In the last trading session of previous week stock indices continued to decline in a unified dynamics. Dow Jones down 0.51 %(20551.69), S&P 500 lost 0.31% (2338.75), Nasdaq is slightly adjusted to 0.01% (5817.37). European markets closed in different directions. Germany's DAX gained 0.20% (12064.27), the British FTSE 100 fell by 0.05%(7336.82).
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 11:00 MSK the Index of business climate IFO of Germany for March
At 11:00 MSK the Assessment of the current situation in Germany in March
At 12:20 MSK the speech of the member of the ECB Lautenslager
At 15:00 MSK the speech of the ECB Prata
At 20:15 MSK speech by a member of the ECB Prata
On Friday from the macro economic data that require attention, were published changes in the number of orders for durables in February. The indicator value was 1.7%, what is above analysts ' expectations of 1.2%, and this show continue of economic growth in the country.
Not so positively ended the day for the administration of Donald Trump. The vote on his bill of health insurance in Congress was not held due to the lack of consensus on this issue among the Republican factions. The vote was postponed until better times. This situation may affect the confidence of investors in implementation of other projects of Trump stated during the election campaign and already standing in the plan. And therefore this reduces the expected growth tempo of the economy and the flow of investment to the real sector. For stock markets, this may result in a correction or a protracted high volatile movement sideways.
Recent speeches from Fed officials add reasons to put the market in correction. The head of the Federal reserve Bank of St. Louis James Bullard stated the slowing growth of the labor market, and Robert Kaplan of Dallas called for a gradual tightening of monetary policy. A new week begins increasing geopolitical risks associated with a new scandal. As it became known during a recent meeting with German Chancellor Angela Merkel, Trump charged her country by invoice in the amount of $ 375 billion for the services provided by NATO of defense. The combination of all these factors has negatively affected the stock market. At the opening of the Asian session it showed a sharp decline with the gap.
For oil market came the positive news from Saudi Arabia about the reduction of supply in the USA on 300 thousand barr. a day. This factor, coupled with the weakening dollar helped to close the previous session in positive territory, but as the results of the week futures contracts for the black gold lost 1.7%. The new increase in inventories of America, as well as the continued growth of drilling activity contributed to the decline. Meeting of OPEC Ministers took place at the weekend. There it was made a preliminary decision on the renewal of the Treaty of Vienna until the end of 2017. The final decision on this issue will be put on the agenda at the meeting in May.
Sincerely, Global FX chief analyst Sergey Melnikov.