Review of May 25-29: the dollar again in the favourites. The forecast for June 1 – on June 5

By | May 31, 2015

Last week share indexes appeared under pressure. Their most part finished week “in the red”. The least strong falling was shown by the American NASDAQ (-0,25%). Dow Jones fell in price for 1,11%. In many respects it was caused by strengthening of dollar in response to quite aggressive spirit of the head of U.S. Fed which declared earlier that increase of a rate will happen until the end of the year and it is necessary to reconcile to it. And even that fact that and really was reconsidered by GDP of the USA on decrease (-0,7% against preliminary 0,2%) couldn’t change a situation essentially. German of DAX 30 (FDAX) decreased by 3,33% against fears of that Greece won’t manage to agree with creditors. The Hong Kong HSI lost 4,0%, being corrected from strong resistance.

Precious metals in the week showed falling under the influence of rising dollar, which makes assets denominated in it less expensive. Gold fell by 1.29%. Silver lost 2.11%. Brent crude oil dropped to the monthly minimum (61.24), but was able to recover losses and finished the week unchanged.

The forecast for June 1 – on June 5
Stock market
Next week the market will be particularly closely monitor the US reports. They will be published data on the index of business activity in the industrial and service sectors, data on employment in the private sector. Of course, the key will report data on non-farm payrolls. In its latest comments the head of the Fed has signaled that the regulator clearly set to raise rates before the end of the year and the market it is necessary to come to terms with. The only question is the timing. And it will depend on incoming macroeconomic statistics. Thus, even the slightest hint that the US economy is showing strong recovery creates new jobs and the growth of hourly wages may trigger an acceleration of inflation, it may be enough for the market to believe in the possibility of the beginning of the cycle increase in September – October 2015 year. Against this background, stocks may continue downward correction. Dow Jones may revert to the district level to around 17692. Nasdaq 4416.50.
German DAX30 recently demonstrated quite restrained dynamics. Benchmarks can not find catalysts for renewed growth. However, recent statements by European Central Bank officials that they plan to slightly adjust the pace of asset purchases during the summer months, can still provide support for the index. Especially because next week a regular meeting of the European Central Bank monetary policy and a press conference by Mario Draghi. FDAX can also support and resolution of the “Greek problem”. Against the backdrop of these factors combined can expect an increase with the primary aim in the level of 11980.
The Hang Seng (HSI) index appeared under pressure in recent days. Benchark can’t pass mark 28605 in any way. Nevertheless, at the beginning of a week it has chances to resume growth with primary purpose at the level of 27970. But it will be possible only provided that data on business activity in industrial sector of China again will appear lower than a level 50,0 that will testify to weakness of one of key sectors of economy and to give the grounds to wait that National Bank of China will continue to undertake the additional stimulating measures. Besides, last week there were data that the State Council of China approved new exchange “sheaf” for stock trade between Shenzhen and Hong Kong. Any details of rather this project can give to a benchmark additional support. The matter is that “sheaf” will give ample opportunities for investors who want to get access to stock market, the second for the sizes, in the world that can significantly increase a capital stream to China.
Commodity and raw marketĀ 
The coming week could be quite important for the black gold. June 5 will be another meeting of OPEC. The probability that the cartel revised down production quotas, is practically zero. Most likely, the cartel will continue to adhere to its policy of “squeezing” the market shale projects. Because of recent developments in favor of such an outcome shows the Iraqi declaration that he plans to bring the diurnal supply oil to the world market to a record 3.75 million barrels of oil. in June. In general, such an outcome has actually been included in the quote of the asset and, even if Brent crude oil would be under pressure, it is unlikely to be sustained. Therefore, even assuming that the oil quotes drop below $ 60 a barrel, quickly they will return to the “usual” range of 60 – 70 dollars set earlier. In order to actively reduce the price of oil is not the fundamental reason is not sufficient.
Commercial inventories in the United States on the basis of the previous week fell by 2.7 million barrels to 482.2 million, which was the fourth decline in a row. Refineries increased their consumption of raw materials by 237 thousand barrels per day to 16.5 million. This demonstrates the continued seasonal demand. Despite the fact that the previous week Baker Hughes data on the number of operating drilling rigs signaled the termination of the folding slate of projects, the latest report once again reflected the decline in their numbers. By the current moment the number of nearly 58% lower than a year earlier. Thus, you can still expect that production in the US is about to begin to fall and this may have additional support to oil. In view of these factors, the existing range of fluctuations of the best looks.
Currency market
Forthcoming week Great Britain will publish data on business activity in industrial and construction sectors and a services sector. Also will take place next MRS meetings on monetary policy. Most likely, impact on the British currency influence will be had by the PMI index as from the British regulator until the end of the year don’t wait for tightening of monetary policy. And, if reports continue to signal that the economy can continue to show so modest growth, as in 1 quarter (0,3%), that, together with April data on consumer inflation (-0,1%), they will only strengthen similar moods. And on this background of GBP/USD steam can continue decrease to the region of level 1,5130.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for informational purposes and do not guarantee the results obtained.

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