The stock exchanges of the United States on Thursday declined, showing a single dynamics, and closed in the red zone. The Dow Jones dipped by 0.53% (21002.97), S&P 500 lost 0.59% (2381.92), the Nasdaq fell 0.73% (5861.22). European sites showed near-zero momentum and closed near the levels of the previous session. The German DAX dipped slightly by 0.06% (12059.57), the British FTSE 100 fell by 0.01% (7382.35).
Today it is expected the number of publications of the macroeconomic data and the speeches of the monetary authorities that could affect investors' decisions during the trading sessions.
At 03:00 MSK FOMC member Mester speaks
At 12:00 MSK the Index of business activity in the services sector in the Eurozone in February
At 12:30 MSK the Index of business activity in sector of services of England February
At 18:00 MSK the Index of business activity in the non-manufacturing sector (PMI) of the US ISM manufacturing PMI for Feb
At 18:00 MSK the Index of employment in nonmanufacturing sector from ISM for February
At 18:15 MSK FOMC member Lacker speaks
At 20:15 MSK FOMC member Powell speaks
At 21:00 MSK the Number of drilling rigs from Baker Hughes
At 21:00 MSK FOMC member Fisher speaks
At 21:00 MSK a Speech of Fed Chairman Yellen
After the explosive rally oа mid-week on Thursday, the market had recovered somewhat, the euphoria subsided. Investors rushed to take part of the profit and the major indexes showed a correction yesterday that accounted for half of growth. The next day after the speech of President Trump the U.S. indices on the wave of the "bullish" momentum has achieved significant key levels, 21000 for Dow Jones and the S&P 500 reached 2400. Now we can assume that these levels can become resistance on the way for further growth and will probably be followed by or more serious correction or consolidation near to the reached values. Already in the Asian session, futures on the index of wide market S&P 500 accelerated its decline and reached the level of the beginning of the week.
Yesterday's statistics from the labor market reports a reduction in the number of initial claims for unemployment benefits from 242 to 223 thousand. It is better than analysts ' expectations, they forecast growth. This also pushes investors to close part of long positions, as the improving of economy not only implies the growth of the stock market and the tightening of monetary policy also. According to yesterday's data, the probability of interest rate hikes in mid-March, now is whiter than 75%, i.e. for this week it has increased more than twice from 31%. Today investors are waiting for comments from fed chair Janet Yellen and other FOMC members.
The increase in the probability of the key rate growth pushes the dollar up, which greatly influenced the price of oil. It after a long consolidation near the year highs rolled down to the lower boundary of the sideways range in which it traded since December of last year. Today the statements of fed officials, as well as data on rig count will influence on the decisions of market participants.
Significant uncertainty on the stock markets, and political risks are pushing investors to diversify portfolios and looking for defensive assets. Against this background, the bitcoin, being recently in a strong uptrend, exceeded the price of an ounce of gold yesterday.
Sincerely, Global FX chief analyst Sergey Melnikov