Yesterday, at the first day of winter, the major stock indices did not show single dynamics and closed mixed. The Dow Jones rose 0.24% (19170.23), the S&P 500 dropped by 0.49% (2188.03), the Nasdaq Composite index fell 1.53% (5242.34).Major European indices closed in the red zone. The German DAX fell by 1.00% (10534.05), British FTSE 100 slid by 0.45% (6752.93).
Today it is expected publication of a large number of important macroeconomic indicators that can influence investors' decisions during trading sessions.
At 09:45MSK will be published GDP of Switzerland for the third quarter, expected figure 0.3%.
At 12:30 MSK in UK will be published Construction PMI for November, expected figure 52.2.
At 16:30 MSK in US will be published Nonfarm Payrolls for November, expected figure 175K.
At 16:30 MSK in US will be published Unemployment Rate for November, expected figure 4.9%.
At 16:30 MSK in Canada will be published Employment Change for November, expected figure -20.0K.
At 16:45 MSK FOMC Member Brainard Speaks.
At 21:00 MSK will be published U.S. Baker Hughes Oil Rig Count.
At 21:00 MSK FOMC Member Tarullo Speaks.
The Dow Jones continues to rise, standing out from the general trend of pullback. This situation is caused by the released better than expected index of business activity in manufacturing sector PMI from ISM. Also, the index growth is enhanced by the strengthening of the oil and accordingly increase the capitalization of large oil corporations. At the end of yesterday's session, Chevron gained 2.96%, ExxonMobil has grown by 1.23%. And even the increase in the number of initial claims for unemployment benefits are unable to have a negative impact on the industrial sector, but not for high-tech companies. Nasdaq is reduced by more than 1.5%. The main outsider is Facebook with a loss of 2.8% of capitalization.
Today an important event for global markets will be the publication of Nonfarm Payrolls at 16:30 MSK. This figure is a key indicator of the state of the U.S. economy, which affects the FOMC decisions on key rates. Now the markets already incorporated almost 100% possibility of rate increasing at the December meeting of the Federal reserve, and in the case of negative employment data this confidence could be undermined, causing a rise of volatility.
European markets declined due to the constitutional referendum in Italy this weekend. With the increasing uncertainty and political risks investors prefer to close positions. Additional pressure on the European market had a decrease in business activity in Germany.
Good support for the pound yesterday had a statement from representatives of the UK and the EU about the opportunities for British business in the Eurozone after completing the procedures for Brexit. In the result, the pair GBP/USD added 1.25%. It is likely that growth will continue to the target level of 1.28.
After reaching of agreement OPEC to reduce production volumes, quotations of oil quickly reached highs of year, and now undergoing consolidation. Perhaps the growth will continue after the meeting of OPEC countries+ next week, from whose support depend the fate of the agreement. Previously countries not members of OPEC have agreed to a reduction in production volumes. Definitely it will have a positive effect for the growth of oil prices, but in a rather limited perspective of a few months. Now literally the green light given for the development of difficult oil producers, which may well take its market share. Today will be published data on the number of drilling rigs. This indicator has long been in an uptrend.
Sincerely, Global FX chief analyst Sergey Melnikov.