Monthly Archives: February 2016

Brent crude oil can change the range. Forecast for the week on February 29 – March 4

In the week ended equity indices showed positive dynamics. Not the least role in this played the stabilization of oil prices. American optimism benchmarks added and revised data on the rate of economic growth. Q4 GDP was revised upward from 0.7% to 1.0%. As a result, Dow Jones rose by 1.4%, while the NASDAQ rose by 1.63%. German DAX30 second week in a row completes growth (+ 1.25%). Hong Kong HSI showed a mixed trend and at the end of five days showed growth of only 0.52%. The leaders of growth were the Japanese Nikkei, which is against the weakening of the yen and expectations of additional stimulus from the Bank of Japan added 3.22%.

On the foreign exchange market has become the leader of the fall of the British pound. The pair GBP / USD lost 3.71%, down to the level of 1.3864, noting the 7-year low. A key factor in the pressure on the pound remain British exit from the EU fears that poses a serious threat to the economy. Against the background of positive dynamics of oil prices and the fall showed a pair USD / CAD. The Canadian dollar was able to strengthen his colleague from the United States at 1.85%.

Precious metals for the week is still under pressure. Gold (XAU / USD) has lost 0.32%. Silver (XAG / USD) suffered more impressive Loss: -4.21%. Recovery in the stock markets, the upward revision of US GDP data for the 4th quarter and the statements by the Fed Loretta Mester that the regulator is to continue raising interest rates in 2016, have become the main negative factor for the metal. Brent crude oil in the second half of the week is clearly demonstrated a positive attitude, and even the most updated in January, rising to 37.24, but the closure has given part of the earned, ending trading at 35.50. However, an asset for the week showed an increase of 7.1%.

Chart of the week:

gbp / usd chart

GBP / USD chart

The economic data of the last week:

  • Monday. Eurozone: February index of business activity in the manufacturing sector (Markit) 51,0 against the forecast of 52.0
  • Tuesday . US February consumer confidence index from the Conference Board 92,2 – below the forecast of 97.4 points
  • Wednesday. US: February, PMI Markit Services in 49.8 vs. 53.5
  • Thursday. USA: January, orders for durable goods + 4.9% vs. + 2.5%
  • Friday. US. Q4 GDP growth + 1.0% against the preliminary assessment of 0.7%

Forecast for the week on February 29 – March 4

Stock market

The coming week will be quite eventful interesting macroeconomic statistics. Deserve attention data on business activity in the industrial sector and the service sector (ISM) and the US employment report in the private sector by ADP. Deserves special attention the report on the labor market (NFP), which will be published on Friday. It is worth recalling that in the past month, the number of newly created jobs fell to 151,000 from 292,000 previously. Therefore, if this time the figure will be released weaker than expected, it can be quite alarming deterioration of the situation in one of the key sectors of the economy.

In addition, it is necessary to monitor and data on the growth rate of hourly wages, which will allow to assess potential inflation at this level. In general, if you planned to publish the statistics would be quite weak, the market will begin to be put on a long pause, which will withstand the Fed before the next rise. At the same time, the first reaction to the pessimistic statistics may be a short-term decline in US indices. Subsequently, however, benchmarks can turn 180 degrees. Dow Jones (YM) can rise to the level of 16950 with a further target at 17080. Nasdaq (NQ) after a break above 4300.00 level can target the traffic to mark 4405.00.

Commodity and raw market

Prices of Brent crude oil in the second half of the week showed a positive trend. Moreover, of Brent, finally, I made an attempt to gain a foothold above the level of 36.20, which limits the range of vibrations from above during the last month. Technically, this level will allow a breakthrough in the area expect an increase in the level of 40.00. But while the price break through the barrier did not succeed. The fact that the increase was largely due to expectations that the oil-producing countries will still be able to agree on actions that will stabilize prices.

Recently we conducted an active dialogue between the major exporters to reduce the imbalance of demand and supply of black gold on the world market. According to the latest meeting of the OPEC member countries and countries outside the cartel, to be held in mid-March. Moreover, according to rumors, it will be about freezing at lower levels than were recorded in January 2016. But it may already be a serious claim. If an agreement is worked out, the chances to reduce the surplus will increase proposals and, of course, then the oil will get strong support. In the meantime, you can expect a change in the oscillation range higher, limited levels of 35.00 – 40.00 dollars per barrel of Brent.

