By IFCMarkets

On Thursday the Fed Chair Janet Yellen said the rate hike is still an open issue this year. This made the Dollar strengthen and the stock indexes fall. Higher rates may raise the credit burden on the US corporations. Further negative came from the construction and mining equipment manufacturer Caterpillar with its sales outlook revised down. Its shares were down by 6.3% reaching the 5-year low. The pharmaceutical companies’ shares fell sharply after the contestant for the US presidency from the Democrats Hillary Clinton speech on the inadmissible price-gauging in medical drugs. The yesterday’s macroeconomic news was more positive. The durable orders contraction in August and the weekly unemployment were less than expected while the new homes sales exceed the expectations. Now the US stock index futures are in the black. Today at 14:30 CET the third US GDP for Q2 is to be released. No changes are expected. At 16:00 CET the consumer confidence index for September will be released, the tentative outlook is positive.

The European markets have almost recovered losses today after the yesterday’s fall. The row with the German car maker Volkswagen is winding down. Yesterday its shares advanced 2.6% while those of its competitor BMW were up by 5%. In France the consumer confidence index in September has unexpectedly hit the 5-year high of October 2007 which made the CAC40 Index climb by 3%. Today no important macroeconomic statistics is expected in EU.

Nikkei index is in line with the other global stock indices. Yesterday it plummeted surging today even more. Investors reacted positively on the slight rise of the annual inflation rate in August. This happened for the first time since the start of the Yen emission, or the «quantitative and qualitative easing» (QQE) policy 2 years ago as it reduces the deflation risk and is in line with the Bank of Japan monetary policy. The electronics maker Sharp shares slumped 10% to reach their low since 1975. The company reported losses of 30 bln. Yen in April-September 2015.

The gold shot up yesterday on the news on the gold import to China via Hong Kong reaching the 3-month high of 59,32 tonnes. The real delivery could have been larger as import is effected via Shanghai and Beijing as well. The premium at Shanghai Gold Exchange has increased from $3-4 per ounce to $5-6. Russia and Kazakhstan have reported the increasing gold share in their reserves in August for the 6th month in a row. The international fund SPDR Gold Shares reported the gold inflow for 3 consecutive days since Tuesday till Thursday. Today the gold is on decline amid the strengthening US Dollar after the Fed statement on the possible rate hike this year.

The sugar, coffee and soy quotes surged due to the significant strengthening of the Brazilian Real from its historical low against the US Dollar. It has lost half of its value since September 2014. The Central Bank of Brazil stated it would support the Real with its international reserves. The news on China buying 13.2 tonnes of the US soy for $5.3 bln. contributed to the soy prices growth. The gross soy import to China is expected to total 79 bln. tonnes in 2015/2016 agricultural season.

The wheat prices went down after the report of the Russian government on the planned decrease of the wheat export duty since October, 1.

The beef price is up after the news that its import to South Korea grew to the 4-year high despite the 35% internal price growth in the last 8 months. The beef is considered to be an important part of the holiday meals in South Korea so the demand on it does not depend on its price.

Market Analysis provided by IFCMarkets