In the previous trading session, on Friday, the stock index of America showed a single strong positive dynamic and closed in green zone. The Dow Jones added 0.44% (21414.34), S&P 500 rose 0.64% (2425.18), Nasdaq rose 1.04% (6153.08). European markets also closed in positive territory. TheGerman DAX gained 0.06% (12388.68), British FTSE 100 rose 0.19% (7350.92).
Today it is expected a few publications of the macroeconomic data and the speeches of the monetary authorities that could affect investors' decisions during the trading sessions.
At 02:50 MSK Adjusted Current Account of Japan
At 02:50 MSK Current Account Japan not seasonally adjusted for May
At 03:30 MSK President of the Bank of Japan Haruhiko Kuroda speaks
At 09:00 MSK trade balance of Germany in May
At 17:00 MSK the Number of open vacancies on the labour market JOLTS job openings for May
After the statement of Mario Draghi about the beginning of tapering of stimulus measures, European stocks and the currency came into motion. However, the volatility in European markets the last few days, declined after the publication of minutes of the June ECB meeting, which states that the regulator will make measures slowly in order to reduce the likelihood of panic. Now DAX is trading at new range, there is a possibility that this week it may fall to the support level of 12,000.
After the collapse on Thursday, the U.S. indices was supported by data from the labour market on Friday,. One of the key indicators, nonfarm payroll grew by 222K, which is significantly higher than the projected quantity 179K. The growth was limited by the unemployment rate which was 4.4%. In its report to Congress, the fed said about steady growth of the economy, which continues to create jobs. It was also mentioned good condition for investments and for consumer confidence. There are a few evidences of a liquidity crisis in financial markets, which do not affect to the risk appetite and do not create problems to continue increasing the value of the assets. This week, fed chair Janet Yellen speaks before Senate committees which overseeing the activities of the regulator.
On Friday the index of wide market S&P 500 returned to their previous consolidation range, and a futures contract on the index continues growth today in Asian session.
Today the President of the Bank of Japan Haruhiko Kuroda reiterated the resolve of the regulator to continue massive stimulus until inflation will not reach above the target level of 2%. Thus, the economy of the country of the rising sun stands out from the others which said about finishing the quantitative easing programs.
Despite the fact that the US Department of Energy reported a decrease of inventories over than expectations, correction in the oil market continues. There already are some negative factors such as oversupply and the increasing of shale oil production. To them it was added the US government decision on the simplification of issuing permits for exploration and drilling activities. The weekly report from Baker Hughes showed another increase number of drilling rigs by 12 PCs. At the Asian session oil continues to decline, the support level can be at 43,70 for WTI.
Sincerely, Global FX chief analyst Sergey Melnikov.