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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Ava Foreign Exchange Decision Analysis]: British public inflation expectations rise, short-term trend analysis of spot gold, silver, crude oil and foreign exchange on March 26". Hope it will be helpful to you! The original content is as follows:
Global Market Review
1. European and American market conditions
The three major stock index futures fell, with Dow futures mainly blue-chip stocks falling 0.10%; S&P 500 futures falling 0.12%; and Nasdaq 100 futures mainly technology stocks falling 0.17%. European stock markets fell, with the German DAX index falling 0.69%; the French CAC40 index falling 0.76%; and the UK FTSE 100 index rising 0.03%.
2. Market news interpretation
The British public inflation expectations rose
① According to a survey by Citigroup/YouGov, the British public's inflation expectations for March of the next year rose from 3.9% to 4.0%. ② Meanwhile, the UK public's long-term inflation expectations rose to 4.2% in March, up from 3.9% in February.
The annual growth rate of home rent in the UK hit the lowest since 2023
The UK National Statistics Office said on Wednesday that in the 12 months to February this year, the average rent increase in the UK fell to 8.1%, the lowest since September 2023. Rents rose slightly by 0.4% to £1,326 ($1,711.3). It is a boon for tenants, whose rents have soared nearly 30% since the outbreak of the coronavirus, exacerbating the cost-of-living pressures caused by rising energy and food bills. This makes it harder for those who want to own their own home to save a down payment. The Labor government has pledged to build 1.5 million units of housing in the next five years to fundamentally solve the housing shortage. AndrewMon, managing director of mortgage brokerage firm Coreco"It is encouraging to see a drop in average rents, as struggling tenants currently need all possible support, but rents are still high," tlake said.
Australia inflation is lower than expected, and room for interest rate cuts increases - Deutsche Bank's view
① According to Volkmar Baur, foreign exchange analyst at Deutsche Bank, Australia's monthly price index in February showed that inflation rate fell again. Although the monthly data only covers some prices, it has proven to be a reliable indicator of avatradescn.comprehensive inflation data for many years.
②Inflation fell to 2.4% in February, lower than 2.5% last month and the unchanged expectations of most analysts indicate that inflation is entering the central bank's target range of 2%-3%. However, there are still some weaknesses, especially the service industry's inflation rate is still as high as 3.6%, and the pace of moving closer to the central bank's target is slow.
③ However, the service industry has also shown signs of slow improvement, with the monthly rate of change in financial services slowing down recently, and the rate of rising housing prices slowing down or even slightly declining, which shows that the price pressure in the rental market (the inflation rate is still high) is also easing.
④ When the RBA holds a policy meeting next week, it needs to decide how to deal with this avatradescn.complex economic situation. Although global uncertainty requires caution, Australia's economic environment supports further interest rate cuts, and inflation data also gives the green light for interest rate cuts.
The European avatradescn.commission calls for strengthening emergency supplies reserves
① The European avatradescn.commission stated that Europe should strengthen the reserves of key equipment and encourage the public to maintain a supply of supplies for at least 72 hours in emergencies.
②In the new EU Emergency Alliance Strategy, the EU is preparing for risks such as natural disasters, cyber attacks and geopolitical crises, including the possibility of armed aggression against EU countries.
③ European avatradescn.commission President von der Leyen said in a statement: "Families living in flooded areas should know what to do when water levels rise. Early warning systems can prevent valuable time from being wasted in areas affected by wildfires."
④ The strategy focuses on improving early warning systems, ensuring the continuity of basic services such as health care and drinking water, and helping citizens prepare for crisis response.
France's 2026 budget faces arduous challenges
① French government spokesman Sophie Primas said that balancing the 2026 budget will be a difficult task because it is necessary to cut the deficit and make room for increasing military spending.
②She pointed out that the 2026 budget will be a "nightmare" because France faces huge financial difficulties. She stressed that the Prime Minister hopes to fully listen to the opinions of all sectors of society and the parliament when formulating budgets.
③ French Prime Minister Francois Bayrou's government plans to gradually reduce the public sector budget deficit from 5.4% of economic output this year (one of the EU's largest fiscal deficits) to 3% in 2029.
④ Minister of Finance Eric LomBard said efforts are being made to increase defense spending, while neither increasing France's debt burden nor undermining its cherished but costly welfare system.
