March 2017 on the markets

Janet Yellen, the First Lady in the U.S. finance, declared the next step of rate hike in March. The employment approaches 100% (if the 100%-level is ever possible), the inflation hovers around 2% - all Yellen’s dreams come true. January appeared to be the awesome month for new jobs (+246,000 fresh vacancies!). New administration in the White House claimed to look after Americans and to open more opportunities for the citizens. The economy overpassed the aftermath of the 2008 financial crisis. Even the 2014–2016 glut and the struggle for oil markets did not damage it seriously. USD attracts purchasers, but not as an asset to keep for years; the currency works as an instrument to benefit from its movement.

Next week USD will be moving according to the fresh Nonfarm Employment report. After the numbers will be announced next Wednesday, investors will trade according to the trend. A market alarm for a short-term trade will sound on March 8. A week later the FOMC will announce another number, the percentage of interest for deposits. So better to push USD in trades to profit in the matter of seconds! EURUSD finished the previous week at $1.0621.

The single currency expects turmoil. The ECB quantitative easing program will last until December 2017, so the Central Bank believes in rates close to 0. According to the ECB website, the bank made a profit more than 1 billion euros in 2016. However, to keep euros in the bank account is not enough, because EUR lost 3.07% in year-to-year. Eurozone inflation hit the highest point in 4 years; in Germany the inflation has reached 2.2% this February. Nevertheless, positive movement of EUR might be seen in the middle of the March: the financiers will discuss their innovation policy with bright brains from MIT at the Joint Conference.

Oil is always attractive. The previous spring crude began at $40 per barrel, this March the barrel of crude costs $54. Crude oil survived above $53 during the week. OPEC insists on increasing its share in the total world liquids supply; OPEC officials forecast the share will reach 37% in 2040, +3% in comparison with 2015. Meanwhile, Saudi Arabia worked out a new PIF to ease the dependence from the trembling oil prices. The market value of Aramco, the Saudi Oil company, is bigger than the combined value of the largest companies in the world (Apple+Google+Microsoft). Riyadh will begin to sell Aramco shares next year. Rigs in the USA return to drilling, the Baker Hughes counted 607 active rigs previous week. Thus, we will continue to witness the fight for the oil market in the next years.

            When USD goes up, gold falls down. These days, the yellow metal is losing its attractiveness. However, if an investor would like to buy gold right now, the investor will earn the money selling it at some moment later. The gold will recover.

Anyway, better to look at other instruments to receive more profit faster.