Disappointing data pushing the European exchanges into the red zone and oil is stable

2022-01-10T18:20:27
Asian indices European exchanges Oil Red Zone stock indices
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Disappointing data pushing the European exchanges into the red zone and oil is stable

Disappointing data pushing the European exchanges into the red zone and oil is stable: European exchanges are preparing for a difficult start today, especially after disappointing data were published in most European countries last Friday. 

Evest follows market developments in the following report.

Topics:

China’s foreign exchange reserves rise to $3.250 trillion 

Oil stabilizes after 5% rally last week

stock indices declined In the United States

Asian indices rally

Disappointing data in Europe

Analysts predicted

 

China’s foreign exchange reserves rise to $3.250 trillion

China’s foreign exchange reserve, the world’s largest, rose by $28 billion in December, to $3.250 trillion, from $3.222 trillion at the end of November.

This is evidenced by data from China’s State Administration of Foreign Exchange Surveillance (SAFE).

Reserves peaked in six years, according to China’s Global Times.

The reserves’ rise was observed for the third month in a row.
Experts polled by the Wall Street Journal predicted that it would fall by an average of $2 billion.

SAFE notes that December’s reserve growth was due to capital inflows into the country, offsetting the impact of a weaker US dollar.

“The dollar index has fallen, while the prices of the financial assets of many countries have changed in different directions,”
said Wang Chun Ying, spokesman for SAFE.

The value of gold reserves in the People’s Republic of China rose in December to $113.13 billion from $113.03 billion the previous month,
according to the National Bank of Kuwait.

Meanwhile, the volume of reserves remained at 62.64 million ounces.

Oil stabilizes after 5% rally last week

Oil prices grow slightly after rising by 5% last week amid concern about a lack of market supply due to the precarious situation in Kazakhstan and Libya.

The cost of Brent crude futures for March on the London Stock Exchange ICE Futures on Monday is $81.89 per barrel,
$0.14 (0.17%) higher than the closing price of the previous session.

 As a result of Friday’s trading, these futures fell by $0.24 (0.3%) to $81.75 per barrel.

The price of West Texas Intermediate crude futures for February in electronic trading on the New York Mercantile Exchange (NYMEX) is $79.01 per barrel,
$0.11 (0.14%) higher than the final value of the previous session. By the end of Friday’s trading, the value of these futures fell by $0.56 (0.7%) to $78.9 per barrel.

Over the past week, the price of Brent crude rose by 5.1%, that of West Texas Intermediate – by 4.9%.

Michael Lynch, head of the Department of Strategic Energy and Economic Research, said that the situation in Kazakhstan is alarming,
with the country exporting about 1.5 million barrels per day. 

Standard & Poor’s Global Platts, the operator of Kazakhstan’s largest oil field,
said it had to adjust production due to logistical problems associated with political protests in the field. 

Tengizchevroil reported to Interfax-Kazakhstan that “a certain number” of people were involved in supporting “peaceful gatherings in the Mengistu region.”

According to the experts, “if a significant amount of production is lost in Kazakhstan, the upward trend in the oil market will intensify.”

In the meantime, production in Libya, which declined last week due to the closure of a major oil pipeline in the east of the country, is recovering.

After completion of work on the pipeline, production increased by 900 thousand barrels per day, according to Bloomberg reports.

 

stock indices declined In the United States

In the United States, stock indices declined by 0.01-1% last Friday against the background of US job numbers statistics,
which turned out to be worse than analysts’ predictions.

The Dow Jones Industrial Index fell as the market closed on Friday by 4.81 points (0.01%) to 36231.66 points.

The Standard & Poor’s 500 fell by 19.02 points (0.41%) to 4677.03.

The Nasdaq Composite Index lost 144.96 points (0.96%) to 14935.90.

Over the week, the Dow Jones index fell by 0.3%, the Standard & Poor’s 1.9%,
and the Nasdaq composite – 4.5%, while last week’s decline was the highest since February.

According to the US Department of Labor, the number of jobs in the country’s economy rose in December 2021 by 199 thousand,
with growth projections of 450 thousand.

The unemployment rate in the country fell to 3.9% in December, the lowest level since February 2020,
with projections of a decline to 4.1% from 4.2% in November.

Last week, the U.S. Treasury yield had also a key role, where the yield on 10-year government bonds jumped to about 1.8% per year.

The steady rise in profitability is putting more pressure on the technology sector, which is affected by its changes,
negatively affecting the dynamics of the Nasdaq composite index, according to MarketWatch.

In the meantime, Mary Daly, President of the Federal Reserve Bank of San Francisco (FRB) ,
said at the annual meeting of the American Economic Society (AEA) held on Friday,
that she supported the idea of a gradual increase in the prime rate by the US Federal Reserve in parallel,
with the declining size of assets on the regulator’s balance sheet.

“I would have preferred that we gradually adjust the rate and begin to reduce the balance earlier than we did in the previous session,” she said.

Asian indices rally

On Monday, index growth prevailed in Asia with the exception of Japan’s closed stock exchange. 

China’s Shanghai index added 0.25%, Hong Kong’s Hang Seng rose 0.8%, and US stock futures stabilized, with the S & P 500 rising by only 0.02%.

Major stock markets in Western Europe declined on Friday, with the exception of Britain, with considerable macroeconomic information released.

 

Disappointing data in Europe

The composite index of the largest companies in the Stoxx Europe 600 region fell at the end of trading by 0.39% to 486.25 points.

The French CAC 40 and IBEX 35 fell by 0.4% during the day, the German DAX – by 0.65%, and the Italian FTSE MIB – by 0.1%.

In the meantime, Britain’s FTSE 100 index closed the session 0.5% higher.

Preliminary data from the European Union Statistical Office (Eurostat) showed consumer prices in the euro area,
rose by 5% in December compared to the same month a year ago.

Thus, its rally pace accelerated for the sixth month in a row and reached a record high.

Prices excluding food and energy (CPI) rose by 2.6% on an annual basis, as in November.

This is the largest increase since March 2002

Analysts predicted

Analysts predicted an increase of 4.7% in the former and 2.5% in the latter, according to Trading Economics.

Eurostat also reported that retail sales in the eurozone rose by 1% in November on a monthly basis and 7.8% on a monthly basis.

At the same time, experts predicted a decrease in the first indicator by 0.5% and an increase in the second by 5.6%.

The European Commission said the composite index of business and consumer confidence in the eurozone,
fell to 115.3 points in December from a revised 117.6 points the previous month.

The consensus expectations assumed a decrease to only 116 points.

In the meantime, industrial production in Germany fell by 0.2% in November compared to the previous month, the German Statistical Office announced.

This surprised analysts, who expected an average rise of 1%.

France’s consumer spending rose by 0.8% in November compared to the previous month, according to the country’s statistics.

This is the maximum rally in the last six months. Experts predicted a less significant rise by 0.5%.

 

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