Expert opinion

For most investors, Pakistan is not an investment destination being considered in their investment process. But soon MSCI, the biggest index provider globally, may bring that to a sudden change. On June 14th, MSCI will announce its decision whether to upgrade Pakistan from the current frontier market classification to emerging market classification or not. In the case of a positive decision, emerging markets funds with an estimated 40x the capital of frontier funds will be forced to have a look at the 180 million population nation on the border between Asia and the Middle East.

What is rather disturbing is that the central bankers have had no experience with the policies that they are following. Theoretically, according to them, consumers should spend more if saving produces no returns and companies should invest in capital expenditure instead of engaging in repurchase schemes. The hope is that growth will be stimulated by low or negative interest rates. Stagnation seems to be the result, and the cyclical nature of economics has apparently brought on a slowdown after the so-called recovery that followed the Great Recession of 2008.

Bearish traders attempted to prolong a correction as lower as possible yesterday, but they met a tough support in face of the weekly pivot point at 1,272.92. Considering that this demand is reinforced by the monthly pivot $20 from below, gold’s bears decided not to take additional risks. The bullion’s spot closed just under the 1,280 mark. Both daily and weekly aggregate technical indicators are pointing to a recovery, as there are no single signals to sell the metal. In the wake of these events, the bulls keep eyeing the 2015 peak at 1,307.06

UBS Q1 profits fell 64 percent with weak numbers in all segments: wealth management – 40%, investment bank – 67% and corporate finance – 39%. The only bright spot is an increase in net new money which follows 2 consecutive quarters of outflows.

FOMC statement used to have little impact on behaviour of the USD/CAD currency pair, which fixed a minimal four-pip decrease in daily value over Wednesday. The short-term outlook remains tilted to the South, provided there is a dense supply cluster located between 1.2722 and 1.28. Here the monthly S1 is backed by the weekly pivot point and downward-sloping 20-day SMA. Dips lower are expected to be shallow, as the first weekly support line is going to meet USD/CAD as soon as at the 1.2509 mark. As for the daily technical indicators, they are still having no distinct bias in any direction, as three "buy" studies are balanced by the same amount of "sell" signals.

Last night’s headline was the Australian CPI inflation falling – 0.2% quarterly (vs est. of+0.2%), which caused the AUD crosses to move against their bullish trend.

The Euro zone’s private sector kept expanding moderately in April, but failed to gather momentum. The Markit Composite PMI, a forward-looking reading tracking development in the Euro bloc’s manufacturing and services sectors came in at 53.0 in the reported month, down from 53.1 seen previously, when it rebounded from February’s 13-month low. The manufacturing PMI declined to 51.5 in April, compared with 51.6 in the preceding month, while the services sector gauge rose to 53.2, slightly ahead of 53.1 in March, but undershooting economists’ expectations of 53.3. The Euro zone’s economic growth continued to be weak as the bloc’s GDP expanded 0.3% in the final three months of 2015 on a quarterly basis, the same pace as in the three months through September. For all of 2015, economic output of the 19 countries using the Euro was up by 1.6% year-on-year.