Yesterday US stocks continued their upward trend, which began Tuesday in single dynamics. Dow Jones down 0.78% (20068.51), S&P 500 added 0.80% (2298.37), Nasdaq rose 0.99% (5656.34). European stocks also rose and closed at positive territory. The German DAX jumped by 1.82% (11806.05), British FTSE 100 rose 0.20% (7164.43).
Today it is expected the number of publications macro-economic data from economies worldwide, which may have an effect for investor decisions during the trading sessions.
At 00:45 MSK it was published the consumer price index in New Zealand for November.
At 02:00 MSK a speech made by the Chairman of the Reserve Bank of New Zealand Wheeler.
At 12:30 MSK UK GDP for the 4th quarter.
At 16:30 MSK balance of foreign trade in goods in the US in December.
At 16:30 MSK the number of initial applications for unemployment benefits in the United States.
At 18:00 MSK it will be published data on new house sales in the US in December.
Yesterday there was a symbolic event, one that had been waiting by traders. The Dow Jones conquered a level of 20,000 points. As the index of wide market S&P 500, Dow Jones industrial came out of a long consolidation and rushed to new heights. Active actions and decisions of the new President, as well as positive macroeconomic indicators have created the prerequisites for growth impulse. But most importantly, now it is presented more certainty for investors in the further development of events. The real action of the new administration of the White House create more clarity, which is now the main driver for the stock markets.
One of the most important news for investors in the industrial sector was the meeting of Donald Trump with the Directors of the three leading automobile manufacturers of America. There was promised to them reducing corporate taxes and simplification of state regulation of the industry.
One of the headaches of the new administration remains a strong dollar. The American currency was started year of 2017 from 14-year highs, the EUR/USD pair reached the level of 1.04. Last week, Donald Trump said that a strong dollar is literally "killing America". The dollar bubble inflated over the past year, can create great difficulties for the further growth of the economy. Adequate price of the American currency below the current by 20-30%. It is likely that now will create the preconditions for the weakening of the dollar, and it will be good deal with the sale from the local historic highs.
The weakening of dollar can serve as a positive factor for the increase in oil prices, which shows a weak dynamics this week, and literally are standing still on the background of general growth. It may be said that the market of black gold has a parity of factors. Down prices stalling growth in the number of drilling rigs in the U.S. and Canada, as well as news about the increase in production from countries that are not included in the agreement OPEC+, such as Libya. This country for six months increased the production volumes in three times to 700 thousand barrels per day, and plans further extension at the expense of foreign investments into development of oil production. They are soon unable to go to Libya after the cancellation of the moratorium and the stopping the riots. Prices of oil are pulling up by the weakening of dollar, by the rising Dow Jones industrial and the positive assessment of the effectiveness of the agreement of OPEC+. According to forecasts, the agreement may be carried out for 80%, which will create the necessary balance of offer and demand of oil in the world.
Sincerely, Global FX chief analyst Sergey Melnikov.