Overview of the major global financial markets for the week 3 — November 7, 2014

Stock markets last week showed mixed trends. Due to this, the results were featureless, while NASDAQ (+ 0,04%), and Dow Jones (+ 1,44%) completed five days in the vicinity of the maxima. Germany’s DAX rose by only 0.18%, despite the fact that Mario Draghi at the press conference after the decision on monetary policy is clearly hinted that the ECB will stick to loose monetary policy for a long time and, if necessary, ready to expand incentives measures. Some negative market was caused by the data on the US labor market. On the one hand, in October, the economy created just 214,000 jobs, while expected to increase by 231 000. But on the other hand, the unemployment rate fell to 5.8% from 5.9%, and there was an increase in wages that allowed to talk about stability in the sector, and not to exclude soon began Fed rate hike. But the Asian indices were outsiders, correcting after rising the previous week. Japan’s Nikkei lost 2.24%. Following him down and Hong Kong’s Hang Seng (-1,48%).

Precious metals at the beginning of the week moved synchronously enough, remaining under pressure on expectations that the Fed still could soon decide to start tightening monetary policy, as well as reports of the Republican victory in the midterm elections in the US, reinforcing expectations of further stabilization of the economy USA. All this allowed assets decreased to a minimum of 4.5 years. However, new reports of rising tensions in the Ukraine, and, later, ambiguous and labor market data allowed metals recover losses. As a result, gold finishes week resulted + 0.85% silver loses only 2.42%.

Brent crude oil for the last week again suffered losses. Black gold fell by 1.15%. The main decrease quotes asset demonstrated in the first 2 days. In future, even though the data on commercial stocks in the US and reports of a major oil pipeline explosion in Saudi Arabia, just stabilized far away from the lows reached.

In the currency market leader in volatility was again the Russian ruble. By five days togam pair USD / RUB increased by 7.4%. Quotes pair reached the level of 48.6285 (Friday influenced by reports of escalating tensions in the Ukraine), but at the same time made an impressive leap down, ending the week at 46.6689. Decision of the Bank of Russia to limit the scope of foreign exchange intervention in the sum of $ 350 million taken on Wednesday, had a significant pressure on the ruble. In addition, the catalyst for the growth of the dollar in the pair is the lack of liquidity in foreign currency. As for the rollback, then he might have been provoked by a more active intervention of the Central Bank of the Russian Federation in connection with the threat to financial stability. EUR / USD once again updated the two-year low, down to the level of 1.2356, from which the completion of the week on profit taking pulled back to around 1.2452. In many ways, the euro’s fall was due to ECB President comments on the possibility of further economic stimulus.

Forecast 10 — 14 November

Stock market

The coming week is not rich in numerous significant macroeconomic reports. Therefore, we can assume that the stock market will continue to act out the events of the week ended. If you consider that the US indices are in the area of global maxima, then it is possible that at the beginning they may make a technical correction. For the purpose of Dow Jones may be the level of 17352. Nasdaq may revert to the district level of 4112.66. But in the future you should not completely exclude the possibility of the resumption of their growth targets for 18000 and 4200.00, respectively. And the reasons for that. Recent reports indicate the continued stabilization of the US economy. But Friday’s data on the labor market, though not refute this assumption, but still give reason to hope that the rush to increase the Fed rate still will not be enough because of the rapid growth in the number of newly created jobs. Although it is possible that the data on US retail sales and a report on consumer confidence from the University of Michigan, published November 14, yet raised expectations of an earlier start to tighten monetary policy. DAX at the beginning of the week can also continue a downward correction with goals at 9182.7 and, further, 9101.5. The European economy is still too weak, and the results from the stimulus package did not show up at the ECB overnight. And only on Friday against the publication of GDP data for Q3 Germany and the euro zone is not possible resumption of growth in the level of 9400.0. In this case, even the poor statistics may support index because it will strengthen expectations of pumping the economy with liquidity. Asian indices, in particular the Hong Kong HSI may be influenced by Chinese statistics. At the same time, signs of economic recovery (in particular, a positive report on industrial production) can support them.


Overall, the precious metal is not much reason for growth. Further strengthening of the dollar is quite capable to provoke renewed decline in quotations of gold and silver. In addition, the gold price would be technically difficult to pass the resistance at 1180 — 1200 without additional catalysts, given that the demand for it from India and China is still quite low. If more and American statistics will indicate the ongoing economic recovery, it may be an additional factor for sales and a return to the lows reached earlier, a breakthrough that will open the way to further down to around 1100 for gold and silver for 14.473. The only thing that can now support the metals — growing geopolitical tensions. If the theme of Russian troops on the territory of Ukraine will receive some logical extension, the chances to test the level of 1200.00 in gold increase.

Quotes Brent crude updated 2 year minimum. As one of the main reasons include the strengthening of the dollar. Besides, if you believe the publications in WSJ, then OPEC representatives say that quotas can be lowered only if oil prices fall to $ 70 a barrel. So while the obvious reasons for the reversal is not. Though. If the Chinese and European statistics will allow a possible stabilization in the economy of these regions, there may be expectations of growth in demand for black gold. We remain of the view that the $ 80 per barrel is very sensitive. We can therefore expect that below this mark quotes black gold is unlikely to fall.

Foreign exchange market

Friday kickbacks pair USD / RUB offers hope that the sharp depreciation of the ruble is still left behind and the pair begin a deeper correction, the purpose of which may be a mark of 44.9518. Oil prices have remained relatively stable. In addition, it was reported that Ukraine has made the first tranche of debt for gas. But the ruble still looks oversold. So, in the short term, the growth of the Russian currency is still not excluded. Unless new posts will appear on the escalation of tensions in the Ukraine. In this case, the ruble will have hard times and it is possible that we will see a couple at 49 -50 rubles per dollar.

If we return to macroeconomic statistics, in addition to those already mentioned is to provide data and the publication of the quarterly inflation report from the Bank of England, which may have an impact on the index FTSE. Provided that the regulator did not raise concerns sharp increase price pressure, it will be possible to expect that monetary policy will remain soft BOE for quite a long time. In this case, no further increase of the index dropped to the district level 6655.6.


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Overview of the major global financial markets for the week 3 - November 7, 2014 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners