Overview of the major global financial markets from November 4, 2014

Stock markets yesterday were torn by doubts, as revised forecasts for a fall of the European Commission and the rumors about the possible resignation of Mario Draghi have contributed to the trend. Japan’s Nikkei lost 3.79% immediately following the results of trading days, but the Hang Seng 0.22% pribail. Meanwhile, Britain’s FTSE fell 0.52%, while Germany’s DAX — 0.92%, while the NASDAQ and the DJIA to the completion of the American session showed contradictory dynamics.

Tuesday, it seemed, it may take quite calm for the currency markets, given the lack of important economic events. However, there are rumors in the evening about a split in the camp forced the ECB euro strengthened and investors — to revise their expectations of QE from the ECB. USD / RUB albeit updated once again a record high at 43.78, but this time she was given the upward movement is difficult, although the fall in oil prices in the area 4-year lows created favorable conditions for such dynamics. USD / JPY had to hand over some positions earned within the previous trading day: a pair from the opening level of 114.03 rolled into the area at the closing of 113.65. EUR / USD struggled all day with a mark of 1.25, and still managed to complete trades higher, thanks history of confrontation between Mario Draghi and other representatives of the ECB. The pair reached the 1.2577 the November peak, closed in the area of 1.2550. A GBP / USD, meanwhile, closed in the area of 1.60, although a full breakdown of this level did not take place in connection with the released weaker than expected data on business activity in the construction sector.

Revised forecasts of the European Commission on the decline in the rate of growth of the euro zone forced investors to once again start to price in the probability of further decline in oil demand. In addition, a couple of crushed expectations and report on the energy reserves in the United States, published on Wednesday. As a result, Brent reached yesterday, the 4-year low of 82.65, but fell back to 83.30 at the close.

But for the precious metals sad news from Europe were good news, as they were able to stabilize the assets at current levels. The market turned his attention to the strength of the US economy threads on the topic of European weakness, and it is quite capable of causing short-term correction of gold up. As a result, starting the day at 1165,21, XAU / USD to the end of day trading rebounded to 1167.10 per ounce, on the road noting the November high at 1174.92. Meanwhile, XAG / USD down to the local minimum of 15.90, but did not go further, ending in a few paragraphs above.

Forecast for Wednesday, Nov. 5

Stock market

Yesterday, there were rumors that the ECB Governing Council representatives are planning to oppose Mario Draghi today. Article in «Reuters» refers to the fact that the last time the head of the European regulator to make key decisions and performed with radical statements, without the knowledge of «our colleagues.» Particular dissatisfaction among some members of the ECB raises its word that the bank balance will be increased to 1 trillion euros.

Thus, the market began to price low likelihood of additional easing and push European indices quotes. There are conversations that 10 of the 24 representatives of the Governing Council against the move to quantitative easing. DAX already played there were conversations and priced in a negative revision of chances to QE. If today the rumors are not true, we may well see an impressive correction back to the 9350 area.


Oil prices continue to remain under pressure, and the news that Saudi Arabia reduces the December prices for the US only added fuel to the fire. In addition, there is reason to believe that US energy reserves increased by 1.9 million barrels to 4-month high. Recall that in October, oil prices fell the maximum from May 2012 rates, as OPEC is going to reduce production volumes. World supply is growing more and the fact that production rates in the US reached a record high in the last 30 years levels. Now this is a game between OPEC and the US for market share, which means that prices may continue to fall with medium-term objective for $ 75.

Today, pay attention to the report on US oil reserves — if the figure will continue to grow the fifth week in a row, it can help break through Brent nearest support around 82.60 a barrel, and send the quotations in the area 80.20.

Foreign exchange market

Last week, the market is enthusiastically accepted the optimistic comments from the FOMC about the state of the labor market. This fact has forced investors to return to the US dollar and the re-start to price in the likelihood of a quick transition to the regime of monetary tightening. Published on Friday, GDP data for Q3 only supported optimistic, but will we see something like that and this week? Gets whether USD / JPY to 115.00 in the next few days? We will try again to predict the results of Friday’s labor market report (Non-Farm Payrolls) on the basis of leading indicators published a little earlier in the week.

For example, on Monday as part of a report on the manufacturing sector ISM, we learned that the employment component exceeded the previous value (55.5 vs. 54.6), suggesting an increase in the number of jobs in this sector. Today will be important to the ADP report on private sector employment and the employment component of the study, the ISM services sector. If there are indicators show positive momentum, it can send the USD / JPY higher current peaks with the immediate goal at 114.80.

USD / RUB could mark the return of investors after the holidays gap up to 43.90 area, but after that is closer to the second half of the day is quite possible downward correction, and quite impressive. The last days of the couple was having problems with the passage of 43.60 resistance area, installed last week empirically. Even very weak oil prices have fallen to 4-year low could not push a couple of more than 10 points. The immediate goal within the downward correction may become a mark of 43.10.


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Overview of the major global financial markets from November 4, 2014 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners