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Old 04-19-2017, 04:21 PM
Libertex Libertex is offline
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Weekly Financial Markets Review
Equity

Geopolitical factors were the key catalyst that powered the market over last week. The investors started to quit risky assets. The US indices, too, faced pressure.

Last Friday, the news appeared of the US being prepared for a preventive attack on North Korea, naturally fuelling the apprehension that the conflict would escalate, as North Korea will obviously retaliate. With the news like that, the indices will remain under pressure.

Whatís more is that President Trump apparently revisited his political stance. He now says that he would prefer that the interest rates are kept low, so giving rise to doubt about Mr. Trumpís acting on his campaign promises regarding the tax and infrastructure reforms.

The statistics are also offering little room for optimism, with the retail sales dropping by 0.2% in March and the February figures also revised downward. All of this is the evidence that the economy growth pace will potentially be weak over the first quarter.
The statistics will remain downbeat even over the week, with the S&P 500 to continue sliding down toward 2290.00.

Commodities

The oil hit the monthly high again, but the momentum was not strong enough to power the price growth, so the quotes were pulled back by the end of last week. Fundamentally, with the current market backdrop, the prices are to consolidate quite high.

The oil prices are being underpinned by a bunch of factors outweighing the hike in oil production such as verbal interventions by OPEC officers boosting hopes that the oil production cut will be extended. With the start of the holiday season in the US, the gasoline demand will grow, and the oil inventories will reduce. The even more acute tensions in Syria will also be an upside driver for the oil. So Brent is to remain within the 55.00-56.90 range.

Forex

Euro is struggling desperately to rebound amid virtually zero growth drivers. The only upside trigger (and the only reason why the prices for the pair are able to grow from time to time) for the USD/EUR pair is the formerís weakness.

The common European currency will be struggling with pressure during the week.

The macro-statistics in focus will be Eurozone CPI figures and the PMI and ISM index reports. If the inflation is lower than expected, this will add more pressure on the euro.

Thus, the odds are very strong that the EUR/USD pair will continue spiraling down toward 1.0500.

Ivan Marchena, analyst of Libertex
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