After a weekend in the first trading session of this week, the stock indices showed a single rising trend and closed in green zone. The Dow Jones rose 0.62% (21993.71), S&P 500 rose by 1.00% (2465.84), the Nasdaq jumped by 1.34% (6340.23). European markets also showed growth in a unified dynamics. The German DAX tacked on 1.26% (12165.12), British FTSE 100 climbed 0.60% (7353.89).
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 minutes of the meeting of the monetary policy of Australia
At 07:30 MSK industrial production in Japan in June
At 09:00 MSK German GDP 2nd quarter
At 10:15 MSK the producer price Index (PPI) of Switzerland in July
At 11:30 MSK the consumer price Index of the UK in July
At 15:30 MSK Base index US retail sales for July
At 15:30 MSK the price Index of US exports for July
At 15:30 MSK the price Index of US imports for July
At 15:30 MSK manufacturing Index, NY Empire State, U.S.
At 15:30 MSK retail sales in the U.S. for July
At 17:00 MSK the Volume of inventory index for June
The publication of the data about the reduction of industrial production in the Eurozone for 0,6% in June have not kept the indexes of the Old World from restorative growth. The softening of rhetoric of the US authorities regarding North Korea had a beneficial impact not only on the markets of the USA, but all over the world. At the weekend U.S. Secretary of state Rex Tillerson and James Mattis, the defense Minister called for a peaceful settlement of the conflict with Pyongyang. As a result, the index of wide market S&P 500 rose and achieved the level of beginning of fall which was a Thursday, and closed the session above the resistance level 2463 p. which increases the probability of its further growth.
This week due to reducing of geopolitical tensions investors will pay attention to the publication of "minutes" of the fed on Wednesday. It is likely that it will be consonant with the most of statements of fed members a week earlier. They noted that they would not vote for further tightening of monetary policy until inflation again will go to growth, and the current key rate is quite adequate for recent macroeconomic data. Now the probability of a rate hike at the fed meeting in September is 29%.
At the moment the quarterly reports submitted 91% of companies from the index S&P 500. 73% of them reported net profit, which exceeded analysts' expectations. This circumstance adds strength to the upward trend of the American market. This week, investors will monitor the financial results of the company Cisco, Wal-Mart, Gap.
The cost of precious metals is reduced under the influence of a strengthening dollar and rising US stock market. On the background of reduction of geopolitical tensions risk appetite returns and thus demand for defensive assets reduced.
First of all the fall of oil prices was due to the news that Chinese oil refineries increased processing to 10.72 million barrels a day in July. This fact became stronger expectations of supply disruption from Libya, where production at the largest field, Al-Sharara fell more than 30%. Now the price of oil WTI has reached a support level of 47,35 USD per barrel, where it will probably stay in consolidation for a few days if there will be no the reasons for a correction up.
Sincerely, Global FX chief analyst Sergey Melnikov.