Weekly reviews

Strong China and European data failed to increase trading activity, Fed meeting in the focus

On Monday, European markets dropped and pulled back from previous week highs. As we expected, the strong oil was not able to bring indexes in the green - all sectors declined, except for energy. With the continuous decline in metal, some negative corporate information (reduction Fingerprint forecasts), and technically overbought assets, investors preferred to take a wait and see attitude. (FTSE -1,06%, DAX -0,17%, CAC -0,07%)

US markets opened the week mixed as united dynamics for US indices did not happen. (Dow + 0,2%, SP 500 -0.11%, Nasdaq -0,59%) Today in US, the main event of the week start - two-day meeting of the American regulator. Markets expect FED to increase the base rate to 0.25%. The current level of rates is 0.25% -0.5%. The markets have already priced in the expected hike and the question is about the next rate hike. In the face of strong US currency, inflation is the main issue for the American regulator for now. In this regard, all the attention will be concentrated around Yellen press conference that will be held on Thursday. This will set up the future dynamics of the American currency in the coming months.

Today European stock indices traded in positive territory amid positive economic data in the EU and the positive in the Italian banking sector. Italian banking sector has moved to gains, after the country's largest lender, UniCredit SpA, published restructuring plan. UniCredit's shares rose 7%. Shares of mining companies are trading under pressure, despite strong industrial production data from China. The statistical data form Europe appeared to be positive as well

The consumer price index in Germany rose by 0.1% in November.

The consumer price index in Spain rose 0.4% in November.

The index of current economic conditions in Germany ZEW in December to 63.5, at the forecast 59.1.

Asian stock indexes closed mixed, despite the positive industrial production data from China, as overall trading activity remained low. Chinese retail sales also rose by 10.8% in November compared with a year earlier, accelerating, compared with growth in October by 10.0%. The volume of industrial production in the second largest economy in the world grew by 6.2% in November. (Nikkei + 0,50%, S P ASX 200 -0,32%, Shanghai Composite + 0,07%)

In the oil market bears attempted to close the Monday gap on profit taking pullback. Technically, they did not succeed, which indicates the strength of short-term bull trends in the oil market. Now there is a cooling positive of Saturday's OPEC agreements - a real decline in production, as in the past is in question. The further strengthening of oil amid a strong US currency and the Fed meeting seems problematic. From a technical point of view, Brent might return to the area of ​​55 seems very shortly.

Today we expect the second day of the reduced trading activity in the stock markets and the FOREX market. US dollar index freased in the range of 101-101.50. Closer to the second half of the week the players' attention will shift to the large volume of important macroeconomic and FED data.