The Reserve Bank of Australia kept its interest rate unchanged at a record low of 2.5% on Tuesday, confirming the expectations of most analysts. The decision had a positive impact on the Australian dollar’s chart performance against its major currency counterparts with the AUD/USD in particular jumping by more than 290 pips and closing at 0.9189 on Friday.
On Thursday, the Bank of England and the European Central Bank followed suit and left their interest rates also unchanged. The ECB President Mario Draghi reiterated his previous statement that the central bank will either maintain its low interest rate or reduce it further for an extended period of time, depending on the economic indicators. Draghi’s speech caused some movements on the Forex market with the most traded currency pair EUR/USD registering a weekly decline of 41 pips and closing at 1.3171 on Friday. Meanwhile, GBP/USD reported a strong appreciation of 133 pips for the past week, mainly due to a positive economic data from the UK and closed at 1.5629 on Friday. The USD/JPY also registered an interesting week with the quote reaching the 100-mark again, but ultimately closing at 99.06 on Friday or an increase of 90 pips.
Indices
Stock markets remained under the influence of Syrian crisis talks as the US and its allies consider a possible military attack on the country. The major US indices were moving back and forth between growth and decline at the end of the past week. Investors were left confused by the combined effect of the G20 meeting news, the Putin-Obama dispute on whether there should be a military intervention against the Syrian regime and the data from the U.S. labour market. Ultimately the Dow closed with a weekly gain of 0.82%, the S&P500 ended the period with a rise of 1.39% and the Nasdaq100 increased by 1.97% for the past week.
European markets were in similar mood with their chart performance. The major indices on the continent have long been moving on a negative territory for the past week; however Mario Draghi’s press conference on Thursday and the U.S. labour data managed to lift them up. Japan’s Nikkei225 also increased and closed with a weekly rise of 4.42%.
Last week also saw one of the biggest corporate deals in history as Microsoft acquired Nokia’s mobile handset business for $7.2 billion. The news skyrocketed Nokia’s shares to more than 40%.
Commodities
The uncertainty which continues to surround the Syrian crisis affected the oil prices once again. U.S. oil futures for October delivery (WTI1013) climbed by more than 2.3%, reaching a price of $110.19 per barrel. For the same period, Brent crude oil futures (COIL1013) rose above 1.50% closing at $115.89 per barrel on Friday.
What to expect this week?
Monday is set for a modest start with the main highlights coming from US Consumer Credit Change for July and the Bank of Japan’s Monetary Policy Meeting Minutes. Tuesday will offer China’s Retail Sales and Italy’s’ GDP on annual and quarterly bases. Wednesday will see more action with Australia’s Westpac Consumer Confidence for August, Germany’s Consumer Price Index (YoY and MoM), UK’s Claimant Count Change for August and the Reserve Bank of New Zealand Interest rate decision. Thursday will deliver Australia’s employment data, UK’s Inflation Report Hearings and U.S. Initial Jobless Claims. Friday will send the week with the Euro zone employment change, US Retail Sales as well as the University of Michigan Consumer Sentiment Index.
Source: dfmarkets.co.uk
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