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  1. 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. What’s 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. Trump’s 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 former’s 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
  2. Weekly Financial Markets Review U.S. indices recovered after the setback caused by Trump’s health care defeat in the Congress. Apparently, the market focuses on the state of the U.S. economy. The upcoming week will bring quite a bit of interesting reports. Those include data on ISM Manufacturing and Services indices. And, undoubtedly, the most important release of the week – NFP data. Strong U.S. statistics will contribute to the continued U.S. index growth. Although a short-term drop might be the first reaction amidst expectations of an earlier rate increase. However, there is a risk factor. A meeting between Trump and Xi Jinping, President of P.R.C., is scheduled for Thursday. A lot depends on how the meeting goes. If there happens to be no constructive dialogue, S&P 500 (ES) may fall back to 2,317.50. And it may be the case because Trump has repeatedly exhibited his protectionist attitude. Commodity Market Oil managed to recoup losses. Brent quotes are back to $53 a barrel. Further growth is doubtful. Oil is still affected by contradictory factors. Brent (BRN) is highly likely to stay within the limits this upcoming week. It will vary between 50.00 and 54.20. The energy carrier is supported by hopes for renewal of the agreement to cut oil production for another 6 months as advocated by Kuwait, Iraq, Venezuela, Angola and Algeria. Those efforts are opposed by a continued increase in drilling activities in the U.S. According to Baker Hughes, over the last 12 weeks the number of active drilling units, along with the production in the U.S., has been on the rise, which has been slowing down the rates of oversupply reduction on the global market. Especially since the reserves are enormous. That factor can impede with a considerable oil price growth. That is why sellers can become active at the resistance line of 54.20. Exchange Market Recently the Australian Dollar has been looking vulnerable. AUD/USD quotes went down even when most of USD opponents were taking advantage of its weakness. The Reserve Bank of Australia (RBA) will announce its decision concerning the monetary policy this upcoming week. We do not expect the RBA to reduce the rate. Such conclusions are suggested by the minutes of the March meeting when the RBA announced that it was expecting a consistent growth in the price pressure. That is why a lot will depend on comments from the regulatory body. Hints at a tighter policy are unlikely. Recovery of GDP growth rates relies on relatively low rates. And, if the regulatory body lets us know once again that an expensive AUD is an obstacle to economy recovery, the Aussie will be under pressure. Therefore, AUD/USD will aim at reduction to 0.7490 after hitting 0.7580. Ivan Marchena, analyst of Libertex
  3. Stock Market Trump’s proposed voting on health reform became one of the key events at the end of this week. Just to remind you, it was postponed on Thursday. However, market is extremely sensitive to this matter. So, if Congress still votes for Obamacare abolition, US stock indices can get a new impetus for growth for almost the entire coming week. The fact is that the outcome of the vote is currently indicative of the public perception of any further US President initiative. Let me remind you, Trump announced both tax reform and new infrastructure projects. Moreover, the final fourth quarter US economy growth data may also contribute to this perception. If the indicator is slightly below tentative estimate, S&P 500 (ES), having experienced a short-term fall, can easily resume its growth to about 2400. This growth will be supported by the expectations that the next US Federal Reserve rate increase will occur no sooner than Q3, 2017. Commodity Market Oil closes one more week with a decline. Previously, Brent quotes renewed the 4-month minimum, falling down to the level of 49.71. There are no reasons for a more dramatic fall. Likewise there are none for recovery of the recent maximums. The likelihood of Brent (ICT) forming a new fluctuation range is high. It will be limited to 50.00 - 52.60. This weekend OPEC+ Oil Output Agreement Monitoring Committee will have a meeting. If compliance with the agreements is high, oil will start moving to the upper boundary of the range at the beginning of the next week. Moreover, the range of $50 per barrel for Brent looks quite low as a purchase price. However, growing number of operating drilling rigs in the United States still remains a risk factor. It results in the production increase and, therefore, hinders reduction of oversupply in the global market. In addition, the market will monitor US commercial stock data. If the indicator continues to reach new heights, Brent will test a 50.00 level for strength again. Currency Market Pound experienced a rather dramatic spike in recent weeks. The Brit grew partially against the weakening dollar. However, GBP/USD in many respects was supported by aggressive comments on monetary policy voiced by the Bank of England. Victorious march of the British currency is likely to interrupt at this point. Next week, the UK government initiates Article 50, officially launching the Brexit process. This fact alone may turn to be a mighty catalyst for the fall. The fact is that Brexit stirs long negotiations about exit conditions. And they are going to last as long as at least a couple of years, which means that British companies will be cautious. They will temporarily stop investing and cut their costs. This uncertainty will naturally impact the pound. Moreover that the European Union is clearly not going to make any concessions. Thus, the GBP/USD pair will target reduction to the level of 1.2380. And, if, on top of that, the Q4 GDP data will be revised downward, the pair will go even lower, to 1.2260. Ivan Marchena, analyst of Libertex libertex.com/?utm_source=forum&utm_country=ue&utm_mediumtype=pr&utm_medium=link&utm_campaign=self