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What to expect on the markets next week
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Loading...Last week, number one event was activation of Article 50 of Theresa May. When May decide to do this, started a lot of shooting between European Commission and Theresa May. The European commission decide to provide hard Brexit for UK. The latest data show real negotiations will begin as early as May 22. The event did not have a serious impact on the market because at the moment all details were covered by the price.
Indices - this week despite growing risks in Europe, European indexes marked new highs. US colleagues also did not go back and quickly absorb losses after correction during the past two weeks. European investors were slightly tense before the activation of Protocol 50 of Theresa May, but subsequently not severely affected news. Next week the most important news for the indices will be Payrolls on Friday. We remain bullish on the indexes and next week, any correction we will use to add new long positions.
Rising indices price and generally rise of the global economy increases the risk appetite and commodity currencies like AUD and NZD growing.
USD - dollar marked a significant growth against the euro, Swiss frank, Japanese yen and New Zealand dollar this week, and remained relatively unchanged against the Australian dollar, British pound and Canadian dollar. The increase came mainly from better GDP figures which were announced on Thursday. At present, the greenback gave indications of end to the correction, and levels at this moment is good for long positioning. Next week, investors will be alert and expect data on new jobs and report to the members of the Federal Reserve, from which it will become clear what are the plans for monetary policy.
GBP - awaiting activation of Article 50, to Wednesday pound traded in a narrow range. After activation of the Article the market was observed of increased volatility, but no serious changes in the value of the pound or FTSE100. The other negative news of the week is that Scotland again resume the debate on separation from the Kingdom. This can be pressed pounds down in the coming days if the secessionist mood intensified. At the moment the mood in the British currency are rather negative and most crosses her move in range.
EUR - Last week the euro fell to its competitors, the most noticeable was the decline against the dollar. On one hand, the euro area and the EU are under pressure, because of the upcoming elections in France and Germany rising populist waves across Europe. On the other hand the activation of Article 50 of Theresa May undoubtedly affects the EU and this adversely affect the price of the euro currency. During the week we heard comments that the ECB is not considering to make any change in monetary policy and quantitative easing programs. All this will continue to suppress the euro in the next week. Sentiment is negative and bearish stay tuned for next week, any correction in the euro will give us a good opportunity to short positions.
Gold - last week the precious metal first rose amid rising risks along article 50, but then fell when the dollar began to recover and indices grew. Considering the good results as the stock market and dollars, we remain bearish set to precious metals and on any correction we will be used for realization of new short positions.
Crude Oil - after meeting in Kuwait on Sunday, a few members of OPEC, decided to proceed to another reduction in Oil yields, the price of black gold began to rise. Later in the week, on Wednesday data on oil stocks in the US showed fewer quantities in warehouses and this further supported oil prices.
What to expect on the markets next week
Monday:
- Day Off in China
- Retail sales in Australia
- PMI in manufacturing to China
- PMI in manufacturing from Germany
- PMI in manufacturing from the UK
- PMI in manufacturing US
Tuesday:
- Day Off in China
- Interest rate in Australia. Expected to increase the rate.
- PMI in the construction of the UK.
Wednesday:
- PMI in the service sector in the UK
- ADP Nonfarm Payrolls
- FOMC Minutes
Thursday: Thursday is not expected important economic data.
Friday:
- Nonfarm Payrolls!
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