• The Forex, Binary Options Forum - welcomes you to our Community!

    DigitalCashPalace Forum is dedicated to discussions about Forex, Binary Options, commodities, stocks related.

    Please take a look around, and feel free to .

Daily market overview by IFC Markets

IFCMarkets

Broker Representative
US stock market ended the session lower for the fourth consecutive day as a weaker than expected December retail sales report released before the start of trading sparked investor concern over the pace of US economic growth. As retail sales slumped in December by the most in almost a year investors are worried that the slide in oil prices hasn’t resulted in a boost to consumer spending. The ICE US Dollar Index, a measure of the dollar’s strength against a trade-weighted basket of six major currencies, fell 0.22% to 92.1030. Today at 14:30 CET Initial Jobless Claims for the week ended January 10, Continuing Claims for the week ended January 3 and December Producer Price Index will be released in US. The unemployment claims are expected to fall, the tentative outlook is positive for US dollar and lower unemployment readings will likely contribute to dollar strengthening. At 16:00 CET the Philadelphia Fed Manufacturing Index for January will be released. The consensus expectation for the index is a decline to 19.1 from previous month’s 24.3 level, a lower than expected reading may negatively affect the US dollar.

DJI.z.15.01.2015.jpg


European stocks fell Wednesday as investors weighed the World Bank’s forecast of slower global growth and lower than expected retail sales data from the US, the world’s largest economy. Euro recovered from session lows after data confirmed that factory output across the euro-zone rose for the third straight month in November. As the euro-zone economy struggles to stave off deflation, the pressure on euro remains strong with investors looking forward to the European Central Bank’s January 22 meeting when additional measures for expanding monetary stimulus program are expected to be announced. Today at 10:00CET the 2014 German GDP will be released, and at 11:00 CET November euro-zone Trade Balance will be published. The tentative outlook is positive for euro.

Nikkei is rising today after shedding more than 400 points in the previous two sessions. Yen advanced to its highest level in four weeks against dollar on disappointing retail sales in the US. The demand for safe haven asset may contribute to further yen strengthening if global equity markets continue to fall.

Oil rebounded yesterday from five and half year low as options expiration bolstered activity. The rebound is seen more technical as indicators signaled that oil was oversold. There are no signs global demand is picking to eliminate the supply glut. US crude production rose last week to highest level since 1983 even as prices slumped. Furthermore, Iraq plans to double exports to 300,000 barrels a day within weeks from its northern Kirkuk oil fields and continue boosting output further south.

Copper led a rebound in base metals after slumping to the lowest in more than five years as central bank data released in China indicated credit growth to 1.69 trillion yuan ($273 billion).

C-COPPER.z.15.01.2015.jpg


Natural gas rose for the third day in the biggest surge in 11 months as a blast of Arctic weather predicted to swoop into the US signaled increased demand after a mild December. Today at 16:30 CET the EIA Natural Gas Storage Change for the week ended January 9 will be published, with an expected decline of 131 billion cubic feet. A bigger than expected actual number may result in increase in gas prices.
 

IFCMarkets

Broker Representative
Friday was marked by growing quotes on international stock markets. The Michigan consumer sentiment index in January outstripped forecasts and suddenly reached 98.2 points, renewing its 11-year maximum. All the other American macro-economic data also appeared to be positive. The month to month inflation rate in December decreased by 0.4% (this has become the maximum decline since December 2008). CPI yoy in December slipped to the lowest level since October 2009 and made up 0.8%. This is far lower than the Federal Reserve System target level of 2%. The data strengthen the expectations of the refinancing rate to be increased this year. Please note that though industrial output in December was comparatively weak, they met the target. Despite the upturn on Friday, theDow Jones, the S&P 500 and the Nasdaq indices fell by 1.3, 1.2 and 1.5 percent respectively, drawing the weekly balance. Earlier, investors responded negatively to the decrease in retail sales and, as fairly, to GDP forecasts. American stock markets turnover was 4% above the 5-day average and made up 7.7 billion shares. Today American exchange markets are closed due to the American public holiday, Martin Luther King Day.

eurchf1901.png


Today European stock indices continue to grow at the prospect of 500-550 billion euro emission which is likely to be announced on Thursday at a regular session of the European Central Bank. As exchange markets are closed and Thursday is still far ahead, the European Union observes a rather weak share price growth. Significant macroeconomic data are not expected to be published today. On Friday euro hit a new 11-year low as a result of the National Bank of Switzerland decision we had written about in our previous overview. Today the European currency is slightly moving up. We believe that until the next ECB meeting takes place, euro is likely to be traded sideways.

usdjpy1901.png


Nikkei has risen this morning together with other world stock indices. It was partly encouraged by the growth of the Japanese consumer confidence marker in December, which slightly outstripped forecasts. JPY/USD slipped in expectation of the Bank of Japan meeting (which is to take place January, 20-21). Investors anticipate the positive forecast of the core inflation rate for the current year, which is likely to decline from 1.7% predicted in October to 1.5%. Herewith, on Wednesday morning the Bank of Japan holds the final press conference and may declare the augmentation of emission and the raised GDP forecast. Analysts do not expect any particular macroeconomic data concerning Japan to be announced tomorrow.
Chinese officials will publish a report on GDP for the fourth quarter along with industrial production and retail sales data in December. In our estimation, forecasts are negative. There is a risk that the GDP growth will not meet the Chinese government’s expectations or even reaches its 24-year low. In this case, commodity futures prices may drop.

As we assumed in our previous overviews, oil and gold prices continued to grow. According to Baker Hughes, the oilfield services company, the number of US-based oil wells reduced by 55. This reduction is the second biggest within 24 years and has already been the sixth one in a row. We recall that the week earlier this number of oil wells decreased by 61. At the moment, there are 1366 operating oil wells, their quantity has been at its minimum since October 2013. We suppose that the rundown in drilling is absolutely logical. When oil price had fell by almost 60% within 6 months, the majority of oil fields became unprofitable. The dwindling number of wellsites may result in oil output declining and the price increasing. According to the U.S. Commodity Futures Trading Commission, the number of net long positions for WTI crude oil rose by 12% last week.

gold1901.png


Gold hit its 4-month high at the prospect of the expected euro printing. The SPDR Gold Trust weekly reserves gained 1.9% and made up 730.9 tons. This has been the max growth since May 2010.
 

IFCMarkets

Broker Representative
US stock markets were closed on Monday for the Martin Luther King Jr. holiday. When trading resumes today investor attention will likely be focused on earnings reports of big corporations like Morgan Stanley, Johnson & Johnson, IBM and Netflix. Today at 16:00 CET the January Housing Market Index by National Association of House Builders will be released in US. The Home Builders confidence index, which is seen as a proxy on housing construction, has been above 50 for 6 straight months and is expected to rise to 58 from 57 in December. The tentative outlook is positive for US dollar.

European stocks rose on Monday on expectations the European Central Bank will announce broad measures for expanding the monetary stimulus program at its meeting on Thursday. The Stoxx Europe 600 posted its highest close in seven years. Investor sentiment was boosted after French President François Hollande said policy makers at the ECB meeting on Thursday “will take the decision to buy sovereign debt, which will provide significant liquidity to the European economy and create a movement that is favorable to growth.” In a note released on Monday Societe Generale projected the quantitative easing package will eventually include 400 billion euros ($465 billion) of private assets, and €500 billion to €600 billion of sovereign bonds. Market participants on the other hand are concerned the additional stimulus measures announced by the ECB at its policy meeting will fall short of analyst forecasts as the euro advanced against the dollar. The euro will likely trade sideways till the ECB meeting clarifies further policy actions by the regulator. Today at 08:00 CET the German and Euro-zone Zew Economic Sentiment Index for January will be published. The indicators are expected to grow and the tentative outlook is positive for euro.