Currency market

This week a decision on monetary policy released by the Reserve Bank of Australia. It is possible that the regulator will keep the rate unchanged at 2%. In this situation, a lot will depend on the rhetoric accompanying statement. Earlier, the Reserve Bank of Australia was quite optimistic in their statements. Moreover, the Protocol February meeting contained hints that reduction is possible, but as long as this is not necessary. Statistics published in recent years, was controversial. On the one hand, the labor market in Australia has not held up to forecasts for all major components.

Unemployment rose to 6% from 5.8% due to lower full-time employment for 40 thousand. This may be the first signal to the fact that the economy may begin to slow down. However, in Q4 capital expenditure were higher than forecast, highlighting the power of the service sector and the weakness of the mining sector. Thus, one can not completely exclude the possibility that the Reserve Bank of Australia will change the tone of its comments on the less aggressive, that can have on AUD / USD moderate pressure. In this case the pair is able to decrease the area of ​​the level of 0.7060 with a further target at 0.7000.

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

Oil is looking for catalysts. Forecast for the week on February 22 – 26

In the week ended stocks showed recovery from the lows reached earlier. Positive attitude has spread to all regions. It is worth noting that even the pessimistic report of the January meeting of the US Federal Reserve did not introduce substantial changes in the dynamics of the indices. The leaders of growth turned out to be German DAX30, which added up to a week 4, 5% largely on expectations of additional stimulus from the European Central Bank in March. The growth showed Hong Kong HSI, which grew by 4.41%. The US Dow Jones rose by 2.74% and the NASDAQ finished the week higher by 3.66%.

The impressive growth (13.08%) was led by Brazil‘s Vale (VALE). Support asset received amid reports that the company is close to launch iron ore mines in the world’s largest within the Carajas complex in the Brazilian state of Amazonia. It is expected that the mine capacity will amount to 90 million tons of ore per year, which corresponds to a quarter of the current level of production Vale. Quotes reached 1.5-month high at 3.21.

The AUD / USD was able to gain a foothold on the week by 0.64%, given enough optimistic from the Minutes of the meeting and the Reserve Bank of Australia, virtually ignoring the labor market data, which proved to be rather weak. The unemployment rate increased to 6% from 5.8% previously.

Precious metals, on the background of the stock market correction at the beginning of the week came under pressure. However, its completion Gold (XAU / USD) was able to recover most of the losses on expectations of a longer pause before the next rise in the US Fed. A week yellow metal ended lower by 0.9%. Copper (HG) rose by 2.33% against the general relatively optimistic about the commodity markets. Brent crude oil showed mixed trends, but still was able to demonstrate growth by 0.95% to the closing level of the previous week.

Chart of the week:

vale chart

Vale chart

The economic data of the last week:

  • Monday. Japan. Q4 GDP -0.4%, -1.4% versus + 0.3%, + 1.3% previously
  • Tuesday . Saudi Arabia and Russia agreed to “freeze” of oil production at the levels of January 11, 2016
  • Wednesday. Minutes of the last FOMC meeting showed that the majority of the growth sees risks for the US economy
  • Thursday. China in January, CPI + 1.8% – the maximum annual increase since last August
  • Friday. US January CPI + 1.4% – higher than the forecast of + 1.3%

Forecast for the week on February 22 – 26

Stock market

Next week is scheduled to be published quite a number of reports from the United States. This data on business activity in the industrial sector and the services sector (PMI Markit), and a report on new home sales and data on personal income and spending. But special attention should be paid to data on orders for durable goods and revised data on the growth rate of the economy in the 4th quarter.

In the current environment, any signs that the US economy begins to show signs of cooling, may be enough to be put on the market has become even more prolonged pause in raising the US Fed. In this case, even a small reminder that the world’s largest economy feels stable enough, it may be enough to ensure that stocks were again under pressure. Dow Jones (YM) can go back to the support at 15600. Nasdaq (NQ) may undertake an attempt to return 3983.00.

Commodity and raw market

Brent crude oil prices continue to be held within the previously established range of 30.00 – 36.20. Still, one of the key pressures on the black gold are concerns of increasing demand and supply imbalance in the global market. The fact that the agreement to freeze production at the January level, reached by Russia and Saudi Arabia, and was joined by some other countries, is not enough to reduce the excess supply in the short term.

