In the last trading session of last week, the Stock indices of America have not showed uniform dynamics, and closed mixed. Dow Jones dipped 0.01% (21394.76), S&P 500 rose by 0.16% (2438.30), the Nasdaq added 0.46% (6265.25). European markets were down in the single dynamics and closed in the red zone. The German DAX slipped by 0.47% (12733.41), British FTSE 100 lost 0.20% (7424.13).
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 08:20 MSK FOMC member Williams
At 11:00 MSK the Index of business expectations of Germany in June
At 11:00 MSK the Assessment of the current situation in Germany in June
At 11:00 MSK the Index of business climate IFO of Germany in June
At 11:30 MSK the mortgage approvals in the UK
At 15:30 MSK Base the orders on durable goods report for May
At 20:30 MSK the ECB President Draghi speaks
In Friday Macro statistics restrained the growth of the European stock exchanges. Preliminary PMI for the Eurozone showed a decline to 55.7 p., this is the lowest figure for almost six months. Also business activity in the services sector declined the indicator showed 54,7 p. in June, which is 1.6% lower than in May.
Despite this, the investment attractiveness of European assets is on the rise. After the agreement of Greece's debts and also the victory of the Macron in France and getting a majority of seats in Parliament of his supporters, we can see the largest capital inflows in the last six years. It is likely that growth indices and strengthening of the single European currency will continue in the near future.
Contradictory statistics was released on Friday in America. New home sales showed an increase of 0,017 million to the level of 0,610 million, it is above forecasts 0,597 million the average cost rose by 11.5%. The index of business activity from Markit, unfortunately, diminished optimism, it was came out worse than expected. In this situation, the growth of energy companies gave support to the markets on the background of correction in the oil as well as growth of companies in the high-tech sector, which continues to recover and looks better than the market. At the end of last week the Nasdaq gained 1.8%, it is more than the Dow Jones and S&P 500 weekly increase of which was not exceeded 0.5%.
Investors continue to take into account the speeches of the voting members of the FOMC, which are often contradicting each other. In Friday the President of the Federal Reserve Bank of St. Louis James Bullard said that it is not necessary to raise rates until 2% inflation will be achieved. This morning his colleague the President of the fed San Francisco John Williams said that if there will be too long delay, the economy will overheat. He said that full employment and inflation of 2% are targets for next year, but the fed should continue to raise rates, though gradually, to keep the economy afloat.
As a result of continued weakening of the U.S. currency gold has increased in price. But at the end of the week we can say that the local decline is over, as the loss amounted just 10 cents during five sessions. This week there is a possibility of correction up.
Black gold lost 3.9 percent during previous week, when it met the support at 42.5 dollars per barrel for WTI it started to adjust upwards. Stronger than on Thursday and Friday the growth seen today in the Asian session. Profit-taking of short positions contribute to the continuation of that, as well as the dollar, which is not showing significant signs of strengthening last days.
Sincerely, Global FX chief analyst Sergey Melnikov.