Yesterday, European stock markets slipped to two-month low. Central news of the day was the message on reduction of industrial production in the euro area in October by 1.1%. Experts predicted that the figure will grow by 0.4%. In the U.S. the data have been mixed. Thus, the number of unemployment claims have risen to 368,000, against a previous figure of 300 thousands and 321 thousands forecasted. This jump in the number of applications was the highest during this year. Worsening in unemployment, supports hopes that the reduction of quantitative easing program may be postponed until March. As a positive for the market was considered a report on retail sales in November. Figure for the previous month increased by 0.7% against 0.6% growth expectations. Compared with the same period of the last year, the sales increased by 4.7%. This indicator is very important, because it shows the real growth in demand for products that depends on the positive attitude of buyers and most importantly the increasing purchasing power of the population. Meanwhile, inventories increased by 0.7% in October. Expected growth was by 0.6%. On this background the dollar strengthened, and the euro has finally started to correct. We expect further movement inside the rising channel. The nearest support levels are 1.3730 and 1.3660. Today, the key news of the day will be the release of data on the level of employment in the euro area in the third quarter (10:00 GMT). We should also pay attention to the industrial inflation in the U.S. (13:30 GMT).
The British pound was corrected due to the strengthening of the U.S. dollar. The index of leading economic indicators in the UK showed an increase by only 0.4% against the previous index rising by 1.7%. Now the price is above the support level of 1.6325. With the aim of further decrease to the level of 1.6260. Growth is limited by a local maximum at 1.6460. USD/JPY has broken through the strong resistance level 103.40 and rushed up because of dollar strengthening. It is worth recalling that in case of cutting down the quantitative easing program in the U.S., the dollar will continue to strengthen. This fact together with ultrasoft policy the Bank of Japan should lead to a devaluation of the yen. We maintain our bullish outlook for the price of the pair. The Australian dollar followed other currencies and has fallen in price against the U.S. dollar. Psychological support level of 0.90 was fairly quickly broken. The price has almost reached the nearest target level of 0.89. We expect a further depreciation of the national currency in a downtrend, due to the policy of the Reserve Bank of Australia, aimed at lowering cost of a local dollar. In case of correction the dollar possibly can get to 0.90.
Oil is consolidating near the level 97.30 amid rising retail sales in the U.S., which gave a clear signal that the world's largest economy shows steady growth, which accordingly leads to increased consumption of petroleum products. Meanwhile, the oil quotations are pressured by a number of fundamental factors, such as possible reduction of quantitative easing in the USA, the growth in oil production associated with the use of new technologies, as well as the expectation of significant growth of oil exports in Libya and Iran. After breaking through the support level of 97.00, the price will rush to the target level of 95.20.
Reserves of the world's largest gold exchange-traded fund SPDR Gold Trust declined by 2.1 tons to 833.61 tons, and once again, updated the minimum since 2009. Gold prices have not reached the target level of 1220 and now are consolidating above 1225. The main reasons for the decline of prices now are the fears and speculations on the subject of U.S. bonds purchasing program reduction. The meeting of the Federal Open Market Committee will be held on December 17-18. There will be determined the fate of stimulating the U.S. economy in the nearest period of time. In case of further decrease, the price can reach the level of 1200. Growth is limited by the resistance at 1240, 1250 and 1265.