Overview of the major global financial markets from November 6, 2014

Yesterday’s meeting of the ECB only strengthened the dominance of the US dollar, but at the same time and gave support to the European index. The remaining benchmarks behaved raznonaprvleno. Japan’s Nikkei lost about 0.76% at the end of trading day, while Hong Kong’s Hang Seng — 0,34%. Meanwhile, Britain’s FTSE rose by 0.18%, while Germany’s DAX — 0.66%, while the NASDAQ and the DJIA also showed a slight increase in the middle of the US session.

Despite the fact that he lived on a Thursday market expectations of ECB meeting, even in the morning USD / JPY managed to break above 115.00 and update the next 7-year high at 115.51. Then there was a sharp drop in Nikkei, which has fallen off a couple and in the area of 114.00. Closing of trading days occurred near 114.90. EUR / USD has received a serious blow is no longer because of what Draghi said, and because of the fact that the rumors about his position at the ECB have not been confirmed. Market partly priced in a neutral position controller that controls said that the central bank is ready to unanimously drastic measures if required. Moreover, the new tools in the development incentive. All this is lowered to a couple of more than 2-year low 1.2382, not far from which to close trades. GBP / USD slipped to 1.5885 intraday low, and closed the day just above 1.59. USD / RUB continued to grow without control of the Central Bank, reaching another record at 46.72.

Oil prices on Thursday passed a consolidation mode, still not daring to move away from the area of the 4-year lows. Fears of an oil pipeline explosion in Saudi Arabia died down, and, hence, to the further strengthening of the US dollar, we may see a new round of sales of energy carrier. As a result, Brent opened at 83.81 and closed in the area of 83.36.

Meanwhile, precious metals continue to be held near the lows reached recently, and despite the impending publication of a report on the US labor market until they are ready to go down. As a result, starting the day at 1142,27, XAU / USD to the end of trading day almost did not budge. Meanwhile, XAG / USD from the opening level of 15.34 was able to add a few points to the end of trading.

Forecast for Friday, November 7

Stock market

So, as we have said in previous reviews, for US equity markets are at a pivotal era — ultrasoft policy brought indices to historic highs, and low interest rates are still favorable for the further strengthening of the moderate. Nevertheless, the market is ruled by rumors and expectations, and in our case, the most devastating news for American benchmarok may be stabilization of the US economy, which will switch to the Federal Reserve tightening. Recall that at the last FOMC meeting was made special emphasis on the stabilization of the labor market, and this news caused investors priced in a high chance for a quick hike. So if today’s report on levels of employment payrolls (NFP) will above forecasts, it may make the US stock indices (S & P, NASDAQ and DJIA) incur losses, the extent of the fall will depend on the strength indicators.

Commodities

Gold prices have hidden near multi-year highs, but we expected to District 1100 per ounce is not yet reached, though, and adjust upward after lengthy sales did not intend. Today published a report on «non-Farm» may become the catalyst that will determine the future direction of the mid-term of the asset. These data, we attach such importance because the Fed has clearly indicated its position, focusing on the good pace of recovery of the US labor market within the last meeting. Now investors have to check — so if everything is okay, really? If employment levels did not come out below 230k, it will sign the death warrant XAU / USD and send the pair to the closest support around 1100. However, the breakdown below may take place only at higher levels of employment of 300 thousand, and the chances of such an outcome is not so too large.

Foreign exchange market

USD / JPY recently behaves quite actively considering an increase of almost 7 figures in the last 7 trading days. Generally, it is time to take a break, and, most likely, near highs, we can observe some time to consolidate, but only after a report on the US labor market. It can give a pair of additional energy for the dynamics and optionally a positive character. The market has already priced in the job growth rate of more than 200 thousand (predictions are in the range of 230-240 thousand), so to see the impressive rally USD / JPY levels of employment should grow by at least 300,000. Thus, there are three scenarios for the outcome probabilities:

1. The least likely (15%). Will rise by more than 300 thousand and provoke a surge in demand for the US dollar with the probability of motion USD / JPY above 116.00.

2. It is likely (35%). The indicator will come below expectations, and given exaggeratedly optimistic expectations of the market, as well as the emphasis that the Fed has done in the framework of the last meeting of the labor market, will cause massive repositioning with the loss of about two pairs of figures.

3. The most likely (50%). The index will be released slightly above forecasts, or coincide with them, and in this case the market may even slightly disappointed and adjust a couple of 40-50 points down.

USD / RUB after strong opposition from the Bank of Russia’s intervention completely lost control and had already managed to break the mark of 46.00, continuing to go up, even at such high levels, only the most risky, investors may decide to enter the market Long. By all indications the pair shows high oversold and can only wait for «boiling point», which scared all the speculators. However, today the couple have additional potential for growth in response to the US data: strong report could send a couple of the area 47,00, although the completion of trade week is still not ruled out a deeper correction to the probability of return to the area of 45.30.

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Overview of the major global financial markets from November 6, 2014 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners