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Alexander Kuptsikevich

Forex: The $60 mark for Brent may not become reality this year

Yesterday, the markets displayed major signs pointing towards a strong oil growth momentum, including Brent price nearing important resistance level of previous highs, anxiety regarding supplies in the Middle East, the dollar falling against most competitors, while U.S. data revealed a significant fall in crude production by almost 1.5 million barrels per day and a drop in inventories by 5.7 million barrels by week, 16.4 in 4 weeks. Yet, this was not enough to send oil to previous peak values. ...

Alexander Kuptsikevich

Forex: Unexpected drop in U.S. payrolls triggers risk-off sentiment

Undoubtedly, the September U.S. Nonfarm Payrolls were shockingly bad. At the beginning of the previous week, analysts had expected a growth of 90K, with a series of very strong releases of business activity indicators in the U.S. significantly raising expectations. On Thursday, we had even observed some markets rallying as U.S. assets were on particularly high demand. Last Friday’s NFP release showed how hasty those purchases were. Nonfarm Payrolls decreased by -33K, while data for the previous ...

Alexander Kuptsikevich

Forex: Not so rosy long-term consequences for USD from the Fed policy

The Fed announced the beginning of a reduction in their massive holding of bonds and mortgage-backed securities starting in October, citing the impact of the recent hurricanes on the economy as temporary and not detrimental to overall economic growth. The scale of reductions will gradually increase, starting from 10 billion USD a month and reaching 50 billion USD within a year. Under existing conditions, the Fed’s balance sheet will decrease by $300 billion to $4.2 trillion. If the program ...

Alexander Kuptsikevich

Forex: The Fed caused a storm in the markets and explosive growth of USD

The Fed promises to start shrinking their balance from October and has kept the rate unchanged. However, committee's forecasts caused a powerful wave of dollar growth immediately after the publication. The committee is set to hold a third raise this year and expects to face three more rises the next year. In addition, the forecasts for GDP growth were revised up for this year from 2.2% to 2.4%. This is an unexpected turn when many market participants expected to see a downward revision. A ...

Alexander Kuptsikevich

New US data did not add positive to markets before FOMC

Published data on construction activity in the US in August slightly exceeded expectations. The number of building permits reached an annualized rate of 1.3M (an increase of 5.7% mom) above expected 1.22M. Housing starts fell by 0.8% during last month to 1.18M from 1.19M, slightly higher than the expected 1.175. Such statistics somewhat reduced fears of negative impact on the industry the beginning of the hurricane season, but did not deprive fears that the construction industry would pull down ...