Review of the world’s major financial markets from December 3, 2014

Stock markets and spent Wednesday in the «green». Hong Kong’s Hang Seng (HSI) at the end of the day lost 1.27%. Britain’s FTSE weakened by 0.38%, but Germany’s DAX rose by the same 0.38%, making attempts to get closer to the 10,000 US stock indices showed synchronous growth.

Currency market on Wednesday was very emotional, and with the obvious dominance of the US dollar. USD / JPY has updated a maximum of 119.86, halting traffic on output rather weak employment data from ADP, but to resume at a strong release of the main ISM index in the services sector. EUR / USD has broken through the support of 1.2350 and continued to fall by more than 2-year low at around 1.2300. Exerted pressure on the pair, and the imminent meeting of the ECB, and rather weak data on PMI Services. But GBP / USD had a good support from the index, which exceeded forecasts (55.8 vs. 55.6), and was able to touch 1.5720, then retreated to the area of 1.5680. USD / RUB at the beginning of the day jerked up and said another record on 54.83, but then came down, completing trades near 53.13.

Oil prices all day kept relatively stable, trading within narrow ranges, but by the end of the trading day a little lost ground. Yesterday Brent fluctuated above $ 70 per barrel the first half of the day, ending trading at $ 69.94, a pullback from a daily high of 71.44.

Precious metals are gradually gaining ground, virtually ignoring the dominance of the dollar and positive market sentiment. XAU / USD finished trading at around $ 1210.30, rolled away from the daily high 1215.05 and XAG / USD was trading around 16.40 to a close environment.

Forecast for Thursday, December 4

Commodities

Gold prices were fixed just above $ 1,200 an ounce, but this is already a victory, given the positive attitude of shares and still growing US dollar, which has previously provided considerable pressure on the precious metal. Even came out better than expected ISM index in the services sector was not able to scare off investors — on the contrary, we have seen the strengthening of the asset to the area of $ 1,210 per ounce with an attempt to break the mark of $ 1,214, which we discussed in the previous review.

Moreover, you should pay attention to data released yesterday by the US: ADP report on private sector employment disappointed, confirming reduction in the number of jobs. A report in the framework of ISM, in spite of the impressive growth of the main index, the employment component fell to 56.7 from 59.6 a month earlier. If you recall, that was the index in the service sector is most closely correlated with the results of Friday’s report on the labor market («Non-Farm»), we can expect disappointing data in the framework of the next releases. This can be a great incentive to strengthen demand for XAU / USD. The immediate goal on the way up to the asset could be around $ 1240 as soon as the resistance of $ 1214 will be broken.

Stock market

German DAX did yesterday timid attempts again to come closer to the strong resistance of 10,000, but the sample above is not yet a success, despite the slump in the euro on expectations the ECB meeting, which may Draghi clarify its plans for the additional stimulus.

Today at a press conference the head of the ECB can help overcome the DAX strong barrier and continue above 10500. However, this requires details about the scope and terms of incentives and, quite possibly, Draghi is not ready to give these details to the market. If so, then drop in the index can be quite impressive, with a probability of rollback in the area 9800.

Foreign exchange market

USD / RUB again after the initial rise to new records, movement and spun down for 2 rubles following the closure of the trading session. It is possible that in the dynamics of bidding again intervened Bank of Russia. At the moment, it is already known that on December 1 the regulator has spent $ 700 million in the first intervention since early November. Yesterday the ruble dynamics very similar to its behavior in the first day of winter. And such a pair behavior can be used to short-term trading: each new record high — it is an opportunity to enter short positions with their closing at the end of the trading session. Today, the couple can open auction «gap» up in response to the decline in oil prices during the US session.

So, it is a key moment of the week for EUR / USD — ECB meeting, from which the market is waiting for more clarity about the implementation of a full program of quantitative easing. The recent series of more positive reports from Germany for a while to make the market believe that the economy may recover itself without the aid of a regulator. However, recent indicators again breezed negative, reinforcing expectations about the «soft rhetoric» of the ECB, and most of these expectations is already incorporated in the price. Thus, Draghi has to be very specific and very «soft» to surprise the market and make it go below 1.23 in order to near the lows in August 2012.

At the moment, yet chances are good that the head of the ECB will disappoint the markets, firstly, because the country’s governing board is growing quite strong opposition against the move to quantitative easing. Secondly, because Draghi may choose to wait for the results of the measures already implemented, before taking a new radical steps. Third, because the market is already roam the rumors that the program weighing one trillion will be implemented in the 1st quarter of 2015. If these rumors are not true, disappointing investors can add EUR 150-200 points within a few hours.

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Review of the world's major financial markets from December 3, 2014 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners