Review for August 3 – August 7: half-yearly lows oil and copper – is not the limit. Forecast for the week August 10 – August 14

By | August 8, 2015

Last week, the US stock indexes were under pressure amplification expectations imminent rate hike US Federal Reserve, which partly contributed to the harsh comments of one of the representatives of the regulator and, in general, good statistics. As a result, NASDAQ fell by 1,48%, Dow Jones lost 1.84%. Hong Kong’s HSI was encouraged by the information that the China Securities Finance Corp., which provides liquidity to market participants of shares of China, intends to obtain from the government an additional 2 trillion yuan.

Index rebounded by week low. But completely unable to win back losses and finished the week down 1.25%. The German DAX 30 (FDAX) was able to gain a foothold on the week. The increase amounted to 1.85%.

Precious metals finished the week unchanged. Gold has fallen in price by 0.13%, 0.27% silver added. Brent crude oil lost 6.34%, closing at 48.51 dollars per barrel. Fears gain imbalance of supply and demand remain, including on the background of growth in the number of drilling rigs operating in the United States, as reported by the company Baker Hughes.

The economic data of the last day: 

  • The Bank of Japan kept its monetary policy unchanged 
  • US July unemployment rate at 7-year low – 5.3%
  • US: July, the number of new jobs created outside the fields of agriculture 215,000 – below the forecast of 223,000

 Forecast for the week August 10 – August 14

Stock market
Friday’s report on the US labor market has put pressure on the US benchmark. Unemployment in the country kept at a minimal level for 7 years, and hourly wages rose compared with the previous month, giving hope for an acceleration of inflation at this level. All this, despite a slight drop in the index number of jobs created (215 thousand vs 223 thousand), Only increased expectations that the US Federal Reserve may move to raise rates in September. Earlier this week, Dow Jones (YM) and Nasdaq (NQ) against the backdrop of a lack of meaningful statistics can try to develop upward correction, the more they are at a fairly attractive buying levels. The objective movements can be levels of 17516 and 4600, respectively. Can accelerate the growth towards the end of working five days if data on retail sales and consumer confidence in the United States will be worse than expected. 
Next week will be published data on the index of sentiment in the business environment of the ZEW institute in Germany, as well as a preliminary report on the rate of growth of the largest economy in the eurozone. The positive dynamics of indicators could trigger a further increase in the DAX 30 (FDAX) in the district-level 11800. The situation in Greece is gradually stabilizing – the country repaid on time the next tranche of the IMF and the European Central Bank continues to pursue a program of quantitative easing. In addition, the low oil prices can improve business in the corporate sector in the medium term, as the euro zone is a net importer of “black gold” and to support consumer spending. The index looks interesting to enter into long positions in the level of 11427.
Commodity and raw market
Brent crude oil updated semi annual minimum. A break below the psychological support level of 50.00 discovered asset further down the path. The aim of the movement can be at least 46.45 in January. Risk gain imbalance of supply and demand on the world market is preserved. This possible increase in supply in the event of Iran’s removal from the sanctions, and the preservation of production in the United States at a high level (according to the EIA report, an increase of 52 thousand barrels per day) which can contribute to growth in the number of drilling rigs operating. According to the latest data from Baker Hughes, it has grown to 884 from 874 the previous week.
Given that China is the world’s largest importer of oil, Brent could respond to the statistics on industrial production in China. Fall indicator may indicate a further slowdown in growth and, consequently, the possibility of reducing energy consumption. It is also worth noting that the market is virtually ignored reports that Saudi Arabia in September, will raise prices for consumers in Asia. Thus, a large number of fundamental reasons for the growth there, although short-term upward correction is possible. 
Copper (HG) updated six-year low, and, it seems, is not the limit. An additional factor of pressure made by weak data on industrial production in Germany. In addition, the metal is denominated in dollars. A US currency feels confident enough amid expectations imminent Fed rate hike. Do not forget that last week went pretty weak data on business activity in the industrial sector in China. Next week will be published data on industrial production in China, which is the world’s largest consumer of the red metal. The decline will be able to exert additional pressure on the asset. Quotes may be reduced to the level of 2.2260.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for informational purposes and does not guarantee a result.
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