On the last day of the previous week the main stock market indexes of America showed weak growth in a single dynamics. Dow Jones closed with a rise of 0.01% (21005.71), S&P 500 up 0.05% (2383.12), the Nasdaq rose 0.05% (5870.75). European markets showed a decline and closed in the red zone. Germany's DAX fell 0.27% (12027.36), British FTSE 100 dipped 0.11% (7374.26).
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 03:30 MSK retail sales of Australia in January
At 18:00 MSK the Volume of industrial orders in the U.S. for January
At 23:00 MSK FOMC member the Kashkari speaks
On Friday it was published a series of macroeconomic data, which continue to report the growth of the American economy. So the index of economic conditions ISM in non-manufacturing sector showed growth for the previous month, with a maximum from autumn 2005 to a level of 57.6 at the same time the forecast level was 56.5. It should be noted that this figure has for several years held above 50 points, which allows to judge about the extension of the activities in the industry, which is one of key in the USA and about the economy as a whole.
On Friday the main attention of participants of the global markets was directed to the speech of the fed head Janet Yellen. In her speech, she said about high probability of interest rate hikes after the next FOMC meeting, which will take place next week on March 15. Although, as usual, Janet Yellen, left room for opposite developments, she stipulated that a positive decision will be made at the rate hike when the indicators for employment and inflation are consistent with and point to continued economic growth. Thus, the important role and the last word remain for the main indicator of the American economy, non-farm payrolls, which will be published on Friday. However, the speech of the head of the Federal Reserve gave more certainty of what is severely lacking to participants of the stock markets. After her speech, the major indexes continued to rise and closed in the positive territory. Also, that was unexpected, this event led to the weakening of the U.S. dollar. Now the probability of a rate hike estimated at more than 80% in accordance with the futures for this event on the Chicago stock exchange. Participants of the market have already placed this factor to the cost of the assets. This week it's possible trades will take place in a wide sideways range close to current levels.
The weakening dollar had a favorable impact on the price of oil, which increased by adjusting the half of the decline in Thursday. Growth also contributed to limiting the supply due to the blocking of the main offshore oil terminal in Libya, which was attacked by rebels. However, the black gold remains under strong pressure from the activity of shale producers and a possible strengthening of the dollar. The previous week the price fell by 1.2%, but all movements occur within a sideways range since December last year.
Sincerely, Global FX chief analyst Sergey Melnikov