Review for September 22: Chinese visit and speech Draghi. Forecast for Wednesday, September 23

By | September 22, 2015

The Japanese market is closed for a second day, but this does not prevent sharp fluctuations of currencies to show. EUR / USD continued its downward movement, reaching a minimum of 1.1112, while the other pairs try to keep within narrow ranges. GBP / USD has weakened under the influence of disappointing economic reports: the volume of borrowing in the public sector were significantly higher than expected. In fact figure peaked in 2012, prompting fears about rising financial costs UK. As a result, the pair went down to 1.5340.

Stock indices have come under pressure in the morning. And the tone was set by the European benchmarks, which greatly worried over the fate of the company Volkswagen. The automaker is accused of defrauding environmental organizations that heavy fines for the company. Behind him and suffered the action FORD (F). Commodity markets are also remain in narrow ranges, although precious metals began to suffer losses. Gold traded at $ 1125.70 per ounce. Meanwhile, Brent down to 47.68, but managed to recover above 48.00 dollars per barrel.

Chart of the week:

ford stock quote
Ford stock quote

Economic data of the previous day:

  • Volkswagen shares have fallen by 20% after US regulators found software that deceive consumers and inspectors. Concern can be fined $ 18 billion  
  •  UK: August, a peak deficit of public borrowing in 2012

Forecast for Wednesday, September 23

Stock market
Xi Jinping, head of China, on Tuesday arrived in the US on a business trip. Despite the fact that this event is more political in nature, the individual comments of officials on both sides may have an impact on the stock markets and the US and China. Great importance will play the tone of the statements. If there are echoes of the accusations of currency manipulation or to restrict trading activity in connection with reaching a record US deficit of trade balance with China, it can put pressure on the position of S & P (ES), Dow Jones (YM) and Hang Seng (HSI).
Also, watch the performances of officials from the Federal Reserve. Now this issue is a dominant value. A sharp change in sentiment in the market was caused by aggressive comments Bullard. If Lockhart followed his example, this may be another factor of pressure on the US indices.
Commodity and raw market
Brent feels insecure, even though the conditions for its recovery still exist. For example, yesterday it was reported that Halliburton Co, second service company in the oil and gas industry, announced the dismissal of workers in one of the units, referring to the low oil prices. This is another confirmation that the market continues to contract, and thus an excess of offers to speak recklessly.
Today, the asset must pass two tests. The first will be during the Asian session on the publication of data from China. Data on business activity in the manufacturing sector will enable to judge the state’s second-largest economy in the world. If the index is lower than expected, it could push for Brent with the immediate goal at the level of 46.90.
The second step will be the publication of the report on commercial oil stocks. The last time the index was lower than forecast, and the volume of production has reached nearly the minimum for the year. If this time the trend continues, you will see a recovery in demand for Brent with the immediate goal at 48.80 and further to 49.90 dollars per barrel.
Currency market
It is of great interest and dynamics of EUR / USD, which is from Friday has lost nearly 3%. Moreover, the pair may continue to move down on a large-scale reassessment of the prospects of the monetary policy of both central banks: the Federal Reserve and the European Central Bank. And it’s more in the European regulators. While the market was focused on increasing the rate of FOMC, it is actively ignored hints of the European Central Bank.
And hints suggest that the regulator is not happy with the slow pace of economic recovery in Europe. If today at the presentation Draghi will understand that it is possible additional quantitative easing program, EUR / USD could easily break the mark of 1.10. His role to play and the data on business activity that could once again point to the slow pace of economic recovery in the eurozone.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.
Share on FacebookShare on Google+Tweet about this on Twitter

Leave a Reply

Your email address will not be published. Required fields are marked *