But at the same time, talks between OPEC and non-OPEC will continue with a view to reaching a compromise in the actions aimed at the stabilization of oil prices. And waiting for new steps in this direction at least to be able to keep the oil away from the lower range breakthrough. Thus, any comments indicating willingness to oil-producing countries to compromise, can easily return the quotation source of energy for growth. In addition, a positive signal for “black gold” can be data on US production volumes. In the past 4 weeks demonstrates the reduction rate, as evidenced by data from EIA. If this trend continues, in the moment, will be able to get the support of Brent.

Currency market

This week the UK economic calendar does not contain a large number of meaningful reports. The only thing you should pay attention – final data on GDP growth in the 4th quarter. But not even this report may have a key influence on the dynamics of the pair. At the final week, it was reported that British Prime Minister David Cameron has yet achieved a special status for the UK in the European Union. According to the prime minister, such agreements allow it to “agitate the country to remain in the EU“.

Taking into account the fact that the results of the latest polls already show that for an exit from the EU is ready to vote has less than half the country’s population, the probability of such an outcome is reduced, which will support the pound. Moreover, the economic data and does not give much reason for disappointment. labor market data were strong enough – in a country marked decline in the number of applications for unemployment benefits and the acceleration of average wage growth to 2% from 1.9% a month earlier. Retail sales on a monthly basis showed an increase of 2.3% in January, the biggest increase in the last 2 years. Taken together, these factors may well have a pair GBP / USD support, aiming its growth to the level of 1.4650.

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

Gold and Yen – remedy against panic. Forecast for the week on February 15 – 19

Most of the week stock markets remained under pressure on Friday, and only managed to partially recover losses. To some extent, contributed to this application Deutsche Bank to redeem certain series of senior unsecured debt of about $ 5.4 billion. For the second week in a row becomes a leader in the fall of the Japanese Nikkei (NKD). The benchmark lost 6.61%, which is largely due to the sharp appreciation of the yen – the rate USD / JPY dropped to 110.97 – the lowest level since October 2014. The German DAX 30 (FDAX) fell by 2.8%. The US Dow Jones fell by 1.21% and the NASDAQ was able to finish the week symbolic loss of 0.15%. Hong Kong HSI on the basis of incomplete work week dipped by 3.67%.

Risk aversion, coupled with expectations of a longer pause before the next rise in the US Fed has made its own changes and the dynamics of commodity assets. The leaders of growth were the precious metals again. Gold (XAU / USD) has reached the level of 1263.23 (annual maximum). asset growth amounted to 5.56%. Silver (XAG / USD) increased by 4.77%. Brent crude oil finished the week on a drop of 3.93%, despite the fact that the last time showed a strong recovery.

Chart of the week:

Gold chart

Gold chart

The economic data of the last week:

  • Monday. Moody’s has revised its rating Australia with AA1 to AA2
  • Tuesday . Germany: December, the trade surplus narrowed to € 18.8 billion compared to the forecast growth of up to 20.2 billion
  • Wednesday. The Fed chief Janet Yellen adhered to the “soft” attitude within the speech on the economy and monetary policy
  • Thursday. Swedish Riksbank cut interest rates by 15 points to 0.50%
  • Friday. US January retail sales + 0.2% vs. + 0.1%

Forecast for the week on February 15 – 19

Stock market

At the end of the week the stock markets still made a rebound from the lows. To say that the fall has stopped, perhaps somewhat prematurely. But upward correction may still take place. Now almost obvious that in March, do not expect the Fed raising rates. And for a short time, it can cause a sigh of relief. Minutes of the January meeting, which will be published on Wednesday, most likely, will not bring anything new, but merely confirms the “soft” mood regulator.

In addition, attention should be paid to data on producer price index, a report on industrial production and consumer price index. Low price pressure will be another confirmation that the Fed‘s rush to the tightening of monetary policy will not be. Consequently, if the market is not overwhelmed by a new wave of panic, the US indices continue to be able to roll back. Dow Jones (YM) can continue to restore the level of 16080 and, further, to 16450. Nasdaq (NQ) may undertake an attempt to return 4110.00.

Commodity and raw market

Prices of Brent crude oil to the end of last week, yet retreated from the local minimum. At this stage, there is no sufficient catalysts for strong growth in the energy carrier of quotations nor to he updated lows. On the one hand, the world has continued to report a surplus supply which in January rose to 2.01 million barrels in fact, against 1.55 million in December 2015. Also recorded growth in OPEC production. In January the cartel increased production to 32.335 million barrels. And this is clearly not conducive to the growth in energy quotes, as well as concerns about the global economic outlook. However, the market continues to haunt the rumors that the oil-producing countries will still find a compromise in order to stabilize prices for black gold. In particular, it is at least of the “freezing” of production at current levels.

