fell in March to 2.556 million from 2.586 a month earlier, holding below the level of 2.7 million for the eleventh consecutive month, as before May 2016 the number had not dropped below this important level since German unification until now.
In seasonally unadjusted terms, the total number of unemployed Germans fell to 2.662 million from 2.762 million in February, while unemployment remained at the February level of 6.3%.
The labor market continues to develop positively. Employment growth continues unabated, the number of unemployed decreased significantly with the onset of spring, and the demand for labor remains strong, analysts say.

The growth of the UK economy accelerated

In the last quarter of 2016 the UK economy expanded at a good pace compared to the previous three months due to solid growth in British exports, but shrinking business investment, showed a final evaluation of official statistics ONS, analysts say.
Gross domestic product in the UK expanded during the period from October to December by 0.7% compared to the third quarter, when increased by 0.5%, confirming previous data on British statistics.
The acceleration of growth was mainly due to British exports, which grew on a quarterly basis by 4.6% against a previous forecast for an increase of 4.1%, after in the third quarter exports declined by 2.1%. Imports did drop by 1.0% after rising by 1.4% in the previous quarter and preliminary data showing reduction of imports late last year by 0.4%.
Meanwhile, business investment in the UK reduced by 0.9% after 0.4% growth in the third quarter, indicating that concerns about already launched Brexit may restrict investment in the future.
On an annual basis, however, the UK's GDP grew in the last quarter of 2016 to 1.9% compared to previous assessment for increase by 2%.
For the full year the British economy expanded by 1.8%, following growth of 2.2% in 2015, confirming preliminary assessment of the ONS.
In a separate study British statistics reported a slight reduction in the service sector in January by 0.1% compared to December 2016, when it was reported expansion of 0.2%. For the three months to the end of January, the services sector grew by 0.6% with expectations for expansion by 0.7% after an increase by 0.8% in the last quarter of last year.

Protective assets are back in fashion (2)

Moreover, in the event of a Trump failure, the sales on the stock exchanges will activate and can be transformed into a tangible drawdown, especially given that the indices fall from record highs. Against this background, players will continue to show interest in the Japanese yen and gold. The precious metal, which rallies over the past six trading days has almost actually played the fall, which started in late February and reached its highs on March 1 at around 1249.33.
The development of the current trend on world markets is able to send gold quotes above 1250, and USD/JPY in this case risks targeting the lows on November 22 last year at 110.25.

Protective assets are back in fashion (1)

These days the prolonged rally of the US stock market was interrupted and resulted in a mass avertion from risky assets in all trading floors of the world. In these conditions, the Japanese yen naturally became the beneficiary and updated the highs of the current year paired with the dollar. USD/JPY has been falling continuously for the seventh day in a row, and today the quotations reached an important support level at 111.00, the breakdown of which will open the way to new records.
Investors are showing concern about the implementation of the plans of the Trump's administration. Tomorrow will be a fateful vote on the abolition of health care reform. And the importance of this event for the markets is that the outcome of the vote will show how successful Trump initiatives will be in the future. Especially the players are concerned about the future of the promised fiscal incentives and tax reform. So, at least until the results of discussion of healthcare reform in the markets are announced, the current tension will remain, and the protective assets will continue to be in demand.

Eurobulls are exhausted

At the auctions in Asia, the dollar rate was under pressure against its main competitors. The euro/dollar for the third time tested the level of 1.0818. The unsuccessful attempt to consolidate above 1.0820 led to a partial closure of long positions and a price drop to 1.0775. By 14.30 GMT, the euro/dollar currency pair revolves around the level of 1.0790.
The participants of the market, apparently, ended in patience. They can not decide whether to buy currencies against the US dollar or sell. The euro does not become more expensive or cheaper, it consolidates in the range of 43 points between the levels of 1.0775 and 1.0818. Negative impact on the single currency has the yield of 10-year German bonds, which fell by 9.13%, to 0.416% from the opening of the debt market in Europe. The yield on 10-year US bonds fell by 0.90%, to 2.412 and partially offset the negative background.
The overall technical picture on H1 for the euro/dollar pair indicates an increase to 1.0818. For this the pair need to pass the level 1,0800. If at the same time the yield of German bonds will increase, and the American yield will decrease, then there is a probability of climbing above 1.0818. The target for the next two days is 1.0849.

