Fundamental analytics

Results of the week 12.08-18.08

Financial markets remain under pressure as global economic development prospects deteriorate

  1. Gold updates multi-year highs  

  2. Stock market remains under pressure

  3. Yield of American treasuries is decreasing

 

Last week, the risks associated with the slowdown in the global economy still had the strongest impact on the dynamics of financial markets. The decision of the White House to postpone the introduction of new trade duties on Chinese imports until December 15 did not contribute to the stabilization of the overall market situation. Active decrease in the yield curve of American treasuries and tense situation in Hong Kong supported a high level of demand for protective assets, thanks to which gold set a new seix-year maximum at the level of $1535.

Currency market

The currency market demonstrated rather multidirectional dynamics of movement against the background of general uncertainty.

The European currency was trading with a decline, while the British pound was able to strengthen its position after good economic statistics from the UK were published.

Demand for the European currency continues to decline against the background of worsening economic indicators in the Eurozone and the difficult situation in world trading, which has a negative impact on the open economy of the EU.

The dollar index kept the uptrend vector of the movement for the week due to the publication of strong economic statistics. But the dynamics of the yield curve of the U.S. treasuries remain a serious risk factor for the U.S. currency, which may strengthen the market's expectations regarding the implementation of a softer monetary policy on the part of the Fed.

Precious metals market

High geopolitical risks and difficult situation in the world trading continue to support the high level of demand for protective assets, the main of which is gold. Thanks to this, the precious metal continues to reach new multi-year highs and this week was able to test the level of $1535 (for the first time since March 2013).  

Oil market

The oil market demonstrated quite volatile trading during the week. Investors reacted very strongly to the trade relations news between the USA and China, as well as the publication of economic statistics from the USA. Despite the presence of serious pressure factors, buyers managed to hold their positions, maintaining good opportunities for the recovery of quotations in the future.

Stock market

Main stock indices closed the trading week in the red zone. Pressure on the market is still exerted by the situation in world trading. Also, the difficult situation in Hong Kong and downward dynamics of the yield curve of U.S. treasuries reduces the investors’ appetite for risk.

 

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