However, in this barrel of honey is and fly in the ointment. For example, Saudi Arabia supported the idea. But it is not ready to take such a step if Iran does not follow the example of others. And the country has only recently got rid of sanctions and is ready to fight for their market share. Also, do not forget that the US continues to decline the number of drilling rigs operating, which could result in a reduction in production volumes. Moreover, the United States and Canada, oil companies once again preparing for the large-scale reduction of costs and will be forced to abandon all wells unprofitable. Thus, in the short term, Brent may show mixed trends within the range of 30.00 – 36.20 dollars a barrel.

Last week, gold (XAU / USD) continues to grow. It is worth noting that after the short-term correction in the precious metal is preserved chances for the resumption of growth. The fact that Friday’s data on US retail sales, which only slightly exceeded the forecasts, is unlikely to be enough to change expectations about monetary policy the US Federal Reserve. At the moment, after comments from Janet Yellen on Wednesday, the probability increase at the March meeting, is estimated as zero, according to the data of the positions on the futures rate. In light of this interest will be data on inflation at the level of producers and consumers, which will be released next week. Even the slightest sign of the decline of the price pressure may be enough to strengthened market expectations of a prolonged pause in monetary tightening. Coupled with the instability in the financial markets, which leads to flight from risky assets, it can support gold, aiming it at the level of growth in the area of ​​1275.00.

Currency market

Next week the markets returned to China after the celebration of the New Year Lunar. By the publication of a number of scheduled reports. This is the data on the trade balance and the index of leading indicators. Also come reports on consumer and producer prices. In recent years, China‘s economy is showing clear signs of slowing down. And while all the attempts of the People’s Bank of China as something to stabilize the situation, in fact, turn out to be fruitless. In general, if the reports come not strong enough, it can affect the commodity currencies. AUD / USD and NZD / USD could come under moderate pressure.

Of course, if we talk about the “Aussie“, he is able to demonstrate a little more resistance due to the fact that the Australian economy to adjust quickly to the downturn in the commodities markets and feels quite stable. In addition, the minutes of the last meeting of the Reserve Bank of Australia will be published. Taking into account the fact that the accompanying statement issued earlier, contained quite optimistic assessment of prospects for the economy, to wait unpleasant surprises on the part of the protocol, perhaps, too, it is not necessary. But the New Zealander can experience the pressure, especially if the price index for dairy products, which is one of the main export products, will continue to fall. In light of this interest to trade can be cross-rate of AUD / NZD.

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

Safe assets to display. Forecast for the week on February 8 – 12

Stock markets ended the week “in the red“. Reasons enough. This is not strong enough statistics from the US, and signs of a decline in business activity in the euro area, and actions to inject liquidity of the People’s Bank of China, which has not brought the expected results, plus quarterly reporting season, which for a variety of companies adds frustration. The leader of the fall of last week was the Japanese Nikkei (NKD), which lost 7.41% including reactivated under the influence of the strengthening of the yen. The German DAX 30 (FDAX) fell by 6.11%. The US Dow Jones fell by 1.5%, but the NASDAQ has fallen to 5.87%, disappointed by Friday’s US jobs data, which showed an increase in the number of new jobs in all 151 000 Hong Kong HSI also closed the week lower by 2.4 %.

The pair USD / JPY has lost everything that could make earlier decisions on the background of the Bank of Japan to introduce negative rates. As a result, at the end of the week it fell by 3.25%. The reason lies in the weakness of the dollar, which was clearly disappointed with published statistics. But its further reduction may be difficult because it is pretty close stolen up to the level of 116.50, which was called as “key“. A stronger yen strengthening for the national regulator is highly undesirable.

The leaders of growth by the end of the week turned out to be precious metals, took advantage of the change in sentiment regarding the US Federal Reserve monetary policy. Gold (XAU / USD) has jumped to the level of 1174.44 (up to the end of October 2015), entrenched at 4.93%. Silver (XAG / USD) increased by 5.26%. Brent crude oil finished the week at 4.96% fall.

