On the last day of the previous week stock markets in America did not show high dynamics and closed in the red. The Dow Jones declined by 0.03% (20656.10), S&P 500 dropped 0.08% (2355.54), the Nasdaq dipped 0.02% (5877.81). European markets showed no single dynamics and closed mixed. The German DAX fell by 0.05% (12225.06), British FTSE 100 gained 0.63% (7349.37).
Today it is expected a few publications of the macroeconomic data and the speeches of the monetary authorities that could affect investors' decisions during the trading sessions.
At 03:00 MSK the President of the Bank of Japan Governor Haruhiko Kuroda
At 04:30 MSK Housing loans Australia for February
At 06:05 MSK FOMC member Bullard speaks
At 15:15 MSK the Volume of construction of new homes Canada for March
At 16:00 MSK statement by the member of the ECB, Constancio
At 23:10 MSK a Speech Fed Chairman Yellen
Today is rich for the speeches of the monetary authorities from different countries. This morning during the Asian session, Haruhiko Kuroda Governor of the Bank of Japan was made a statement. He reiterated the determination of the regulator to sustain broad-based monetary easing as long as inflation is stable above target level of 2%. On this news main pairs EUR/JPY and USD/JPY pulled up.
On Friday an important event of previous week was the publication of data from the labor market for March. Indicators came out mixed. The growth of payrolls in the non-agricultural sector of the economy took place, but contrary to the projected numbers of 180 thousand it was only 98 thousand. And previous result was revised for the worse. That lowered the visibility of the dynamics of employment growth. This happened on the background of the publication of data from ADP on Wednesday that showed a more substantial increase. The American market reacted to this event very calm, just slightly increasing of volatility. Today it will be interesting to know the opinion of fed chair Janet Yellen and her comments on the adjustment of monetary conditions.
Last week, investors ' attention was directed to the summit of the US and China. The heads of two state discussed the prospects of development of business relations between the two countries after a period of tension. As a result, the partners agreed on the compromise and expressed a desire to reach a final agreement for trade within 100 days. This news calmed down investors and this reflected clearly in the dynamics of the prices for defensive assets, the price of gold has declined significantly.
Nevertheless, the geopolitical situation continues to be a significant factor in the stock markets. The recent rocket attack to a Syrian military base and the clear intent of Donald Trump to show forces to North Korea has an impact on the price of oil. During the past week due to a combination of several factors black gold have increased in price for more than 3% and continues to increase this morning during the Asian session. The threat of the US being drawn into a new conflict in the middle East and as a consequence of disruption of supply from the region overshadows other factors such as the increase in the number of active drilling rigs and the effect of the Vienna agreement.
Sincerely, Global FX chief analyst Sergey Melnikov.