On the last day of the previous week US stocks closed mixed. Dow Jones slightly declined by 0.03% (19885.73), S&P 500 rose 0.18% (2274.64), Nasdaq rose 0.48% (5574.12). European markets showed strong growth. The German DAX gained 0.94% (11,629.18), the British FTSE 100 closed up 0.62% (7337.81).
Today America celebrates the Day Martin Luther King, so publications of the important macroeconomic indicators are not expected, and U.S. markets will be closed. In spite of this, we want to note the following events that can have effect on investor opinion in the process of trading in other countries.
At 7:30 MSK in Japan published index of business activity in the services sector.
At 21:30 MSK will be held the speech of the head of the Bank of England Carney.
Among the stock indices growth leader remains Britain's FTSE 100, which continues its climb for the sixth consecutive week. Primarily this is due to the weakening of the national currency. Today trading of the pound in early Asian session opened with a significant gap down and showed a new thirty-year minimum. First of all, this situation is related to the process of Britain's withdrawal from the EU. Most experts agree that Brexit would be more painful for England than for Europe. Tonight investors will wait for new comments from the head of the Bank of England Carney.
U.S. currency is now experiencing weakness also. Investors are not met expectations to receive more clarity on economic policy from the new President . Last week on the first official press conference Trump did not say anything specific except a promise to provide all the details immediately after the inauguration, which is scheduled for January 20. Fed Chairman Jeanette Yelen refrained from comments also. Being in an information vacuum, investors prefer to wait and see. That can be considered as positive, because, despite hovering over the market gloomy of uncertainty, signs of a major correction is not observed. The main factors supporting now are the macro economic data and news about quarterly reports, a season of which started last week. Particularly distinguished representatives of the financial sector. On Friday also support the stock market in America had the news of the decline in Chinese exports to the levels of 2009. While the index of wide market S&P 500 continues to trade in a narrow range 2250-2275. This week promises to be rich in fundamental news, so it is expected higher volatility and possible long-awaited release of indexes from the consolidation ranges.
Donald Trump continues to express intentions in short posts via Twitter. This time, Sunday his message was concerned with heavy industry, namely car manufacturers, which have once again been invited to place production within the country.
The European automaker Renault is coming through difficult times in respect of which the French authorities opened an investigation on the basis of exceeding the exhausts of diesel engines. On this news the company's capitalization decreased by -2,89%.
In Friday quotes of oil were corrected after two days of growth. Mainly the decline was due to the appearance of publications in the media about the doubts of OPEC in the full execution of the Vienna agreements. According to forecasts of experts of the cartel is expected that the actual decrease in production will be about 75 %, but not less than 50% of the stated capacity of 1.8 million barrels per day. This week January 18, it is due to release its monthly report OPEC, which will be reflected the current situation. Today it is possible continued growth on the news about reducing the number of drilling rigs. About that Baker Hughes said in weekly report on Friday. This event is also noteworthy that interrupts the semi-annual trend of steady growth.
Sincerely, Global FX chief analyst Sergey Melnikov.