Yesterday, the major indicators of the U.S. stock market showed a weakly up trend and closed in positive territory. Dow Jones industrial average up 0.01%(20858,19), the S&P 500 rose 0.08% (2364,87), the Nasdaq rose by 0.02% (5838.81). European markets did not showed a single dynamics and closed mixed. The German DAX rose 0.09% (11978,39). Index of the British economy, the FTSE 100 went down by 0.27% (7314,96).
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 10:00 MSK trade balance of Germany in January
At 12:30 MSK industrial production in the UK in January
At 12:30 MSK the Volume of production in the manufacturing industry in the UK in January
At 16:30 MSK the unemployment rate in the non-agricultural sector of the USA for February
At 16:30 MSK unemployment rate for February
At 16:30 MSK the Change in employment Canada in February
At 16:30 MSK the unemployment rate for February
At 18:00 MSK the Assessment of GDP growth NIESR UK
At 21:00 MSK the Number of drilling rigs from Baker Hughes
At 22:00 MSK the Report on execution of the Federal budget of the USA for February
Yesterday stock indexes of the Eurozone showed a positive trend on the background of the results of the ECB meeting. As expected by most market participants the regulator has left the basic parameters of monetary stimulus unchanged. Also the revision of the forecasts for GDP growth from 1.7% to 1.8% in 2017 and from 1.6% to 1.7% for 2018 added optimism. In addition to the growth of the stock market was observed and a significant strengthening of European currencies. Today in the morning will publish data on the trade balance of Germany.
After a strong jump of volatility and the growth of the main indexes of the New World last week, major market participants refrained from serious action in anticipation of the main event today, which will be the publication of a change in employment in non-agricultural sector of the USA. In the case of positive statistics the increasing of the key rate next week would be a foregone conclusion. Now the probability of this event is estimated at more than 85% and almost completely incorporated in the price. So if the situation on the labour market deteriorates, it will cause a surge of volatility in the wave of the uncertainty in the fed's decision next week.
A dramatic fall have seen on the energy market during the previous two sessions, which in total amounted more than 7%. And now we can hope that the oil price found a support at level around $ 49 per barrel for WTI oil. Looking at the nature of the fall it is possible to imagine how patience of the big players ended under pressure of record of growth stocks in the U.S., strengthening the dollar and the lack of results from the agreement by OPEC to reduce offer. Today market participants will pay attention to data of the number of drilling rigs from Baker Hughes as well as to the statistics from the labor market.
Sincerely, Global FX chief analyst Sergey Melnikov.