On the first day of pre-Christmas week, the stock indices closed in the green zone. Dow Jones rose by 0.2% (19883,06), S&P 500 by 0.2% (2262,53), NASDAQ increased by 0.37% (5457,44). European stocks showed weak growth too. German DAX added 0,20% (11426,70), British FTSE 100 rose by 0.08% (7017,16).
Today we expect a number of events and publications of macroeconomic indicators that can influence investors ' decisions during the trading.
At 06:00 MSK Bank of Japan is to release Interest Rate Decision.
At 10:00 MSK Germany is to release PPI for November.
At 16:30 MSK Canada is to release Wholesale Sales for October.
At 18:10 MSK New Zealand is to release GlobalDairyTrade Price Index.
Yesterday, the index of American markets continued to consolidate in the same range like a previous day. The index of wide market S&P 500 reduces volatility and every day increasingly approaches to level of 2260. There is the feeling that market participants are waiting for new drivers. Yesterday's speech of Fed chief Janet Yellen did not lead to significant reactions of the quotes, as Yellen is not announced something completely new. She reiterated her positive assessment of the indicators of the labor market, noting that the current unemployment rate of 4.6% is the lowest since 2007. Yellen also reminded that continues to regard economic future of the country with the new President as unpredictable. However, it considers that the measures envisaged for the development of innovations and lower of taxes will have a positive effect on the economy. Also, the Fed chairman confirmed that the key rate will be hiked three times within 2017. The low activity of traders is also a factor of approaching Christmas and New Year holidays, which reduces the volatility and trading volumes in all markets. Investors partially fix its position, reducing the risk on assets. In such periods of low liquidity markets may become thin and very susceptible to various sudden events.
European markets traded near annual highs yesterday, without making any sudden movements. But in Europe can be involved other strong factors now. Last night there were two dastardly terrorist acts in Germany and Turkey. This creates a strong tension and forces citizens to take additional security measures, which could lead to lower purchases during the Christmas sales. Investors in the stock markets will take into consideration of these factors today.
WTI crude oil continues to reduce volatility and to consolidate around the level of $ 52.00 per barrel, which above broken the annual levels. While trading, volume has significantly decreased in comparison with Friday. Agreement of OPEC+ is pushing the quotes up. Downward pressure has the fact that it will start to act only since January. Of course the pressure was increased from shale oil producers, which, according to a Friday report from Baker Hughes, are increasingly expanding their presence in the market.
Sincerely, Global FX chief analyst Sergey Melnikov.