After a little hesitation, the rally in stock markets continued yesterday, the indexes moved up in a single dynamics. Dow Jones rose by 0.58% (19911.21), S&P 500 up 0.65% (2271.72), Nasdaq jumped by 0.95% (5463.83). European indexes also turned green. The index of Frankfurt stock exchange DAX rose by 0.84% (11284.65), British FTSE 100 rose by 1.13% (6968.57).
Present day is rich of events and publications macro-economic data that can influence the decisions of investors during the trading session.
At 12:30 MSK in UK Average Earnings Index +Bonus for October will be published.
At 12:30 MSK in UK Claimant Count Change for November will be published.
At 15:15 MSK in UK BoE Gov. Carney Speaks.
At 16:30 MSK in USA Core Retail Sales for November will be published.
At 16:30 MSK in USA PPI for November will be published.
At 16:30 MSK in USA Retail Sales for November will be published.
At 18:30 MSK in USA Crude Oil Inventories will be published.
At 22:00 MSK in USA Fed Interest Rate Decision will be published.
At 22:30 MSK in USA FOMC Press Conference.
The growth of the European indices especially the DAX yesterday was buoyed by positive macro statistics. The November inflation data in Germany for November came out within expectations, at 0.8%. The December ZEW current conditions was above analysts ' expectations, the final level is 63.5, predicted is 59.1.
European investors were encouraged by news of plans of UniCredit Bank to sell shares in the amount of 13 billion euros. In addition, it became known that the Bank transfers a portfolio of toxic loans for more than $ 17 billion to affiliate companies. UniCredit is also planning a significant reduction in jobs. All these anti-crisis measures contribute to improvement of the situation of the credit institution, and they also reduce the risk of collapse of the entire Italian banking system. Recently, after the failure of the constitutional referendum among investors there is worry about the fate of the Italian economy, such news is able to stabilize the situation.
The main event today is the announcement of the FOMC decision on changing the refinancing rate. The expectation of interest rate hikes have been already included by market participants to prices, and other news will make them to surprise. The focus will be on the Fed comments to be made at a press conference at 22:30 MSK. Predictions will be made on further action on the monetary regulation for the coming months.
Despite the positive expectations of reduction in offers in the oil market, the price for black gold dropped. This is facilitated by the news from OPEC on the November production volume is higher than expected. Nearly reaching the target level of $ 58.00 per barrel futures for Brent oil went to correction. A significant impact on the continuation of the upside movement today can provide the news about reduction of stocks in USA.
Sincerely, Global FX chief analyst Sergey Melnikov.