Nikkei is rising today after better than expected growth data were released in China and investors weighed the prospect of further monetary easing measures by the ECB. China’s GDP rose 7.4 percent in 2014 from a year earlier, and the industrial production last month grew 7.9 percent from a year earlier, compared with a 7.4 percent forecast. The yen declined for a third day versus the dollar as better than expected growth data from China reduced the demand for haven assets. Tomorrow morning at 01:00 CET Bank of Japan Monetary Policy Statement is expected.

NIKKEI.z.20.01.jpg


Oil fell on Monday as J.P. Morgan cut its 2015 average Brent crude price forecast to $49 a barrel from $82, saying in a note oil could trough in March at an average of $38 a barrel followed by a U-shaped recovery, rising to $90 a barrel in 2019. There are no signs the global demand will rise in the near term to clear the supply glut on the backdrop of the global economy slowdown. The International Monetary Fund cut its 2015 global growth forecast to 3.5 percent from an earlier estimate of 3.8 percent and revised downward its China outlook to 6.8 percent from 7.1 percent.

OIL.z.20.01.2015.jpg


Gold prices are rising today after slipping on Monday. Weak equity markets and the prospect of further stimulus measures from ECB contribute to sustained safe haven demand for gold. Copper is rising today after better-than-expected growth data in China, the world’s largest consumer.
 

IFCMarkets

Broker Representative
US stocks recorded marginal gains on Tuesday after pairing big early losses as investors appeared uncertain about the prospects of the monetary stimulus program in Europe. The European Central Bank is expected to announce further measures of monetary expansion to support the euro-zone economy, but investors are concerned that the scope of the measures will not be sufficient to combat deflationary pressures. The dollar strengthened after the International Monetary Fund raised its US growth forecast to 3.6 percent expansion in 2015, from 3.1 percent. Today at 13:00 CET the Mortgage Applications for the week ended January 16 by Mortgage Bank Association will be released in US. And at 14:30 CET the December Building Permits and Housing Starts will be published, the tentative outlook is positive for US dollar as both indicators are expected to grow.

S&P500.z.21.01.2015.jpg


The European stocks advanced, hitting multi-year highs on expectations the ECB will launch a new phase of monetary stimulus program. Market participants expect the ECB will announce a program of around €500 billion to €750 billion of sovereign bond purchases to revive slowing Eurozone economy. The euro traded near an 11-year low reached last week on anticipation of the launch of the ECB government bond purchases program. Today at 10:30 CET the November Average Weekly Earnings Index, Unemployment Rate and Employment Change will be published in UK. With the average weekly earnings expected to rise and unemployment rate forecast to fall, the tentative outlook is positive for British Pound. The Bank of England minutes are also expected to be released at the same time. As disinflationary pressures have become apparent with data showing falling CPI levels, the minutes may reveal a change in the vote split of the Monetary Policy Committee, where the votes in favor and against a rate hike were split two to seven. If the split disappears reflecting increased dovish stance in favor of waiting longer for an interest hike, this may negatively impact the Pound.

Japan’s Nikkei surged on Tuesday as investor sentiment was buoyed by China's better-than-expected growth data and expectations of ECB monetary stimulus plan. The yen gained against the dollar, snapping a three-day drop, after Bank of Japan decided not to expand further its monetary stimulus program and keep the pace of monetary base expansion at 80 trillion yen ($679 billion). Instead, it extended for a year two loan schemes aimed at encouraging banks to lend more, expanding one of them by 3 trillion yen. The Nikkei is falling today as investors are taking profits.

Oil prices fell as the IMF cut its global growth outlook and Iraq’s Oil Minister said Iraqi crude production surged to a record 4 million barrels a day and plans are to boost exports further. On the backdrop of falling oil prices, oil companies are reviewing their capital expenditure and shale oil exploration plans. US drillers cut the number of oil rigs in service by 209 since December 5, the steepest six-week decline since Baker Hughes Inc began tracking the data in July 1987. Analysts estimate lower prices will slow the US shale oil output growth in the second half of this year.

Gold futures prices rose above $1,300 for the first time since August on investor concerns over worsened global growth outlook after IMF made steepest cuts in global growth forecasts.

XAUUSD.z.21.01.2015.jpg
 

IFCMarkets

Broker Representative
World stock markets were mixed on Monday. US stocks recorded small gains after choppy trading session. The investor optimism was underpinned by the launch of the sovereign bond-buying program last week by the European Central Bank. The main indexes closed with marginal gains after swinging between small gains and losses. The ICE dollar index remained unchanged at 94.7720. The investors discounted the Greek election results clearly considering them no threat to stability of financial markets. Investor attention will be focused on earnings reports this week and the policy-setting Federal Open Market Committee two-day meeting starting today. The Fed is expected to leave interest rates unchanged. Today Apple and Yahoo will report their earnings and a number of indicators including the Durable Goods Orders, Case-Shiller 20 City Home Price Index and, Markit’s Composite and Service PMIs and New Home Sales will be published in US. At 14:30 CET December Durable Goods Orders will be released. The tentative outlook is positive for US dollar. At 15:45 CET Markit’s PMI January preliminary data will be released, and 16:00 CET December New Home Sales and January Conference Board’s Consumer Confidence index will be published in US, the tentative outlook is positive as indicators are expected to rise.

S&P500.z.27.01.2015.jpg


European stocks closed higher with Stoxx Europe 600 gaining 0.6%, recording its eighth straight win. On Monday anti-austerity Syriza party formed a coalition with the anti-bailout Independent Greeks party. The euro remained higher against most of 16 major currencies. Investors consider the possibility of Greek exit from euro-zone unlikely, as euro-zone finance ministers signaled their willingness to do a deal with Tsipras with possible debt-maturity extension but no debt writedown. Today at 10:30 CET fourth quarter yoy GDP preliminary data will be released in UK, the tentative outlook is positive for the Pound with a forecast of 2.8% growth rate against 2.6% previous quarter.

Nikkei fell 0.3% on Monday, and is rising today as investors expect the earnings reports from Japanese exporters will reflect the gains from a weaker yen. Economy minister Akira Amari said today that the central bank was not constrained by a loose schedule of about two years for achieving its inflation goal with falling energy prices likely delaying efforts to reach its target. The comment indicates that the Bank of Japan is not considering extra monetary stimulus measures, providing some extra support to yen.

Oil fell on Monday as concerns over Greek election possible fall-out for euro-zone economy added to worries about slowing global economy. Earlier Monday, the Organization of the Petroleum Exporting Countries’ Secretary-General Abdalla el-Badri said oil at $200 a barrel would be possible if producers don’t invest in new supply. He indicated $45 - $55 as likely the bottom, with a rebound likely “very soon”, according to Reuters. Experts expect the oversupply to persist at least through the first half of 2015. In its January outlook the US Energy Information Administration forecast Brent crude to average $58 a barrel this year and $75 a barrel in 2016.

