A volatile week for the equities and commodities markets ahead of the FOMC meeting

Friday, December 13, 2013

European equity markets finished lower on Friday, ending a fairly volatile week amid mixed economic data from the US and Eurozone, hurting market sentiment, while renewed concerns about QE tapering dominated the markets. CAC, DAX and London equities retreated, while the euro remained under pressure, trading at 1.37 against the US dollar.

On the macroeconomic front, the core US producer-price index increased by 0.1% in November, in line with analysts’ expectations, while US PPI inflation rose by 0.7%, slightly below analysts’ estimates of 0.8% increase. The US dollar was firmer against the euro, while the USD index held above 80.0 area, showing signs of correction higher, following news the US House of Representatives passed the budget bill on Thursday evening, which will head to the Senate next week for a final vote.

It has been a fairly volatile week for the equity and commodities markets, including mixed US economic data and renewed concerns about an end of the US Fed stimulus programme.

In commodities, base metals prices found some upside momentum and rebounded higher in today’s trading session. LME Copper ended above 7,250 level and Ali rebounded to retest 1,800 area.  

However, the oil market remained under pressure as Brent has plunged more than $3 this week, retreating from $111.80 per barrel on Monday down to $108.20 per barrel area.

The main focus next week will be on the FOMC meeting, which could give a clear direction for the future of the US stimulus programme. 

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