Yellen Stands At The Crossroads Of FED's Easing Policy.

Yellen, chairman of the US Federal Reserve (FED), said on Monday (March 31st) that the reduction of bond purchases was not a result of the Fed's easing of loose promises, but it did reflect some progress in the job market. (JanetYellen) Yellen demonstrated this position in an American Chicago campaign, saying that the QE policy shows that the need for economic recovery has not increased rapidly. Pressing us fingers briefly fell below the 80 pass, but it still closed at yesterday's close to today's Asian market opening near 80.10. However, the trend of "crossroads" also makes the market need to observe more economic data to choose the direction of us fingers.

In the evening, the final value of Markit manufacturing PMI in March, the monthly rate of construction expenditure in February and the PMI data of ISM manufacturing industry in March will be released. If the data is not performing well, the US index is likely to break the 80 pass again. If the data are unexpectedly strong, the US index or the expected test will be 80.20. However, directional choices may not be released until this week.

Since the 2007-2009 recession, Federal Reserve In essence, it has printed about 3 trillion US dollars. The Fed has maintained close to zero interest rates for more than five years, and has indicated that even after the end of the purchase of debt, it will maintain a near zero interest rate for quite a long time. The market expects the Federal Reserve to end its debt purchases later this year.

　　 The euro is strong but cannot be ignored. It is concerned about the economic data of European countries.

After the euro reached its support on the 60 day moving average last Friday, its performance this week continued to be steady. Although yesterday's European bad news continued, but in the context of the big market, the prospect of a sharp decline in the euro exchange rate did not appear. The euro area will have multi country economic data released within the day. The euro will be faced with heavy data test. It is still possible to continue to play the "strong but not fail" drama.

The ECB [micro-blog] policymakers worry that the euro is approaching the level of $1.40 that has not been seen since 2011, which will worsen deflationary pressure and damage the economic recovery. JoeManimbo, a senior market analyst at WesternUnionBusinessSolutions, said that the European Central Bank would take action to reduce the euro and investors would like to see the action of the European Central Bank. The market is skeptical that the ECB will take further easing this week.

Data on Monday showed that inflation in the euro area dropped to only 0.5%. However, Wiedemann, President of the German central bank and the European Central Bank (CMC), said on Saturday (March 29th) that the euro zone did not fall into deflation cycle. The ECB should not overreact to the slowdown in inflation caused mainly by cyclical factors. These factors should be temporary.

Intraday European markets will take the lead in releasing PMI data from Germany, France and the euro area. Data on unemployment rates in Germany and the euro area are expected to break 1.38 or 1.37 in the US dollar, but large directional changes may be left to the ECB interest rate resolution.

　　 Japan In the first quarter, both manufacturing and non manufacturing industries were improved, focusing on the impact of increased sales tax.

Japan's central bank (BOJ) released data on Tuesday (April 1st) that Japan's performance in major manufacturing and non manufacturing industries improved in the first quarter of 2014, but the large business in all sectors expected the business situation to deteriorate in the next 3 months. At the same time, the large Japanese manufacturers believe that the 2014/15 dollar against the yen in the financial year of the average rate of 99.48. After the release of the data, the US dollar reacted against Japanese yen in a limited way and narrowed it to around 103.31.

Japan has announced that sales tax (consumption tax) has been raised since April 1st. In the first few months before the start of the measure, the domestic consumption of the Japanese people has greatly boosted the economy. However, with the increase of sales tax, Japan's economic downside risks will be increased. This is also one of the important factors for the Japanese enterprises to deteriorate their confidence in the next three months.

The short cut survey also showed that the first quarter of the year saw the capacity index of +6, the largest producer in Japan, with a value of +8. Japan's employment index for all enterprises in the first quarter was -12.

Yesterday, Kuroda Higashihiko, President of the BOJ (HaruhikoKuroda), said on Monday (March 31st) that it is too early to discuss the specific exit strategy for quantitative easing (QE). Premature discussion of exit strategies may confuse the market.

Japan is about to raise the consumption tax from April 1st. Many analysts expect the consumption tax increase to slow down economic growth for the time being, but there is a concern that has been lingering, that is, it is difficult for the economy to rebound quickly, thereby enhancing the need for stimulus measures.

　 　 Australian dollar Meet the RBA resolution against the US dollar

The Aussie dollar rose to a higher level in the early morning of the Asian market, which is now trading near 0.9276. Within days, investors need to focus on the RBA resolution and a series of China's economic data. Yellen, chairman of the Federal Reserve, released a dovish speech yesterday in New York. She pointed out that the US economy still needs a period of unconventional support; in some ways, the job market is more severe than any recession; for many Americans, the recovery is still in decline. Yellen's remarks pushed the global stock market higher and also supported the risk currency Australian dollar.

Today, the RBA will announce interest rate resolutions, which are widely expected at the moment, but investors need to focus on policy statements after the resolution, with special attention to the words of the RBA on exchange rate and policy direction. If the RBA stresses again that the exchange rate is too high and there is a further easing expectation, the Aussie dollar will be under pressure. On the other hand, in the morning, China announced the official manufacturing PMI of China. The official manufacturing PMI50.3 of China in March was 50.2, with an expected value of 50.3. After the data was released, the Australian dollar rose by more than 20 points to 0.9291 against the US dollar.

Technically, in the 4 hour chart of the Australian dollar against the US dollar, the price has gone up again after a slight drop in price, and has maintained a strong momentum as a whole. Technical indicators MACD and RSI show bullish state, which indicates that the price trend is excessive.