Yesterday, the stock indices showed mixed dynamics and they did not go far from closing of the previous session with low volatility. Dow Jones added 0.02% (21998.99), S&P 500 dipped 0.05% (2464.61), the Nasdaq fell 0.11% (6333.01). European markets showed growth in the unified dynamics and closed in the green zone. TheGerman DAX rose 0.10% (12177.04), British FTSE 100 rose 0.41% (7383.85).
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 Index of changes in wages Australia
At 11:30 MSK the Average wage including bonuses in the UK in June
At 11:30 MSK the change in the number of applications for unemployment benefits in the UK in July
At 11:30 MSK the unemployment rate in the UK for June
At 12:00 MSK Eurozone GDP for the second quarter
At 15:30 MSK the Number of issued building permits in the US in July
At 15:30 MSK the Volume of construction of new homes in the U.S. in July
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)
At 21:00 MSK the publication of the FOMC protocols
The trend of the recovery of European stocks, started on Monday, continued yesterday despite of not the best macroeconomic indicators. German GDP for the 2nd quarter increased by 0.8%, while expected 1.9%. The consumer price index of UK for July also came in below the forecast of 0.1%.
Yesterday, American markets opened with a slight minus, but by the end of the session, the Dow Jones managed to reach the green zone. Market participants reacted to the news of retail sales in July, there is recorded an increase of 0.6%, though analysts forecast growth was 0.4%. This helped to strengthen dollar which brought to a reduction of gold and silver prices. Also a decline of demand for defensive assets has contributed to the slowdown in the escalation of the conflict with North Korea also. North Korea has announced that it will delay a decision on the missile strike to the Guam Island and will wait for U.S. action.
Market participants took a breather in anticipation of important macroeconomic statistics, which will be published today, so the volatility was low. Perhaps market will remain in consolidation until the FOMC meeting minutes release. The investor sentiment was influenced by the recent speech of the FOMC member Dudley, he said he supports the continuation of a gradual increase in the key rate even with inflation that is below target level of 2%. This added to the attractiveness of assets denominated in dollars.
The growth of the market was inhibited by drawdown of companies of the energy sector and suppliers of consumer goods, while the paper of financial companies show decent growth. Capitalization retailer of products for the home, Home Depot, fell by 2.8% due to fears for the fragile state of the housing market, despite fairly successful quarterly financial results. Also, the market capitalization of the conglomerate General Electric is reduced by 0.9% after news that Berkshire Hathaway, exclude it from their portfolio.
The oil market goes down under pressure of negative data from China, according to which last month local refineries reduced the volume of oil refining by 500 thousand barrels to 10.71 million barrels per day. Yesterday a decline was about of 3%. Today investors will watch data of changes in inventories in the United States.
Sincerely, Global FX chief analyst Sergey Melnikov.