Weekly reviews

Trading activity declines as markets consolidate on current levels

Yesterday, with the start of a new week, European markets closed mixed. Consolidation and partial profit taking mood prevailed amid further development of correction in the European banking sector; however, decline was restrained and limited in French and Italian markets. Consumer and IT sectors gain, plus strong  expectations index in Germany has allowed the German market to close in the green. (FTSE + 0.08% DAX + 0,2%, CAC -0,22%)

The US market started the week positively - on the background of significant news lack, the head of the US Federal Reserve supported the markets with her speech in University in Baltimore. Janet Yellen said that he sees a lot of signs of a healthy labor market, including sustainable growth to create new jobs, with a slight amount of layoffs. Against this background, the markets were able to show a slight increase. (DOW + 0.2%, SP 500 + 0.2%, NASDAQ by 0.3%)

Today US futures for main indices trade in the green zone, pointing to a positive Wall-Street start. European stock markets traded mixed amid positive statistics and concerns on yesterday's terrorist attacks. Published statistics have been largely positive.

Eurozone PPI ((producer price index) rose 0.6% in November month to month, according to analysts' expectations.

Germany PPI (producer price index) rose 0.3% in November month to month, while analysts had expected an increase of 0.1%.

In the Brent oil market the volatility gradually begins to increase. However, this week it is typical for the whole market on the eve of the Christmas. Many market participants are already on holiday, trading volumes are low. Brent holds around $ 55 as the fight for this level seems to intensify. Given the current fundamental picture and the strong dollar, it is unlikely Brent can go higher- despite recent OPEC + agreement there is risk of production increase primarily in the United States amid larger number of drilling stations. At the same time, the medium-term demand in the oil market is strong, as yesterday's expected technical correction did not develop and was bought out by players at $ 53 levels. This week, the oil market is likely to go to consolidation at current levels of $ 53- $ 56.

In the FOREX market during the Asian session, the Japanese Yen continued its decline, after BOJ left interest rate unchanged at - 0.1%, while the 10-year government bonds yield around zero. USD / JPY is close to the resistance level JPY118.60, however the upward impulse aim is around JPY120-JPY120.30. The Japanese regulator meeting confirmed the tendency for further Yen weakening. At the same time, the victorious American dollar gain keep on moving- on positive US economy assessment,  the dollar index crossed the 103 points level, and is very close to the maximum of a year. So expensive US dollar was not worth since 2003. The European currency is close to the year minimum and today is trading at Eur 1.0380 levels.

In general, the market trading activity is becoming low reduced. At the same time, positive market sentiment is still present. Bank of Japan meeting ended with the expected results- so nothing has changed in this area. The situation is developing in accordance with our expectations; we are seeing a small Christmas rally in developed stock markets. To a large extent, an optimistic view on American economy and oil price around $ 55 area provides this positive. A strong US dollar put pressure on metals and commodities, which combined with optimistic view on the US economy, could trigger massive yesterday sales in emerging markets and the subsequent capital outflow from developing countries. Today, the economic calendar is empty for the United States.