In the last trading day of previous week, the stock indices showed a slight negative trend and closed in the red zone. The Dow Jones fell by 0.10% (20914.62), S&P 500 dipped 0.13% (2378.25), Nasdaq is slightly moved down by 0.02% (5901.00). European markets were grown in a unified dynamics. Germany's DAX added 0.10% (12095.24), British FTSE 100 grew 0.12% (7424.96).
Today it is expected a few publications of the macroeconomic data that could affect investors' decisions during the trading sessions.
At 10:00 MSK the producer price Index (PPI) Germany in February
At 13:00 MSK wages for the 4th quarter for the Eurozone
At 15:30 MSK the Volume of wholesale sales in Canada for January
At 19:45 MSK the President of the Bundesbank Weidmann
At 21:20 MSK Speech by BoE MPC member Haldane speaks
The Japanese market will be closed today, due to the day off in honor of the spring equinox.
Last week a memorandum of Brexit has been approved by both houses of the British Parliament. The day of starting is still not assigned, but according to the analysts, this could happen in a week, around March 27. Due to this certainty, the British stock market sets new records, pushing the FTSE 100 at the historic peaks with the strengthening of the national currency, and it is likely that this trend continues.
After fixing of the key rate increasing and a surge in bullish sentiment, the US market went into a mild correction, adapting to the new reality. On Friday also the price movements are influenced by the expiration and transition to a new futures contract for some base assets. The volume of trading on the New York Stock Exchange exceeded the average quarterly level, but there significant volatility was not observed. The indices had gotten just a weak loss. Today the session will pass in the normal mode.
The American currency continues to weaken. The reason for that may be dovish rhetoric of fed Chairman Janet Yellen. She said that interest rates will rise more evenly, and it was a surprise for many investors. Today with the opening of the Asian session, the dollar continues to lose weight due to the added uncertainty in world trade policy, as it was evidenced by results of a meeting of Finance Ministers of the world's leading economies last weekend.
During the past week gold has risen in price by 2.4%. Buyers have revived after it was clearer that monetary tightening will be gradual. But still, these purchases are more short term and speculative in nature, as, in spite of all the "dovish" intentions of Fed, the rate is raised from zero anyway. That will add to the yield of state bonds and will reduce the investment attractiveness of gold.
Despite the negative statistics from the U.S., the growth of inventories and production of oil, it still managed to rise 0.6% over last week closure. The confirmation of the continuation of compliance to the Vienna agreement its participants helped to that.
Sincerely, Global FX chief analyst Sergey Melnikov.