Analysts expect a downtrend to develop next week

Analyzing the technical picture on the Russian and American stock exchanges, as well as the situation on the oil market, we can conclude that next week there are likely risks of a downward correction and updating of local minimums.

In particular, this is evidenced by the position of the Moscow Exchange and RTS indices below the resistances of 4220 and 1875 points (the average Bollinger bands of the daily charts). A moderately pessimistic scenario assumes the consolidation of indicators below the psychologically important values of 4100 and 1800 points. For Brent and WTI futures, the key resistances are located at $84 and $82.50, respectively.

If we analyze the fundamental background, no significant negative signals are expected to appear next week, however, fears of a tightening of the Fed's rhetoric due to a strong increase in US inflation may persist in the markets. 

Economic calendar 

In the US and China, data on retail sales and industrial production, the first data on the US housing market for October, as well as the Philadelphia Federal Reserve index of manufacturing activity will be published. In Europe, revised estimates of the region's GDP for the third quarter and consumer inflation for October will be presented. Germany will publish production inflation data for last month (acceleration from 14.2% to 16.2% y/y is expected).

Oil market

The drivers of the movement of oil prices next week will be the monthly report of the International Energy Agency and its forecasts on supply and demand. Moreover, investors continue to assess the risks of the sale of US strategic reserves, which creates additional pressure on the oil market.