The new 2017th is going to be quite interesting for traders and those, who are interested to watch the market. Therefore, Trade-24 marketing department provides you an overview of interesting events and expectations, that are in the zone of heightened interest.
Europe and the US
The ECB will continue to intensify its pressure on a number of problematic indices. Since Brexit impact on Europe’s economy will be strong until the end of the first quarter of 2017, it is worth emphasizing, that the main counterargument against the pound becomes unstable three scenarios: the revision of the ECB’s rate to a negative (to – 0.1%) or positive (0,1 to 0.2%), increased the collateral value of European bonds in the 5 and 10-year term, as well as strengthening of the dollar against the pound, which will make the euro strengthened rally, but without a stable trend from the “bears”.
The capitalization of the British group Lloyds Banking Group in the a EU banking sector could be worth 11 billion pounds. According to analysts of the Fitch agency, this movement of capital may significantly affect the stability of the British currency. However, the capital transfer process can take a period of from 4 to 8 months.
Italian banks are in the loan from the state in the amount of more than 14 billion US dollars due to the crisis in the European sector. As of December 30th, 2016, the banks of Siena, Milan’s Bank agreed to an expanded program of stop-loan financing from the State Bank of Italy. Under the terms of the protocol between the European Central Bank, the German Government and the banking sector in Italy, the provision will follow the hybrid formula, the algorithm of which will be released at the end of the second decade of January 2017.
Meanwhile, the Fed may raise the main interest rate at least three times during the 2017. It is noticing, that such movements are decisive for the cost of many goods and services index. Gold continues to experience stress because of the price of the US dollar index. According to Bloomberg, this volatility will strongly depend on the set for a number of these services, but it is expected that such a scenario will be realized from the end of January 2017.
OPEC meeting in Abu Dhabi, which will be held on January 13th, takes about the price policy, as well as the percentage on the daily oil production within the cartel agreement in Tripoli (26-29 October 2016) can be a major point of departure in the price of oil for 2017. From the January 1st, it came into force the decision of the Board of the OPEC production cuts beginning of “black gold” on the earlier allocation of quotas between members and non-members of the cartel.
Asian markets will be located in an elevated area of interest to a number of indices. Among the priority interests of the group are Chinese and Japanese indices, metals quotes, buy short term bonds.
The Chinese authorities continue to monitor the withdrawal of capital from the country. The main event for the CPR would be the inauguration of the 45th President of the United States, Donald Trump, who promised to bring a part of American business. It is also worth noting, that in recent years the Chinese authorities have taken a number of measures designed to restrict the outflow of capital.That’s why, on December 30, 2016 Bank of China (PBOC) has tightened the requirements for the provision of reporting banks on cross-border transactions of their customers, as from January 1st, introduced additional measures to control purchases of foreign currency citizens.
Brazilian oil and Chilean copper
American Journal Wall Street Journal in the New Year’s edition of the material indicates, that the Latin American region will be much more attractive Asian due to a number of reasons. The first one is the constant instability of the Chinese and Japanese markets, the unpredictability of Australian and New Zealand foreign exchange rates, which does not provide a profit forecast. The second factor is the political expectations of making future administration of the White House, led by Donald Trump. Accordingly, investors and traders began to seek new sources of income.
So the market players took on the view to Brazil and Chile. The largest country of the Latin American region attracted by low share prices of the two industrial giants – oil company Petrobras and processing group Samarco Mineração S.A, who will return to the international market this year after the restructuring of their bonds.
Despite the loud political scandal with the involvement of two former Presidents of Brazil in obtaining illegal profits and power abuse (which cost Dilma Rousseff presidency by impeachment), this weakening of the state influence will give the necessary impetus to active trading. Another factor is the strong support of the insurance assets, which provides the strength of the Bank of Brazil’s bonds. All these conditions appear promising to invest the assets of a number of investors.
As for Chile, where the vector of attention a little bit different. Since the Mexican copper aroused great interest in the market for many years, now this segment of the market might be taken a much more liquid raw materials from Chile. Large capacity, good and flexible insurance policy on the quality of metal processing, logistics and gain a number of successful contracts with EU countries and companies for the production of electric cables could oust the once monopolistic position of Mexico in the global copper market. As in Brazil, it is expected to decrease political control out of upcoming presidential elections, which already displayed on the provisional application of the entrance to the Chilean market for such industry leaders like Morgan Stanley, JPMorgan Chas and BTG Pactual Group.
Indian and Indonesian bonds market services
Changing the external economic policy of the USA towards protectionist action by the incoming administration of Donald Trump, the assets of some South Asian countries look pretty attractive. These are India and Indonesia.
In November 2016, the Prime Minister of India, Narendra Modi along with the Bank of India decided to withdraw from circulation the large bills. Such a step is indicating as a danger, that could cause a slowdown in financial growth. However, the positive aspect is to reduce interest rates, which could play into the hands of Indian bonds that last for several years suffered a collapse in the value for money and reputation.
At the same time, many large companies are hesitant to Indonesia hitherto risky but justified step. Exchange of the country code is completely focused on the domestic market of consumer goods and services, as well as the mining industry, which can take advantage of the price of coal and nickel, provided growth for this commodity prices. High Yield Indonesian bonds have long been popular among European investors, as in Indonesia in recent years significantly decreased the deficit of the current account of payments of the country. This reorganization of the economy and the emergence of additional income makes Indonesia to be less vulnerable of the increase in US interest rates for the entire period of this year.
Kazakhstan mining industry
In 2017, traders and market players continue to look with interest to the Central Asian region and its mining industry. Among the main riders, Kazakhstan and the shares of KAZ Minerals PLC stands on the first role.
During the first 9 months of last year after a three-year long decline, the value of securities increased by 2.2 times – from 180 to 390 dollars per share. Such a jump became possible by a number of conditions – the latest processing equipment, a number of successful sales on the London Stock Exchange raised the profile of the Kazakh company.
Now interest in the Central Asian market will go up, as opposed to the Latin American region. On the basis of improving the quality and quantity of raw materials, goods and services, it will allow traders to raise rates in the markets and earn, and for financial analysts – the material for the analysis of formation of projections and proposals for further development.
Trade-24 Marketing department advises our traders and prospective customers continue to monitor our analytical reviews on the world market. Also we recommend to listen to the main rule of our financial analysts – “market lives by one law – only a well-known trader will make a profit.”