Beginning of the week proved to the stock of assets is not the most optimistic. They remained largely under pressure amid concerns about the prospects for the Chinese economy. But in the second half of the week the market has returned optimism associated with the closing of the month, quarter, and in the United States and even the financial year. Increased positive sentiment after data on US labor market, which gave reason to wait for a longer period of low interest rates. A result of the US benchmarks played incurred losses earlier in the week. Dow Jones up 1.24%. NASDAQ rose by 1.36%. Hong Kong HSI finished the short work week with a total of + 1.38%. And even the German DAX 30 (FDAX), weakened by the scandal with Volkswagen, in a general optimism has increased by 0.57%.
Gold most of the week remained under pressure on expectations the US Federal Reserve rate hike before the end of this year. But after it became known that in September, the US economy created only 142,000 new jobs instead of the expected 203 000, showed a sharp recovery. For the week it lost only asset of 0.98%. Brent crude oil has not gone beyond the previously established range of 47.00 – 50 -0. “Black gold” finished the week down on 0.35%.
Chart of the week:
Gold futures chart
Economic data of the last week:
- Monday. China August industrial profits showed the biggest fall since 2011: -8.8%, or 156.6 billion yuan
- Tuesday. Reserve Bank of India lowered rates greater than expected: on 50 to 6.75%
- Wednesday. UK: 2nd quarter GDP 2.4% vs. + 2.6%
- Thursday. China September PMI index in the manufacturing industry 47.2 in line with expectations
- Friday. US: September, the number of new jobs created outside the agricultural sector 142 000 lower than forecast 203 000
Forecast for the week October 5 – October 9
In general, the mood of the American regulator is clear: until the end of the year the rate should be increased to meet the expectations of the market. And, most likely, this hypothesis will be reflected in the release. However, much more interest will cause attitude control with respect to the intensity of tightening. If the Protocol market will find at least a hint of the fact that the increase is to be a one-time action, and further tightening will continue very slowly, benchmarks can save optimistic. Unless, of course, surprises are not followed by large companies (similar to the story of Caterpillar (CAT)).
On Wednesday, a meeting of the Bank of Japan‘s monetary policy. Previously, re-elected Shinzo Abe, speaking with the new program is not even hinted at the possibility of additional economic stimulus. While noting its focus on the growth of GDP to 600 trillion yen. In light of this, the session controller acquires special importance. If the market does not receive additional evidence that monetary stimulus may still be extended, the Japanese Nikkei (NKD) will remain under pressure and may be of interest for sale in the 18100 level.
Commodity and raw market
Quotes of Brent crude oil came to the end of the week at 48.16, and not being able to break out of the range of 47.00 – 50.00. It is worth noting the extreme force level 50.00, with an approach which is clearly more active sellers. In general, an obstacle to the growth of quotations of the “black gold” still remain concerns about the global economic outlook. Moreover, the IMF revised its forecast for a fall in the rate of growth to 3.0% from 3.3% previously. However, there are just two factors that can support the oil and trigger a new wave of movement to the level of 50.00.
Firstly, the intensification of fighting in the Middle East could affect the stability of oil supplies from regions close to the conflict zone. Second, the United States continues to decline in production, which contributes to the gradual reduction of oversupply. And probably this trend continues, taking into account the fact that the slate miners fold capacity (currently working drilling by 61.4% lower than a year earlier). The report from Baker Hughes reflected the relatively sharp decline in the week (-26 units). This means that the black gold can demonstrate the growth and try to overcome the mark of 50.00, targeting further growth in the area of the level 52.10.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.