On Thursday, the stock indices have shown slight downward momentum and closed in the red zone. Dow Jones slightly declined by 0.02% (20656.58), S&P 500 dropped 0.11% (2345.96), the Nasdaq fell by 0.07% (5817.69). Major indices European markets closed in positive territory. The German DAX grew by 1.14% (12039.68), stock index UK FTSE 100 rose 0.22% (7340.71).
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 02:00 MSK FOMC member Kaplan speaks
At 10:45 MSK French GDP for the 4th quarter
At 11:30 MSK the Index of business activity in the manufacturing sector (PMI) in Germany for March
At 15:30 MSK Base orders for durable goods in the U.S. for February
At 15:30 MSK the consumer price Index (CPI) of Canada for February
At 16:05 MSK FOMC member Bullard speaks
At 16:45 MSK the Index of business activity (PMI) in the US services sector for March
At 17:00 MSK FOMC member Dudley
At 21:00 MSK the Number of drilling rigs from Baker Hughes
In Europe the terrorist attack in London remains in the focus. Police found a trail of Islamic terrorism. This turn is wary European investors, because it could bring Marine Le Pen to the leadership in presidential race in France. Her election program includes, as the struggle of migrants and Islamization of Europe, also the idea of exit from the European Union.
Yesterday US markets were in patience, trading was in low volatility. Investors expect that the fundamental factors will give direction for further developments. Unfortunately expectations were not fulfilled. Fed Chairman Janet Yellen in her speech left the further steps of the regulator in monetary policy without comment, maintaining the confusion of market participants.
Voting in Congress about the new health insurance program did not meet expectations of investors. The Republican fraction in the house of representatives has postponed a vote on today. The adoption of the law of Donald Trump administration about the new program of health care instead of Obamacare can open trend on the implementation of the election promises of the new President. Then fiscal and other changes have more possibilities to be approved. That in turn will lead to economic growth. Now there is a separation in the Republican faction. So it is not allow to reach majority to pass a law through Congress. Today investors will continue pay attention to the situation.
As positive news yesterday was good statistics from the labor market and a recovery in the banking sector, which in turn led to the strengthening of the dollar.
A slow strengthening of American currency positions at once resulted in a continued decline in the energy market. Here investors are also waiting for news from congress and trades are coming with low volatility. In addition to other factors today investors will pay attention to the change in rig count, which indicates the activity of the shale producers.
Sincerely, Global FX chief analyst Sergey Melnikov.