Zhang Wei: Super Week Begins The Baptism Of Foreign Exchange Market

German inflation data prompted investors to anticipate the pressure of monetary policy shift, and the euro may weaken. The German consumer price index (CPI) fell 0.3% in April from a month earlier, down 1.1% from the previous year, down by 1.3%. After rising for five consecutive trading days, the euro fell 0.3% to US $1.3810 against the dollar. The euro fell 0.4% against the British pound and 1 euros to 1.2183 euros. After the German inflation figures were released, investors bought pounds, although GDP in the first quarter was slightly lower than expected.

Yesterday, sterling strengthened against most currencies, because investors believed that the GDP data in Britain were not weak enough to push the Bank of England to change its monetary policy stance. Investors believe that the Bank of England will raise interest rates in 2015. When the United Kingdom increases interest rates, the sterling denominated assets will be more attractive than the currencies of countries whose interest rates remain unchanged, thus raising the pound.

On the stock market, the major stock indexes of the world mostly rose. The three major indexes of the United States collectively rose, and the Dow and the S & P 500 index rose for second consecutive trading days. The Internet sector rose for the first time in 5 consecutive trading days. The NASDAQ ended after two consecutive days of decline, rising 0.72%. The main European stock indexes rose all the way, continuing the previous rally, and German stocks rose 1.46%. International gold prices continued to fall on Tuesday as the market worried that the Federal Reserve would continue to reduce stimulus policies overshadowed the acceleration of gold prices in Russia and Europe. Investors are now eyeing Washington, where the two day policy meeting of the Federal Open Market Committee is held. Federal Reserve Last December, January and March, the amount of monthly purchase debt was reduced by 10 billion US dollars. Some investors bet that the Federal Reserve will continue to reduce the size of its debt purchases when it makes policy statements on Wednesday.

　　 Currencies As of the end of the day, the exchange rate of 1 euro was 1.3811 dollars, which was lower than that of the previous trading day of 1.3849 US dollars; the exchange rate of 1 pounds was 1.6823 US dollars, which was higher than the 1.6805 US dollars of the previous trading day; the 1 Australian dollar was 0.9264 yuan, which was higher than the previous day's 0.9257 dollars; the 1 dollar changed to 102.62 yen, which was higher than the previous Japanese yen of the previous day. The euro fell against the US dollar yesterday in the US session, falling from 1.3877 to 1.3805 within a day. But the euro exchange rate continues to oscillate.

The European Central Bank has hinted that if the euro continues to strengthen, it may be suppressed by buying assets. But investors and analysts agree that even if the European Central Bank adopts Japanese quantitative measures, Loose measures Nor can it fundamentally shake the strength of the euro. The European Central Bank has taken decisive action to break the taboo of quantitative easing (QE) many people believe that the biggest economy in the region, at least, is opposed to the implementation of QE by Germany, which may limit the rise of the euro. But analysts believe that even if QE is implemented, the scale will not be large enough to fundamentally reverse the strength of the euro. In the world's three largest central banks, the scale of the European Central Bank's balance sheet is shrinking, which has increased the difficulty of breaking the taboo. The ECB absorbs the liquidity of the economy through debt cancellation operations, which helps to support the euro.

In particular, when the US Federal Reserve continues to buy assets at a monthly rate of $55 billion, the Bank of Japan promised to invest $1 trillion and 400 billion in the economy within two years, supporting the euro. At present, the ECB needs to study the national conditions of various countries to find a suitable solution for asset purchase, and if the central bank wants to establish a market for its purchase of asset-backed securities, the central bank must act quickly. Even if the European central bank finally launched the QE plan, all these measures may not be enough to shake the strength of the euro.

Wednesday's risk events are more concentrated and more numerous. First of all, during the Asian session, investors should pay attention to the minutes of the Bank of Japan meeting. The market expects the Bank of Japan to maintain some easing policies now. Since Japan raised sales tax in April 1st, the market will drag down economic performance, but the Bank of Japan has always been more optimistic, and suggests that the deterioration of the second quarter GDP is likely to increase QE. In the afternoon, investors should pay attention to a series of economic data in the eurozone, including German retail sales, German employment data and euro area inflation data.

German inflation is weak on Tuesday, and speculation about the euro zone QE is heating up again. The euro area inflation data is particularly important during the day. If inflation continues to be weak, the euro will be suppressed. During the evening session of the United States, GDP and industrial price index data will be released in Canada. The governor of Canada's central bank reiterated that the central bank held a neutral stance on interest rates and maintained low inflation. Canadian economic data can raise the Canadian dollar once again, let us pay attention. There are also a series of important economic data from the US, including ADP, GDP and Chicago PMI. ADP is the weathervane of non-agricultural data this Friday, while GDP and PMI will also play an important role in the trend of the US dollar.

In addition, Beijing will announce interest rate resolutions at 2 o'clock a.m. tomorrow, which is expected to have limited market impact. It is widely expected that the Fed's policy will remain unchanged, and no press conference and quarterly economic report will be released after the resolution. At present, the market is widely expected that the Federal Reserve will continue to reduce its QE scale at its present pace after this week's FOMC meeting. However, since the Fed has raised interest rates on the desktop, it is believed that reducing QE alone may not be able to attract more interest from investors.