04.12.2013- The market is waiting for data on unemployment and the Fed meeting
Yesterday the U.S. markets closed in the red zone. The reason for the decline was the profit fixation and the desire not to rush with action before the release of important macro data. We remind that today will be published the data on non-farm payrolls in the U.S (13:15 GMT), trade balance (13:30 GMT) and the index of business activity in non-manufacturing sector in the U.S. (15:00 GMT). But the main news this week in the U.S. will be the release of unemployment rate, which will be published on Friday. Further measures of stimulating the economy will depend from these indicators on labor market. In Europe the major indexes fell to three-month low. The reasons for decline were the same fears of reduction of quantitative easing. The dynamics of indexes was also influenced by statistics of euro area countries. Thus, the industrial producer prices in the euro area in October fell for the third month in a row. The index of producer prices on the domestic market fell by 1.4%. This happened after a decline of 0.9% in August and September. It was expected that prices would fall by 1% in October. Energy prices fell sharply by 3.6%, while prices for semi-finished products fell by 1.8 percent. Prices for consumer durable goods rose by 0.5%. On this background EUR/USD has recouped losses that incurred in the morning and now the price is consolidating near 1.36. We expect the movement to continue in the rising channel. Support stands at 1.3525. Besides the data from the U.S, the dynamics of prices today will be affected by the non-manufacturing PMI (09:30 GMT), retail sales and preliminary data on GDP growth in the Euro area (10:00 GMT). ThyssenKrupp AG shares tumbled 2.4% after news that Germany's largest steelmaker announced that will issue 51.5 million of new shares to raise capital. Shares will be offered to German and foreign institutional investors by the underwriters Commerzbank and JPMorgan Chase & Co. In the UK, the activity in the construction sector grew in November for the seventh consecutive month. The index of business activity in the construction sector came at around 62.6 at the forecast of 59.3. Growth rates were highest in more than six years. It was facilitated by the sharpest increase in housing construction since 2003. Price of a pound was not able to overcome the resistance level of 1.6440. Apparently, investors have decided to wait for the decision of the Bank of England on interest rate that will be published tomorrow at 12:00 GMT. Decrease is still limited by the level of 1.6350. We expect that the price will continue to move within the local rising channel. GDP growth in Australia slowed to 0.6%, while expected growth was 0.7%. On this background the Australian dollar continued its decline in a downtrend. Slower growth is another stimulus for loose monetary policy of the Reserve Bank of Australia. Our target on reduction of Australian dollar remains at 0.89. Growth in case of correction is limited by the level of 0.9170. The sharp decrease of the USD/JPY today resulted in decline of the Japanese stock market by 2%. As we expected, the correction took place inside the rising channel. Further movement of the pair will be determined by news from the U.S. labor market. A lower limit of the upward channel will serve as support. In case of absence of unforeseen events, we expect the growth to continue within the channel. Oil prices have risen strongly in anticipation of the OPEC meeting. The participants of the meeting, which will take place in Geneva today, will decide the future policy of the cartel. In addition, today we should pay attention to the report on crude oil inventories in the U.S. Decline is expected by 0.5 million barrels. During the last 10 weeks was registered an increase of inventory by 10%. In the long term, we maintain a negative outlook on the oil prices. Gold prices yesterday reached its lowest level since the beginning of July. The main factor that puts pressure on prices is the possibility of reducing the quantitative easing program in the U.S. Demand in Asia, though is still high, but buyers are in no hurry to accumulate positions because they expect further decline in prices. Growth in risk assets has not yet given the opportunity to talk about the reorientation of investors in gold, but in the case of falling of stock markets, many people will return to the "safe haven" in the form of gold. Closest targets for gold are the levels of 1200 and 1180.