Wednesday, March 29, there were low volatility on the American trading session, indexes had not single dynamics and closed mixed. The Dow Jones fell by 0.20% (20659.32), S&P 500 rose 0.11% (2361.13), Nasdaq adds 0.38% (5897.55). European markets continued growth in a unified dynamics. The German DAX rose 0.44% (12203.00), British FTSE 100 added 0.41% (7373.72).
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 03:00 MSK new home Sales in Australia in February
At 10:00 MSK the Index of leading economic indicators KOF for March
At 10:00 MSK Harmonized index of consumer prices in Spain for
At 15:00 MSK the consumer price Index (CPI) of Germany in March
At 15:30 MSK U.S. GDP for the 4th quarter
At 15:30 MSK the Number of initial applications for unemployment benefits USA
At 15:30 MSK the Index of prices for raw materials in Canada for February
At 16:45 MSK FOMC member Mester speaks
At 18:00 MSK FOMC member Kaplan speaks
At 23:30 MSK FOMC member Dudley speaks
Yesterday, Tim Barrow, the UK Representative in the European Union handed over a letter from Theresa May to the Chairman of the European Council Donald Tusk. The procedure of Brexit started officially. The adoption of further directives from the EU it is planned to make at the summit a month later on April 29. Hard times are coming for the UK, these are and modification of the legislative framework, reviewing contracts for contractors and a lot of other work of lawyers and legislators. It will be necessary to literally put the country on a new track that for the economy can be a period of uncertainty and instability. In addition Brexit would cost England 60 billion euros that is about 2% of GDP.
Yesterday, the main attention of the USA market participants was directed at the comments of the monetary authorities on further steps to tighten regulatory policy. The head of the Chicago Fed Charles Evans, in his speech in Frankfurt noted the favorable development of the economy based on the dynamics of fundamentals. According to this, he did not rule out another two interest rate hikes before year-end. Evans also suggested that if the current temps of economic development will be holded for the coming years, unemployment could fall below the level at which inflation will cease to hold back and quickly approach to the 2% target. In this scenario, it's possible three of a rate hike next year. The market reaction yesterday was in strengthening of U.S. dollar and even the possible change of local down trend in the national currency of the United States. Today investors ' attention will focus on new comments from Fed officials.
The strengthening of the dollar was reflected on the precious metals market. After two weeks of growth, the gold corrects down. This is mainly due to technical factors, market participants fixed profits. From the beginning of the year growth in demand for gold from China continued, imports of the yellow metal in February increased there by more than 50% in relation to January.
Oil continues to grow and has reached the upper borders of consolidation corridor, 49,60 USD per barrel for WTI. The catalyst for the growth was the increase in US inventories less than expected. The main factor of pressure is to increase the oil production on the domestic market of America.
Sincerely, Global FX chief analyst Sergey Melnikov.