Yesterday the stock market of the United States showed a slight positive trend. The major indices closed in the green zone. Dow Jones industrial average added 0.01% (20658.02), the S&P 500 index climbed 0.07% (2357.16), Nasdaq rose 0.05% (5880.93). Unlike the American European markets demonstrated a single negative dynamics. The German DAX slipped by 0.20% (12200.52), British FTSE 100 fell by 0.01% (7348.94).
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 01:45 MSK retail sales on electronic cards in New Zealand in March
At 04:30 MSK the NAB business confidence Index Australia in March
At 11:30 MSK Index of consumer prices in the UK for March
At 12:00 MSK the Index of economic sentiment ZEW
At 17:00 MSK the Number of open vacancies on the labour market of the USA JOLTS job openings for February
At 20:45 MSK FOMC member the Kashkari speaks
Janet Yellen in her statement yesterday made clear that the fed intends to continue the indicated earlier policy of monetary regulation. The main macroeconomic indicators say that the US economy has already emerged from the crisis and it does not need more stimulus. The inflation target of 2% not just reached, but now it begins to exceed. The data from the labor market are constantly talking about reducing unemployment, which is already below the target level of 5%. Janet Yellen expressed wariness about the possible start of economic overheating, which was dispersed at the external stimulation, in this regard, there is a need to slow down and continue tightening monetary policy. On this news, the main currency pair EUR/USD continued decline. The stock market reacted slightly to the words of the Chairman of the fed, because such a scenario is already incorporated into market prices.
This week the main driving force of the markets will be a geopolitical event, it is the continued development of the situation around the attack of America on the airfield in Syria. Also the capitalisation of the companies will begin to impact the quarterly reports season which began this week. In spite of this volatility in the markets is low, which is likely related with reduced activity before the long weekend. On Friday, the stock markets of the majority of Catholic countries will be closed due to celebration of good Friday in anticipation of Easter. Thus, the activity is gradually reduced and trading volumes are decreased which can thin the market and lead to flash cream. It is likely that due to the reorganization of portfolios and reduce risks, you will see a decrease in the next few days.
Oil continues growth that started in late March, amid geopolitical risks and the possible introduction of sanctions against Iran. Prices are also heated by news about the production stoppage on the field "Sharara" in Libya and the confirmation received from Russia on accession to the Vienna agreement of OPEC+ till the end of the year. This week will also come the reporting of the cartel and the IEA about the effectiveness of this agreement and accuracy of compliance by the participants. It is likely that they will push oil prices further up.
Sincerely, Global FX chief analyst Sergey Melnikov.