Chart of the week:

gold chart

Gold chart

The economic data of the last week:

  • Monday. China in January, PMI (Caixin) in the manufacturing sector 48.4 vs. 48.0
  • Tuesday . Reserve Bank of Australia kept interest rates at 2.0%
  • Wednesday. USA: January, business activity in the ISM Services 53.5 vs. 55.1
  • Thursday. The Bank of England kept interest rates at 0.5%. 9 Voting results: 0 in favor of the constant level
  • Friday. US: number of new jobs created outside the agricultural sector 151 000 – below the forecast of 190 000. But at the same time marked by the growth of average wages and the fall in the unemployment rate to 4.9%

Forecast for the week on February 8 – 12

Stock market

The new week will be less eventful. However, the reasons for the unrest may still be. In particular, special attention should be paid performance Janet Yellen to be held on Wednesday, February 10. The head of the US regulator will speak before Congress. The market will watch closely, what grade it will give the economy, and will feature some hints regarding monetary policy prospects. As a result of the January meeting, the Fed was soft enough.

Last week, in the same vein, he expressed and Dudley. He noted that in comparison with December, “financial conditions have tightened considerably” and, if they persist, it will have to take into account when making decisions on monetary policy. If it confirms a mild attitude, the US indices may still try to start an upward correction after the NFP data reflected the lower-than-expected growth in the number of new jobs, reinforcing fears that the economy may show slowing. Against this background, Dow Jones (YM) can continue to restore the level of 16675 after breaking the mark 16450. Nasdaq (NQ) may undertake an attempt to return 4245.00.

Commodity and raw market

Oil prices last week showed mixed trends. But on the whole, an energy coming prospects look quite optimistic. As it became known, the six countries of the largest oil producers, including Iran, Iraq and Russia, are ready to take part in the extraordinary meeting of OPEC. On Sunday, a meeting should take place in Venezuela oil minister with a colleague from Saudi Arabia, where he will try to persuade him to join the negotiations. Similar initiatives in Saudi Arabia will be quite difficult to ignore. This means that the country may agree to participate in the meeting.

For this fact alone could push quotes of Brent crude oil in the area of ​​39.40 level. It is obvious that if the meeting will be held, and trade-offs will not be found, it would have a negative impact on the energy market. In addition, note the publication of black gold will attract short-term forecast of the EIA report and the global demand and supply of oil on the world market (9 February). According to recent reports, in December, the surplus amounted to 1.55 million barrels per day. In general, even if the figure does not show growth at the end of January, it already can be perceived by the market as a positive signal that will also push up quotes Brent. If the imbalance intensified, short-term decline in oil prices is not excluded, but it can provide good opportunities to enter long positions.

Last week, gold (XAU / USD) has shown steady growth. It is worth noting that a key factor supporting the precious metal made changes in expectations for further Fed action on monetary policy. If in December, the US regulator sounded quite aggressively, hinting at the possibility of four rate increases for 2016, it is already, the possibility to increase the March meeting is estimated at 7.8% according to the data of the positions in the futures rate.

In light of this very interesting is the speech of the US Federal Reserve in front of Congress, scheduled for February 10. If Janet Yellen will confirm a mild mood regulator, the dollar could come under additional pressure, which will only increase under the condition of a weak report on retail sales on Friday. Against this background, the yellow metal has the potential for further growth with the primary goal in the area of ​​the level of 1191.43 (maximum in October 2015) dollars per ounce, which break would open the way to the next psychological level 1200.00. Although at the beginning of the week profit-taking is not ruled out, which may lead to a downward correction, which can provide good entry points into long positions.

Currency market

The pair EUR / USD has shown impressive growth in the dollar’s weakness. But even a mixed report on the US labor market was enough for the pair reversed 180 degrees and quickly retreated from the highs. Let me remind you that the number of new jobs created was lower than expected (151,000 vs. 190,000), but at the same time, the unemployment rate fell to 4.9% from 5.0% and average hourly wages on a monthly basis rose by 0.5 %, which gives reason to expect inflation at this level.

This week we are waiting for a fairly large block of European statistics, in particular, it will be data on the trade balance and the German consumer price index, the final data on the growth rate of the German economy and the euro zone in Q4, as well as reports on industrial production. Weak statistics can create the preconditions for reducing the European currency quotations, as the market begins to “laid” on the extension of incentive programs by the European Central Bank. Against this background, it is possible decline in the EUR / USD in the first half of the week in the area of ​​1.0960 level. And further to 1.0910. But this will be possible only in case of a sufficiently aggressive tone of the comments of the US Federal Reserve.

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