Weekly Market Review — Sep 28 – Oct 2
NFP Is the Main Highlight of the Week
At the end of the week almost all the major currencies showed a decline. The largest decline against the US dollar showed the Swiss franc (–0.91%). A smaller decline recorded Japanese yen (–0.42%), British pound (–0.33%), euro (–0.20%) and Canadian dollar (–0.11%). Growth showed the Australian dollar (+0.14%) and New Zealand dollar (+ 0.54%).
The market was focused last week on the press conferences of the ECB President Mario Draghi and the head of the US Federal Reserve Janet Yellen. The former expressed a willingness to expand the program of quantitative easing, if necessary. The latter, on the other hand, expect monetary tightening before the end of this year.
This week, market participants will be looking forward to a report on the NFP, which should confirm the intention of the Fed to raise rates this year. This week opens with a publication of the PCE Price Index, Personal Income and Spending in the United States, scheduled for 12:30 (GMT) on Monday. On Tuesday will be published less important data. Wednesday promises to be an eventful day in terms of economic statistics. For example, the U.K. will release of the final estimate of its GDP for the second quarter at 08:30 (GMT). A little bit later, at 09:00 (GMT), will be published CPI in the euro area, as well as Unemployment Rate. Canada will release data on its GDP at 12:30 (GMT). The main event of the Wednesday will be the speech of the Fed Chairwoman Janet Yellen, scheduled for 19:00 (GMT). A little later the Bank of Japan will publish its Tankan report at 23:50 (GMT). On Thursday, Japan is to publish data on Unemployment Rate at 23:30 (GMT). And finally, on Friday will be released a long-awaited report on the NFP at 12:30 (GMT).
The main US stock exchanges were trading in different directions last week, and showed the following dynamics: the Dow Industrial fell by 0,51%, S&P 500 dropped by 1,28%, while NASDAQ was down by 2.92%. The main influence on the US stock markets had a publication of the Manufacturing PMI in China, which declined once again and fell with analysts’ expectations. The dynamics of the US stock markets was also influenced by the speech of the Fed Chairwoman. Recall that she noted that she hopes to see a rate hike before the end of this year.
As for the European stock markets, their dynamics was influenced by the slowdown of the Chinese economy, as well as the scandal around Volkswagen AG. Recall that the US government suspected the company rigged its emission tests in the United States. This fact put pressure on quotations of all automakers. European stock markets got some support from the statements of the ECB President Mario Draghi. He said that the regulator is ready to increase the volume of Asset Purchase Program, if necessary, in order to defend the current level of inflation.
The gold quotations have not changed significantly throughout the trading week, rising by only $6 against the opening price. The dynamics of trading was influenced by the statistics from the United States. On Thursday, gold prices have risen significantly on the background of concerns about the US economy. They were caused by the publication of weak statistics on Durable Goods Orders. And with that, all of those gains were forgotten on Friday against the publication of the final estimate of US GDP, which surpassed analysts’ forecasts. In addition, the gold prices pressured by Janet Yellen that there is still a probability of a rate hike before the end of the year.