Last week, stock indices showed mixed trends. US Dow Jones and the NASDAQ finished it virtually unchanged (down -0,09 YM and 0% for the NQ). Published macroeconomic data (GDP revision upwards to 2.1% increase in orders for durable goods above forecasts of 3.0 vs. 1.5%) shows a fairly stable state of the US economy and convince the market that the Fed decides to increase rates in December 2015. The German DAX 30 (FDAX) finished the week higher by 1.69%. The reason is the same – waiting expansion of quantitative easing in the European Central Bank‘s meeting on 3 December. At the same time, the publication in the Reuters confirmed that the regulator is ready to go to the most unconventional measures that could encourage lending and reduce the threat of deflation. HIS Hong Kong came under pressure, losing for the week 3.48%.
Growth showed cryptocurrency. Bitcoin added 7.96%, while Bitcoin has appreciated by 11.85%. Gold (XAU / USD) has conducted most of the week in a fairly narrow range, but on Friday showed a fairly sharp decline in which updated the recent low (1052.74). At the end of the week its loss amounted to 1.91%. Silver (XAG / USD) and closed with a decline of 0.4%. Brent crude oil finished the week higher by 0.9%. Earlier this week, the energy carrier peaked from November 11 (46.47), but later resumed its decline.
Chart of the week:
The economic data of the last week:
- Monday. Germany: November PMI index in the manufacturing industry 52.6 – 52.0 above forecast
- Tuesday . Germany: November, the index of economic expectations IFO 104.7 – 103.5 above forecast
- Wednesday. US: October, orders for durable goods 3.0% vs. 1.5%
- Thursday. Australia: Q3 private capital expenditure -9.2% vs. -4.4% in the previous period
- Friday. China in October, changing industry profits -4.6% vs. -0.1% in September
Forecast for the week November 30 – December 4
The first week of December traditionally brings reports on business activity (ISM) in the industrial sector and the services the US. But undoubtedly, the most important will be the data on employment in the non-farm payrolls. Strong figures will be an additional confirmation that the Fed will be decided in December to raise rates (according to the positions of futures rate, the probability of such an outcome is estimated at 77.5%). Against this background, the US indices may show a decline. But it is unlikely to be sustained fall since the recent positive statistics from the US market perceives it as a confirmation of the stability of the economy. Thus, the fall can be seen as an opportunity to enter into a long position at an attractive price. But even before the release of a key report will perform Janet Yellen to Congress (December 3, 17:00 GMT). In anticipation of the December Fed meeting market will very closely follow the tone of the head of the regulator.
It is possible that in the speech will be given any signals of further Fed action. If the expectations that further tightening of monetary policy will be happening very slowly, justified, benchmarks can provide a pretext for further growth. Dow Jones (YM) after a level of 17900 can target the growth in the region 18250. Nasdaq (NQ), to continue to grow to new highs is required to overcome the resistance at 4730.00. China‘s stock market on Friday again showed a fall. In part, he reacted to the information on the investigations against some of the largest brokers of the country, in part it was caused by weak statistics. Profits of industrial enterprises in the country in October fell by 4.6%. Next week will be published data on the index of business activity in the industrial sector of China (PMI Caixin). In the last 2 months showed a recovery rate, however, he is still held below the watershed of 50 that separates growth zone by zone recession. If the figures come out below the level of 48.3 recorded in September, HSI may continue to decline in the area of level 21090.
Commodity and raw market
Quotes of Brent crude oil has not been able to gain a foothold above the resistance level of 46.40. Basically, the negative impact on the black gold continue to have concerns gain imbalance of supply and demand on the world market. But the coming week for the oil can be very interesting. December 4 will be the next OPEC summit. One of the key questions that the market wants to get an answer: what are the quotas? Until recently, some members of the cartel, especially Saudi Arabia, persistently said that they are ready at any price to fight for market share.
But in the end we finished the week in the media reported that they were still dissatisfied with the current level of prices. Just like most oil-producing regions, they would like to stabilize around 60 – 80 dollars per barrel. This gives some hope that the OPEC countries still decide to even a slight reduction quotas. In this case, Brent crude oil can demonstrate growth with the return of quotations in the range of 47.00 – 54.00, where they were from late August until 11 November. And growth can only be accelerated when the US Energy Information Agency lock reduction of commercial stocks and another decline in oil production in the country. In favor of the decline in production continues to witness the fall of the number of operating drilling rigs. The index reached a value of 555, which is 64.69% lower than a year earlier.
This week the Central Bank will publish three once a decision on monetary policy: The Reserve Bank of Australia, Bank of Canada and European Central Bank. First, it will make the RBA (December 1). Recall that at the last meeting of the Australian regulator did not reduce the rate. Moreover, in November, he overestimated the better prospects for the country’s economy. Provided that the RBA will keep its fairly optimistic and continue to pause in rate cuts, it will give an additional reason to talk about regarding the aggressive attitude of the regulator. Against this background, AUD / USD can gain additional momentum for the resumption of growth. The primary objective will be the level 0.7280 with a further target at 0.7360 in the case of a breakthrough.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.