Panoramas of the market. November 14, 2016

  

I focus markets:

  US dollar at the beginning of the new week continues to grow. Providing support to the dollar expectations of Fed tightening monetary policy at a meeting in December. The time now is likely to increase rates next month, according to the dynamics of federal funds futures, estimated at 81.1%. Expectations in connection with these activities regulators have risen after Fed comments vice president, Laurel Fisher on Friday, who noticed a significant precondition for the gradual abolition of accommodative policy. Fischer added that many members of the FOMC welcome the initiative of the newly elected US President Donald Tramp concerning fiscal incentives, the application of which weaken the problem for monetary policy. Overall, Tramp win the elections proved to be very favorable for the dollar, which allows its index, which tracks the flow of American currency against a large number of others, to get closer to field 13-year maximum.

 Despite the fact that last night went better than expected GDP data in Japan, the yen began a new week under pressure. Negative impact on the Japanese currency had the comments of the Governor of the Bank of Japan, who noticed a weakening in the pace of reaching a level of 2% inflation target.

 Chinese statistics (fixed capital, industrial production and retail trade) was mixed, so that its impact on the dynamics of the market was fairly limited.

 Highlights at the first session of the week will be the speech of ECB Governor Mario Draghi at 15:00 GMT and New Zealand retail sales data at 21:45 GMT. It should be noted that due to a strong earthquake that occurred yesterday in the New Zealand response to the published data on retail sales can be ambiguous.

 

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 II What is talk in the market:

  German economy is likely to expand moderately in the third quarter, despite the feeling of insecurity created after the vote in the UK to leave the European Union. However, the recent victory in the presidential election of Donald Trump in the United States added to uncertainty, "- the Ministry of Economy." The global economic environment is still characterized by uncertainty due Brexit and the US election results, - said in a statement Ministry of Economy.- However, no negative effect is not expected in the short term. "Recall, the German economy grew by 0.7 percent in the first quarter and 0.4 percent in the second, which contributed to the high costs of households and increased government spending for migrants and Infrastructure. For the third quarter, economists expect that the quarterly growth rate was 0.3 percent.

  "Sharp" Brexit in which Britain would lose free access to the EU market currently looks the most likely outcome of the plan of the country to withdraw from the block, "- said by experts of international rating agency Standard & Poor's." Britain will take over the burden of the economic impact Brexit, and impact on the world economy will be very limited, "- pointed out the agency in its renewed report on the British economy. Recall, the agency S & P lowered the highest credit rating in the UK AAA to AA soon after the referendum on EU membership (23 June), arguing that the country's capacity for effective and sustainable policies decreased.

  Data from the University of Michigan showed that the indicator of consumer mood in the US rose in November, indicating a more positive attitude at the beginning of the season of active buying. According to the report, preliminary index of consumer mood- rose to 91.6 in November from 87.2 oktobar final value. Surveys in the context of a preliminary calculation of the November index held from 27 October to 8 November - the day of US presidential elections.Economists had expected the index to increase to 87.5. "The recent improvement of consumer sentiment is due to the positive prospects for the economy", - said a senior economist at the University of Michigan, Richard Curtin. In addition, consumer inflation expectations rose. The index of current conditions rose in November to 105.9 against the final index for October 103.2.The index of expectations rose to 82.5 from 76.8.

 Report the company to provide oil services Baker Hughes showed that from 5 to 11 November, the number of active drilling for oil in the US rose to 452 units from 450 units. The amount of the unit for production of gas is reduced to 115 units with 117 units. Meanwhile, the total number of drilling (oil and gas) fell to 568 units from 569 units. Recall, according to the working week, as of 4 November, the total number of drilling increased by 12 units, or 2.1%, to 569 units. Number of oil installations has increased by 9 units, or 2%, to 450 units. Number of wells for gas production increased by 3 points, or 2.63%, and amounted to 117 units.

 People's Bank of China on Monday weaken the yuan against the dollar by 0.26%, according to the regulator. On Monday, the Bank of China established the average exchange rate of the yuan against the dollar at around 6.8295, which is 180 points higher than what was recorded on Friday, when the rate was 6.8115. Thus, the exchange rate of the yuan against the dollar reached its lowest level since June 2010, when China's currency traded at 6.82 yuan to the dollar.

 Bank of Japan Governor Kuroda called on the company to increase the salary of employees in order to quickly achieve the inflation target of 2%, saying that such a step is essential for sustainable economic growth and recovery from deflation. "The annual negotiations on wages, as a rule, take place under the influence of inflation in the previous year, and this is one of the reasons why inflation expectations remained weak in Japan," - said Kuroda. - Labour market conditions will probably continue to be tightened, and inflation will continue to rise to 2%, while the Bank implemented an aggressive monetary policy mitigation ", - he said." The Japanese economy is experiencing a fairly significant change curing, accounting important investments in " people, "including wage determination based on the level of 2% inflation as a guide that will benefit individual companies in terms of medium and long-term perspective for management, not to mention the fact that it is of crucial importance for the Japanese economy as a whole", - said Kuroda .

