Weekly reviews

Yellen expects interest rate hikes, depending on economic conditions

On Tuesday, despite the positive trading for the whole day, European markets lost all the gains and closed the day neutral. US dollar gained due to Fed's chief statement on impending interest rate hike, this fact returned the pressure on the metals markets and oil. On the contrary, the US market continued to update the historical highs amid the financial sector gains.

Today, European stocks have returned to growth, amid gaining banking sectors that have received support after Yellen’s speech yesterday.

Banks and insurance companies have become the locomotive for the stock market gains today. High interest rates will create a favorable situation for the financial sectors, due to the growing profitability of loans. US monetary policy has a significant impact on the banking system in the world. The yield on US government bonds returned to this year's highs.

Greece and its lenders are stepping up efforts to conclude the negotiations on the fund allocation for the country. In July, Greece must repay debts of 6 billion euros.

The average wage in the UK, excluding bonuses in December rose by 2.6%, with growth forecast at 2.7%.

Numbers of jobless claims in the UK in January fell by 42,400, with growth forecast at -800.

UK unemployment rate in December remained unchanged at 4.8%, in line with expectations of economists.

Strong upward movement of the oil market did not happen - on the contrary to our expectations. Statistics on oil inventories from API had a negative impact on the market - an increase in crude oil reserves amounted to almost 10 million barrels. Today, the focus of the market will be on official US data. Brent crude oil will keep range trading inside $54.50-$57 for the rest of the week.

In the first half of this week, global markets remain positive sentiment. Markets priced in the tax regime changes the United States. In addition, the demand for the financial shares has returned amid the latest news. Yesterday FED statement has a hawkish character, though more or less discreet. Against this background, the US currency continued to gain amid local burst of volatility in metals markets. Today, the focus is on large block of US data - US inflation, industrial production and retail sales. In addition, the head of the Federal Reserve will make another statements today.

chart

chart