Monthly Archives: August 2016

Oil may rise. The forecast for the week August 15 – August 19

Last week, stock markets felt confident enough, showing positive dynamics under the influence of rising oil prices. The largest growth was the German DAX (FDAX), which added 3.18%. Futures on US stock indexes rewrote highs. However, the weak retail sales data led to their correction. The report disappoint, reflecting zero growth in consumer activity, while expected to grow by 0.4%. As a result, by the end of five days Nasdaq (NQ) grew by 0,22%, S & P500 rose by symbolic 0,04%, Dow Jones added 0.25%.

On the currency market the dollar remained under pressure mainly by gaining a foothold only to the British pound. NZD / USD ends the week higher by 0.86%, despite the decrease in the rate of the Reserve Bank of New Zealand.

Precious metals most of the week showed growth received further support on Friday after weak data on US retail sales and consumer confidence. As a result, the gold (XAU / USD) strengthened by 0.46%. Silver (XAG / USD) increased by 0.91%. Brent crude oil reached a maximum of 3 weeks, returning to the level of 46.70. At the end of the week energy source adds 5.29%.

Chart of the week:

dow jones chart

Dow Jones chart

The economic data of the last week:

  • Monday. Germany: June, industrial production 0.8% vs. 0.7%
  • Tuesday. China in July, the CPI 0.2%, 1.8% vs. 0.1%, 1.8%
  • Wednesday. UK: 3 months, GDP from NIESR + 0,3% against + 0.6% in the previous period.
  • Thursday. The Reserve Bank of New Zealand lowered the rate to the record low of 2.00%
  • Friday. US July retail sales 0% vs. 0.4%

The forecast for the week August 15 – August 19

Stock market

In the United States next week will publish a lot of reports that will form the overall economic picture. It also reports on building permits, housing starts, Consumer Price Index. However, the key event for the American indices will be the publication of the July meeting of the US Federal Reserve report.

In the comments accompanying the decision to control it is not so actively relied on external risks. Recent statistics was more than expected on the labor market. Naturally, this led to an increase in the expectations of the Fed raising rates before the end of 2016. But do not forget that the previous rate of US economic growth for the 2nd quarter were twice lower than the average forecast, while retail sales reflected the unwillingness of the population to spending.

All this puts the controller in front of a difficult choice. But if the report will contain at least a slight hints of a possible tightening of monetary policy as early as this year, the first response index may be to reduce the levels of 18250 on the Dow Jones (YM) 2157.75 and the S & P 500 (ES). Subsequently, however, benchmarks can turn around and resume growth against the backdrop of the fact that hints at a rate hike, it is able to self-control of the economy.

Currency market

Brent has the potential to continue to grow, trying to gain a foothold in the range of 45.00 – 48.00 dollars per barrel. We do not forget about the Fed Protocol. If the market does not find evidence of an aggressive attitude and an optimistic view of the economic situation, it can put pressure on the dollar across the board.

And about a pound. Next week will be published by a fairly large block of macroeconomic statistics from the UK. Deserve attention data on the consumer price index, the labor market, as well as a report on retail sales.

Recall that last week, one of the representatives of the Bank of England McCafferty, known for its unflinching look at monetary policy, the Central Bank announced its readiness to cut rates back to zero in the case of weak economic indicators. Thus, if the reports prove even slightly weaker than expected, the market with a vengeance will begin to be put into a new phase of monetary policy easing. In this case, the pair GBP / USD after the breakdown of support at 1.2900 would target the June lows drop to 1.2795.

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