Gold fell for a third day to the lowest in a week before Federal Reserve policy meeting and as European finance ministers agreed to work with the new Greek Prime Minister to restructure the Greek debt repayment schedule to keep the country in the euro-zone.

XAUUSD.z.27.01.2015.jpg
 

IFCMarkets

Broker Representative
Global stocks dipped on Friday. The USA Q4 GDP deepened worse-than-expected 2.6% after 5% rise in Q3. The year 2014 marked a 2.4% surge in economy, which is 2.2% higher than in 2013. Most investment banks consider the US Q1 GDP to ramp up by 2.5% this year. This week Dow and S&P 500 lost 2.8%, Nasdaq was down by 2.6%. As of January, Dow, S&P 500 and Nasdaq declined by 3.6%, 3.1% and 2.1% respectively. American stocks turnover on Friday was 22% over its 5-day average and made up 8.5 billion shares.

dji0202.png


Significantly, the USA dollar index was weakly affected by macro-economic statistics. In January it recorded 7 straight months of expansion which has been the longest constant surge period since 1971. Our analysts believe it to be driven up by negative data from Greece that weakened the euro. Again, a rather moderate GDP advance was countervailed by other positive indicators. Q4 consumer spending added 4.3% (the best result since Q1, 2006). Michigan’s Consumer Confidence index has risen to its strongest since January 2004. We suppose that it was encouraged by cheap fuel, which has plunged by 43% since July 2014. Amid stable low inflation the Fed rate hike is more likely to happen. Today at 13:30 CET the US Personal Spending and Personal Income for December will be issued: indicators may be negative. At 14:45 CET the Manufacturing PMI index by Markit will be released, followed by the ISM Manufacturing PMI for January and Construction Spending for December, which are to be announced at 15:00 CET. The tentative outlook is neutral.
This morning European stocks have surged together with the US futures. New Greek authorities stated that harming banks or replacing bank managers with party officials is not among their plans. The announcement gave a 5.7% rise to the ATG stock index, which boosted other indicators. Several European and other countries’ Manufacturing PMI have been published this morning. They appeared to be neutral; no important economic statistics is expected today in Europe.

Nikkei slipped today amid Seiko Epson and Konica Minolta low earnings. These companies’ shares dropped 10.1% and 9.4%, respectively. The strengthening yen and Chinese negative statistics added additional pressure on stocks. Market participants expect little important data on Japan this week.

The Chinese Manufacturing PMI suddenly plunged below 50 points, for the first time over 2.5 years, and equaled to 49.8. That had a negative effect on quotes of several commodity futures.

brent0202.png


Global oil prices rose due to the strike of American oil workers (the largest one since 1980). There are 3.8 thousand participants, working at 9 refineries that account for 10% of petroleum production in the US. The price was also affected by Baker Hughes announcement of 94 oil wells closed last week. This is the biggest figure since 1987 and the reduction continues for 8 straight weeks. There are 1223 operating oil pumps left: the 2014 high of 1609 oil pumps was reduced by 1/4, reaching the minimum since 2012.

wheat0202.png


Grain futures continue to retreat on the back of good weather forecasts. We suppose that they are also negatively affected by cheap oil, which is a part of prime cost for grain production. Low oil prices also slashed the demand for biofuel. Investors consider farmers to opt for grain instead of planting biofuel crops. Currency factor in crop-producing countries should be mentioned as well. The Brazilian real, the Russian ruble and the Canadian dollar sagged against the US dollar.
 

IFCMarkets

Broker Representative
US markets recorded solid gains on Monday after a choppy trading session as investor sentiment improved with rebounding oil prices. Energy sector shares led the gains. Markets discounted disappointing economic news. The ISM report showed that manufacturing activity slowed in US, the manufacturing index fell to 53.5% in January from 55.1% in December, marking the worst performance in a year. At the same time, consumer spending didn’t increase with the falling oil price as it was widely expected - it fell 0.3% in December while personal income rose 0.3%. The Federal Reserve’s preferred inflation measure, the price index for personal consumption expenditures, fell 0.2% from November. The commerce Department report showed construction spending rose 0.4% in December, less than expected. The latest batch of economic data indicate that the US economic growth is slowing down. US dollar weakened against commodity currencies as oil rose. Today at 16:00 CET December Factory Orders will be released in US. The outlook is negative with the factory orders expected to decrease further after falling for four consecutive months.

European stocks edged higher on Monday. The gains were led by energy issues. The Markit PMI manufacturing report indicated the euro-zone manufacturing sector avoided contraction in January with activity expanding at a marginally higher pace compared with the previous month. After much investor anxiety about the negative impact of newly elected Greek government’s calls for Greek debt write-off on eruro-zone economy, Greek Finance Minister Yanis Varoufakis on Monday unveiled proposals to swap Greek debt for new bonds linked to economic growth. The proposal essentially is aimed at restructuring Greece’s 315 billion euros in foreign debt to ease the burden of repayment. Euro traded higher against dollar on Monday after the Greek Prime Minister Alexis Tsipras reassured the public that Greece would not leave the euro-zone. Today at 10:30 CET January Markit’s Construction PMI will be released in UK. The tentative outlook is positive with the construction sector expected to expand compared to the previous month. At 11:00 CET December Producer Price Index for Euro-zone will be published by Eurostat, the tentative outlook is negative with producer prices expected to fall for third consecutive month.

S&P500.z.03.02.2015.jpg


Nikkei is falling today after reports on US economic performance fell short of investors’ expectations. The airline companies and rubber product makers, which benefited from declining oil prices, continued to drop after oil prices rose strongly again on Monday. Yen traded lower against the dollar on Monday, pairing the gains following the report over the weekend, which showed China’s manufacturing activity contracted.

The Reserve Bank of Australia cut its cash rate today to 2.25% from 2.5% in a surprise move to keep a downward pressure on its currency. As a result, Australian dollar slumped against US Dollar and Japanese yen.

Oil continued to rise on Monday after recording an 8% gain on Friday, prompted by reports of another sharp decline in the number of drilling rigs in operation in US.

Gold futures were flat on Monday after the precious metal recorded its biggest monthly gain in three years last week. Gold rose more than 8% in January with increased demand for the safe haven asset as investors weighed the outlook for global equity markets on the backdrop of increased uncertainty and signs of slowing global growth.

XAUUSD.z.03.02.2015.jpg
 

IFCMarkets

Broker Representative
US markets surged on Tuesday as rising oil prices lifted energy shares. Energy issues gained 2.8%, marking fourth-straight advance. Investors' optimism was boosted also by developments in Greece’s debt negotiations and automaker’s reports of increases in January car sales. Markets discounted the negative economic news indicating the factory orders fell in December 3.4%, more than the 2.5% decline forecast. The ICE dollar index, a measure of the US currency unit against a basket of six major currencies, fell 0.9% with easing of worries about Greece’s debt. Today at 14:15 CET January Employment Change will be released in US by ADP Inc. The tentative outlook is neutral as private employment is expected to grow by 225000 after rising by 241000 in December. At 15:45 CET the Markit PMI Services final index will be released, with a forecast of a marginal upward revision to 54.1 from the preliminary reading of 54.0. And at 16:00 CET ISM Non-Manufacturing PMI for January will be released. The tentative outlook is neutral for the dollar.

