Weekly Market Review — November 30 – December 4
The Long-Awaited Report on NFP is the Main Event of the Week
Last week was all about the strengthening of the US Currency. This was caused by positive statistics published during the week. Among the key reports that could force the Fed to raise rates at a meeting on December 15th –16th, the report on GDP, Durable Goods Orders, and the price index for Personal Consumption Expenditures. All three reports have shown growth. At the end of the week all major currencies closed below zero. Major currencies have lost around 1% against the US Dollar: the Japanese Yen (–0.05%), the Canadian Dollar (–0.19%), the New Zealand Dollar (–0.25%), Euro (–0.40%), the Australian Dollar (–0.59%), the British Pound (–0.97%) and the Swiss Franc (–1.12%). The coming week will be very busy on important Economic statistics. On Monday the Consumer Price Index in Germany will be released at 13:00 (GMT). Also on this day Investors’ attention will be drawn to the Chicago Purchasing Managers’ Index at 14:45 (GMT). On Tuesday the Manufacturing PMI in China will be published at 01:00 (GMT). Then, at 03:30 (GMT) the Reserve Bank of Australia will announce their decision on the basic interest rate. At 06:45 (GMT) Switzerland will report on changes in GDP for the third quarter. At 10:00 (GMT) the Unemployment Rate in the Eurozone will be published. At 13:30 (GMT) Canada will report on its GDP for the third quarter. On Wednesday, Australia will present data on its GDP at 00:30 (GMT). At 10:00 (GMT) the Eurozone will report on the CPI. At 15:00 (GMT) the Bank of Canada will announce its decision on key interest rates. On Thursday, the European Central Bank will release its decision on interest rates at 12:45 (GMT), and at 13:30 (GMT) its head will have a press conference. Also, on the same day at 15:00 (GMT) the semi-annual report on monetary policy by the Fed chairman Janet Yellen will be published. On Friday at 08:15 (GMT) the report on inflation in Switzerland will be released. At 13:30 (GMT) Canada is to publish data on the labor market. And finally, the most anticipated NFP report will be published at 13:30 (GMT).
The past week wasn’t very successful for the US Stock Market. The dynamics of trading, in addition to US Economic statistics, were influenced by reports of M&A activity. Thus, Pfizer (PFE) and Allergan (AGN) confirmed their expected merger, which would create the world’s largest pharmaceutical company. Reports from the Middle East, where Turkish air forces shot down Russian warplane on Tuesday also had a negative effect. These reports raised concerns over the escalation of the conflict in the Middle East. Thursday and Friday were marked by limited Trading Volumes as the US celebrated Thanksgiving Day. This week the dynamics could be significantly influenced by the ECB decision on the QE program. In addition, Investors’ attention will be focused on Friday’s NFP report.
European Stock Markets spent last week Trading in a positive trend. Such dynamics were caused by anticipation of the ECB meeting to be held on December 3rd. Investors expect the expansion of stimulus measures by the European regulator. This can be done by expanding the volume of quantitative easing or lowering the already negative interest rates on deposits. The negative impact last week came from reports of the downed Russian warplane. On Friday, China reported that profits of its major industrial enterprises were in decline once again. This week, the European Stock Market may be influenced by the Manufacturing PMI in China, the ECB meeting, and, of course, Friday’s report on the NFP – the main indicator of the health of the labor market of the world’s most powerful Economy.
Light Sweet Crude Oil Futures, Daily
“Black Gold” quotes showed some recovery in the first part of the week after reports that Saudi Arabia was ready to negotiate with OPEC and non-OPEC members on the stabilization of world Oil prices. In addition, a message about the downed Russian warplane raised concerns about possible supply disruptions of Oil from the Middle East, which accounts for about 30% of global Oil production. This, in turn, had some support for prices. Meanwhile, API report showed a significant increase in crude Oil stocks, pointing to the continuing oversupply of Oil in the world market. The general strengthening of the US Dollar is also putting pressure on Oil prices. The market is awaiting the highly anticipated and crucial event in the oil market, the OPEC meeting, scheduled for December 4th.