Equity markets finished the week “in the red“. Dow Jones fell 3.84%. NASDAQ lost 4.58%. On the one hand, the pressure on the benchmarks have expectations soon began to tighten monetary policy the US Federal Reserve. But on the other hand, the indices are not too optimistic and perceive negative statistics from the United States (as, in particular, happened on Friday after the release of weaker-than-expected retail sales data). The German DAX 30 (FDAX) also ended the week lower at 3.19%, including under the influence of a further signs of a slowdown in the German economy (GDP grew by 0.3% in the 3rd quarter against growth of 0.4% in the second) . Under the pressure and turned Hong Kong HIS, who lost for the week 2.65%. A number of negative data on the Chinese economy (fall in price pressures, slower than expected growth in industrial production, the decline in lending to 476.6 billion vs. 1.14 trillion) have had on the benchmark pressure.
In commodity markets the majority of assets remained largely under pressure amid fears of lower demand from China. Copper (HG) fell by 3.57%, Platinum (PL) lost 8.57%, reaching the lowest level in 7 years (859.9), Palladium (PA) has fallen by 12.82%. Gold (XAU / USD) updated the July low (1074.08), but could not continue to fall. Losses amounted to 0.56%. Silver (XAG / USD) and closed with a decline of 3.45%. Brent crude oil finished the week down 6.77%, noting at least at the level of 44.14. Pressure for oil also provide evidence of growing imbalance of supply and demand on the world market.
Chart of the week:
|Platinum price chart|
The economic data of the last week:
- Monday. Germany: September, the trade balance 19.4 billion euros against forecast 20.0 billion
- Tuesday . China: October, CPI + 1,3% compared to 1.6% in September. PPI fell 5.9%
- Wednesday. China in October, industrial production + 5.6% vs. 5.8%
- Friday. US October retail sales 0.1% – below the forecast of 0.3%
Firstly, these conclusions are pushing data from Baker Hughes, which showed a significant reduction in the number of operating drilling rigs (drop compared to last year amounted to 63.6%). Second, the US Department of Energy fixes the decline in production in the major provinces of States. Also, the market will follow the EIA data on commercial stocks in the United States. If the index is still starts decline from historic highs, oil can get a positive boost.
Against this background, the black gold may start to return to the district level 47.00. In addition, the hope of all the commodity market can be associated with the actions of the People’s Bank of China. Recently there were rumors that the regulator may decide on further rate cuts. If the rumors become facts, could increase expectations of growth in energy demand, which will lead to an acceleration of inflation.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.