.
DJI.z.04.02.2015.jpg


European stocks closed near seven year high after the Greek government proposal indicated it backed down from earlier calls to write-down Greece’s bail-out debt. Greek government proposed to swap bail-out debt for growth-linked bonds instead, aimed at shifting the burden of repaying the debt further into the future by replacing some of the current debt with growth-linked bonds and perpetual bonds. Euro traded higher on signs that the negotiations will soon end in a mutually acceptable compromise. Today from 9:45 to 10:00 CET final January Services and Composite PMIs for euro-zone countries including Germany, France, Italy and Spain and Euro-zone itself will be released by Markit. The tentative outlook is positive with the euro-zone services sector forecast to expand over the previous month. At 10:30 CET January Services and Composite PMI will be published in UK. The tentative outlook is positive. And at 11:00 CET euro-zone Retail Sales for December will be released by Eurostat. The tentative outlook is positive.

Nikkei is rising today extending its recovery from Tuesday's one week low. Financial shares are leading the gains as banks outperformed on strong earnings from Mitsubishi UFJ Financial Group. Yen traded lower against dollar staying in the familiar range of ¥117- ¥119.

Oil surged on Tuesday on speculation that a sharp decline in US drilling activity will result in supply declines. BP Plc announced it may spend less than previously planned after prices slumped more than 50 percent since June. While oil companies are adjusting their capital expenditure plans in the face of falling oil prices, market observers note that it will take time to balance the projected global surplus of roughly 1.5 million barrels a day. Currently global inventories are building as more unused oil goes into storage in many countries. Today at 16:30 CET Crude Oil Inventories change for the week ended January 30 will be released by the US Energy Information Administration. A report from the industry group American Petroleum Institute yesterday showed US crude stocks rose more than 6 million barrels last week.

OIL.z.04.02.2015.jpg


Gold slipped on Tuesday as safe-haven appeal faded with Greece taking a much more accommodating stance on its standoff with the European Union on repayment of debt.

Commodities rose as surging oil prices boosted investors' optimism. Sugar led increases in agricultural commodities, with New York futures gaining as much as 3.7 percent.
 

IFCMarkets

Broker Representative
US stocks pulled back on Wednesday on the backdrop of resumed slide in oil prices and news that European Central Bank will no longer accept Greek bonds as collateral. Energy, utilities and health-care stocks led the losses, with six of 10 main sectors ending the session with losses. The US economy added 213 thousand jobs in January in private sector. Though the increase was less than expected the report highlights the relative strength of the labor market which keeps adding jobs even as slumping energy prices hurt industries exposed to oil. The Institute for Supply Management’s non-manufacturing index advanced to 56.7 from a six-month low of 56.5 in December, indicating that services sector kept expanding at a slightly higher pace. The dollar strengthened with the dollar index pairing losses from the previous day. Today at 14:30 CET December Balance of Trade, Initial Jobless Claims for the week ended January 31 and Continuing Claims for the week ended January 24 will be published in US. The trade gap is forecast to decrease to -38.0B from -39.0B in previous month. The tentative outlook is moderately positive for the dollar with jobless claims expected to increase to 290000 from 265000 in the previous week, staying below the four-week average of 298500.

S&P500.z.05.02.2015.jpg


European stocks ended Wednesday’s choppy session mostly higher. The Stoxx Europe 600 index rose 0.5%, extending gains into a third straight day. Euro tumbled after the ECB revoked a waiver that had allowed Greek banks to use the country’s junk-rated sovereign debt as collateral for cheap loans. The decision by the ECB to reimpose minimum credit rating requirements for Greek bonds effectively shifts the burden on to the Greek central bank to finance its banks and came after the meeting of Greece’s Finance Minister Yanis Varoufakis with the ECB President Mario Draghi. Greece has also started negotiations with the International Monetary Fund on the debt-swap deal to exchange existing government debt with bonds linked to future growth. Data released on Wednesday indicated that euro-zone economy expanded more rapidly in January than previously estimated, with the retail sales rising for a third straight month in December and at the fastest pace in almost eight years. Today at 11:00 CET Retail PMIs for Euro-zone, Germany, France and Italy will be released by Markit and at 13:00 CET the Bank of England Interest Rate Decision will be announced. No change in policy is expected.

Nikkei is falling today as investors decided to take profits following earnings announcements while investor confidence was undermined by news of the ECB hardline stance on Greek debt and the resumed fall in oil prices. The yen rose against the dollar.

China’s central bank cut the required reserve requirement by half a percentage point to stimulate lending and the broader economic growth.

Oil plunged on Wednesday after advancing for four consecutive sessions as US stockpiles grew by more than expected. On Wednesday, the U.S. Energy Information Administration said crude stockpiles rose 6.3 million barrels for the week ended January 30, almost twice as much as expected. The inventory buildup indicates that the production levels are still high to rebalance the oversupply glut.

Gold and other metals prices settled higher on Wednesday buoyed by the China’s central bank decision to cut the reserve-requirement ratio for banks to free more reserves for increased lending aimed at boosting economic growth.

XAUUSD.z.05.02.2015.jpg
 

IFCMarkets

Broker Representative
US markets were traded lower on Friday. Unemployment rate in January rose to 5.7% from 5.6% in December. Non-Farm Payrolls dropped to 257 thousand from 320 thousand. Investors consider the most important thing that for the first time since 1994 Non-Farm Payrolls has been outperforming the level of 200 thousand for 11 consecutive months. They deem it indicates stable economic development and raises the possibility of the Fed rate hike in the second half of 2015. As we have already mentioned, the expected rate hike pushes the US dollar index higher and stock prices lower, as observed on Friday. The Dow added 3.8%, showing the record close since January 2013. The trading volume on US exchanges was 3% lower than the 5-day average and made up 7.7 billion stocks. Major American macroeconomic data is not expected today. US stock indices futures are currently traded considerably lower.

European stock indices are down today for the second straight day. The German statistics released on Friday was negative. German industrial production in December was worse-than-expected. Positive data on German Trade Balance reported this morning has made up for these losses. In our opinion, European stocks are down because of the Greece situation risks. EU Finance Ministers will hold a meeting regarding the economic situation in Greece on February 11. The current loan agreement between Greece and the EU is expired on February, 28. To extend the agreement, the request should be sent by February 16th inclusive. Recall that new Greek authorities insist on writing off the external debt in the amount of 240 billion euro, and not on the debt restructuring as proposed by the European Union. Significant economic data will not be reported today in the EU.

usdjpy0902.png


Nikkei upped on Friday as yen weakened greatly against the US dollar following the US labour market data release. Today it has opened with a gap up on positive Japanese macroeconomic data. Stocks of large exporters such as Honda Motor and Nissan Motor added about 1% each. However, after higher opening Nikkei started to fall in tandem with the global downtrend, helped by weak Chinese data. Today at 23:50 СЕТ Q4 Bank lending will be reported in Japan.

Chinese exports in January tumbled 3.3%, while imports plunged 19.9%. Of course, the country posted a record trade surplus. However, investors believe that such trade performance indicates a possible production slowdown. It may drag lower commodity futures, especially copper. Copper imports to China in January amounted to 410 thousand, almost unchanged compared with December figures. Nevertheless, it dipped 24% compared with January 2014.

brent0902.png


Crude oil prices slipped following dismal Chinese Trade Balance release. Oil imports in January reached 6.6 million barrels per day, only 0.6% below the level of 2014.

gold0902.png


According to the US Commodity Futures Trading Commission (CFTC), last week gold and silver net long positions reduced for the first time over six weeks. Note that a week earlier gold net long position hit the two-year high. Gold prices added 8% in January, the record monthly growth over three years. We deem the possible increased Greek risks may bolster the precious metals demand.
 

