On Wednesday the stock indices moved to a growth in the single dynamics and closed on the green side. The Dow Jones rose by 0.12% (22024.87), S&P 500 rose by 0.14% (2468.11), Nasdaq up for 0.19% (6345.11). European markets also showed a single upward momentum and closed positive. The German DAX gained 0.71% (12263.86), British FTSE 100 rose 0.67% (7433.03).
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 02:50 MSK trade balance of Japan in July
At 04:30 MSK the PMI Australia for July
At 11:30 MSK retail sales in the UK in July
At 12:00 MSK the Eurozone CPI for July
At 12:00 MSK Eurozone's trade balance for July
At 14:30 MSK publication of the minutes of the meeting of the ECB's monetary policy
At 15:30 MSK the Number of initial applications for unemployment benefits USA
At 15:30 MSK the unemployment claims Philadelphia fed for August
At 15:30 MSK Volume of sales in the Canadian manufacturing sector in June
At 15:30 MSK the Index of manufacturing activity Philadelphia fed for August
At 20:00 MSK FOMC member Kaplan speaks
At 20:45 MSK FOMC member the Kashkari speaks
First of all the growth on the European market was supported by positive macroeconomic statistics. The growth of the GDP Eurozone for the second quarter was 0.6% compared to the first quarter, growth in year to year ratio was 2.2%, what is above of expected 2.1%. The British pound also grew up under the influence of positive from a wide block of statistics on the labor market. The unemployment rate for June was 4.4%, it was below the expected value of 4.5%. The change in the number of applications for unemployment in July showed a decrease of 4.2K while the forecast was for 3.7K. It helped to stop the fall of the national currency and turned it to the correction and today in the Asian session, the GBP/USD has added more than 0.1%, and there is probability of continuation of the rising movement during the day.
An important event for the US economy and for the whole world was the publication of minutes of the last meeting of the Federal Reserve System. It became clear that it is very painful now see a reduction in the rate of inflation. Value of it has been below 2% for the period of more than five years. There are those, between of the members of the Commission of open markets, even who would like to suspend the increase the key rate, until it becomes clear that inflation continued to move in the direction to the target level of the fed 2%. In contrast to these statements there are members who believe that FOMC should not pay any attention to the rate of inflation now, because then it will be difficult to restrain it, if rates did not to continue raise. Now the market assessment of the likelihood of a rate hike in September is 5%, and in December is 44%, and this does not give cause for the strengthening of the dollar.
Also the pressure to the American currency was rendered by the publication of negative reports from the construction sector of the United States. The number of issued building permits in July, amounted in absolute value 1,233M contrary to forecasted of 1.25M. The volume of new construction amounted to 1,155 M what is below the expected value of 1.22M.
The reduction of oil inventories of the United States helped to futures quotations for "black gold" to stop their decline. According to the US Energy Department, crude oil stocks fell by 8.9 M barrels against an expected decline of 3,058 M. Unfortunately, market participants understand that this decline is seasonal in nature and it does not give reason for sustained optimism.
Sincerely, Global FX chief analyst Sergey Melnikov.