On Friday, August 11, the US stock market showed a weakly positive trend, the indices closed in the green zone. The Dow Jones rose by 0.07% (21858.32),S&P 500 rose by 0.13% (2441.32), Nasdaq up 0.64% (6256.56). European exchanges, on the contrary, decreased in a unified dynamics. Germany's DAX dipped 0.03% (12014.06), British FTSE 100 fell 1.08% (7309.96).
Today it is expected a few publications of the macroeconomic data and the speeches of the monetary authorities that could affect investors' decisions during the trading sessions.
At 01:45 MSK the Basic index of retail sales in New Zealand second quarter
At 01:45 MSK retail sales in New Zealand second quarter
At 02:35 MSK a Speech of the Deputy head of the RBA Kent
At 02:50 MSK Japan's GDP second quarter
At 12:00 MSK industrial production in the Eurozone in June
On Friday it is the main driver still was the anxiety of the investors due to the deteriorating geopolitical situation over the conflict of the USA and North Korea. If this quarrel comes to business, there will be participated not only these two countries, the war will affect many. Now mutual threats include the specific details, which referred to the direction of impact. Taking into account that both leaders of countries already have a reputation of unpredictable people, it is difficult to calculate the risks for the investors, and most of them are closing positions in the stock market. Now, if it will be received positive news "from the front" geopolitical battles indices again will rush up from the current levels.
Thus last week, the decline lasted for three days until the market has found support, and then adjusted during the previous trading session. The increasing of IT companies shares helped to this. On Friday, the capitalization of Microsoft rose 1.53%, and Cisco Systems, plus 1.52%, Apple added 1.4%. Although, there was not everyone in positive territory. NVIDIA loses of 6.94%, despite the fact that quarterly report shown the financial results better than expected. Investors believe that securities of this company have greatly overestimated.
Inflation data was weak again. The consumer price index in July rose by 0.1%, less than the forecast value of 0.2%. Now annual inflation is 1.7%. And this is below the optimal level of core inflation at 2%, which was indicated by Fed. So it is unlikely that interest rates will increased in September. On this background, the pair EUR/USD made another leap upwards almost reaching the level of 1,185 on Friday.
This week markets will watch data on retail trade in the United States, as well as the publication of minutes of recent meetings of regulators in America and Europe, although they are unlikely to seriously affect the market.
Due to demand increasing for defensive assets attraction of gold has increased, So over the past week the rising cost of precious metals amounted to 2.3%. Now the price of gold came close to a strong area of resistance $1290 per ounce, and is likely in the near future we will see a downward correction. But a break of that level will open way to the top.
Oil has managed to grow on Friday on the background of the increasing of forecast of consumption of oil in the world this year by the OPEC and the IEA. Meanwhile the results of loss black gold amounted to 1.5% last week.
Sincerely, Global FX chief analyst Sergey Melnikov.