IFCMarkets

Broker Representative
US stocks retreated on Monday as concerns over possible fall-out from standoff between European Union and Greece weighed on investor confidence and market participants digested the disappointing economic news from China. Greece’s government announced plans to cancel about a third of the debt-reduction and economic reform measures imposed as conditions for its international bailout. Investors are concerned that Greece will default on its debt and may even leaver the euro-zone, which will have a negative impact on euro-zone economic growth and may even prompt other European countries to renege on their bail-out promises. The surprise trade data out of China, showing that exports slid 3.3% and imports fell more than 19%, indicate falling demand from abroad and home. On the backdrop of slowing overseas economic growth, US economy is proving resilient as it created 257 thousand jobs in January and more than a million jobs over the past three months, developments which are in line with Federal Reserve’s assessment of steadily improving US economy. More than 60 companies in the S&P 500 will report their earnings this week. Today at 14:20 CET Federal Open Market Committee member Jeffrey Lacker will speak on economy in North Carolina. At 16:00 CET the December Job Openings and Labor Turnover Study results and Wholesale Inventories will be released in US. The tentative outlook is positive with the number of job openings expected to rise from previous month while inventories are expected to grow at a much slower rate.

S&P500.z.10.02.2015.jpg


European stocks fell on Monday as worries over Greek debt standoff intensified and news about disappointing Chinese trade data hit the markets. Greece is considering proposing 10 new reforms at the Eurogroup meeting on Wednesday night in return for a longer bridging loan, to cover its funding needs until the end of August. The euro inched higher against the dollar on Monday, reversing earlier losses as markets appear to have priced in the possibility of Greece’s exit from euro-zone and widened German trade surplus and lower energy costs provided additional support to the single currency. Today at 10:30 CET December Industrial Production and Manufacturing Production will be published in UK. And at 16:00 CET the NIESR Gross Domestic Product for January will come out.

Nikkei is falling today having risen 0.4 percent on Monday. Investors are risk averse as Greece's rejection of its bailout terms spurred concerns over the prospect of financial turmoil in the euro zone. The Japanese yen traded higher against the dollar on Monday as investors moved in to buy yen after it fell against the dollar on Friday.

Oil advanced on Monday for a third straight session, helped by data indicating the number of oil rigs fell last week to the lowest level in roughly five years, marking the ninth straight weekly decline. At the same time, the Organization of the Petroleum Exporting Countries slashed its 2015 estimate for non-OPEC supply growth by 420,000 barrels a day to 850,000 barrels and raised demand forecast for its oil by 400,000 barrels per day to 29.2 million barrels a day in 2015.

Wheat harvests in Australia will produce larger-than-predicted crops in the country’s west and south, adding to the supply of the commodity in the biggest ever world grain production season that began July 1, according to United Nations’ Food & Agriculture Organization. Increasing supplies are pushing prices down.

C-WHEAT.z.10.02.2015.jpg
 

IFCMarkets

Broker Representative
US stocks rose on Tuesday as investor optimism was buoyed by hopes that Greece and its creditors are nearing a compromise on Greek debt impasse. Equities were boosted by reports about a possible six-month debt extension of Greece’s bailout program, which would allow the country to negotiate a new deal with creditors while avoiding a default. Tuesday report by the Labor Department indicated that job openings in the US rose in December to the highest since 2001 and the number of people hired climbed to the highest level since 2007. Dollar strengthened on Tuesday after hawkish statements by two voting members of the Federal Reserve’s policy committee. Jeffrey Lacker, president of the Richmond Fed, who spoke on economy yesterday in North Carolina, told reporters that a June rate hike was an “attractive option” for him. And John Williams, the president of the San Francisco Fed, said conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization.” Today at 13:00 CET Mortgage Applications for the week ended February 6 will be released in US. At 20:00 CET Monthly Budget Statement for January will be released in US. The US Government is expected to run a higher budget deficit compared with the previous month.

DJI.z.11.02.2015.jpg


European stocks closed higher on Tuesday as market participants’ optimism was boosted by reports of possible Greece deal at Eurogroup meeting on Wednesday. Stoxx Europe 600 gained 0.6% , bouncing back from a slide on Monday. In a reversal of earlier steps, Greek government has announced that it plans to go ahead with the privatization of the country’s main port of Piraeus, as country’s creditors demand. Greece has also backed from earlier demands to write-off part of its debt. After earlier reports about possible quick resolution of the Greek debt crisis, Germany’s Finance Minister Schaeuble told reporters at the Group of 20 meeting in Istanbul that any speculation about a possible six-month extension of Greece’s bailout program was fantasy and no hasty deal would be reached on Wednesday. Germany demands that Greece abide by the existing bailout program. European Union leaders will hold a summit meeting on Thursday, offering an opportunity for more negotiation. A Eurogroup meeting will take place on February 16. So far markets have discounted the possibility of Greek default.

Nikkei fell yesterday on worries about possible fallout from Greek bailout crisis. Japanese markets are closed today for a public holiday.

Oil fell yesterday after advancing for three consecutive sessions. The gains in last three session were driven by expectations that declines in active drilling rigs would help ease the oil supply surplus. But the oversupply still persists, and investors expect the data that will be released today at 16:30 CET to show another weekly increase in US oil supplies to record levels.

Copper fell the most in more than a week after reports on Tuesday indicated China’s consumer prices rose at the slowest pace in more than five years in January while producer prices continued falling. The lower inflation deepened concern that demand will decline in China, the world’s biggest user of industrial metals. Nickel, aluminum, zinc, lead and tin also declined.

C-COPPER.z.11.02.2015.jpg
 

IFCMarkets

Broker Representative
US stocks opened lower on Wednesday and ended a volatile trading session essentially flat as investors adopted a cautious stance in anticipation of Greek debt negotiations outcome. The broad stock market index S&P 500 closed flat at 2,068.53, while the Nasdaq Composite rose 0.4% due to a 2.3% gain in Apple Inc shares. PepsiCo shares rose 2.5% as the company reported higher than expected earnings and announced share repurchases and dividend increases. The volume of trading on US exchanges at 6.4 billion shares was below the 7 billion average for the last five sessions. The ICE US Dollar Index, a measure of the US currency’s strength against a basket of six major currencies gained 0.2% and closed at 94.9530. Today a batch of economic data will be released in US. At 14:30 CET December Advance Retail Sales, January Retail Sales Excluding Autos, Initial Jobless Claims for the week ended February 7 and Continuing Claims for the week ended January 31 will be published. The tentative outlook is positive for the dollar, with jobless claims forecast to increase by just 9 thousand over the previous week. At 16:00 CET Business Inventories for December will be released, the tentative outlook is neutral with no change expected over previous month’s levels.

S&P500.z.12.02.2015.jpg


European markets retreated on Wednesday as market participants awaited a meeting between the euro-zone finance ministers and Greek delegation. The Stoxx Europe 600 index fell 0.2%. Market participants’ optimism was boosted by a CNBC report late Wednesday that Greek and European Union officials have reached an agreement “in principle” on a plan to rework the country’s bailout. Euro traded higher on Wednesday on hopes of a quick resolution of the Greek debt standoff. Later Reuters reported that Euro- zone finance ministers were unable to agree with Greece on the future of the financial aid, and no joint statement on the next procedural steps was issued after seven hours of talk. The parties are scheduled to meet next Monday, meanwhile the summit of European Union leaders today will provide another opportunity for more negotiation. The single currency will likely trade sideways until an indication that the Greece government fails to come to terms with its creditors and Greek exit from euro-zone becomes inevitable.

