On the first day of August, the stock indices showed a single rising trend and closed in positive territory. The Dow Jones rose by 0.33% (21963.92), S&P 500 up 0.24%(2476.35), the Nasdaq added 0.23% (6362.94). European stocks showed a strong growth in the unified dynamics. The German DAX rose by 1.10% (12251.29), British FTSE 100 grew 0.70% (7423.66).
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 unemployment Change New Zealand for the second quarter
At 04:30 MSK building Permits Australia in June
At 08:45 MSK the Index of consumer confidence in Swiss SECO third quarter
At 10:15 MSK retail sales in Switzerland in June
At 10:30 MSK the PMI Switzerland Chicago purchasing Manager for July
At 11:30 MSK the Index of business activity in the construction sector for July
At 15:15 MSK the unemployment rate in the non-agricultural sector of the USA from ADP for July
At 17:30 MSK crude oil Inventories USA
At 17:30 MSK the Data on excess reserves of oil in Cushing (Oklahoma)
At 19:00 MSK FOMC member Mester speaks
At 22:30 MSK FOMC member Williams speaks
The European market closed with growth due to the positive caused by good corporate reports and macro statistics. It was fixed the acceleration of GDP growth for 2.1% during the reporting period, as it was forecasted. In July the index of business activity in manufacturing sector of Germany showed reduction to the level of 58.1, while the forecast was 58.3. The change in the number of unemployed in Germany fell last month to 9 thousand at the forecast of 5 thousand. In the second quarter BP company reported about a decline in profit by $36 million compared to last year due to the weak oil prices.
US markets continued to consider the macro statistics and corporate reports. The index of business activity in the manufacturing sector grew by 0.1 point to 53.3 while analysts ' expectations were 53.2.
Shares of largest American manufacturer of diesel engines Cummins fell by 7.01% after the publication of the operating profit outlook for 2017, which remained unchanged. And it happened despite the fact that the revenue of that company increased by 12.1% in the reporting period compared to last year. The quarterly profit of Pfizer exceeded expectations to $3.07 billion or 51 cents per share. Xerox quarterly profit increased by $8 million, growth of capitalization of the company amounted 5.84%.
Despite the rapid growth of American indices, the national currency continues to show weakness, and now it is moving in a downtrend. There are expectations on the market that the EUR/USD may rise to the level of 1.20 in the coming year. Hedge funds bet on further weakening of the dollar. Volume of this bet has reached the highs for 4 years. But while there is a possibility of rollback, as the median consensus forecast for the main currency pair is 1.14 at the end of the year.
Yesterday after continued growth oil dropped, it offsets the efforts of the buyers in the previous three trading sessions. The statistics of oil inventories from the API contributed to that, it showed growth at 1.779 million, it was against the expectations of a decrease by 2.900 million. In addition, the OPEC announced growth of production in July for 90,000 barrels per day up to 33 million barrels. In the coming days, market participants will pay attention to the solution about of US sanctions against Venezuela. Today also the official statistics from the US Department of energy commercial stocks will be published.
Sincerely, Global FX chief analyst Sergey Melnikov.