A Week On The Market: Oil, The Fed, And A Pinch Of Politics

A Week on the Market (09/16 - 09/22): Oil, Fed and a Pinch of Politics



At the beginning of the new week, capital markets are focused on oil as well as on the approaching session of the Federal Reserve System. Investors are not going to get bored.

Brent: aiming at 70 USD

Brent: aiming at 70 USD

By Monday, the terrorist attack on the petroleum refineries of Saudi Arabia, which damaged a number of plants and predictably reduced the volume of export to the world market, raised the price of Brent oil by almost 10%. It should soon become clear who is behind those attacks and how the market will cover up for the supply vacuum that is inevitable to show up. For Brent oil, the current situation is a chance to reach 70 USD, though it is clear that as soon as the situation stabilizes, the price will head back for 60 USD.

The Fed should decrease the rate, the dollar is ready

The Fed should decrease the rate, the dollar is ready

The September session of the US Federal Reserve System, which will end Wednesday, September 18th, is not going to become serious stress for the EUR/USD. It has been long known that the White House is pressing hard on the regulator, demanding an interest rate significantly lower than the current one. So, this time the Fed will risk a decrease by 25 basic points; and in December, it is likely to secure the result and decrease the rate once again. This scenario is embedded in the EUR/USD quotations, so there may be some movements in the pair only if the reality differs significantly from the forecasts.

The pound will have to react

The pound will have to react

There is another session of the Bank of England planned for the coming week, but in this case, the interest rate is likely to remain around 0.75% per annum — the time for stimulations has not come yet. GBP/USD will follow the speech of the Central Bank head Mark Carney and decline if the economic forecasts of the usually cautious British regulator are grave.

The yen: the demand for the safe asset may be back any time

The yen: the demand for the safe asset may be back any time

The week of the Central Banks on the market could not do without the session of the Bank of Japan. The last published statistics in the country clearly reflected a slow-down of the main economic indicators, which may induce a new wave of stimulating. However, it is unlikely that the Bank of Japan will make any decision; everything should remain the same, with the rate of -0.1% per annum. USD/JPY normally demonstrates a poor reaction at the statistics, though the commentaries of the BoJ may make the yen step back. Moreover, nowadays the investing world is full of optimism and appetite for risk, and the demand for the safe yen is low, but it might be back at any moment.

Syria: the issue remains unresolved

Syria: the issue remains unresolved

This week, Russia, Turkey, and Iran will gather in Ankara to discuss the issues of Syria. The main point of the agenda is the presence of terrorists in the North-East of the republic and in the Idlib province. What is more, the parties plan to get down to restoring the infrastructure of the region, which means that later we may hear of interesting bargains and orders at the corporate level. Such talks, if they are positive, are good for the world capital markets on the whole.

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