On Tuesday the stock indices of the United States showed a single rising trend and closed in positive zone. The Dow Jones rose by 1.12% (20996.12), S&P 500 added 0.61% (2388.61), the Nasdaq rose by 0.70% (6025.49). European markets also rose, without much dynamics. The German DAX gained 0.10% (12467.04), British FTSE 100 has increased the value of 0.15 percent (7,275.64).
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 04:30 MSK the consumer price Index (CPI) of Australia during the first quarter
At 15:30 MSK Base index of retail sales Canada in February
At 17:30 MSK crude oil Inventories in the United States
At 17:30 MSK the Data on excess reserves of oil in Cushing (Oklahoma)
Investors around the world continue to adjust portfolios after the first round of the French presidential election, where centrist Emmanuel Macron has won. The assets are passed from protective instruments into a more profitable, risk appetite grows. These are the main reasons for the continuing growth of stock exchanges not only in Europe but also the United States.
Today is scheduled the meeting of European Commission President Juncker and coordinator of the EU negotiations about Brexit Barnier with Theresa May, the Prime Minister of Great Britain. There is the discussion of the process of exit from the European Union in the agenda. For investors it is important to know how hard a breakup will be and whether it will be possible for officials to smooth things over.
The index of technology companies Nasdaq climbed to new heights, exceeding the round level of 6,000 points. Other stock indexes of the New World also continued the growth that began on Monday, and now it looks like they are not going to close the gap of Monday. The main driver of growth is the quarterly reporting period, which brings more positive news. Yesterday, McDonald's added to the capitalization 5.21% on the back of results profit better than analysts ' expectations. But the world's largest arms manufacturer Lockheed Martin has lost 2.83 % due to worsening forecasts for the current fiscal year. This is probably due to disagreements with the President on defense orders.
Today Donald trump will present to Congress a proposal about lowering income tax from 39.6 % to 15%. He acts according to plan, fulfilling his election program. At the same time, market participants are interested in, from what sources will be financed by these tax incentives? Also for the refund of hundreds of billions of dollars into the country, the President is going to introduce a 10% tax on profits of U.S. companies earned abroad. The same thing Barack Obama was going to take, but the bill has not passed through Congress.
Gold continues to back away from six-month highs. Current correction is due to the decline in demand for defensive assets. It is likely that the correction will continue.
According to the report, the American Petroleum Institute (API), which was published on Tuesday, inventories rose by 0.9 million barrels in the country, which was contrary to analysts. Oil continued to decline, one of the factors can be a doubt of the market participants in the possibility of extending the Viennese agreement until the end of the year. Today will be published official data of inventories that may affect price movements.
Sincerely, Global FX chief analyst Sergey Melnikov.