 In the third quarter, economic growth in Japan was faster than expected, due to increased exports. In the period from July to September, gross domestic product rose by 2.2% on an annual basis, that is, growth continues the third consecutive quarter. Japanese companies rely on foreign demand to offset slowing sales in the country. Recent data also indicate that the third largest economy in the world increased by 0.5% compared with the three months to June, well above forecasts, according to which growth should be 0.2%. However, analysts believe that growth rates can be volatile, given Japan's dependence on exports. The volume of public investment in the reporting period decreased by 0.7% compared to the previous quarter, private - has not changed compared to the second quarter. Growth in private consumption, which accounts for 60% of Japan's GDP, was 0.1%. Exports increased by 2% compared to the previous quarter, while imports fell by 0.6%.

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 Foreign Exchange market

III The situation in the markets

 Pair EUR / USD traded with a moderate reduction in the vicinity of the minimum of 21 January.The dollar continues to gain support for an increase in US bond yields, which began after the Tramp victory. Analysts expect the Tramp to introduce protective trade policy, which may push wages and inflation. Strengthening of the dollar is also contributing to the strengthening of the probability of the Fed raising interest rates in the next few months. Many experts believe that if the situation remains favorable in the market, it is likely to be nothing to prevent the Fed to raise rates in December. Pressure on the yen also provided an increase in the yield on 10-year and 30-year US bonds. According to the futures market, is now likely tightening of monetary policy the Fed in December amounted to 81.1% compared to 71.5% on Friday. Today, the analysts pay attention to the September data on industrial production in the eurozone. Companies eurozone in August increased the pace of production, leading to reduced concerns of a rapid decline of the British pound and its negative impact on the indicators of export. It is expected that industrial production fell in September compared to August. In addition, the focus will be the speech of the Governor of the ECB - Mario Draghi, scheduled for 15:00 GMT. Later this week, investors will monitor the October inflation data in the euro zone, whose publication is scheduled for Thursday. According to preliminary data, in October consumer prices rose 0.5% per year, after rising 0.4% in September. This is far below the inflation target set by the ECB, which is slightly less than 2%. Strong resistance - $ 1.0954 (a maximum of 10 November). Significant support - $ 1.0710 (minimum 5 January).

 

 Pair GBP / USD is moderately decreased, recovering a minimum since Friday. Experts point out that due to lack of statistical data from the UK, the current impact of today's trading dynamics dollars. Later this week, investors will pay attention to the official October inflation data in the UK. Consumer prices in the country in September rose the fastest in almost two years, and most experts expect further acceleration in inflation due to the weakening of the British pound after Brexita. Economists expect annual inflation rose to 1.1% in October, compared to 1% in September. In addition, the market will wait for the October data for the labor market in the UK, which will be combined with data on retail sales probably make it possible to judge the prospects of consumer costs. According to forecasts, the unemployment rate has remained at around 4.9%, while average earnings growth accelerated to 2.4% from 2.3%. An important resistance - $ 1.2770 (maksiimun 5 October). Significant support - $ 1.2352 (minimum 9 November).

 

 Pair AUD / USD traded in a narrow range, remaining close to opening levels. Little impact had news for China. Today, the People's Bank of China lowered the yuan against the dollar by 0.26%. On Monday, the People's Bank of China on Monday weaken the yuan against the dollar by 0.26%, according to the regulator. On Monday, the Bank of China established the average exchange rate of the yuan against the dollar at around 6.8295, which is 180 points higher than what was recorded on Friday, when the rate was 6.8115. Thus, the exchange rate of the yuan against the dollar reached its lowest level since June 2010, when China's currency traded at 6.82 yuan to the dollar. Experts believe that the pair will continue to trade due to the strengthening US currency and growth in global bond yields. When this is the increase in prices of iron ore and coal coke provided some support to the Australian dollar. The likelihood of another interest rate cuts Reserve Bank of Australia this week may be reduced if the new employment data, which is expected on Thursday to be strong, which will also support the Australian dollar. Most likely, in the coming weeks, the dynamics of the market will depend on developments in Washington, because investors are actively seeking to clarify the economic policy of the administration Trump. Meanwhile, the Australian dollar, which is a barometer of risk, will continue to reflect changes in the market mood. Strong resistance - AUD0.7739 (maximum of 10 November).Significant support - AUD0.7505 (minimum 13 October).

