In Tuesday the stock indices of the United States continued the downward correction in a single dynamic and closed in negative territory. The Dow Jones dipped 0.14 percent (20924.76), S&P 500 dropped 0.29% (2368.39), the Nasdaq lost 0.26% (5833.93). European indices has not demonstrated a single dynamics and closed mixed yesterday. The German DAX gained 0.06% (11966.14), British FTSE 100 declined 0.15% (7338.99).
Today it is expected a few publications of the macroeconomic data that could affect investors' decisions during the trading sessions.
At 00:35 MSK Weekly crude oil inventories according to the American petroleum Institute (API)
At 02:50 MSK Japan's GDP for the 4th quarter
At 10:00 MSK the Volume of industrial production in Germany in January
At 16:30 MSK the Level of productivity in the U.S. nonfarm
At 16:30 MSK labour Productivity in Canada in January
At 16:15 MSK the unemployment rate in nonagricultural sector from ADP in the United States in February
At 18:30 MSK crude oil Inventories USA
At 18:30 MSK the Data on excess reserves of oil in Cushing (Oklahoma)
The US stock market continues slowly drift in negative territory. After explosive growth following the speech of the President of the United States in Congress, the index of wide market S&P 500 has been declining for nearly a fourth consecutive session. During this time had closed the gap, which was the first of March and this circumstance adds to the likelihood of further upward movement. Current correction will likely change to sideways movement with wide volatility, due to the expectation of investors on the fed's decision on the key rate, as well as data from the labour market, published on Friday. Previously when Janet Yelen spoke about the probability of a rate hike next week, she said that determining factor will be positive statistics on the labor market. Today in the second half of the day will be published the first data from ADP, which may allow to make prediction of the actions of the Federal reserve. At the moment the probability of monetary policy tightening after March 15th is estimated at 85%.
It is likely that today the stock exchanges of the USA will stop the correction movement and will grow from current levels. The reason of this can be a meeting of Donald Trump with the leaders of the companies responsible for the infrastructure of the country in the White House. During the election campaign, Trump said he will insist on the direction of investment to infrastructure more than $ 1 trillion. dollars. The money should go to rebuilding roads, bridges, airports and other public works. According to preliminary estimates of the American society of civil engineers it needs a total of about 3.6 trillion. dollars within the period up to 2020 to fully bring the country's infrastructure in order. Steps in this direction will create more jobs, and increase of capitalization of the companies involved in this work.
According to the American petroleum Institute (API) weekly crude oil inventories has increased enormously, surpassing analysts ' forecasts. This circumstance had deep impact on the quotes. Futures for WTI fell to $ 52,76 barrel that is approximately in the middle of the sideways range, the lower limit of which is the level $50,80 barrel. Despite the verbal intervention of the representatives of OPEC and speculative purchases, there is likely a price decline to the lower border of the consolidation and the nearest additional visible reason for this may be the continued strengthening of the dollar.
Sincerely, Global FX chief analyst Sergey Melnikov.