Indices: White House favourite for Fed Chairman Janet Yellen was firm in defending the quantitative easing programme in her first appearance before Congress. She justified the economic need for a $85 billion-a-month asset purchasing and keeping the interest rate at record low. Her hearing caused a furor on the US stock markets, pushing them to new highs.
The S&P500 ended the week at 1,798 points, marking another weekly appreciation, this time by 1.57%. The Dow closed the period at 15,961 points, or up 1.26%. Investors in tech stocks also had a reason for joy after the Nasdaq100 added 1.73% to its value, ending the period at 3,423 points.
Yellen’s speech had a positive impact on the European stock markets as well, and despite the record low inflation in the euro area in October, stock market indicators were coloured in green. Germany’s DAX30 added 0.90% to its value on Friday, closing at 9,175, while France’s CAC40 ended the week with a 0.49% increase, landing at 4,293 points.
In Asia, Japan’s Nikkei225 crossed the psychological barrier of 15,000 points for the first time in six months and closed the week with a gain of 7.22% at 15,302. Shares of tech giant Sony (6758/JP) rose nearly 12%, reaching a price of 1,842 JPY after the company began selling its new PlayStation 4 console, which was bought by more than 1 million fans in the first 24 hours.
On the Forex market, chart movements were triggered by news from the US. The most popular currency pairs, EUR/USD and GBP/USD, rose by 131 pips and 100 pips, respectively, closing the week at 1.3490 and 1.6112, while the JPY/USD increased by 106 pips to 100.21.
On the commodities market, gold and silver trading was missing a vibe and was not very active. The price of gold remained virtually still on Friday, closing at $1,288 per troy ounce, or a change by 0.01%. Silver, on the other, was down by 3.30% to $20.75.
What to expect this week?
As the Earnings season is already approaching to its end, investors’ attention will again be focused mainly on the economic calendar events. Tuesday’s highlights include the Reserve Bank of Australia Meeting minutes, the ZEW Survey of the Economic Sentiment in both the Euro zone and Germany, and Japan’s Exports and Imports for October (YoY). Wednesday has a lot to offer, with quite a substantial amount of data coming from the US – Fed’s Bernanke speech, Mortgage Applications, Consumer Price Index for October (YoY and MoM), Retail Sales and Existing Home Sales Change, with both reports being for October. Other events include the Bank of England Meeting Minutes as well as the country’s Inflation Report Hearings. Thursday is set to reveal the Bank of Japan Interest rate decision and Monetary Policy Statement, the Markit Manufacturing and Services PMIs for November of France, Germany and the Eurozone. More data will come from the US Initial Jobless Claims and Producer Price Index for October (YoY and MoM), along with the Eurozone Preliminary Consumer Confidence for November. Friday’s main entries will be Germany’s GDP (QoQ and YoY) and the Bank of Japan Monthly Economic Survey.