Overview of the major global financial markets from November 3, 2014

Monday brought a relatively high activity in the market, as once again raised the question of growth points in different parts of the world. US data continues to talk about the stability of the recovery, while the Chinese and the European economy is still going through a phase of stabilization until after a recession. All this led to trading on the stock exchanges. Japan’s Nikkei gained 1.3% in the trading day, but the Hang Seng lost 0.75%. Meanwhile, Britain’s FTSE fell 0.89%, while Germany’s DAX — 0.81% and the DJIA and NASDAQ to the completion of the American session showed a slight increase.

Monday reopened renewed demand for the dollar in anticipation of key economic reports from the US. USD / RUB opened Monday gap up, returning to the area last week highs on the market reaction in response to the past in the LC and the DNI election. USD / JPY, meanwhile, updated 7-year high at 114.21, almost fell back to close. EUR / USD at the opening slipped to 2-year low of 1.2437, but managed to recover in the area 1.2480. Conflicting data on business activity in the manufacturing sector of various countries in the eurozone have been ignored by the market. But GBP / USD was supported by the sharp appreciation of the index PMI (53,2 vs. 51.2) and was able to recover the losses incurred in the morning, ending trading at around 1.5980.

Concerns about the weak pace of the global economy do not let the oil market and fundamental reports continue to support these fears. Report from China, the PMI index showed at around 50.8 against expectations of growth to 51.2. Brent reached intraday low of 85.64 yesterday, but retreated to 86.40 at the close.

Yesterday’s data on business activity in China’s manufacturing industry has also further pressured gold prices, as China is one of the largest consumers of the precious metal. Nevertheless, the asset has managed to restore its position to the end of trading. As a result, starting the day at 1167,44, XAU / USD to the end of day trading rebounded to 1171.00 per ounce, on the road noting local minimum at 1161.63. Meanwhile, XAG / USD plummeted to a local minimum 15.74, rolled district 16.10 at the close.

Forecast for Tuesday, November 4

Stock market

Despite the fact that the entire Russian stock market now looks unattractive shares Yandex (YNDX) are leaders among domestic «blue chips». In October, the company reported a profit of $ 331.5 million (+ 28% y / y), and the rate of EPS was $ 0.34 — higher than expected in both cases. Moreover, the company’s forecast for Q4 revenue growth stands at 27-30%, which is higher than the market estimate at 23% y / y. Contextual advertising is the main driver of growth stocks, bringing about 93% of revenue, while contextual advertising from the site Yandex brings 71% of total revenue, showing an increase of 33% year on year. Increases with income from paid clicks increased by 19% y / y due to a higher average cost of clicks (8% y / y in the quarter. This confirms that, in general, the Internet advertising market in Russia remains healthy, and, hence, the reduction potential of the asset is very high.

We would like to draw your attention to a rather low level of the company, despite continued growth in revenue. All this is due not only to the overall unfavorable macroeconomic situation in the country, but also the threat of tighter regulation of the Internet by the state. However, the most negative scenarios already included in the price: October 3, quotes seem «bottomed» and since then shows a steady upward movement. The recent acquisition of new assets (Auto.ru, AdFox, PriceLabs, Parascript), the launch of new projects («Yandex. Master») and restarting the old («Yandex. Music»), coupled with good dynamics can provide stable earnings growth rates YNDX probability of return in the level of the opening of the year in the medium term. Our verdict — buy in the medium-term and long-term strategy.

Commodities

The fact that the XAU / USD Breaks Through 1180, and continued downward movement restrained can talk about the probability of falling to around 1100 on a background of increasing market confidence in the fact that the US economy has coped with their problems and in the future we will only observe recovery. Nevertheless, it is recognized that gold has gone down to 4-year low, and given the general instability of world economic growth, continued its downward movement can be difficult.

In the coming week should pay attention to the report on the US labor market — namely optimistic estimates of employment during the last FOMC meeting called surge of sales of the precious metal. If the figures will not be as strong as expected by the market, it can return the interest in «safe assets», especially at such low levels. The immediate goal on the way up, in this case, can be found at 1200 per ounce.

Foreign exchange market

The week following the FOMC meeting and the release of US GDP, is often quite boring for the currency market. But not this time, because almost every day we will see the release of important economic reports and meeting major central banks around the world. This week we will publish data on the US labor market, it will be interesting to see whether they confirm the optimistic view of the Fed, announced in the recent past under the accompanying statement.

In addition, another important event will be the ECB meeting, especially given the recent string of reports showing weakening of inflationary pressures in the euro area and the overall negative trend in the indices of business activity. The market is likely to expect from the regulator a little more softness, but Draghi might at this time refrain from radical statements for several reasons. Firstly, the results of the stress testing of the banking sector were not so bad. Secondly, Germany may have already gone through the most difficult period of the economic cycle, and gradually begins to recover. So, EUR / USD the first half of the week may remain under pressure on expectations of the ECB, but the lack of hints on implementing QE program could trigger a sharp demand for the restoration of the euro area in a couple highs last week.

USD / RUB in the coming days will move under the influence of official reaction to have occurred in the LC and the DNI election. Given the fact that these events only support Russia, most likely, it will remain a factor of pressure on the Russian ruble. The only thing that could limit growth opportunities couples — technical factors. The pair seems groped the ceiling near highs last week — 43.60 area could be a short-term barrier to upward. This fact confirms the numerous failed attempts to pass a mark made on a background of thin trading on Monday. Apparently, a large number of vendors in this area will continue to be an obstacle to the fall of the ruble.

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