On Monday, the stock indices showed a downward correction in the unified dynamics, and closed in the red zone. The Dow Jones fell by 0.10% (21184.04), the S&P 500 index went down by 0.12% (2436.10), the Nasdaq declined by 0.16% (6295.68). In Europe, the part of the exchanges were closed, including Frankfurt, because of the national holidays. In the last trading session on Friday, the DAX showed an increase of 1.25% (12822.94), the British FTSE 100 fell yesterday by 0.29% (7525.76).
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 02:01 MSK retail sales in the UK from BRC in may
At 04:30 MSK balance of the current account of Australia in the first quarter
At 07:30 MSK the RBA Decision on interest rates at June
At 12:00 MSK retail sales in the Eurozone in April
At 17:00 MSK the Number of open vacancies on the labour market of the US JOLTS job openings for April
At 17:00 MSK the Index of business activity in Canada (PMI) from Ivey in may
At 17:30 MSK the Index of prices New Zealand GlobalDairyTrade
Due to national holidays in Europe were closed stock markets of Switzerland, Denmark, Germany, Norway, Austria, Ireland, Greece. After growth on Friday the rest stock markets of the Old World went into a correction. French national index the CAC 40 has decreased for 0,66 %. Today a gap down on other stock markets can be expected at the opening. The main driver of the fall is a terrorist attack in London on the weekend. It can greatly affect the mood of the voters in the upcoming Thursday early parliamentary elections. The new Parliament will determine the developments in the negotiations on Brexit. Also on June 8 the decision of the European regulator monetary policy will be announced. Investors admit the possibility of a change of course in the direction of tightening.
The American trading session was influenced by various macroeconomic data, which mainly indicate decline. In April, orders in the manufacturing industry decreased by 0.2%, which was within expectations. The index of economic conditions ISM non-manufacturing sector showed a fall more than expected to 56.9 from 57.5. At the same time for the first quarter labor productivity has not changed, with increasing cost of labour by 2.2%, giving an extra growth of inflation. And this, in turn, increases the already high probability of a rate hike at the June fed meeting next week.
And this week market participants are waiting for news from the domestic political battles. The key event may be the speech of the former Director of the FBI James Comey at the Senate intelligence Committee on Thursday 8 June at 17:00 Moscow time. Very high probability of a correction in the major U.S. indexes during the process could happen if it will be uttered a negative thesis against the president.
It may be noticed that Thursday, June 8, will be rich for key events worldwide, which may cause increased volatility. So in the coming days, most likely we can expect a consolidation of indices at the current levels.
The technical picture in gold, is speaking about the breakdown of multi-year down trend that started from 2011. June has opened beyond, which can give a strong signal to buy for the big players.
Oil continued to decline today during the Asian session. The reason for this was the conflict of Qatar and some Arab States. Investors regard this as increasing of the risk of the break the agreement of OPEC. Although the oil production of this country is in last place among the cartel, however, it threatens the whole agreement and which is already not an effective tool in stabilizing oil prices. As a result, yesterday crude oil fell more than 1%.
Sincerely, Global FX chief analyst Sergey Melnikov.