Stock indices finished the working week in the “red.” In many ways, this was due to the negative dynamics of corporate reporting, and fears that the strength of the dollar will start to have a negative impact on the US economy. In addition, the published macroeconomic statistics proved to be quite strong, which increases the likelihood of an early beginning of the cycle of monetary tightening Fed. As a result, NASDAQ (NQ) lost 1,9%, Dow Jones (YM) fell by 2.61%. German DAX30 (FDAX) fell 3.37%. Hong Kong HSI was under moderate pressure amid falling commodity prices and weak statistics from China, down 1.69%.
EUR / USD received a temporary reprieve on news that the Greek parliament adopted the second package of laws on reforms, paving the way for negotiations with the EU for a third aid package. Against this background, the pair managed to gain a foothold in 1.46%.
Precious metals again came under pressure amid growing expectations of tighter monetary policy the US Federal Reserve. Gold has fallen in price by 3.1%, updating earlier in the week for at least 5.5 years. Silver lost 1.36%. Brent crude oil “closed” week below 55.00, having fallen in price on 4,31%. Black Gold “crippled” data on commercial stocks in the US, the general sentiment in the commodities markets, the weak statistics from China, and data on the number of drilling rigs operating in the US showed an increase according to Baker Hughes.
Chart of the week:
|Brent crude oil chart|
A large block of American statistics, as well as a meeting of the US Federal Reserve may put additional pressure on precious metals. The main condition – strong evidence and proof of the aggressive attitude of the American regulator. All this will cause a strengthening of the dollar, which adversely affects the value of assets denominated in it. In this case, you can consider selling gold (XAU / USD) and silver (XAG / USD) in the breakdown of levels of 1067.00 and 14.370, respectively.
GBP / USD in the coming week could make an attempt to recover the district level of 1.5640. But such dynamics will be possible only when published on Tuesday showed the pace of economic growth in the 2nd quarter will reflect the acceleration of growth at least in line with expectations.
Such dynamics of the indicator could lead to the fact that the representatives of the MPC will continue to speak out as aggressively relative to the market and inflation, as we did at the last meeting. Moreover, the uncertainty on Greece has exhausted itself, and will not have a deterrent effect on them.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for informational purposes and does not guarantee a result.