Overview of the major global financial markets from October 27, 2014

New week for the stock markets opened contradictory: Positive news from the ECB in respect of the results of stress tests were crossed harsh speech of the president of Russia on the «Valdai». Japan’s Nikkei lost 0.8% at the end of trading day, Hong Kong’s Hang Seng — 0,2%, the UK FTSE -0,40%, while Germany’s DAX — 0,95%. Only the American NASDAQ and DJIA traded in the «green zone» in connection with the expectations of a more prolonged period of low interest rates from the Fed.

The dollar lost some trust in connection with the upcoming meeting of the FOMC, where we can hear less aggressive statements by the Fed. While only in pairing with Rouble US currency retains a strong position. USD / RUB reiterated another record high of 42.29, as the recent speech of Vladimir Putin at the weekend finally assured the markets that the rapprochement with the West in the next few days will not happen. USD / JPY, meanwhile, slipped below 108.00, closed in the area of ​​107.80. EUR / USD made ​​attempts to consolidate above 1.27 on the positive results of the stress testing of the banking sector of European regulators. Nevertheless, the fall index of economic expectations and current conditions in the study IFO Germany sent a couple to the area 1.2670. By the close of trade, the pair returned to the area of 1.27. GBP / USD spent the whole day in the fight against the resistance of 1.61, and weak data from the US she still managed to punch him and finish trading at around 1.6120.

Oil prices were again under pressure, partly in connection with the released forecasts Goldman Sachs, which said that OPEC will lose its influence on the oil market in the light of the shale boom in the US. As a result, the oversupply will continue to put pressure on the quotes of «black gold.» Brent reached intraday low of 84.54 yesterday, but retreated to 85.40 at the close.

Precious metals came under slight pressure to the news that the stress tests, which conducted the ECB gave not such bad results. Reduced concerns over global growth a little pressure on the «safe-haven assets.» As a result, starting the day at 1230,43, XAU / USD by the end of the trading day down to the area of ​​1225.90 per ounce. Meanwhile, XAG / USD slipped to 17.10 at the close.

Forecast for Tuesday, October 28

Stock market

US stocks may be in high spirits in the coming days, given scheduled for the next week meeting of the Operations Committee on the Federal Open Market (FOMC). The market is growing awareness that, even with the end of quantitative easing, which is expected in the current environment, the Fed will not rush to move to higher rates. This is supported by several factors, ranging from the most unstable recovery of the US economy and ending with a sharp strengthening of the US dollar, which will limit the price pressure, and thus create the conditions for a prolonged period of low interest rates. If the accompanying statement from the Fed’s market understands exactly that, we will see a sharp strengthening of the NASDAQ and the DJIA. However, the US indices and can add to the expectations of such an outcome.

Commodities

OPEC was in a difficult situation and begins to lose its impact on the market. In order to resist the projects of shale oil it needs to significantly increase production volumes and prices dropped below $ 75. The only factor that can significantly move prices up now, can become a significant revival of the world economy and the rapid growth in demand, but in light of the slowdown in China and the euro zone, a scenario for the next few quarters looks realistic. From the point of view of technical analysis can be noted that Brent is trying to gain a foothold above the 200-hour moving average. Near this mark traditionally formed significant amounts of side products in the prevailing market trends. If the quotes will move down and strikes support around 84.20, then at the current level of volatility, it can provoke a decrease in the area of 80.00.

Foreign exchange market

USD / RUB continued upward movement on Monday, noting the historical maximum 42.28 on the realization of the market, that «good relations» between Russia and the West after the «Valdai speech» Vladimir Putin not wait. Looks like nobody revoke sanctions in the near future will not, and this means that the most powerful factor to support the ruble will not soon on the scene. The only scenario in which we expect some correction in the district pairs 41,50, may be efficient completion of gas talks with Ukraine, scheduled for October 29.

Despite the fact that yesterday’s report from Germany has confirmed that it is early to hope for positive developments in Europe’s largest economy, EUR / USD held fairly stable, and may well return above 1.27 in the coming days with further goals at 1.2760 and 1 , 2830. This is supported by several factors.

Firstly, fears about the results of stress testing were dispelled: 25 banks did not pass the test, but they need to attract only 25 billion euros, which is not so much on the background of the imposing 22-trillion balance sheet of the ECB. Moreover, it was reported that 12 of them have already found the necessary amount, and two Greek banks are already experiencing the healing process. As a result, it turns out that only 11 banks have to attract only 7 billion euros.

Secondly, this week the market’s attention will be focused on the meeting of FOMC, and market rumors that the representatives of the Federal Reserve will not quite aggressive. This attitude explains still uncertain pace of recovery of the US economy, the weak position of the world economy (the Eurozone, China, Brazil, Russia, Japan), which may slow the growth of the United States; as well as the recent sharp appreciation of the dollar, which could hurt US exports and limit inflation.

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Overview of the major global financial markets from October 27, 2014 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners