All focus on Central Banks meeting in Jackson Haul next week

19/8/2016

US stocks closed slightly higher on Thursday due to the gains in energy sector. Brent oil surpassed the level of $50 for the first time in 6 weeks which lifted up energy shares. Oil is being supported by the meeting of oil producers late in September where they are to discuss an output freeze. As a result, the energy index added 1.8%. Wal-Mart stocks were another driver of the markets as they surged 3.1% to more than a 14-month high. The company performed that well after the release of its quarterly earnings that managed to beat expectations. US dollar index, a measure of a greenback’s value against a basket of six major currencies, slid 0.6% to 94.077, almost a two-month low, after the Fed meeting minutes which gave additional support to dollar-denominated oil. S&P 500 rose 0.22% to 2,187.02 and is up 7% since the start of the year. The index has been advancing recently on expectations of the US Fed interest rate hike given the upbeat economic data. Dow Jones industrial average advanced 0.13% to 18,597.7. Nasdaq composite added 0.22% to 5,240.15. Telecommunications sector was among the bottom performers as it lost 0.8%. Cisco stocks fell 0.8% after announcement is planned massive job cuts. Data showed on Thursday that less Americans filed to unemployment benefits than it was expected. The trading volume on the US stock exchanges was lower with 5.9bn shares having changed hands with the 20-day average of 6.4bn shares. Today at 19:00 CEST the Baker Hughes oil rigs count will come out.

European stocks were on the rise on Thursday with pan-European STOXX 600 index adding 0.72%. Today on Friday the index slumped 0.6% as US dollar was looking down and mixed data were coming from Fed on possible rate hikes. The index has already lost 6.7% this year. All the main sectors were in the red on Friday with only energy sector outperforming as BP and Statoil shares advanced on rising oil prices. EURUSD fell 0.3% to $1.1325 up 1% this week.

Asian stocks were mixed on Friday. Japanese Nikkei closed higher on Friday as yen strengthening halted, but investors were cautious ahead of the meeting of the central bank chefs next week in Jackson Hole, US. The Nikkei index added 0.4% to 16,545.82 on Friday but failed to pair all the losses and closed the week 2.2% lower. USDJPY is traded at 100.15 after hitting a low of 99.55 on Tuesday. At the same time Hong Kong’s Hang Seng index fell 0.4% on Friday to 22,937.22 also cautious about the central banks meeting which may shed light on timing of interest rate hikes.

Oil futures prices were advancing with Brent crude having surpassed the level of $51. The oil prices were supported by cheaper US dollar as oil is denominated in dollars.

Gold was looking down on Friday as some hawkish comments from Fed renewed hopes on Fed rate hike this year. Still, there is no clear direction from the Fed, the last meeting minutes showed the Fed members were of mixed opinion on the rate hike. Spot gold fell 0.3% to $1,348.31 an ounce. Silver lost 0.6% to $19.61 an ounce while Platinum fell 0.2% to $1,123.