Although the end of the week was relatively poor for economic data, traders were definitely not bored. While stock indices around the world continued their growth, with two months of growth, the US dollar has long emerged from its good trend and began to weaken sharply again.
The dollar will again replenish the better sentiment in the financial markets, which is the main driver of the growing interest on other than dollar assets. While during the financial crisis last year the American government was able to strengthen sharply, the situation has changed since last year, as evidenced by this week. During it, the US currency lost 2.07% to the euro. Pensions, which last year went into safe (dollar) assets, are now going back to Europe, Asia and other risky destinations, and the dollar is weakening darkly at all currency crossings.
As a good mention of the start of a further downward trend this week, Monday’s meeting of one of the UN panels was discussed, which again discussed the future role of the US dollar as a world reserve currency. It has been questioned in the past by Russia, and at their instigation, alternatives such as the use of SDR (Special First Funds), an ethnic unit of artificially created leather, used by the International Monetary Fund, are being discussed.
As for economic data, even the little he drank from the US and the euro area during the week proved to be very optimistic among traders. The results of the US trade balance left a very good impression. Although it recorded a widening deficit from $ 27.5 billion to $ 32 billion, both exports and imports grew quite sharply. This is especially true of imports, its growth is a very good first for Europe and Asia, which are still very high on American demand.
US imports increased mainly due to the company effect, which increased the demand for new cars in the USA. Despite the growth of imports helping Germany and Japan, for example, to stabilize, its total volume is still about 30% lower than last year. At the same time, it is not at all certain how it will develop in a situation where the effects of fiscal stimulus begin to fade, and therefore the risks to the future have definitely not disappeared so far.
Central banks on both sides of the Atlantic are well aware of this for a long time. Even in recent days, they have once again indicated that they do not intend to change their expansionary monetary policy in any way, which was one of the other major factors that helped support the growth of stock indices. The German Bundesbank Axel Weber, for example, made it very clear on Thursday, according to which it would not be wise to remove the monetary and fiscal crutches at a time when the eurozone economy is just beginning to return.
The continued shift of favorable economic data and the intensive support of economies by monetary and fiscal policy can be considered as the main factors that help actions to grow again. In America alone, therefore, the indices rose five days in a row and in the afternoon of the afternoon they grew by less than 5% (S & P500).
Commodity prices rise
The situation was also interesting in the commodity markets. The price of gold, after a sharp rise last week, remained below the $ 1,000 per troy ounce mark, where it was hit by such a weak dollar. He prospered in the week of your commodity and so the price of oil (brent) could rise again to 70 dolarm per barrel.
This time, the oil did not react to the Wednesday meeting of the OPEC cartel in Vienna, where, according to a broad reference, OPEC agreed that there is no need to modify the current flowers in any way. The price of around $ 70 per barrel is, according to elnch representatives of the cartel, frov for both producers and consumers.
The price of natural gas on the commodity market rose sharply, rising by almost a quarter to 3.4 USD / million BTU during the week. Its growth was a response to the steep soil from the last month and thus to the development of the population in the USA, which for a long time surprised with an unexpectedly low finger.
Next week will be very rich in economic data and volatility in the financial markets will remain relatively high. Among the most interesting data in Europe are the results of the German (ZEW) index of economic climate, industrial production and the euro area CPI, while the United States is very much in line with the results of retail sales, CPI and other data from the housing market.