Yesterday, the major stock indexes of America showed an increase. The Dow Jones climbed by 0.30% (19852.24), S&P 500 was up 0.39% (2262.03), Nasdaq added 0.37% (5456.85). European indices also showed a rise after a day of correction. Germany's DAX increased by 1.08% (11366.40), British FTSE 100 rose by 0.72% (6999.01).
Today we expect several publications macro-economic data that can influence on of investors decisions during trading sessions.
At 13:00 MSK Trade Balance of Eurozone for October will be published.
At 13:00 MSK CPI of Eurozone for November will be published.
At 14:00 MSK CBI Industrial Trends Orders of UK for December will be published.
At 16:30 MSK Building Permits in USA for November will be published.
At 21:00 MSK U.S. Baker Hughes Oil Rig Count will be published.
During the European trading session was observed positive dynamics after weakening on Wednesday. Now the main European indexes close to their highs for the 12 months. That is quite understandable by serious weakening of Euro against the dollar. It happen after the rate hike and forecasts made by FED about further rise of borrowed funds price in the United States. Also ECB helped to European currency fall by its recent decision to extend the asset buyback program and quantitative easing. It's helpful for the export-oriented European companies because it reduce competition. The first to feel the increase of capitalization the largest exporters, such as Volkswagen, Shell, Daimler, etc. the Shares of these companies recoilless grow for a second week, pulling European stocks. News of December from monetary regulators of different countries will continue affecting market, so it is likely in the near future, European stocks will overcome the annual maximums and will threaten the historic.
Yesterday an important event was observed in the international currency market Forex. Pair EUR/USD went beyond the sideways range in which it traded more than two years. During trade session the pair fell below the 1.04. Such values, market participants had not seen for 14 years since December 2002. The recent announcement of the Fed's plans about future increases in the key rate boosts the dollar. It is likely that it will not stop and a pair of major world currencies will continue to decline. The nearest aim of such movement can be a support in the range of 1.00 to 1.01.
The strengthening of the dollar slowing growth in oil prices which was expected after the long-awaited signing of the agreement of the limitation of production volume. In addition to the strong dollar there is a pressure and other factors. First is the activity of the companies producing shale oil. This can be seen from recent statistics, which showed growth in production volume and a spike in the number of drilling rigs. Also in the current situation, investors prefer to reduce positions in risky assets such as oil. In addition, it is now becoming evident that to stabilize the market of black gold is not enough to reduce offer, but it is also necessary to increase the demand. Predictions for its growth have not yet inspired much optimism. Today market participants will pay attention to data from Baker Hughes the number of rigs.
Sincerely, Global FX chief analyst Sergey Melnikov.