Markets rise on Fed minutes release - 9.10.2015

The dollar weakened with the US Dollar Index, a measure of the dollar’s strength against a basket of six major currencies, falling 0.5%. US stocks were going up on Thursday on the publication of the minutes from the Sept. 16-17 Fed meeting and the labor market data on the reduced number of applications for unemployment benefits reaching almost the 42-year low. The minutes showed that the rate hike was a close call but the policymakers were concerned that the China-led slowdown could weight on the US. S&P 500 closed 0.9% higher today reaching the fresh 7-week peak with all its ten sectors being in the black and energy and basic materials leading the growth. The Columbia Pipeline Group Inc. and the Noble Energy Inc. both jumped more than 6%. The Dow Jones Industrial Average edged up 0.8%. Today at 15:00 CET the Wholesale Trade Sales for August will be released in the US. The tentative outlook is negative. And at 18:00 CET the Baker Hughes US rigs count will be released.

The euro reached its three-week high of $1.1328 on Thursday. Today dollar holds steady against the euro at 1.1279. European stocks rallied on Friday with UK FTSEuroFirst index gaining 0.8% daily and 5% weekly led by basic materials. German DAX 30 Index and French CAC 40 were gaining 1% each despite the news that German exports slide by over 5%. The mining company Glencore topped the list of gainers surging 11.4% today and 41% this week and mining company Anglo American PLC surging 8.8%. The minutes from the ECB’ policy meeting were released today stating that downside risks to inflation intensified over summer. In UK the policymakers voted yesterday to keep the interest rates unchanged at the record-low 0.5% given weak inflation prospects aggravated by the strong pound. Today in Great Britain the Trade Balance for August was released, the data showed narrowing deficit. No more important macroeconomic data is expected today in EU.

The USD/YEN currency pair showed the strengthening of 0.19% reaching 120.14. The Yen is still under pressure as markets expect the Bank of Japan to ease the monetary policy on the October meeting. Asians stocks were ralling today due to the jump in oil prices and the release of the September Fed meeting minutes unveiling that policymakers were not in a rush to hike the interest rates. Japan’s Nikkei index ended up 1.6% adding as much as 4% this week. No important macroeconomic data is expected today in the Asian region.

Brent crude oil price set for the biggest weekly rise of 12% since March 2009 reaching $53.80 today. The WTI price added 2% reaching $50.43 a barrel. The forecaster PIPA Energy Group report released on Thursday said the oil would grow up to $70 a barrel by the end of next year thus contributing to the today’s oil price growth. It should not go unmentioned, that zinc prices surged 9% on the announcement from commodities giant Glencore that it would cut its zinc production by 4% of global supply to withstand weak commodities prices.

Copper shot up today adding 3% in reaction to the news from Glencore and reports on a pick-up in Chinese demand.

Gold rose today to three-week high supported by the yesterday’s release of the Fed minutes showing policymakers were waiting for additional signals the US economy was ready for the rates hike.