Stock Markets Are Under Bearish Control, and Precious Metals Are Under Bullish Control (Weekly Review)

Today, among the factors with the most significant influence on the financial markets, one should above all mention the spread of the coronavirus from China to other countries, including the countries of the European Union. This factor was able to stop the development of the upward trend on stock exchanges that lasted for more than 10 years, as well as stop the development of the upward correction in the oil market that is under renewed pressure from sellers, and the pressure is not weakening despite current events in the Middle East.

Investors' flight from risk also returned interest in the JPY. Thus, the growth of the USD paired with the JPY encountered an interest in sales at the level of 112.20, and under the onslaught of sellers, the USD has currently lost about 100 points. Nevertheless, the coronavirus, among other factors, can be a certain threat to the Japanese economy. This threat is likely to trigger some additional incentive measures from the Bank of Japan, and the JPY may face fresh interest in sales on growth.

Due to some panic on the stock exchanges, gold received enough momentum to break through the highs of the year. At the moment, its quotes are approaching the psychological level of $ 1,700 per ounce, on the approach to which, given the rather strong overbought status of the instrument, we may suggest some activation of sellers. In addition, any positive news on the coronavirus can contribute to the elimination of longs, but so far one should hardly expect a large-scale sale.

Schedule for this week:

Monday, February 24
09:00 GMT - Germany. IFO Current Assessment;
09:00 GMT - Germany. IFO Business Expectations;
13:30 GMT - USA. Chicago Fed National Activity.

Tuesday, February 25
07:00 GMT - Germany. GDP nsa (not seasonally adjusted);
07:00 GMT - Germany. GDP;
14:00 GMT - USA. House Price Index;
15:00 GMT - USA. Consumer Confidence;
17:45 GMT - Canada. Bank of Canada Governor Council Member Lane Speaks.

Wednesday, February 26
15:00 GMT - USA. New Home Sales.

Thursday, February 27 
21:00 GMT — New Zealand. Trade Balance;
21:00 GMT - New Zealand. Import/Export;
10:00 GMT - Germany. Business Climate;
10:00 GMT - Germany. Consumer Confidence;
13:30 GMT - USA. Durable Goods Orders;
13:30 GMT - USA. GDP (QoQ, Q4);
13:30 GMT - Canada. Current Account.

Friday, February 28
23:30 GMT - Japan. Unemployment Rate;
23:30 GMT - Japan. Consumer Price Index (CPI);
23:30 GMT - Japan. Retail Sales;
23:50 GMT - Japan. Industrial Production;
08:55 GMT - Germany. Unemployment Change;
10:00 GMT - Germany. Bundesbank President Weidmann Speaks;
13:00 GMT - Germany. Harmonised Index of Consumer Prices (HICP);
13:30 GMT - Canada. GDP (QoQ) (Q4);
13:30 GMT - USA. Personal Income/Spending ;
14:45 GMT - USA. Chicago Purchasing Managers Index (PMI) (Feb).

Author: Anthony Porter, IAFT Analyst