Weekly Market Review — August 24-28
The Highlights Of the Weeks Are Stat Data on the US, UK, German, Swiss, Japanese and New Zealand Economies
Last week most of the major currencies strengthened against the US dollar. The greatest increase showed the Swiss franc which rose by 3.19%. The euro gained 2.46%, the New Zealand dollar 2.23%, while the Japanese currency rose by 1.88%. The British currency also increased by 0.28%. But some currencies fell against the US dollar like the Canadian and Australian dollars by 0.64% and 0.87% respectively. The main event of last week was undoubtedly the publication of the Fed meeting minutes. After its publication the American currency began to fall against major competitors. The minutes noted that the labor market recovers and comes to a point where you need to raise rates. And with that, the growth rate of inflation raised concerns among the US Federal Reserve leadership. In addition, the economic situation in Greece and China could have negative consequences for the US economy. Therefore, market participants shifted their expectations on the first rate hike from to September to December, and even up to the beginning of 2016. It put a lot of pressure on the US currency. The main events of this week will be the final data on the change in Germany’s GDP in the second quarter, which is scheduled for Tuesday at 06:00 (GMT); durable goods orders in the US in July on Wednesday at 12:30 (GMT); the revised estimates of US GDP on Thursday at 12:30 (GMT); the inflation report as well as retail sales in Japan at 23:30 (GMT); release of data on GDP in Switzerland and the UK on Friday at 05:45 (GMT) and 08:30 (GMT), respectively; preliminary data on the Consumer Price Index in Germany on Friday at 12:00 (GMT); US personal income and spending in July on Friday at 12:30 (GMT).
Last week the major US stock markets conducted trading in a downward trend. The negative dynamics of the indices was affected by weak corporate reports, waiting for the publication of the Fed meeting minutes, as well as the situation in the Chinese economy. Upon the publication of the minutes on Wednesday, market participants shifted their expectations of rate hikes from September to December. The forecasts of the US Federal Reserve were published on Thursday, which noted the negative impact of slowing down of the Chinese economy on the growth of the world economy. The Chinese stock markets fell again on Thursday and Friday, adding up concerns about the negative situation in the Chinese economy. Therefore, concerns about falling commodity prices, slowing down of the economies of developing countries triggered investors to get rid of the securities, which, in turn, put pressure on the major stock indexes. Last week major US stock indexes showed following dynamics: Dow –5.82%, S & P –5.77%, NASDAQ –6.78%.
European stock exchanges following the Asian and American markets spent the past week trading negatively. The stock markets were pressured by falling commodity prices, as well as a bad economic statistics from China. Also investors have watched the publication of the Fed meeting minutes. The downward movement in Chinese stock exchanges has spread to other stock markets. Panic sentiment caused by the slowdown in the world’s second largest economy pressure put downward pressure on major European stock exchanges.
Light Sweet Crude Oil Futures, Daily
The oil quotations opened last week at the level of $42.75 per barrel. It is worth noting that during the week oil prices updated multi-year lows on almost a daily basis. The week was closed at $40.18 per barrel. Throughout the week, the quotations have been under pressure by uncertainty surrounding the Chinese economy, which recently became obvious, as well as oversupply in the world oil market. It is also worth noting that the 6-month forecasts of oil prices were revised by few reputable organizations with a downward trend. Moreover, investors worried about the global slowdown in the world economy.