Global financial markets: November 2013
Material posted: -Publication date: 02-12-2013

Last month, the situation on world financial markets was largely determined by three main events:

  • beginning October 1 new fiscal year in the United States;
  • the signing on October 17, President of the United States act to raise the debt ceiling until a budget has been agreed until January 15, 2014 the government's borrowing limit extended until February 7.
  • published on October 20-21 Protocol of the fed meeting from October 29-30 to discuss the staff reduction in the coming months, the volume of quantitative easing program; more simply – suspend or slow down the emission of US dollars to support the U.S. economy.

These three events financial market participants were received with optimism, which strengthened the credibility of the US dollar. If you say the words of the classic of the genre, the financial world turned green from hope.

Primarily, this was evident in the foreign exchange market by the end of November the dollar rose by nearly all major currencies (Fig. 1-12) with the exception of the British pound. However, this should not be surprising – US and UK have traditionally taken a coordinated policy, including in the financial sector.

Against the US dollar to the greatest extent depreciated the Brazilian real, South African Rand, Japanese yen, Russian ruble and Swedish Krona (Fig. 12).

Especially it is necessary to say about the Chinese yuan – its rate to the US dollar has not changed. Moreover, it has been stable for a long time. It is the result of a deliberate policy of the Chinese Central Bank formally, to follow the Bretton woods agreements of 1944, about maintaining a hard dollar of exchange rate.

China is not exchanged for details, trying something tactically to profit from speculation on the exchange rate (he can afford it at high international reserves), and in fact turned its yuan into a clone of the us dollar, thereby blocking the possibility of external manipulation of its financial system. This strategy is most effective during periods of financial crises, the incidence of which increases continuously with increasing magnitude of the public debt of the United States. By the way, on October 21, 2013 it exceeded $17 trillion.

Naturally, this position of the Chinese Central Bank irritates the leadership of the U.S. Federal reserve – the Central Bank of China has actually become a branch of the fed, eliminating the possibility of penetration into the Chinese market. Therefore, the U.S. periodically receives not only proposals, but even the requirements of the change of the Renminbi, allegedly for the welfare of Chinese citizens.

The Council is therefore working in the foreign exchange market traders, especially novice: eliminate the yuan, which is actually a miniature copy of the dollar, from its investment portfolio. This is not for Your pranks. Easier to use the US dollar.

If You are not averse to risk, engage the canadian dollar or the Swiss franc – a lot not to win, but the loss is relatively small.

For indifferent to the risk of the foreign exchange market we can recommend the US dollar, Euro, British pound, Indian rupee.

Lovers of risk and exotics can do Swedish crown, Japanese yen, Brazilian real or South African Rand.

Strategic commodities on the world commodity market – oil, structural and precious metals (Fig. 13-27).

This list by the end of November in dollar terms rose oil (Fig. 13) despite the strengthening of the US dollar. And rose substantially – more than 3.5%. Perhaps this is due to the onset of winter in the Northern hemisphere. But most likely – with the replenishment of oil reserves in case of aggravation of the situation in the middle East.

All structural metals have fallen in price, especially aluminum, lead and Nickel (Fig.14-21). The prices of these metals was observed and the highest volatilnosti (Fig.22).

Precious metals prices in November also tended to decrease (Fig. 23-27). As a percentage of the most diminished the price of silver (more than 8%) and platinum (over 6%). The prices of these metals were the most volatilny.

The decline in precious metals prices indicates that the end of the year market participants do not expect the occurrence of a serious financial crisis. Otherwise the prices of precious metals, conversely, would be increased – on the eve of the crisis, the traders always prefer to "go" in the well time-tested values, which are gold, silver, platinum and joined them in recent years, palladium.

So, the General situation in world currency and commodity markets have identified the strengthening of the US dollar, increasing oil prices and decreasing prices of basic metals.

Not so clearly characterized the situation on the world stock market (Fig. 28-51). Here we observed various trends that this is not surprising: stock market is the most movable part of the financial market, which is sensitive to various events not only economic but also political nature.

All major U.S. stock indices (Fig. 29-32) rose due to strengthening of the US dollar. Moreover, this rise was synchronous so that the timelines of indices were largely similar. Note the typical notch in the range of 15-22 November. They have been associated with the exacerbation of the issue on raising the U.S. debt ceiling, its subsequent decision and publication of the fed's decision on reducing its quantitative easing program. Who knew in advance about these events, could receive substantial profits from transactions in the stock market.

Incidentally, such a characteristic notch and appears on the charts of the stock indexes of some other countries.

The November increase in total U.S. equity indices amounted to about 2,5-3,5%.

But November's champion of the stock indices was the Japanese NIKKEI which rose more than 10%. Very well proved to the German DAX, rising nearly 4.5% and the Chinese SSE (increase 3.3%) and Mexican IPC (an increase of 3.46%).

Stock indices of other countries hardly participated in this "celebration of life" which have restricted lateral movement and even decline, as the Russian dollar-denominated RTS index. Not even the increase in oil prices (in the structure of the Russian index of the high proportion of oil companies). In the end, RTSI declined in November by almost 4.9% – a record drop among the considered stock indices.

We can say that by early December, financial markets were overwhelmingly optimistic spring mood, which is not surprising: December is the beginning of spring financial (financial year to USA starts October 1), when everywhere breaks young greens.

The optimism caused by hopes that while all the problems have settled, and in the short term, i.e. until the middle of next year, the basic rules of the game in the financial markets will not significantly change.

Simply put, the assumptions that have not yet worked out a more effective scheme of robbery of the world. Or it is already developed, but not yet running. Therefore, at least for a few months, the world will continue to pillage as usual.

With what I congratulate You. As for Russia, in the short term, we are all in for the devaluation of the rouble, with all the consequent problems. Wish that it happened in the most mild way.


The pictures to the paper.

Tags: assessment , crisis , finances