On Thursday, the stock indices showed a weak single growth dynamics and closed in the positive zone. Dow Jones industrial average added 0.04% (21182.53), S&P 500 rose by 0.03% (2433.79), the Nasdaq jumped by 0.39% (6321.76). European stocks have not shown uniform dynamics and closed mixed. The German DAX gained 0.32% (12713.58), British FTSE 100 fell by 0.38% (7449.98).
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 04:30 MSK Housing loans Australia for April
At 07:30 MSK the Index of business activity in the services sector of Japan
At 09:00 MSK trade balance of Germany in April
At 11:30 MSK the Volume of production in the manufacturing industry in the UK in April
At 11:30 MSK trade balance the UK in April
At 15:00 MSK Estimate of UK GDP growth from NIESR
At 15:30 MSK the unemployment rate of Canada in may
At 20:00 MSK the Number of drilling rigs in the United States from Baker Hughes
According to the results of exit poll on parliamentary elections in the UK Conservative party is leading. It gets 314 seats out of 650 in the legislative authority of the country. To achieve most of the Theresa May party it is not enough, it is less for 12 seats. On the eve of the polls it was clear that after terrorist attacks in London, the ruling party loses the vote. But still investors were not ready to such outcome, which can lead to a harder scenario for exit from the EU. On that background national currency sharply lost over 2% against the US dollar, the FTSE 100 fell by 0.38%.
Following the meeting of the European Central Bank's key rate in the Eurozone was left unchanged at 0% as interest rate on deposits remained -0,4%. Back asset purchase level left on the current level of 60 billion euros a month in accordance to quantitative easing. Contrary to the expectations of many market participants, the rhetoric becomes more "pigeon": the regulator announced that not only is not going to tighten monetary policy, but is ready to expand stimulus if required. The market reacted by the decline of the European currency to the support level of 1.2 to the U.S. dollar. Despite the statistics on the EU GDP growth above expectations the special reaction of the market was not followed.
In America yesterday, investors ' attention was focused on the hearings of the former Director of the FBI James Komi. According to his statement he has no doubt the attempts of Russia to intervene in presidential elections, but at the same time he has no information or evidence of this fact. The main worry of market participants was connected with the fact that following the hearing, it could be found a pretext for beginning impeachment of Donald Trump, but this did not happen. There was a burst of volatility at the market, but basically indexes remained at the same levels. It is likely that in the coming days will continue to rise until reaching the nearest target at the level of 2450. Yesterday's news on the labor market came out not much worse than expectations, at the same time it talked about reducing the number of initial claims for unemployment benefits. A particular reaction for that was not followed; as it can not hardly exert a special influence on the fed's decision on the key rate next week.
Investors continue to monitor developments around the Qatar conflict and its neighbors. Now buyers are not willing to open new long positions in crude oil futures as the isolation that the Arab countries could lead to its exit not only from the reduction of oil supplies Treaty, but the exclusion country from OPEC, which will lead to increase of offer and then will reduce the cost of oil. Today, you can pay attention to the publication of data on the number of drilling rigs in the United States from Baker Hughes, which will say about the changing production of shale oil.
Sincerely, Global FX chief analyst Sergey Melnikov.