Will the rise of oil? Forecast for the week on April 11 – April 15

By | April 10, 2016

Week stock indices ended in the red. The leader of the fall was again the Japanese Nikkei. The benchmark lost 2.47% largely in response to the strengthening of the Japanese yen, which this week reached a year and a half high. The US Dow Jones and NASDAQ lost 1.187% and 1.30%, respectively. Under pressure I turned and German DAX30, which lost 2.32%. Hong Kong’s HSI was down 0.78%. Even the fact that the US Federal Reserve meeting minutes reflected the regulator fears about the prospects for the world economy, which casts doubt on the June rate hike and no material support. That global risks at this stage are putting pressure on the indices.

USD / JPY pair has demonstrated an impressive fall. Quotes fell by 3.24%. The changing expectations of the Fed‘s monetary policy seems to be made and the Japanese regulator to change its principles. The only thing that the Bank of Japan did in response to the strengthening of the yen, which in general, negative for the export-oriented economy, said that following the course.

On commodity markets, Brent crude oil showed an impressive recovery. Quotes energy source rose 8.31%. Efforts concerns about the global economic outlook have allowed precious metals to demonstrate growth. Gold (XAU / USD) ended the week in the level of 1240.00 dollars per ounce region, adding 1.51%. Silver (XAG / USD) increased by 2.17%.

Chart of the week:

Brent crude oil chart

Brent crude oil chart

The economic data of the last week:

  • Monday. Eurozone: February level of 10.3% versus 10.4% – to 5-year low
  • Tuesday. Reserve Bank of Australia kept interest rates at 2%
  • Wednesday. China: March, PMI Caixin index in the service sector rose to 52.2 against 51.2 in February
  • Thursday. Minutes of the last meeting of the European Central Bank showed that the considered more significant reduction in the rate
  • Friday. UK: February, industrial production -0.3%, -0.5% vs. 0.1%, 0.0%

Forecast for the week on April 11 – April 15

Stock market

The upcoming trading week in terms of the planned to the publication of macroeconomic statistics is expected to be more interesting. Among US data worth paying attention to retail sales data, reports on consumer price inflation and industrial production. After the publication of the US Fed‘s March meeting minutes it became clear that the US regulator in a fairly high degree of concerned about the global threat. This means that the state of the national economy at this stage is not the only factor to be taken into account when deciding on the rate.

Therefore, if the published statistics would be strong enough, it is possible that the US indices will attempt to resume growth in the upbeat sentiment regarding the economic outlook States with immediate goals for the Dow Jones (YM) at 17800 and NASDAQ (NQ) at the level of 4550.0. But by the end of the week it will be published by a fairly large block of statistics from China, including data on the growth rate of China‘s economy in the 1st quarter. Signs that she continues to slow down, can provoke an impressive reduction of the stock of assets. Also, do not forget that next week will start the season the publication of corporate reports. And then, most likely, will not be without any unpleasant surprises. And it is also an additional reason for the sales. So maybe shopping rush is not worth to consider the rise of the index as a good opportunity to go short.

Commodity and raw market

Brent crude oil after last week renewed month low, falling to around 37.26, still managed to recover most of the losses. Positive attitude is supported by energy source, on the one hand, expectations that the meeting is still to be reached on the freezing production agreement in Doha on 17 April. On the probability of such an outcome hinted several members of OPEC, in the same vein, expressed and Minister of Energy of the Russian Federation. In addition, the market and were pleased about the fall of the commercial stocks in the US, as well as signs of further decline in production volumes in the United States.

On the part of the weekly EIA data, you can wait and support in the coming week as the holiday season begins in the United States, which traditionally increases demand for gasoline fuel and, therefore, the refinery start working at the limit of capacity. But at the same time, on Tuesday, it will be published monthly report on global supply and demand of energy carrier. If the imbalance of supply and demand show growth, of Brent could come under pressure, returning to the area of ​​the recent lows. While signs of its decline will be able to trigger testing the upper limit of the previously established range (42,50). But most likely, until the announcement of the results of the meeting the major oil-producing countries, oil will remain within the range of 37.00 – 42.50.

Quite an interesting dynamic in the coming week may show, and copper (HG). One of the world’s biggest consumers of red metal is China (which accounts for about 45%). During the five-day working Celestial publish many reports. Data on producer price index and consumer reports on the trade balance, retail sales, industrial production and the growth rate of the economy in the 1st quarter of 2016. Naturally, the data on GDP will be key. If China‘s economy will show signs of further cooling, copper can experience the pressure on fears of demand reduction. Especially because there was information about the readiness of China to increase exports of this metal by selling excess (about 1 million tons) of the current week. Thus, if copper exceeds the level of 2.0660, could be to reduce the level of 2.0090.

Currency market

This week attention is paid to the British pound. Firstly, to be published data on the index of consumer prices. If the index is lower than the March 0.3% in annual terms, it will be an additional indication that the Bank of England will be in for a longer period to keep monetary policy unchanged. About regulator also plans to become known in the next week, as will be issued on Thursday a decision on monetary policy. Much will depend on how the ratio of the votes will be for the rate increase and preserve it intact. If the decision is unanimous, the pound may also come under pressure, especially taking into account the fact that “Brekzita” risks remain. And completely eliminate this factor will only be possible after 23 June, when a referendum will be held. Coupled with a strong enough statistics, all of which can put pressure on the pair GBP / USD and send it to the district level 1.3900.

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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