Nikkei is rising sharply today as weaker yen boosted exporters, with Toyota rising 1.8 percent and Sony gaining 3.8 percent. The dollar advanced against yen and traded at ¥120.41, its highest level since the closing compared with ¥119.35 late Tuesday.

Oil fell on Wednesday after the US Energy Information Administration said crude inventories rose to “highest level for this time of year in at least the last 80 years”, amounting to total of 417.9 million barrels and marking a bigger than expected increase in weekly inventories. US crude inventories are rising on the backdrop of declining rig counts. The report of the International Energy Agency indicates that the United States will remain the world's top source of oil supply growth up to 2020, even after the recent collapse in prices. It estimates that the build-up of oil inventories around the world due to slowing demand and oversupply will stop by mid-2015 and the markets will start to tighten afterwards.

OIL.z.12.02.2015.jpg
 

IFCMarkets

Broker Representative
Global stocks grew further on Friday. Investors continued speculating on the Ukrainian cease-fire. American Dow, S&P 500 andNasdaq indices marked a weekly gain of 1.1%, 2% and 3.2% respectively, hitting a 15-year high.

sp1602.png


S&P utilities lost 1.6% previous week. We believe it reflects investors' growing confidence in Fed Rate hike this year. Utilities bonds are kin to treasury bonds and are considered as safe havens. Earnings were released by 391 companies on S&P 500 list: 71.1% of them outstripped their forecast for gross profit and 57.5% - for net profit. The overall growth made up 6.6%, which is below 11.2%, estimated on October, 1, and above 4.2%, estimated on January, 1. Macroeconomic data turned out to be neutral on Friday. A relatively weak Michigan Confidence was compensated with positive Import Price Index (MoM), slipping by 2.8% in January and reaching high since 2008. Prices have been falling for 7 straight months. Market participants expect inflation in the USA to remain low. TodayAmerican stocks are closed due to President's Day. Stock market trade volume on Friday was 11% below monthly average, amounting to 6.5 billion shares.
European indices have been traded in a range for 2 consequent days in expectation of the EU finance ministers' meeting, devoted to Greek bailout. The conference begins today at 14:00 CET. We observe euro slightly strengthening against dollar for the time being. The ATG index dropped by 3.7% today, following the 5.6% surge on Friday. The EU trade balance for December is to be released today. The tentative outlook is neutral. To be noted, positive GDP in Germany and the EU was issued on Friday. Market has not reacted yet, but if the situation in Greece normalizes today, the single currency and European stocks are expected to expand.

Today Japan reported falling Industrial Production for December. Since the growing Q4 GDP (2.2%) had been announced earlier, the pressure against Nikkei was very weak and it is still traded around the 8-year high. Market participants consider Japan to escape recession it has been suffering from since July-September. Forthcoming important data will become public at 6:00 CET on Wednesday after the Bank of Japan meeting.

soyb1602.png


As we anticipated in our previous overviews, oil continues to soar, boosting futures for wheat, cotton and cacao. Brent has risen by 30% in 3 weeks with no significant pullbacks due to a number of factors. American oil-workers' strike has been continuing for 3 weeks. Kuwait minister of Natural Resources leaves room for oil to advance in the second half of the year on the back of probable production curb. Egyptian air forces delivered a strike against Libyan guerillas after several Egyptian citizens had been executed. On top of that, militants meddle in Libyan energy supplies export. Operating oil wells in the USA have reduced to their lowest number since August, 2011.

gold1602.png


Gold futures have been gaining for 3 consequent days amid the Dollar Index retreating. The USA Consumer's Confidence plunged in February to its 11-year low, which was another factor pinning up gold. We do not rule out that the demand for gold will boost shortly before Chinese New year, celebrated next week. However, the trend may appear to be short-termed, affected by low premium on gold ($3-4 per ounce) at Shanghai Gold Exchange, as against London Exchange. Usually at this period the premium makes up $10. In India it slumped from $16 to $2-3 last month.
 

IFCMarkets

Broker Representative
US markets advanced on Tuesday on hopes the Greek debt stalemate will soon be resolved. The S&P 500 started the session lower and steadily rose, adding 0.2% and posting the second record close this year. Investor optimism was boosted by news reports that Greece may ask for an extension of the country’s loan agreement on Wednesday. Market participants largely discounted the economic data that came in below expectations on Tuesday. The Empire State Manufacturing Index moved slightly lower but remained in positive territory, indicating improving business conditions. Also, the Housing Market Index fell to four month low at 55, still indicating a favorable outlook of construction in the months ahead. The ICE US Dollar Index, a measure of the dollar’s strength against a basket of six major currencies, fell 0.12% to 94.0880. Today at 14:30 CET January Housing Starts, Building Permits and PPI for final demand will be released in US. At 15:15 CET January Industrial Production, Manufacturing and Capacity Utilization will be published. The industrial production is forecast to rise. The tentative outlook is neutral. And at 20:00 CET the Minutes of the January 27-28 FOMC Meeting will be released. The investor interest will be focused on whether it will contain new information on when the committee plans to increase the borrowing costs.

S&P500.z.18.02.2015.jpg


European stocks recouped early session losses but gains were limited by the uncertainty about Greece’s future in the euro zone. The Stoxx Europe 600 ended 0.1% higher having opened lower after Greece’s new anti-austerity government rejected an extension to its 240-billion-euro ($272 billion) bailout program under the conditions offered by its creditors on Monday. A new meeting of euro-zone finance ministers is scheduled for Friday. Today European Central Bank will conduct a biweekly review of an emergency liquidity assistance (ELA) to the Greece’s banking sector. There is little chance the ECB will not let the Greek banks to continue to use the ELA. The euro traded higher against the pound, yen and dollar Tuesday as economic data showed continued improvement in the euro-zone. The Center for European Economic Research’s, or ZEW, reported that ZEW indicator of German economic sentiment rose in February to 53.0, the highest reading since February of last year. Today at 10:30 CET labor market report will be released in UK.

Nikkei is rising today on hopes a deal on the bailout program will be reached between Greece and its creditors. Today the Bank of Japan’s monetary policy board decided to maintain the monetary stimulus program at the current annual pace of 80 trillion yen ($671 billion), as it was expected, and revised up its assessment of output.

Oil rose on Tuesday recording a gain of more than 9% over the past three trading sessions. The recent rise is the result of a weaker US dollar and increased geopolitical tensions including violence in Ukraine and the Middle East, and volatility tied to crude options expiration. Options on Nymex March crude futures contracts expire at Tuesday’s, which added to session’s volatility.

Gold fell to a six-week low approaching $1,200 an ounce on Tuesday on expectations that demand will fall as Chinese leave for the Lunar New Year holiday, which starts February 19. The market so far is discounting the apparent lack of progress in Greek debt talks, indicating expectations the turmoil will be resolved soon.

