Review for June 29 – July 3: Greece and Iran in the focus of the market. Forecast for the week July 6 – July 10

By | July 4, 2015

Stock indices closed in the past “in the red“. Starting week gap down on news that Greece and the EU negotiations were interrupted, American and European benchmarks have not been able to close the “window“. As a result, NASDAQ lost 1,48%, Dow Jones fell by 1.46%. German DAX30 (FDAX) fell by 3.78%. Hong Kong HSI ended the week with a score of -2.42% including under the influence of “collapse” bubble in the stock market: 3 weeks in the Chinese market capitalization decreased by $ 2.8 trillion.

Under pressure appeared and commodity currencies. NZD / USD lost 2,26%, ADU / USD «dipped” to 1,88%, USD / CAD rose 2.02%.

Precious metals most of the week remained under pressure amid rising dollar. But a little weaker than expected report on the labor market has allowed them to stop the decline and attempted to recover. Gold has fallen in price by 0.6%. Silver lost 0.84%. Brent crude oil most of the week was kept above the level of 62.00, but it collapsed at the end of the district-level 60.55.

brent crude oil price chart
Brent crude oil price chart

At the end of the week “black gold” has fallen in price on 4,15%, playing on the growth of the number of drilling rigs operating in the US from Baker Hughes and news on Iran’s nuclear program: it became known that Iran and the “six” of international mediators agreed to export uranium Russia.

Forecast for the week July 6 – July 10
Stock market
The outcome of the Greek referendum may have quite a strong impact on the German DAX30. It is difficult to assume what will be the selection of the country’s population as well as preliminary polls show nearly equal numbers of supporters and opponents accept the creditors. If Greeks vote for the salvation of the country under the terms of the EU and the IMF, the market will accept this with a fairly high degree of optimism that will be able to send a benchmark in the area of ​​level 11580 and further, 11800. Although, such an outcome does not add to clarity as appeared on the market rumors that in this case the Greek Prime Minister resigns. Therefore, to remain vigilant.

In addition to the “Greek saga” American indices in the coming week may react to data on business activity in the services sector. In addition, we should not lose sight of, and the publication of the minutes of the last Fed meeting. But most attention is probably deserved Friday speech Janet Yellen. It will be interesting how the position of the head of the Federal Reserve on the possibility of a rate hike at the September meeting changed after the data on non-farm payrolls that came below expectations (223 thousand vs. 230 thousand). To Dow Jones and the Nasdaq returned to growth will be small enough for even a hint of what such action regulator may be delayed. In this case, benchmarks are waiting at levels 17,900 and 4477.16, respectively.

Commodity and raw market
Prices for Brent crude oil remained under pressure. Several factors have on the “black gold” negative impact. It is still uncertainty regarding Greece, although there have been some positive developments. And the expectations of signing an agreement on the Iranian nuclear program, which ultimately could lead to the lifting of sanctions with Iran. And it can only increase the imbalance of supply and demand on the world market, coupled with the already high volumes of production by OPEC countries.Recall the end of June the cartel by 1.5 million barrels higher than its own quota. Therefore, if the July 7 agreement will be signed, Brent may try to overcome support at 60.00, falling in the area of the level of 58.5 dollars per barrel. Although unlikely to be able to consolidate at these levels for a long time, as the market is still waiting for the beginning of the decline in production in the United States, where for the past six months to more than 2 times, reduced the number of operating drilling rigs. This means that oil can “pick up” at relatively low levels.Currency market
If you ignore the little threads of Greece, the next week it is worth paying attention to the meeting of the two central banks. On Tuesday, the RBA will announce its decision. Australian regulator this year twice cut rates. While he does not give a direct allusion to a possible third. But it is still in favor of the fact that the aussie is still too high to maintain a balanced growth of the economy. Therefore, even small hints on keeping loose monetary policy may not be enough to AUD / USD pair continued to fall with the immediate goal to 0.7400.

GBP / USD after the “win back” the results of the Greek referendum, will follow the decision of the Bank of England. It is possible that the controller will hint at the possibility of an earlier rate hike: index of business activity in the services and construction sector went better than expected (58.5 and 58.1, respectively), the country marked acceleration in wage growth, which allows glad increasing inflation on the salary level. Against this backdrop, the GBP / USD may try to recover the district level of 1.5750.

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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