Review for November 30-December 4: the Fed plans no longer afraid of the market. Forecast for the week 7 – 11 December

By | December 6, 2015

Last week, stocks have shown contradictory dynamics. On Thursday, the benchmark came under pressure decision of the European Central Bank‘s monetary policy, which was not enough seating. But on Friday, the US Dow Jones and NASDAQ have been able to recover losses after a report on the labor market (in November, the number of new jobs increased by 211 thousand.). Overall, the week, they showed an increase of 0.17% and 0.67%, respectively. The German DAX 30 (FDAX) lost 3.76% on disappointment the insufficient measures taken by the European regulators. HIS Hong Kong was able to recover some of the losses suffered the previous week. The index showed an increase of 1.14%.

Precious metals to the end of the week could be restored. This is partly on profit taking after sales. Gold (XAU / USD) rose to two-week high (1088.72) by adding at the end of five days of 2.85%. Silver (XAG / USD) and closed higher by 3.44%. Brent crude oil finished the week down 3.74%. One of the reasons for the disappointment was the decision of OPEC.

The economic data of the last week:

  • Monday. Japan: October retail sales up 1.8% vs. -0.1% in September
  • Tuesday. Reserve Bank of Australia kept its benchmark rate unchanged at 2.0%
  • Wednesday. UK: November, PMI in the construction sector, 55.3 vs. 58.2
  • Thursday. The European Central Bank cut its deposit rate to 0.3%, extended the quantitative easing program until March 2017, but no expanded it
  • Friday. US: November, the number of new jobs created is with / agricultural sector 211,000 – higher than the forecast 200,000

Forecast for the week 7 – 11 December

Stock market

The week ahead in terms of the planned macroeconomic statistics from the United States will be relatively quiet. The most interesting reports will be released only on Friday. It will be retail sales data. In general, the report is unlikely to be able to change the market expectations about the Fed‘s actions at a meeting to be held on 15 – 16 December. The mood, which showed Janet Yellen looks quite aggressive. The fact that the need to raise rates further this year and expressed the head of the Federal Reserve Bank of Philadelphia. The data on the labor market also did not give reason to doubt that the regulator will decide to raise rates.

If the figures on retail sales will be released fairly strong, the US benchmark may continue to grow. The fact is that in recent years the market perceives good Statistics exclusively, as a sign of stability of the state of the national economy. Especially because there is no reason to say that the Fed will be to force the issue in raising rates. Rather, motion in this direction will be quite slow. Thus, Dow Jones (YM) after a level of 17900 can target the growth in the region 18250. Nasdaq (NQ) will grow more complicated, because the benchmark is in the area earlier highs, and to continue to grow, it will need to overcome resistance at 4730.00 but this will require additional catalysts.

Commodity and raw market

Meeting of the OPEC countries, as a whole, presented no surprises. However, Iraqi Oil Minister Adil Abdel Mahdi said at the final press conference that OPEC should not have a hard quota on oil production. Formally, the cartel has kept the quota at 30 million barrels a day. But it was decided to leave unchanged the actual production (about 31.5 million barrels). If we take into account the fact that OPEC has recently consistently exceeded quotas, then, in fact, that decision will not result in a significant increase in supply in the market. That is why oil brand Brent, although it showed a fall, but rather restrained, just returned to the area of ​​the recent lows. The decision of the cartel confirms that it is ready at any price to fight for market share.

Now, when the OPEC meeting was over, the market will be a particular attention should be short-term forecasts for the Energy Information Agency of the energy market, which will contain data on global supply and demand. If, however, the surplus will decline offers, oil can get support. Also, do not exclude from the field of view of the situation with oil production in the United States and the state of commercial stocks. Judging from the data on the number of operating drilling rigs (noted another reduction to 545 units), in the United States throughout 2016 should mark a gradual decline in production because the life cycle of shale is relatively short, and the development of new investments are required, which at the current level of prices on the black gold itself is unlikely to be justified. In the light of particular importance for oil will play a report from the US Energy Information Agency on Wednesday. We ate it at least reflect a slight reduction of commercial stocks, Brent could move in the area of ​​the level 45.00. Otherwise, it is possible to short-term decline and renewal lows marked in August.

Currency market

This week’s monetary policy decisions will be announced the Bank of England and the Reserve Bank of New Zealand. British control at the November meeting, gave the market a clear message that the increase in 2016 can be expected. And significant reaction from the pound can be seen only when the regulator deviates from this line. But the Reserve Bank of New Zealand at a meeting in October made it clear that the drop in rates from the current 2.75% is not excluded. As the regulator, the growth of the New Zealand dollar is undermining the economic recovery, and if it continues, it will have a devastating impact on inflation and foreign trade. Thus, if the Reserve Bank of New Zealand decides to lower the rate, the pair NZD / USD may return to the area of ​​0.6500 level.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

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