Focus on Fed next week - 11.12.2015

US stock markets closed higher on Thursday ahead of the anticipated interest rate hike in the US next week after three days of decline. Currently the probability of the rate hike is estimated at 85%. US dollar index, a measure of the dollar’s value against a basket of six major currencies, edged up 0.6% to 97.915 rebounding from one-month low against the euro and the Japanese yen (see US dollar index live). Trade volume on US stock exchanges was in line with the average for 20 last trading sessions. S&P 500 historical prices show the index advanced 0.23% to 2,052.23 with 6 out of 10 its sectors being in the black. Energy sector was leading the growth gaining 0.64% while utilities were the bottom performers with -1.60%. Energy sector may be in the black as investors start seeing the oil market bottom and are looking for bargains. Consol Energy Inc added 10.14%. Dow Jones Industrial Average advanced 0.47%, Nasdaq Composite added 0.44%. Yesterday the unemployment data came out showing the jobless claims edged up to the 5-month high of 282’000 previous week but still the US labour markets tightening is on track. Today investors will closely watch the November retail sales data including the start of the holiday shopping season to come out at 14:30 CET and the October confidence index from the Michigan University at 16:00 CET.

European stocks were steady on Thursday having bounced off the 2-month low with retailers and technology firms being the bottom performers. The FTSEurofirst index fell 0.3 to 1,430 having lost already 6% since the start of the month after the too moderate easing from ECB. Glencore advanced 8% on the news the company is planning to cut its costs and debts. The France’s utility EDF advanced 6% on its upgraded forecast of the 2015 earnings. As for chemicals, Syngenta stocks rose 5% on the rumours it may merger with Dow Chemical and DuPont. Meanwhile, chipmaker Ams AG tumbled more than 20% on the news it lost some business Apple Corp. No important macroeconomic data is expected today in EU.

Japanese Nikkei rose 0.97% to 19230.48 snapping a three-day losing streak on overnight Wall Street gains and cheaper yen. The index lost 1.4% in a week due to the falling energy shares amid slumping oil prices. The USD JPY pair increased 0.4% to 122.06 a yen. In China, the Shanghai index lost 0.7%. Experts believe the US interest rate hike will provoke the money outflow from the Asian markets.

Oil is extending losses hitting and hovering near sever-year lows on concerns about the global supply glut and weak demand. The data on the reduced US stockpiles failed to support the commodities markets. Brent crude oil prices fell 1.5% to $39.52 a barrel while WTI fell 1.1% to $36.76.

Spot gold prices slid 0.14% to $1,071.30 an ounce and continue looking down as US dollar gains ground ahead of the Fed meeting next week. As investors widely believe in interest the looming interest rates hike, the gold edges lower being the non-interest-paying asset. Moreover, slumping oil triggers some fear of deflation which is a bearish factor for gold often used to hedge against inflation. Silver lost 0.3% to $14.10 an ounce while platinum lost 0.1% to $855.95 an ounce.