On Wednesday, the stock indices of America have not shown a single dynamics, and closed mixed. Dow Jones dipped 0.01% (21478.17), S&P 500 added 0.15% (2432.54), the Nasdaq rose 0.67% (6150.86). European markets showed an increase with low volatility. The German DAX added 0.13% (12453.68), British FTSE 100 rose 0.14% (7367.60).
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 10:45 MSK FOMC member Williams speaks
At 13:00 MSK the representative of ECB Prata speaks
At 14:30 MSK publication of the minutes of the meeting of the ECB's monetary policy
At 15:15 MSK the unemployment rate in nonagricultural sector from ADP for June
At 15:30 MSK the number of initial applications for unemployment benefits USA
At 16:45 MSK Composite index of business activity in the United States from Markit for June
At 16:45 MSK the index of business activity (PMI) in the US services sector for June
At 17:00 MSK FOMC member Powell speaks
At 17:00 MSK the index of employment in the non-manufacturing sector index for June
At 17:00 MSK the Index of business activity in the non-manufacturing sector (PMI) from ISM, USA in June
At 18:00 MSK crude oil Inventories USA
At 18:00 MSK the data on excess reserves of oil in Cushing (Oklahoma)
After the celebration of the Independence Day the main event for investors was the publication of minutes of the last meeting of the Federal Reserve of the United States. From the content it was clear that the FOMC members discussed plans for the coming months to reduce the portfolio of assets on the fed's balance sheet. The opinion of the members of the commission were divided on those who believe that markets are already ready to the process of reducing the balance, and those who are waiting for more evidence of inflation growth rate. At a previous meeting the key rate was raised, and plans for another increase before the end of the year has been voiced. Despite the lack of consensus among the members of the commission, forecast for one more hike of key rate within the next six months is still in power. Now a strong influence on the opinion of FOMC members can make data on employment and inflation. This, in turn, may add volatility to the market, which now goes into consolidation before publication of data on employment in non-agricultural sector tomorrow.
Gold, after stopping the decline at the support area close to level of 1220 dollars per ounce, starts correcting up. The main reason is the rising geopolitical risks on the background of testing Intercontinental ballistic missiles in North Korea. The US warned Pyongyang about the possibility of a preemptive strike. Before that North Korea announced a new breakthrough in the development of nuclear weapons. If the escalation of the conflict continues, the trend of rising gold prices, as a protective asset, will be developed.
After a very long weekly non-stop growth for a few years, which amounted to 11%, yesterday oil went to correction in high volatility. The reduction reached more than 3%. This happened despite the positive data for the inventory reduction in the US according to the reports API. Therefore, the main cause was the closing of speculative positions, weakening of the dollar contributed to that. It also should be considered the fact that other factors pressure as increased supply and production remain valid.
Sincerely, Global FX chief analyst Sergey Melnikov.