At the mid-week stock indices have not shown unified dynamics and closed mixed. The Dow Jones fell by 0.58% (20404.49), S&P 500 down 0.17% (2338.17), the Nasdaq rose 0.23% (5863.03). European markets also did not move to the one direction. The German DAX added 0.13% (12016.45), British FTSE 100 fell 0.46% (7114.36).
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 the consumer price Index (CPI) of New Zealand during the 1st quarter
At 02:50 MSK trade balance of Japan
At 09:00 MSK the producer price Index (PPI) Germany in March
At 15:30 MSK the PMI manufacturing, US Philly fed for April
At 15:30 MSK the Number of initial applications for unemployment benefits USA
At 15:30 MSK the unemployment claims from the US Philly fed for April
At 18:30 MSK the President of the Bank of England's Carney speaks
At 19:30 MSK the President of the Bank of England's Carney speaks
At 20:15 MSK Speech by Minister of Finance USA Mnuchin
Yesterday European Commission spokesman, Margaritis Schinas, said that negotiations on Brexit will begin in the June. The Prime Minister of Great Britain Teresa May and European Commission President Jean-Claude Juncker, has agreed to begin negotiations after the elections to the Parliament of Great Britain, which to be held on 8 June. Building of a clearer future plans adds certainty to the market, which in turn reflects the strengthening of the national currency, the pound, against the rest.
Dollar takes a breath, lowering volatility, and it is trading this morning slightly above the low reached this week. The strength of dollar and the euro could depend on the results of the first ballot of the presidential elections at the end of this week. Its position in the lead has firmly taken the candidate from the centrist party Emmanuel Macron, this can be judged according to the latest polls, this past Sunday, according to which he would have won if elections were held today.
In America, quarterly reporting season is ongoing, where the financial sector good scored yesterday. Capitalization of Morgan Stanley rose 2.9 percent, the Bank showed 74% growth in profits for the first quarter. The Prudential and Charles Schwab also grew more than 1%. The outsider of the sector was by the company BlackRock, losing 2.1 percent, despite positive reports. The biggest disappointment for investors yesterday was the company IBM, having lost 5% of capitalization when revenue decline by 2.8% and the report is worse than expected.
The forecasts of the analysts were also better then the data on oil inventories in the US from EIA. It decreased by 1,034 million barrels, but still this was not enough for the resumption of purchases. Black gold fell sharply, reaching the $50 per barrel for WTI. The reduction contributed to the recent report from the agency JODI, according to which OPEC has increased production by almost 260 thousand Barr. day. According to projections of energy US shale oil production will reach 5.2 million barrels. day, which exceeds the maximum of 2015. It is likely that oil prices will consolidate at current levels.
Sincerely, Global FX chief analyst Sergey Melnikov.