Weekly reviews

News-rich and interesting week ahead

On Monday, US markets are closed; America celebrates the birthday of Martin L. King.  and, therefore, the trading activity in most markets will be reduced. Despite the day-off, investors began to prepare for a busy week ahead, as the most significant event no doubt will be Donald Trump’s inauguration for US presidency.

On Friday, January 13, most US indices closed in the green, amid positive US financial sector statements. As we wrote earlier, investors' attention has shifted completely to the US reporting season. The bank profits growth convinced players that the recent financial sector pre-Christmas rally triggered by Trump's victory was somehow justified. JP Morgan Chase & Co. reported earnings above expectations, mainly due to the bank's trading department, while Bank of America profit increased by 43%. Wells Fargo reported earnings below expectations. Financial giants will continue to report this week. Goldman Sachs, Citigroup and Morgan Stanley will publish their reports on Tuesday. On Thursday, IBM and American Express will report, on Friday General Electric.

Recent economic data in the US showed that the December retail sales rose by 0.6%, which was less than expected, while sales during the Christmas holidays have grown by 0.4%. Producer prices rose 0.3%, while inventories rose 0.7%. The consumer confidence index from the University of Michigan came out with a value of 98.1, the data was better than expected.

On the FOREX currency market, the week began with a slight US dollar gains. Today, trading volumes on FOREX are significantly below average.

The oil market is stable in the absence of US players. Brent crude oil futures are traded at $ 55.55 per barrel. This week, the focus will be on any hints of OPEC+ production volumes cuts. Formed fundamental background for oil is rather negative. This week, we expect volatile trading within range of $ 53.50- $ 56.50.

The starting week and at least, the first part of it suggests restrained trading in anticipation of the Trump inauguration. Despite the fact that the week will be of an extremely rich in news background, most likely it will be exactly the case when the policy will prevail over the economy. In addition to the inauguration, market expects Fed comments and statements. Janet Yellen will speak twice this week, on Wednesday and Friday. On Tuesday, we will hear two FED representatives: William Dudley and Lael Brainard. British Prime Minister T.May  is due on Tuesday to clarify its position on Brexit and finally on Thursday ECB hold a press conference. US corporate earnings continue to be published - industrial corporation will report closer to the second part of the week.

International Economic Forum in Davos, Switzerland, will begin on Tuesday, and, as always, attract a lot of economists from around the world. President of China Xi Jinping and his comments are the most significant figures  to watch  in the light of possible "currency" deterioration with US and international trade prospects as a whole.

chart 01.2017

chart 01.2017

chart 01.2017