XAUUSD.z.18.02.2015.jpg
 

IFCMarkets

Broker Representative
US stocks ended Monday’s session essentially unchanged. Falling oil prices dragged energy shares down, while news of merger and acquisition deals in pharmaceutical industry helped push health-care stocks higher. The S&P 500 closed flat. The Dow Jones Industrial Average slipped 0.1%, retreating from the record close of Friday. Nasdaq edged higher 0.1%, recording its ninth winning session in a row as Apple stocks rose 2.7% after it said it will invest $1.92 bn to build two data centers in Europe that will run 100% on renewable energy. According to the National Association of Realtors US home resales declined 4.9 % to their lowest level in nine months in January, indicating housing sector is still fragile. The US dollar index rose on Monday. Today at 16:00 CET Federal Reserve Chair Janet Yellen testifies to the Senate Banking Committee. After dovish minutes from Fed’s January meeting showed that the Fed was in no hurry to start hiking interest rates investors are looking forward to the testimony to see if the Fed Chair is still considering raising interest rates at Fed's June meeting. At 15:00 CET the December Case-Shiller Home Price Index will be released in US, at 15:45 the February preliminary Services PMI and Composite PMI will be released by Markit. And at 16:00 CET Consumer Confidence index will be published by Conference Board.

S&P500.z.24.02.2015.jpg


European stocks moved sharply higher on Monday as investor optimism was bolstered by an agreement to extend Greece’s bailout. The pan-European FTSEurofirst 300 index closed at new 7-year record high. Eurozone finance ministers will be discussing today Greece’s list of reform proposals, which will then be reviewed by the European Commission, the ECB and the IMF. Euro is declining today against the dollar after retreating on Monday as Greek government delayed the submission of its reform suggestions until Tuesday morning. Today at 08:00 and 11:00 CET fourth quarter German GDP and January Euro-zone CPI will come out. The tentative outlook is neutral.

Nikkei is rising today while the investors are cautiously awaiting for Federal Reserve Chair Janet Yellen’s comments for clues on when the Fed may start raising the interest rates. The dollar is edging higher against the yen ahead of Janet Yellen’s testimony. With Japanese stocks trading at 15-year highs, an indication that the Fed is still on track for raising interest rates in June may result in a selloff.

Oil prices fell on Monday amid concerns about oversupply and strong dollar. The prices slid after Friday's data from Baker Hughes oil-services company showed a slowdown in the weekly decline in the number of rigs drilling for oil in the United States. Concerns about oversupply exacerbated as Libya’s largest oil field at Sarir and a key oil export terminal in eastern Libya resumed operations on Sunday. Also, over the weekend Union workers walked out of three more US refineries, with growing supplies of crude oil adding further pressure to oil prices as refineries deal with the expansion of the strike of workers.

OIL.z.24.02.2015.jpg


Heating oil prices rose as the expansion of oil workers’ strike raised concerns over production levels for the petroleum products.

Gold prices declined on Monday as the creditors reached an agreement with Greece to extend the bailout for four additional months, conditional on Greece’s submission of reform proposals. The demand for dollar denominated gold decreased also as dollar continued strengthening on Monday.
 

IFCMarkets

Broker Representative
World stock markets advanced on Tuesday. S&P 500 and Dow Industrials closed at record highs as investor optimism was buoyed by Federal Reserve Chair Jannet Yelen’s testimony to Congress. Yellen said the Fed was considering interest rate hikes on meeting-by-meeting basis and that an increase was not likely for at least the next couple of meetings. She said that the central bank is “reasonably confident” inflation is moving toward its 2% goal, indicating that inflation has surpassed the job market as the Fed’s top priority. Markets interpreted Yellen’s testimony as assurance that rate hike might not occur until the second half of the year. Shares in First Solar Inc. and Home Depot Inc. surged 10.2% and 4% respectively, leading the gains among the S&P 500 and Dow stocks. Economic reports on Tuesday indicated that US home prices rose again in December and activity in the services sector expanded in February at its fastest pace since October, but consumer confidence fell. The ICE US Dollar Index , a measure of the dollar’s strength against a basket of six currencies, declined 0.14% to 94.4410. Today at 13:00 CET Mortgage applications for the week ended February 20 will be released by the Mortgage Bankers’ Associations in US. At 16:00 CET January New Home Sales will be published. The tentative outlook is negative. Also at 16:00 CET Janet Yellen will testify before the House Financial Services Committee.

DJI.z.25.02.2015.jpg


European stocks rallied on Tuesday after the reassuring testimony of Federal Reserve Chair Janet Yellen and the approval of Greek bailout extension by international creditors. The International Monetary Fund, the European Commission, the European Central Bank and the euro-zone finance ministers on Tuesday approved Greece’s proposed reform measures in exchange for a four-month extension to its bailout program. Later this week the euro-zone member states are expected to sign off on the deal. The Stoxx Europe 600 gained 0.6%, marking the highest close since October 2007. Germany’s DAX 30 and UK’s FTSE 100 both closed at record highs, while France’s CAC 40 recorded its highest settlement since June 2008. Greece’s Athex Composite surged 9.8%, outperforming the broader European equity market. Euro edged higher about 0.1% against the dollar. Today at 10:30 CET January Loans For House Purchases will be released by British Banker’s Association in UK. The tentative outlook is positive for the Pound.

Nikkei snapped a five day winning streak today after closing at a 15-year high in the previous session as investors took profits. Dollar is edging down against yen today following gains the previous day after Janet Yellen’s testimony.

Oil prices fell on Tuesday ahead of the official data on US inventories as the American Petroleum Institute report indicated US crude oil inventories rose by 8.9 million barrels in the week ended February 20. The build-up was bigger than anticipated. Today at 16:30 CET Crude Oil Inventories for the week ended February 20 will be released by the Energy Information Agency.

Gold prices declined on Tuesday but settled off their session low after Janet Yellen’s testimony suggested that it is not likely there will be an interest-rate hike in the next couple of meetings.

Copper prices climbed amid signs that global supplies will tighten as BHP Billiton Ltd, the world’s biggest mining company, announced on Monday it plans to cut back production, joining other miners in reducing capital expenditures.

COPPER.z.25.02.2015.jpg
 

IFCMarkets

Broker Representative
US stocks ended mixed after Wednesday’s session. The S&P 500 inched lower 0.1% while the Dow Jones Industrial Averagegained 0.1% to close at record high for the third time this year. Apple shares, which had gained 21 percent since the start of the year, fell 2.6 percent as investors took profits. Hewlett Packard shares fell 10% as the company missed the first quarter revenue target and cut its 2015 outlook citing the negative impact of stronger dollar. Yellen’s testimony on Wednesday confirmed that the Fed is in no harry to hike interest rates. The ICE US Dollar Index, a measure of the dollar’s strength against a basket of six currencies, slid 0.3%. Data released the previous day showed US new home sales in January fell much less than expected. Today at 14:30 CET the January Durable Goods Orders, inflation data as well as Initial Jobless Claims for the week ended February 21 and Continuing Claims for the week ended February 14 will be released in US. The indicator forecasts are mixed. While the CPI is expected to fall reflecting the influence of lower energy costs, the durable goods orders are expected to rise after an unexpected decline previous month. The initial claims are expected to rise to 290 thousand from the previous week’s 283 thousand. And at 15:00 CET the House Price Index will be published. The tentative outlook is negative.