 

 Pair USD / JPY has risen significantly, reaching its highest level since June 7th. The couple renewed rally on Monday after the US dollar generally continued to grow due to the expectation of active stimulate the economy of the new administration. The pair was likely to continue the rally, because the players have already warned of strong GDP data in Japan and weaker indicators of China. Recall, in the third quarter, economic growth in Japan grew faster than expected, due to increased exports. In the period from July to September, gross domestic product rose by 2.2% on an annual basis, that is, the growth continues for the third consecutive quarter.The data also show that the Japanese GDP grew by 0.5% compared with the three months to June, above forecasts, according to which growth should be 0.2%. However, analysts believe that the pace of growth may be unstable, due to the dependence on exports from Japan. The focus is also governor of the Bank of Japan comments Kuroda, who urged the company to increase the salaries of employees in order to achieve faster growth target inflation of 2%. He said that such a step is essential for sustainable economic growth and recovery from deflation.An important resistance - Y109.12 (maximum 3 June). Strong support - Y104.95 (minimum 10 November). 

 

 

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 Stock market

 The main US stock indexes finished trading on Friday without a single unified dynamics.However, the Dow Jones Industrial Average has renewed the record maximum of closure and recorded the maximum weekly gain for nearly five years. According to the results of Sunday trading, the Dow rose 5.36%, S & P rose 3.80% and the Nasdaq gained 3.78%. The biggest winners last week were shares of industrial companies and banks. Investors invest in actions that, in their opinion, can benefit from an increase in public spending, reduced regulation and rising inflation during the presidency of Trump. Shares of biotechnology companies are also increasing continuously, as analysts and investors connect tighter regulation of the price with the loss of Clinton. At the same time investors withdrew funds from assets that have been the most successful of the financial crisis, including the securities of a large number of technology companies and government bonds. On Friday, investors rushed to adjust their portfolios to benefit from Tramp plans to simplify legislation in the area of health and finance, as well as increasing spending on infrastructure. Little influenced by data from the Institute of Michigan.As it became known, in November the US consumers felt more optimistic about the economy.According to the data, the index of consumer sentiments rose to 91.6 from 87.2 in October. It was expected that the index will be 87.5.

 Asian stock indexes traded mixed. Kote the largest in Asia, the Tokyo Stock Exchange will lead to a weakening of the yen, which is useful for Japanese manufacturers who are export-oriented.The dollar jumped against the yen to its highest level since the beginning of June under the influence of expectations that investors have in the economic policy of the newly elected President of the United States, Donald Trump. Also corners in Tokyo rose due of positive statistics. How has today announced the Japanese cabinet ministers, gross domestic product grew by 0.5% in the third quarter. On an annual basis, the economy expanded by 2.2%. Kote in China are in the green zone, where, to some extent contributed to the published data. As it became known, the industrial production in China rose by 6.1% on an annual basis in October, as in September. However, analysts have forecasted growth of 6.2%. The volume of investments in fixed assets in China, with the exception of agriculture, grew by 8.3%, which is higher than the previous value, and economists are betting 8.2% in January-October 2016.

 Expected positive start to trading on the major stock exchanges in Europe. 

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The market of financial instruments

At present, the yield of 10-year US bonds at the level of 2.22% (+7 bp).

The yield of 10-year German Bunds are currently at the same level - 0.32% (+2 bp).

The yield of 10-year bonds the UK is retained in 1.37% (0 bp).

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Raw materials market

 WTI crude oil futures demonstrate the negative dynamics. Currently, the December futures traded at $ 43.31 per barrel (-0.23%). Oil prices are falling, as investors continued to win information on increasing oil production of OPEC, as well as increasing the number of wells in the United States. Recall, on Friday, OPEC announced that in October, increased oil production by nearly 240 thousand barrels per day compared to September - up to 33.64 million barrels per day. Such information has been negatively experienced by market participants and maximize their doubts about the possibility of reaching an agreement on limiting oil production of OPEC.The final decision should be adopted at an official meeting of OPEC in Vienna on 30 November.The pessimism of investors was caused by Baker Hughes data, published on Friday. The report showed: from 5 to 11 November, the number of active drilling for oil in the US has increased to 452 units from 450 units. The amount of the unit for production of gas is reduced to 115 units with 117 units. Meanwhile, the total number of drilling (oil and gas) fell to 568 units from 569 units.

 At this time, the price of gold traded at $ 1,224.80 (-0.20%). Precious metal is a bit cheaper because of the general rise in prices dollar. Now the US dollar index, which shows the relationship of the US dollar against a basket of six major currencies, traded with an increase of 0.5%. Contribute to the strengthening of the dollar forecasts faster growth of the basic interest rate of the Federal Reserve. This is the outcome of presidential elections in the country on 8 November. It is their victory won Republican Donald Trump, whose economic policies, as expected, can lead to an increase in budget spending and higher inflation. According to the futures market, it is now likely tougher Fed monetary policy in December amounted to 81.1% compared to 71.5% on Friday. Gold usually cheaper when interest rates rise, because it yields interest income and becomes in this case less popular compared to the funds, which bring income.

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 IV Highlights of today's session I data (time GMT 0)

 

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