The possibility of the Bank of Japan hikes in advance has increased
① Since the Bank of Japan's policy meeting in March, the market's expectation of interest rate hikes has gradually increased, with the expectation of interest rate hikes rising from 16% in May meeting to 28%.
② As Japan's largest trade union organization Rengo releases more details of wage increases and new inflation data before May's meeting, market expectations for the Bank of Japan's rate hike may be further raised.
③ Although the yen has weakened recently due to seasonal factors and the exchange rate against the US dollar has fallen below 150 at one point, the hawkish revaluation of Japanese interest rates may limit the further decline of the yen.
④ Koeda, a member of the Bank of Japan, said in his first speech that several indicators show that Japan's base inflation is approaching its positive target and that Japan's real interest rates are currently at an extremely low level.
⑤Koeda's hawkish tendency suggests that the Bank of Japan's board of directors may have less resistance to faster rate hikes. Therefore, although the market generally expects interest rate hikes in July, the possibility of interest rate hikes in May or June cannot be ignored.
UK inflation fell, and expectations for interest rate cuts rose in May
①UK inflation fell from 3.0% in January to 2.8%, a downward trend welcomed by EFG asset manager JoaquinThul, who believes this is good news for the Bank of England.
②Thul pointed out in the report that although the market currently expects the Bank of England to cut interest rates at its June meeting, the latest inflation data may prompt the market to re-evaluate, and it is expected that the interest rate cut may be seen at the earliest meeting on May 8.
③The main driving factors for the decline in inflation in February include the decline in prices of clothing, shoes, housing and family services.
④ London Stock Exchange Group data shows that the money market currently expects the Bank of England to cut interest rates in May at 54%, and the likelihood of a rate cut in June at 85%.
3. Trends of major currency pairs in the New York Stock Exchange before the market
Euro/USD: As of 20:20 Beijing time, the euro/USD fell and is now at 1.0787, a drop of 0.04%. Before the New York Stock Exchange, the EUR/USD price rose slightly in recent intraday trading, and under the influence of the double-top pattern, it moved along the downward correction trend line in the short term as the price tried to make up for some recent losses.
GBP/USD: As of 20:20 Beijing time, GBP/USD fell and is now at 1.2891, a drop of 0.41%. Before New York, GBP/USD fell slightly in recent intraday trading, after hitting resistance from the 50 candlestick, accumulating more selling pressure, and after reaching overbought levels, the stochastic indicator showed negative signals., and the price is also affected by the negative rising wedge pattern, which increases the likelihood of more losses.
Spot gold: As of 20:20 Beijing time, spot gold rose, now at 3026.99, an increase of 0.24%. Before the New York Stock Exchange, gold prices fell in recent intraday trading despite being affected by the flag pattern avatradescn.complementary to the main upward trend, while prices tried to gather positive momentum to rise again as it relied on support from the 50 candlestick.
Spot silver: As of 20:20 Beijing time, spot silver rose, now at 33.732, an increase of 0https://avatradescn.com.01%. Before the New York Stock Exchange, silver prices fluctuated at the intraday level, with prices falling to vent overbought saturation in the stochastic indicators and relying on the support of the 50 candle SMA to boost the price again as it trades along the trend line, with the main upward trend dominating.
Crude oil market: As of 20:20 Beijing time, U.S. oil rose, now at 69.580, an increase of 0.86%. Before New York, U.S. crude oil prices expanded their gains in the latest intraday trading, and after trying to vent overbought saturation, the stochastic indicator showed positive signals, with an upward correction trend dominant in the short term as prices traded along the trend line.
4. Institutional View
Dutch International: The market underestimates the US reciprocal tariffs. The euro is expected to decline to 1.05 at the end of the second quarter.
Dutch International Group analyst Chris Turner pointed out in a report that the market underestimates the risks posed to the euro by the US reciprocal tariffs that will take effect on April 2. "The EU (led by Germany) has a large trade surplus with the United States, which is likely to become the primary goal of the US government to adjust its global trade policy." Dutch International Group expects that the euro against the US dollar will fall to 1.05 by the end of the second quarter due to tariff measures implemented by the United States.
The above content is all about "[Ava Foreign Exchange Decision Analysis]: British public inflation expectations rise, short-term trend analysis of spot gold, silver, crude oil and foreign exchange on March 26", which was carefully avatradescn.compiled and edited by Avatrade Foreign Exchange Editor. HopeHelps your transaction! Thanks for the support!
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