S&P500.z.26.02.2015.jpg


European stocks retreated on Wednesday snapping a six session winning streak as investors weighed mixed corporate reports.The Stoxx Europe 600 slipped 0.1%, with the energy, basic materials and consumer goods sectors all finishing in negative territory. So far in the earnings season, 63 percent of STOXX 600 companies have reported corporate earnings, of which 55 percent have met or beaten profit forecasts. France’s CAC 40 and UK’s FTSE 100 fell 0.1% and 0.2% respectively, while Germany’s DAX 30 gained 4.5 points, marking its 17the record closing of 2015. Euro traded higher against dollar. Today at 09:55 German Unemployment Change and Unemployment Rate will be published. The tentative outlook is positive for euro. At 10:30 CET the fourth quarter GDP preliminary estimate will be released in UK by the Office of National Statistics, the tentative outlook is neutral.

Nikkei is rising today as investors’ risk appetite improved after Fed Chair Janet Yellen’s testimony indicated the Fed is not ready to raise interest rates just yet. Market sentiment was also helped by the news that the Federation of National Public Service Personnel Mutual Aid Associations, which manages Japan's national civil service pensions, will raise its target allocation for domestic stocks to 25 percent from 8 percent.

Coffee prices fell after rains in Brazil improved crop prospects in the world’s biggest producer and exporter. According to a report by Volcafe, the coffee unit of commodity trader ED&F Man, Brazilian output will rise to 49.5 million bags this year from 47 million bags in 2014. A bag weighs 60 kilograms.

C-COFFEE.z.26.02.2015.jpg
 

IFCMarkets

Broker Representative
American stocks and US Dollar Index slid on Friday. The forecast for Q4 GDP was marked down from 2.6% to 2,2%. Chicago CPI and Pending Home Sales turned out to be worse-than-expected. Most investors believe Q4 GDP in US to rise 2.4%-3%. To be noted, US Dollar Index added today due to rate cut in China and the weakening yuan. Today at 14:30 CET Personal Consumption and Spending for January will be released in the US. At 16:00 CET ISM Manufacturing and Construction Spending indices will be issued. In general the tentative outlook is positive.
European stocks have continued their Friday growth driven by two factors: stabilizing economy in Greece after bailout extension and emission of the euro by European central bank, estimated in the current month. Euro Stoxx 50 has jumped 15% since early January showing the best new-year start ever. Estimated overall surge in earnings among Stoxx 600 companies in 2015 can be 3 times as much as among enterprises on S&P 500 list. Besides, Markit and BME issued Manufacturing PMI in Germany today. It has marked an increase for the first time over 5 months. In 11:00 CET Consumer Price Index for February and Unemployment for January will become public in eurozone. The forecast is positive.

Nikkei expanded today underpinned by European stocks and the weakening yuan (Chinese central bank has reduced the rate). Against this background Nikkei has hit its 15-year high. Japanese Government Pension Investment Fund sold government bonds last year in the fourth quarter and bought domestic stocks worth $15 billion. That was another positive factor for Nikkei. The Pension Fund is going to continue replacing bonds with domestic stocks this year.
Rate cut in China boosted commodity futures since market participants believe it will support Chinese economy and pump up the demand for commodities. It should be pointed out that reduced rate weakened the Australian dollar because from now on most investors expect Central bank of Australia to do the same during the tomorrow meeting.

Oil prices added after OPEC reported production declining from 30.27 million barrels daily in January to 29.92 million barrels in February (the production has fallen to its weakest since June, 2014). This is below the introduced quota of 30 million barrels per day. Contraction in supply was caused by declining exports from Iraq and Libya.

gold0203.png


Gold edged higher. The Indian finance minister offered to keep custom taxes on imported gold. Earlier they were expected to be reduced 10% before wedding season in May. Premium on gold in India has risen to $5 per ounce. Significantly, the demand on precious metals expanded after Chinese rate cut. According to Commodity Futures Trading Commission (CFTC), hedge funds have reduced their net long positions for gold and silver for 4 consequent weeks. However, the last week contraction has been the lowest in 6 weeks.

copper0203.png


Copper posted a 6 week high with net short position still prevailing according to CFTC. UBS investment bank raised next year copper cost forecast from $5500 to $6700 per ton. To be mentioned, copper already costs $5947 at London Metal Exchange and 43280 yuan ($6900) at Shanghai Futures Exchange. We do not exclude that hedge funds will place net long positions this week.

wheat0203.png


Cold weather in US pushes wheat prices up despite wheat futures position (net short) increased the last week at CBOT. We suppose that weather may dramatically affect the quotes.
 

IFCMarkets

Broker Representative
US markets rallied on Monday as investor optimism was boosted by a surprise rate cut by the People’s Bank of China and a series of mergers and acquisitions deals. NXP Semiconductor acquired Freescale Semiconductor for $11.8 billion, Hewlett-Packard bought Aruba Networks for $2.7 billion, and Cardinal Health acquired Cordis from Johnson & Johnson for $1.9 billion. The Nasdaq Composite ended above 5000, a level it had not reached since 2000. S&P 500 and Dow Jones Industrial Average also closed at new record highs. Markets shrugged off the economic data that came in lower-than-expected. As personal income rose 0.3% in January personal spending declined 0.2%, more than expected. This resulted in increase in savings rate 5.5% in January against 5% in previous month. If consumers keep spending less while their income rises this may negatively affect the GDP growth rate. Construction spending fell unexpectedly in January, which may be explained by bad weather. The weaker than expected manufacturing gauge from the Institute for Supply Management for February pointed to a slowdown in manufacturing activity. The next important economic report of the week will be the February employment report on Friday, where market participants’ focus will be on average hourly and aggregate earnings. The dollar traded higher against the euro, yen and pound, helped by the surprise rate cut from the People’s Bank of China. The ICE US Dollar Index rose 0.2% to 95.47. Today auto manufacturers will be reporting their sales figures in US.

DJI.z.03.03.2015.jpg


European stocks ended lower on Monday giving up gains that followed the release of encouraging economic data earlier in the session. The 0.3% year-over-year decline in consumer prices in February was lower than expected. Euro-zone’s unemployment rate fell to 11.2% in January from 11.3% in December, its lowest since April 2012. The signs of positive developments in euro-zone’s economy point to the prospect of sizable equity gains when the ECB starts its quantitative easing program this month. Meanwhile the Stoxx Europe 600 slid 0.2% with energy shares leading declines after oil prices fell 3.9%. While most European indexes closed lower on Monday, Germany’s DAX 30 hit the 20th record closing high of 2015. Greece’s Athex Composite stock index fell 2.5% amid concerns about the country’s debtAt 11:00 CET euro-zone Producer Price Index for January will be published. The tentative outlook is negative.

Nikkei is falling today as investors took profits following recent record closings. Chip-related shares such as semiconductor-equipment makers outperformed after the Nasdaq closed above 5,000 on Monday, implying strong demand for the semiconductor industry. Exporters were mixed, with Toyota Motor Corp falling 0.6 percent and Honda Motor Co gaining 0.4 percent. Sharp Corp slumped 9.8 percent on news that it is planning to seek aid from its main lenders to prepare for restructuring as it expects losses to mount this year.

Australia's central bank held its interest rate steady today contrary to expectations of another rate cut.

Oil prices fell on concerns of increasing oversupply on the back of news of rising output from Libya. The spread between the West Texas Intermediate crude-oil futures and Brent crude narrowed to just under $10.

BRENT.z.03.03.2015.jpg


Gold prices retreated on Monday, ending a three-day winning streak as rising US stock markets and stronger dollar lured investors away from the safe haven asset.
 
Top