Last week most of the stock indexes again came under pressure amid uncertainty of the situation in the credit market. American NASDAQ lost 0,76, Dow Jones fell by 0.98%. Additional pressure on the US benchmark has a strong labor market statistics (the number of new jobs outside the agricultural and economic sectors increased by 280 thousand vs. 225 thousand). The German DAX 30 (FDAX) fell by 2.21%, by updating the May lows against the background and the unresolved problems in Greece. Hong Kong HSI ended the week with a loss of 0.31% symbolic.
Precious metals finished another week with losses amid increasing expectations of an earlier rate hike US Federal Reserve. Gold fell by 1.58%. Silver lost 3.83%. Brent crude oil dropped to the monthly minimum (60.94), but was able to partly recover the loss. Loss of black gold for the week amounted to 3.53%.
Commodity and raw market
The main event of last week, the OPEC summit, not a surprise. Production quotas have been maintained at the same level – 30 million barrels per day. Thus, the cartel has confirmed its unwillingness to fight for the oil price by losing even a small market share. This decision was included in the price, so the long-term decline of quotations Brent crude oil was not observed. In a short time supporting factor may be evidence of continuing seasonal demand.
Already 5 weeks in a row in the US commercial inventories are reduced (to 477.4 million). At the same time, utilization of refineries is at 93%. Data from Baker Hughes on the number of working rigs confirmed their further reduction. Yes, the growth is not impressive: the fall was only 7 units. But the trend has continued and it only increases the likelihood of an early decline in production in the United States. Such expectations are quite logical, because for the last six months the number of drilling declined by more than 50%. Therefore, we can assume that oil quotes continue to move in the “usual” range of 60 – 70 dollars.
This week the Reserve Bank of New Zealand will publish a decision on monetary policy. Probably until the regulator will keep it unchanged. But accompanying comments will be of particular interest. The fact is that even at the last meeting of the Reserve Bank of New Zealand has indirectly hinted at the possibility of a rate cut. It is possible that the results of the June meeting, these hints will become more apparent.
For such a decision could push several factors. This is a difficult situation on the labor market and reduced cost pressures (in Q1, inflation fell to 0.1% from 0.8% in Q4 2014), and prices for dairy products, which is one of the main exports of the country. If this happens, the pair NZD / USD may attempt to overcome at least at the level of June 0.7077, which will aim to reduce its level in the area of 0.6990 and further to 0.6900.
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.