Weekly Outlook 08th-12th of January, 2018
The US dollar moderately rose against the euro, retreating from the low of September 8, as investors believe that the weaker than expected US non-farm employment report will not prevent the Federal Reserve from raising interest rates several times this year, albeit at a gradual pace . We assume that the mark of 1.20 is a sensitive, psychological level, a kind of red line for which the market to let the US financial and monetary authorities not be profitable ahead of the upcoming 1Q. aggressive placement of the US Treasury. According to the Ministry of Labor, the number of jobs in the non-agricultural sector increased by 148,000, the unemployment rate remained unchanged at 4.1%. The biggest drop since March was the level of employment in the retail sector, with 20,300 jobs in December. The annual salary increase in December increased to 2.5% against 2.4% in November.
The British Pound traded last week most volatile, out of all major pairs. At the beginning of the week, the pound strengthened strongly, reaching its highest level since September, on technical factors - breaking through a strong resistance level of $ 1.3550. Further, the exchange rate fell solely on the fundamental indicators. Data for the UK were much worse than expected - IHS Markit's growth in production activity slowed in December, the Purchasing Managers Index fell to 56.3 with the expected 58, weak PMI construction data, job creation in the services sector declined to 9-month minimum in December. At the end of the week, the pound rebounded against the background of mixed data on employment in the US.
Bitcoin continues to recover, the cost of crypto currency last week was above $ 16,000. After exceeding the historical maximum at $ 20,000 in mid-December, the price fell from $ 17,000 to $ 13,300 in just one day, now investors are gradually recovering losses. In early 2018, bitkoyn started trading at around $ 13,000, but already in the middle of the week, reaching $ 15,000 on news about significant investments in Bitcoin Founders Fund. Judging by trading volumes, today's growth again drew investors' attention to bitcoin, which gave a significant push to grow to a new high of 2018 at $ 16,000
In December, 2017, against the backdrop of problems on the pipeline in the North Sea, the cost of oil rose above $ 65 per barrel. But in the beginning of 2018 the pipeline will resume its work - this temporary factor will disappear and the cost of Brent crude oil may drop a little. Another factor that is negative for the market is the rate of economic growth of China, one of the largest consumers of oil. The decline in GDP in the totems of 2017 and in subsequent periods may also cause a correction in the market.
Interest in gold has increased. Last week, buyers pushed prices for gold up amid concerns about inflation in the US. Investors are also afraid that crypto-currencies are a soap bubble. You should always observe the price of gold, as their growth can be a warning sign, as it was on the eve of the financial crisis.
We bring to your attention a number of news, which, in the opinion of our analysts' team, will have a significant impact on the market volatility this week.
Monday 08 January
Switzerland - Consumer Price Indices
Evrozon - Indicators of investor confidence, business climate, level of consumer confidence, Service mood indicator, As the service sector accounts for almost 2/3 of the euro area economy, the indicator is of great importance for determining the level of economic activity in the region.
USA - data on the placement of 6 monthly bills, Data on the volume of consumer loans,
Tuesday 09 January
Japan - The change in the level of wages, the index of consumer confidence - an indicator published by the Cabinet of Ministers of Japan and assessing the mood and degree of citizens' confidence in the economy of the country.
Switzerland - Unemployment rate
Germany - data on industrial production, report on imports and exports, balance of payments.
Evrozona - ECB meeting on monetary policy
Canada - begun construction of houses
USA - Report of the American Petroleum Institute
Wednesday January 10th
Australia - assessing the business climate in Australia
China - indices of consumer prices, producer prices, data on the issuance of new loans
UK - data on industrial production, GDP growth estimates
USA - Change in oil and oil products stocks
Thursday January 11
Japan - data on foreign exchange reserves
Australia - Retail Sales Data
UK - Bank of England Report on Credit Conditions
Evrozona - data on industrial production, Information on ECB meeting on monetary policy
USA - Data on applications for unemployment benefits, price indices
Friday January 12th
Japan - Investment data, foreign trade balance, bank lending
China - Data on investments, exports and imports, trade balance
USA - Consumer Indices