Inflation in the UK passed the limit of 2%

For the first time in three years, consumer prices in the UK recorded a growth of 2.3% yoy, as expectations were for 2.1%. Bank of England repeatedly hinted its willingness to tolerate exceeding goal inflation is limited.

On Tuesday the pound recorded strong growth, while GBP/USD rose by 114 pips, closing at 1.2471. The British pound was also supported with the exact date of activation of Art. 50 of the Treaty of Lisbon.

The euro continued to gain against the greenback and the EUR/USD rose to 1.0806 dollars per euro.

The dollar was subject to sales also against the Japanese yen, as USD/JPY fell over 70 pips, closing at 111,777 yen per dollar. According to Japanese analysts pressure on the greenback was due to falling yields on US bonds.
   
On Tuesday, gold rose by 0.85% at the beginning of the Asian session, the precious metal was subject to sales and reached 1226.91, but subsequently rose and closed at 1244.38 dollars per ounce. The gold price is sensitive to interest rate increases, but rate hikes are not expected in the near future, which explains the bullish sentiment of investors and analysts. Since the increase in interest rates last Wednesday, gold has increased by over 45 dollars per ounce.

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Federal Reserve Rates Boost End to Global Policy Mitigation

The Fed's return to higher interest rates could support the central banks of Japan and Europe that were under pressure and signal the completion of a long cycle of monetary stimulus across Asia, as evidenced by the reaction of world regulators, from Beijing to Ankara and London, to a change in US policy.
The widely expected small increase in the Fed rate on Wednesday was only the third since the global financial crisis. However, this happened earlier than investors had predicted only a few weeks ago, and paved the way for two more increases this year amid the strengthening of the economy.
China, the world's second largest economy, on Thursday reacted with an increase in key rates to combat the weakening of the national currency. The same reason forced to tighten the policy of the central banks of Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain within one and a half hours after the announcement of the Fed.
As for the leading economies, the Bank of Japan and the European Central Bank continue to focus on aggressively combating low inflation and growth. And while both regulators are still far from raising rates or turning off asset purchases - which was made clear by the head of the Bank of Japan Haruhiko Kuroda, when the ECB left the policy unchanged on Thursday - both recently became more optimistic, indicating that their hour will soon come.

The US dollar has almost no chance

The US currency remains under the pressure of sellers, despite the publication of a moderately positive value of the consumer sentiment index from the University of Michigan. Recall that the previous value was at the level of 96.3, the forecast was 97.1, the fact is 97.6. In January and December, this indicator exceeded the 98-point mark. Therefore, I can not say that now we have very good value for it, but I would not consider it a signal for selling the US dollar.
However, at the time of publication of the index, demand for the US dollar declined. Within the first 5 minutes after the release, the US dollar index decreased by 0.1%, moving away from the session high by more than 25 points with the average daily volatility of the US dollar index of 59 points (per month) and 67 points in six months. Accordingly, the risk of further weakening of the US dollar paired with major currencies remains very high.

USD/CAD reduces growth against the background of positive statistics in Canada

On Friday, the US dollar reduced the achieved advantage against the Canadian currency after the publication of positive data on sales in the manufacturing sector of Canada, while the "dovish" sentiment of Fed officials this week continue to put pressure on the US dollar.
During the morning trading on US exchanges, the pair USD/CAD retreated from the session high of 1.3346 to 1.3318, keeping this position during the day.
It is likely that the pair will find support at the level of Thursday's two-week low at 1.3274, and resistance at the high of 1.3402, recorded on March 2.