01/17/2014 - The US and European stock markets have updated highs this week. Weekly review.
Organisation for Economic Co-operation and Development (OECD) presented a monthly report, in which the forecast is presented with the prospects for most sectors of the world economy, which have improved at the end of 2013. Signs of improvement in leading indicators showed Euro zone (rising to 101.0 from 100.8) , the US (rise up to 101.0 from 100.9 ), Japan (rise up to 101.4 from 101.2 ) and China (rise up to 99 4 vs. 99.3 ). The organization has stressed that growth remains quite fragile and, therefore, the central banks are not going to significantly tighten monetary policy .
The World Bank said, that in 2014 the steady growth is expected in the world economy. According to analysts from the organization, the world's GDP is to grow by 3.2% in 2014, 3.4% in 2015 and 3.5% in 2016 . The results of 2013 according to the World Bank grew by 2.4%. High rates of economic growth, will show developing countries. Basel Committee on Banking Supervision, softened the requirements to the size of liabilities for credit institutions. The purpose of this step was to prevent the decline in crediting to the economy. In addition, measures were taken to avoid double count of derivatives.
Number of macroeconomic indicators of the countries in the Eurozone, was published this week. Thus, it became known that Germany's GDP last year grew by 0.4%, compared with growth of 0.7% in 2012. Export growth was 0.6 %, against 3.2% a year earlier. Eurozone trade surplus in November rose to 16.0 billion Euro, it was expected to rise to 16.7 billion. The volume of industrial production in the Eurozone rose by 1.8 % in December, even though it was only expected to increase by only 1.6%. The final Eurozone GDP growth in the third quarter met expectations of analysts and was 0.1%.
Euro on the background of current events did not show strong volatility and traded in the local up-link. In case of continued growth , the price will reach 1.3710. Support is located at 1.3550.
The consumer price index in the Eurozone in December, showed an increase of 0.7%, compared with the same period last year. The situation on the labor market in the US during the week slightly improved. Thus, the number of applications for unemployment benefits fell by 2 000, to the level of 326 000. Consumer inflation in December, as expected, was 0.3 %.
The growth of retail prices in the US went on the level of the forecast of 0.2 %, while the same figure with the exception of car sales rose by 0.7%, and exceeded the expectations of growth of 0.4%. Inventories in the US, as expected, increased by 0.4 %. Consumer inflation rose by only 0.1%. The number of new applications for receiving unemployment benefits has reached 2 000 better than expected and reached 326 thousand.
US markets are at a maximum in history. In the case of fixing value of the broad index S & P 500 above 1844, we expect continued growth. Support is located at 1820.
In UK, the Sunday Times published an article, according to which the growth rate of the economy according to experts, in the middle of this year will equal to 4%. Also, data was published on consumer price inflation, which was 2.0% in December, while the forecast was 2.1%. Retail prices of 0.1% rose above expectations and reached 2.7%. Positive factor for the British pound was the publication of the report on retail sales. In December the index showed an increase of 2.6 %, although the predicted increase was just 0.5%.
This year, one of the factors that could negatively affect the quotations of the Sterling Pound, is the possibility of Scotland exiting from the United Kingdom. In that case, it is possible for rating agencies to lower the credit rating of the country. A referendum on this issue will take place on September 18th.
After departing from the scope of this figure, we can see a strong movement. To enter the position, you need to wait for a confirmation signal, which in the case of reduction will be fixing prices below $ 1.6320 , with purpose 1.6230 and 1.6140. For an upward movement, confirmation signal will be fixing prices above 1.6460. The immediate goal with the growth rate will be a local maximum of 1.66.
Data on the balance of payments of Japan, which disappointed analysts and showed 0.05 trillion deficit Yen, at forecast 0.02 trillion yen, led to the growth of quotations pair USD / JPY. The growth of the monetary base in Japan in December was 4.2 %, while waiting for 4.5%. However, positive data was shown on the volume of orders for machinery equipment, which in December rose by 28%, compared with growth of 15.4% in November. We maintain our positive outlook for the pair, due to monetary policy from the Bank of Japan, aimed at currency devaluation and rising inflation to 2%. The index of business activity in the services sector in Japan, in November, rose by 0.6 % vs previous forecast of 0.8%. At the same time, internal orders for machinery jumped by 9.3% , while expected growth was only 1.2%. Support is located at 103.90, resistance is at 104.70 and 105.40 .
After breaking through the strong support of 0.89, quotes of the Australian dollar collapsed, breaking the local minimum at 0.8840. The cause of the collapse, was the negative statistics on the labor market in Australia. It was expected that, employment growth was 10.3 thousand, but the amount of people employed fell unexpectedly to 22.6 thousand. Further movement of the pair quotes, will depend on a large block of macroeconomic statistics in China, which will be published on Saturday. Due to the soft monetary policy of the Reserve Bank of Australia, aimed to the devaluation of the national currency of Australia, we maintain a negative forecast on the Australian dollar.
Central news this week for traders of oil Light Sweet, was the publication of data on oil reserves and oil products in the US. Analysts expected, that inventories would fall by 0.7 million barrels, but they fell by 7.7 million. Therefore, it has provoked a wave of purchases in the market. As a result, the price of Light Sweet was above $94 per barrel. The Organization of Petroleum Exporting Countries (OPEC) kept its forecast correctly, for global oil demand in 2014 at 90.91 million barrels per day, which is 1.2% higher than in 2013. Oil prices continue to be pushed by the expectations at growth of supply from the Middle East and the growth of production in the United States.
With continued growth, the price may reach 95.60. Support is located at 92,80. We expect the price to be delayed in the region of 94.00 dollars per barrel. Support will serve 92,80
Low demand for physical gold in the world continues to push the quotes for gold. Investors prefer to invest in higher yielding, riskier assets. Investors attention may again be drawn to the so called safe haven - gold, in the event of a major correction in the stock markets of Europe and America. Price is consolidating around a strong level of 1242. Further movement will depend on the performance of the Chinese economy. Large block macro statistics from China will come this Saturday. Resistance level at 1265. Support is located at around 1220 .