Yesterday the first trading day was at the American stocks after the long weekend. Stock indices showed strong growth in the single dynamics. Dow Jones up 0.90% (20636.92), S&P 500 rose by 0.86% (2349.01), the Nasdaq added 0.89% (5856.79). European markets opened today after a long break. In the last trading session, on Thursday, the indexes of the Old World were reduced into a single dynamics. The German DAX fell by 0.38% (12109.00), British FTSE 100-on-0.29% (7327.59).
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 03:30 MSK the minutes of the meeting of the monetary policy of Australia
At 15:30 MSK the Number of issued building permits in the US in March
At 15:30 MSK Volume of construction of new homes in the United States for March
At 15:30 MSK the Volume of foreign investments in the securities of Canada for February
At 16:15 MSK the industrial production in the US in March
In Europe the key event of this week will be the first round of the presidential election of France, it will be held on Sunday, April 23. According to preliminary surveys, the main leaders of the race and the candidates that pass to the second round can become Emmanuel Macron and Marine Le Pen. Fillon and Jean-Luc Mélenchon can catch up them whose ratings also continue to grow. Elections in France remain the main factor for the increase of volatility in European markets.
Judging by the reaction of the American indices, market participants reacted positively to the results of the Vice President of the United States Mike Pence visit to the demarcation line between South and North Koreas. This happened on the background of another attempt of the DPRK to carry a test launch of a ballistic missile. One of the statements of the Vice-President was that "the period of strategic patience is over" toward North Korea. It was also stated that the United States together with the allied countries including China are developing a set of measures against North Korea, including economic sanctions. Pyongyang, meanwhile, is ready to continue missile tests and not deviating from the charted course.
The recent publications of the macro economic data say about a possible change of the Fed tone regarding monetary policy tightening this year. This can be judged on the apparent slowdown of inflation growth rate in March. The probability of the scenario where the rate may be increased not more than once, but not two or three is growing. This week it will be possible to consider the tone and content of speeches from fed officials Eric Rosengren, Neil Kashkari, Esther George and Stanley Fischer. Now the probability of a rate hike in June fell to 55%, while maximum it reached 70%.
In America, the quarterly reporting season is ongoing. This week the results of Johnson & Johnson, Morgan Stanley, the American Express and General Electric will be released.
Correction continues in the oil market. The normalization of the situation in Libya contribute to that, the news came from there about partial restoration of supply. Support to quotations of black gold has given Iran's desire to continue participation in the Vienna agreement on reduction offer. The effectiveness of this Covenant still covers the growth of offer from countries not signatories it.
Sincerely, Global FX chief analyst Sergey Melnikov