This week is set to be filled with interesting political and economic events which are likely to stir the financial markets. Particular attention will be drawn to the monthly US non-farm payroll report along with the unemployment rate, both due to be released by the US Department of Labor on Friday. This important economic data comes just a week after the two-day testimony by Fed’s Ben Bernanke, in which he zealously defended the asset-purchasing program for stimulating the US economy, which has been running for more than a year.
Most analysts expect that a positive data on Friday would give a new impetus to leading indices as well as record values for the blue chip US30, which closed on Friday at just about 100 points (14090) below its highest value ever reached – 14190.
Central bank meetings take place in the upcoming days in order to decide on their key interest rates, starting with Australia on Tuesday, followed by Canada on Wednesday; and Japan, the UK and the Eurozone, all set for Thursday. Investors will be kept in tension as poor economic data from the Eurozone intensified speculations about lowering the interest rate of the area, which will probably lead to a new decline in EUR/USD. In last week’s trading, the most popular currency pair lost 166 pips and closed at 1.3021, just above the critical support level of 1.30.
The political unrest surrounding elections in Italy, which took markets by surprised, will be another major topic that can move the charts. Three coalitions and a single party won first places in the elections; however, their almost equal results made it impossible to form a stable government. Following this political uncertainty, EUITALY40 lost 3.57% of its value last week and closed at 15,689 points.
Gold and silver ended the week with minimal losses. The yellow metal closed on Friday at $1,575 per troy ounce, or a 0.30% loss, while silver closed at $28.57 and a decrease by 0.68%.
A more serious downtrend was seen in oil futures. BrentCrude lost 3.16% over the last 5 days and was last quoted at $110.61 a barrel, while U.S. WTI0413 wiped out 2.64% of its value, ending the week at $90.92 a barrel.
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