Weekly Market Review — February 29 – March 4 2016
The report on NFP will be the main event this week
At the end of the week almost all the major currencies showed a decline. The largest drop against the US dollar showed a pound (-3.70%). The smaller decline recorded euros (-1.69%), Japanese yen (-1.17%), Swiss franc (-0.69%) and the Australian dollar (-0.21%). Growth showed only the Canadian dollar (+ 1.85%). During the week the European currency came under pressure because of Brexit. Commodity currencies continue to follow the dynamics of commodity areas. Meanwhile, the Canadian dollar showed strong growth against the US currency against the background of recovery in oil prices. This trend was caused by the expectation of G20 summit’s decisions on supporting the growth of economies. This, in turn, in the near future would lead to an increase in demand for oil. This week market participants will pay attention to decision of the Reserve Bank of Australia’s interest rate and Chinese PMI indices for the manufacturing and services sectors. Certainly one of the main events of the coming week will be report on NFP, which will be published on Friday at 13:30 (GMT).
The main reason of last week’s movements in the US stock market was oil. Earlier this week, the quotations of “black gold” rose on reports that in the near future in the US will be a decline in oil production. Also, investors focused on the statistics on GDP and personal spending and income. Published data showed moderate growth confirming that the momentum of the US economy was not completely lost in the fourth quarter of last year. This week, just before Fed meeting, scheduled for March 15-16, there will be very important data on the US labor market. The report. At the end of the trading week: Dow + 1,64%, S & P + 1,68%, NASDAQ + 2,01%.
On European stock markets, investors paid a lot of attention to corporate reporting. Meanwhile, the European statistics was a bit disappointing. Only the expectation of positive changes after meeting G20 leading countries made investors to buy. However, most investors expect that the ECB will make the next step to stimulate economic growth in the region. That is why ECB meeting, which will be held March 10 will be very important.
Quotes of the precious metal are mainly reacted to the dynamics of the stock markets. As investors avoided the risks, gold was in high demand. In addition, last week marked the influx of bullion gold in secured funds. It should be said that since the beginning of this year, gold prices rose overall by 16%, and recovered all last year’s losses. Also, most investors are hoping that the US Federal Reserve will not rush with the next increase of interest rates due to the increased risks to the global economy. Thus will make investors to trade gold in the new higher bands.