Daily Market Review — 11/02/2016
U.S. Fed Chair Yellen’s Speech Will be in the Focus of Market Participants Today
US currency strengthened somewhat against the Swiss franc during yesterday’s trading day on background of the expectation of U.S. Fed Chair Yellen’s speech. This trend was caused by the market’s reaction to the Ms. Yellen’s words before the statement that the US regulator will hike rate gradually. However Fed Chairman, during her speech, noted that the need to reduce the rate at the moment does not exist, and the Committee will keep on top the economic situation. Meanwhile, the market participations doubled their confidence that Fed will not hike rates in March. Today, the dynamics of the pair may depend on publication of the consumer price index in Switzerland 08:15 (GMT). In addition, today will be presented data on the US labor market at 13:30 (GMT). Also, market participants should pay attention to the second Janet Yellen’s statement. Today, she will speak before the Joint Economic Committee, in Washington
Resistance: 0.9819, 0.9904, 0.9989
Support: 0.9692, 0.9613, 0.9543
The Japanese currency continues to be in demand as a safe asset, which is due to significant fluctuations in the financial markets. Thus, the investors hedged their positions by buying the Japanese currency and yen-denominated securities. Some influence on the pair’s dynamics had Janet Yellen’s speech. She noted that the economic conditions for the rate hikes have become more stringent, but, nevertheless, it does not exclude the possibility of monetary tightening during the current year. Meanwhile, she added that the terms and temps of increase will be slower due to low inflation, which is due to low energy prices. Today, the dynamics of the pair may be affected by the publication of US labor market data in the 13:30 (GMT).
Resistance: 113.54, 114.41, 115.93
Support: 112.27, 111.23, 110.12
US stock markets showed mixed trends yesterday, which was caused by the Fed Chair Yellen’s report. Let us remind, she made it clear that the probability of a rate hike in March is almost zero. That fact supported the stock markets. However, the falling price of oil has had a negative impact on future dynamics of trading. Also, quarterly reports are important for investor. So, Walt Disney published report yesterday, which surpassed analysts’ expectations. Nevertheless, prospects for stock markets remain negative, at least until the termination of the general unrest in the global financial markets.
Resistance: 1850.86, 1864.74, 1884.58
Support: 1831.24, 1821.54, 1804.35
Light Sweet Crude Oil Futures
During yesterday’s trading day quotes of “black gold” showed a downward trend again. Despite the publication of U.S. Crude Oil Inventories, the data showed its decline by 0.75 million barrels, this morning quotes renewed multi-year lows at $26.67 per barrel. The OPEC’s forecast of growth in oil demand this year influenced the market. However, according to most experts, the low price of oil will not boost demand. In consideration of the global oversupply of oil on the world market, the prospects for oil are extremely negative.
Resistance: 27.81, 29.20, 30.18
Support: 26.67, 26.00, 25.50