Weekly Market Review –April 11–15 2016
Bank of Canada and Bank of England Interest Rate Decisions will be the main events this week
Last week all major currencies showed mixed dynamics. The decline against the US Dollar showed the Australian Dollar (-1.56%), the New Zealand Dollar (-1.32%) and British Pound (-0.67%). The growth showed: euro (+ 0.08%), Canadian Dollar (+ 0.10%), Swiss Franc (+0.37%) and Japanese Yen (+ 3.14%). Last week investors paid a lot of attention to statement of Eurozone and US central banks’ leaders. Mario Draghi, the head of the ECB, said that the March decision to mitigate the monetary policy is appropriate, and the European regulator is not limited in the choice of instruments. However, the March minutes of the US Federal Reserve meeting indicated the general opinion of the majority of the leaders of the American regulator in terms of a gradual increase in interest rates. The day after the publication of the minuets Janet Yellen gave her speech. She talked about the strength of the recovery of the US economy, and expressed confidence in its future prosperity. Also, she noted that a recession was avoided. The main events of the coming week will be the announcement of the results of the meetings of the two central banks – Wednesday at 14:00 (GMT) Bank of Canada, and on Thursday at 11:00 (GMT) The Bank of England will present their decision on monetary policy.
At the end of the trading week: Dow -1,38%, S & P -1,48%, Nasdaq -1,46%. Last week all the major US stock indexes recorded a slight fall. This was due to the dynamics of oil prices. Traditionally, investors in the stock markets look at oil market’s dynamics, and their mood depends on its dynamics. In addition, investors were concerned about the prospects of rate hikes by the US Federal Reserve. Next week, they will pay a lot of attention to companies’ quarterly reports. Traditionally Alcoa, the global leader in lightweight metals, will open the earning season.
European stock markets (the same as US) reacted to the dynamics of oil prices, rather than to economic statistics from the region. Nevertheless, the major stock indexes in the region showed a small growth last week. According to latest dynamics of stock markets in Europe, investors are waiting for the meeting in Doha, Qatar (April 17).
During the last week the precious metal quotes showed significant growth, this was due to the fall of the American currency. The main impact on gold was provided by the publication of FOMC meeting minuets. Let us remind you that during the low interest rates the gold is more competitive. In the near future, investors will pay attention to dynamics of the US Dollar.