In the last trading session of the previous week stock indices demonstrated growth in a single dynamics and closed in positive territory. The Dow Jones added 0.21% (20902.98), S&P 500 rose 0.33% (2372.60), the Nasdaq rose by 0.39% (5861.73). The stock markets of the Old World closed mixed on Friday. The German DAX fell by 0.13% (11963.18), FTSE 100 gained 0.38% (7343.08).
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 07:30 MSK the Index of business activity in the services sector of Japan
At 15:45 MSK the speech of the member of the ECB Lautenslager
At 16:30 MSK the ECB President Draghi speaks
At 17:00 MSK the member of the ECB, Constancio speaks
At 19:30 MSK speech by a member of the ECB Prata
The main event of the previous trading session and of the last week was publication of macro data from the U.S. labor market for February. The unemployment rate continued to decline, which for the month was from 4.8% to 4.7%, in accordance with expectations. The data of Non-farm payrolls came out at 235 thousand, that is above the projected level of 190 thousand. Positive statistics increased already high probability of the fed rate hike this week. Now investors of the Chicago stock exchange estimated it on more than 90%. With the approaching of meeting of the FOMC, stock markets lay in the price of the tightening of monetary policy. This process can be assessed as favourable, as it does not cause unexpected spikes in volatility and market participants can gradually advance to change the structure of investment portfolios.
So, a meeting of the Committee on open markets will be this week, Wednesday , which they certainly will decide to raise its key rate by at least 25 basis points. Investors ' attention will focus not on the event itself, but to the comments of monetary authorities, particularly the heads of the Federal reserve Janet Yelen, which will reveal plans for further steps of the regulator. The volatility and movement in financial instruments will depend on the rhetoric of these comments.
Oil continued to decline on Friday and as a result of the trading day, and of the week it has been broken the uptrend, where the black gold is trying to raise his head for more than a year. The main catalysts for this collapse was the steady growth of inventories and production in the United States, as well as growing activity in shale producers. Major players and holders of futures contracts get rid of long positions and this phenomenon has acquired an avalanche in the absence of sufficient demand from buyers. In total for the week the price loss was 9.1%. A quick recovery of the black gold is unlikely, pessimism is also supported by statements of members of the Vienna agreement about the absence of reason to extend it for an additional six months.
Sincerely, Global FX chief analyst Sergey Melnikov.