The US stock market was closed on Thursday due to the Thanksgiving Day and is closed today for most of the afternoon. The US dollar index, a measure of the dollar value against a basket of six major currencies, stood at 99.844.
The European stocks advanced on Thursday ahead of the ECB meeting next week, where the bank is to ease monetary policy in order to boost inflation. The EUR/USD pair headed towards the 7-month lows on expectations of ECB decision next week. Markets believe more in aggressive actions by ECB, which provokes rally in the European markets that already outperform the US stocks and drives euro even lower. The divergence between the ECB and the Fed monetary policies in case the Fed finally hikes the rates in December will further weaken the euro. The pan-European FTSEurofirst 300 index rose 0.8% while the Euro STOXX 50 rose 1.1%. Companies continue releasing their quarterly operating profits and outlook for the next financial year, which has a great influence on their stocks. Chipmaker Infinion surged 14% on its strong financial statements and dividend increase that were above the expectations. The news drove up the other chipmakers’ stocks: STMicro (N:STM) rose 5.6% and Dialog Semiconductor (L:0OLN) rose 4.8%. Royal Unibrew (CO:RBREW) sh=ky-rocketed 8.4%, while Remy Cointreau (PA:RCOP) lost 2%. Notorious Volkswagen (DE:VOWG_p) was 3.8% up after 10 consecutive days of growth. Other auto stocks were gaining ground as well thanks to the weakening euro. Miners saw their stocks growing on the rebounding base materials prices after hitting multi-year lows.
Nikkei index lost 0.30% on Friday on mixed economic data. The USD/JPY pair was nearly flat at 122.60. Today in Japan, the data came out that the October household spending fell 2.4% year over year in real terms. The core consumer prices are declining for the 3rd month already driven lower by falling energy prices, which shows that consumers are not strongly confident in the economy. On the other hand, the unemployment fell to 3.1%, the record low since mid-1995. Nevertheless, experts say forex is not too sensitive to the Japanese macroeconomic news.
Today the China’s stock markets slumps losing 5%, its record daily drop since this August. The market is highly volatile ahead of the IMF decision and the news the stock regulator probes one of the China’s major brokerages. On Monday the IMF will announce its decision on whether the yuan will become one of the reserve currencies included in a basket of SDR.
Brent crude oil prices edged down 1.2% in a thin trade on Thursday closing at $45.46 a barrel, while WTI futures fell to $42.51 a barrel. Markets remain concerned about the oil supply glut and stronger dollar further supports the case for demand-supply imbalance making oil contracts more expensive for international investors. Since the start of the year, Brent oil has already lost around 20%, and 8% out of them in November. On Thursday, the Chinese commercial crude oil stockpiles for October were released showing the 4.4% fall in October month over month, which is their biggest drop since 2010. Meanwhile, the oil stockpiles are increasing in the US and the EU.
Spot gold was nearly flat at $1,071.50 an ounce, its growth is limited by the expected interest rate hike in the US next month.