Daily Market Review — 09/12/2015
Reserve Bank of New Zealand Interest Rate Decision Will Be Closely Watched By Market Participants
The pair didn’t demonstrate any specific dynamics during yesterday’s trading. This was primarily caused by an ongoing fall in commodity prices, as well as by the weakening of US currency. However, in the medium term, market participants will come back to the buy-side of the US dollar against its major rivals as the Fed is ready to make a step towards the rate increase at the meeting on December 15th – 16th. This will likely support the dollar. The highlight of today’s trading session will certainly be the Reserve Bank of New Zealand Interest Rate’s Decision, which will be announced at 20:00 (GMT). The accompanying statement will be published the same time. According to preliminary estimates of analysts, the central bank may lower the rate by 25 basis points from 2.75% to 2.5%. It is worth noting that no important news for the US economy will be published today, so the pair will respond to this event.
Resistance: 0.6658, 0.6738, 0.6785
Support: 0.6604, 0.6545, 0.6492
The Russian currency has been depreciating against the US dollar for 12 consecutive sessions. This is caused by a sharp drop in oil prices, which accounts for the lion’s share of the Russian budget revenues. In addition, the obvious problems in the Chinese economy are not allowing the ruble to recover. Recall that the Russian Federation is one of China’s major trading partners so the slowdown in the Chinese economy has a huge impact on the Russian economy. The USD/RUB has been updating its yearly highs in almost every session. It should be noted that the Russian budget for 2015 was developed based on the price per barrel of 3,500 rubles. For this reason, the Central Bank of Russia has to make interventions to the Forex Market, so in the case of falling oil prices budget revenues remained at the same level. This, in turn, leads to the devaluation of the national currency. On the other hand, inflation in the Russian economy is rapidly growing. Therefore, the decision of the Central Bank of Russia, which is expected on Friday at 11:00 (GMT) is expected to be very difficult.
Resistance: 69.4225, 70.0445, 70.6044
Support: 68.6140, 67.6827, 66.7394
Major US Stock Markets showed a downward trend yesterday, reacting to the negative situation in the commodity markets. All major commodities fell yesterday to new lows for the past few years. This dragged shares of commodity oriented and energy companies down. Such dynamics were caused by negative data on the Chinese trade balance, which pointed out that exports have fallen for the sixth consecutive month. In addition, oil prices fell to new lows this year. The focus of investors remains on the dynamics of commodity assets and on a recent decision from the OPEC. Today’s trading dynamics will be affected by previously published data on the Consumer Price Index in China, which was higher than analysts’ forecasts. This situation may force the Chinese central bank to take additional stimulus measures, so as to curb the pace of inflation. This, in turn, will have a negative impact on the stock markets.
Resistance: 2066.08, 2072.38, 2078.45
Support: 2058.39, 2051.27, 2046.49
Light Sweet Crude Oil Futures
Oil quotes rebounded a little bit yesterday after the price of WTI crude oil dropped below $37 per barrel. The market continues to experience a negative impact of the oversupply in the global oil market and weak Chinese trade data, which is the world’s second largest consumer of raw materials. Moreover, the decision of the OPEC not to decrease production quotas also has a negative impact on oil prices. However, oil was somehow supported yesterday by publication of data on Crude Oil Stocks in the US by the American Petroleum Institute. It turned out they fell by 1.9 million barrels per day. A similar report will be released today by the US Department of Energy at 15:30 (GMT). In general, the prospects for the oil market remain disappointing.
Resistance: 38.53, 39.30, 39.97
Support: 37.46, 36.56, 36.00