Market Weekly Update 18/8-22/8
NSFX | Aug 18, 2014 03:53AM ET
Good Morning,
It was a positive week for US stock indices: S&P500 rose 30 points at 1,955.06 (+1.56% weekly) and the DJIA closed on Friday at 16,662.91 (+0.93% weekly), up 153 points. Nasdaq outperformed other gauges and rose 112.75 points at 4,464 (+2.91% weekly), and made a double top at its multiyear high. Precious metals performance is in contradiction with the interest rate policy expected by the financial community. Gold lost 5.5$ at 1,305.5 $/oz (-0.42% weekly) and Silver lost 0.39 cents at 19.55 $/oz (-1.96% weekly). Crude Oil closed off its intraweek low and made a doji candlestick, that shows uncertainty. The commodity lost 41 cents at 97.24 $/barrel (-0.42% weekly). Natural Gas did worse and closed at 3.76 $/BTU (-4.44% weekly).
In the currency market EURUSD lost just 8 pips at 1.3399 (-0.06%). After 4 consecutive negative weeks seems that the rate might have a rally. Cable seems that cannot stop its slide: 6 consecutive losing weeks and the pair closed down 80 pips at 1.6691 (-0.48% weekly). USDJPY rose 34 pips at 102.36 (+0.33% weekly). Multiple tops in USDCHF suggest that the Swiss Franc might gain ground and last week the rate lost 29 pips at 0.9023 (-0.32% weekly). The Canadian dollar also gained against the Greenback and USDCAD lost 73 pips at 1.0899 (-0.67% weekly). Both Kiwi and Aussie dollar gained ground against the US dollar: NZDUSD rose 27 pips at 0.8486 (+0.32% weekly) and AUDUSD rose 45 pips at 0.9320 (+0.49% weekly). Risk appetite still high in the equity market, considering that the Volatility Index (VIX) closed last Friday at 13.15. In the FX market there are pairs that are making a correction after they reached multiyear highs and is the case of GBPUSD, EURUSD, NZDUSD and the next might be GBPJPY. This pattern will see likely a strong US dollar. In case risk appetite will decrease then the Swiss Franc and the Japanese Yen will rise as well. This situation usually is linked with a weak global equity market. Gold is down 32% from its peak reached on summer 2011 and it should benefit from a global dovish interest rate policy. On Monday morning will be released at 09:00 GMT the EU Trade balance and at 14:00 GMT in US will be released the NAHB Housing Market Index. On Tuesday night at 01:30 GMT Aussie dollar traders should pay attention to the RBA Meeting’s Minutes. Another important macro data will be the RBNZ Inflation Expectations at 03:00 GMT. At 08:30 the British Pound likely will increase its volatility with the CPI data. At the same time will be released the PPI and DCGL House Price Index and Retail Price. In US at 12:30 GMT traders will pay attention to housing data (Building Permits and Housing Starts) and to Consumer Price Index as well. At 12:55 GMT will be released the Redbook Index. At 23:30 the Reserve Bank of Australia’ Governor Stevens will hold a speech and is likely that the Aussie dollar will increase its intraday range. On Wednesday morning the most relevant data of the European session will be the Bank of England Minutes at 08:30 GMT. In the afternoon, during the US session, the weekly appointment with EIA Crude Oil Stocks change at 14:30 GMT. At 18:00 GMT, the most waited event of the day: The FOMC Minutes. Maybe the US dollar will stop its rally against the Euro and the British pound. On Thursday the Jackson Hole Symposium, a forum that is held at annual frequency since 1891, should be the generator of many news flow considering that many Central Bankers, policy experts and academic will attend the event. During the Asian session will be released the Chinese PMI Manufacturing, at 01:45 GMT. At 06:00 GMT the Swiss Trade Balance will kick off the European session followed at 08:00 GMT by the Eurozone Markit Manufacturing PMI and Services. At 08:30 GMT UK Retail Sales data. At 12:30 as usual, US Jobless Claims followed at 13:45 GMT by the US Markit Manufacturing. At 14:00 GMT will be released the Eurozone Consumer Confidence; at the same time US Existing Home Sales data and Philadelphia FED Manufacturing Survey. At 14:30 GMT the data regarding Gas Storage Change. On Friday will continue the Jackson Hole Symposium and the economic calendar will offer data regarding the Canadian economy. At 12:30 GMT will be released the CPI index and Retail Sales.
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