Weekly Market Review — February 8 – 12 2016
Publications of GDP in Germany and Eurozone will be the main events this week
At the end of the week most of the major currencies closed above the zero mark. The strongest growth against the US dollar showed the Japanese yen (+ 3.70%), Swiss franc (+ 3.23%), euro (+ 2.98%), the New Zealand dollar (+ 2.19%), British Pound (+ 1.79%), Canadian dollar (+ 0.40%). The Australian dollar showed decline (-0.35%). During the first half of the trading week, the US dollar was under the pressure against the background of negative statistics on the US Services PMI. This situation shows direct impact of global financial problems on the US economy. Thus, the market does not expect the next rate increase by the Fed in March. However, support for the US dollar provided a publication of labor market data on Friday. The economic calendar for the upcoming week will be filled with the publication of important statistics. So, on Tuesday there will be the data on Switzerland Unemployment Rate at 06:45 (GMT). Also on this day will be presented with data on Germany Industrial Production at 07:00 (GMT). On Wednesday, 09:30 (GMT) U.K. Industrial Production will be presented. On Thursday at 08:15 (GMT) Switzerland will report on consumer price index. On this day in 15:00 (GMT) to be held speech Fed Chairman Janet Yellen, and 22:30 (GMT) there will be RBA Governor Stevens statement. Finally, on Friday will be published GDP data for Germany and the Eurozone 07:00 (GMT) and 10:00 (GMT), respectively.
Major US stock spent the past week in a downward trend. This was due to the disappointing statistics on manufacturing activity in China, which was published at the beginning of last week. Also, the negative factor was a rapid drop in oil quotations. Also, US Services PMI showed a slowdown, pointing to some problems in the world’s largest economy. Also, investors are negatively perceived by the NFP report. At the end of the trading week: Dow -1,59%, S & P -3,10%, NASDAQ -5,44%
A similar downward trend showed the major stock exchanges in Europe. Concerns over a slowdown in the Chinese economy have intensified after the publication of a negative report on business activity in the US Services PMI. In addition, negative reports on the economy of the euro area do not add optimism to investors. Nevertheless, the European stock market is hoping ECB to expand stimulus measures, in March. This week the investors’ attention will be on reports on German and Eurozone GDP.
Light Sweet Crude Oil Futures, Daily
It was one the most volatile weeks for quotations of “black gold”. Sometimes, fluctuations in oil prices have reached 10% during the trading day. Concerns over a slowdown in the Chinese economy, which is the second largest oil consumer in the world, caused precipitation of oil prices at the beginning of the week. In addition, the US oil stocks showed significant growth. Meanwhile, a few quotes rebounded after it became known that the OPEC countries are ready to enter into negotiations with other major oil-producing countries in order to stabilize the oil market by reducing production volumes. In general, the oil market outlook remains negative as oversupply will continue until the second quarter of 2017.