On Wednesday, the stock indices did not show the overall dynamics and closed mixed. The Dow Jones fell by 0.33% (20855.73), S&P 500 dipped by 0.23% (2362.98), the Nasdaq added 0.06% (5837.55). European markets also did not have a single direction. German DAX has grown slightly by 0.01% (11967.31), British FTSE 100 is reduced by 0.06% (7334.61).
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 09:30 MSK the change in the number of people employed in non-agricultural sector of France for the 4th quarter
At 15:45 MSK the Rate on Deposit rate in the Eurozone
At 15:45 MSK a Decision on the refinancing rate of the Eurozone
At 16:30 MSK the Number of initial applications for unemployment benefits USA
At 16:30 MSK time the Index of prices of new housing in Canada, January
At 16:30 MSK Press conference of the ECB
From European statistics, released yesterday, a positive impact on growth provided the index of industrial production of Germany, which grew by 2.8%, above expectations. This helped the DAX to close in positive territory. Mainly European markets are now traded with low volatility in view of the upcoming decision on the key rate of the Eurozone, which will be announced today. According to most participants of stock market rate will remain at the same level. But bigger importance will have the comments of the ECB head Mario Draghi. He will speak on a press conference immediately after the announcement of decisions on monetary policy. Currently, the regulator buys assets worth 60 billion euros a month that it plans to continue to do until December of this year.
Yesterday a significant impact on the markets had the statistics from the labor market in the United States. Automatic Data Processing has published the change in the number of jobs in the private sector, it came out at 298 thousand, well above the projected 187 thousand. Employment growth continue approaching of the fed's decision on the key rate. Janet Yellen in her speeches repeatedly stressed that the tightening of monetary policy is only possible when a satisfactory situation on the labour market will be. Today it is expected the publication of the number of initial applications for unemployment benefits, and tomorrow, Friday basic statistics employed in the non-manufacturing sector. The rate decision will be announced in the middle of next week and the probability of its increase is now estimated by market participants at 85%.
Approaching of this event created a strong negative background for the market of black gold yesterday. Oil lost more than 5%, and the trigger for that was the information about growth stocks in the U.S. for 8,209 million at the forecast 1,967 million barrels, as it was reported by EIA. Until that time, prices held close to maximum for a year and a half no matter what, but the possible strengthening of the American currency in the near future broke the patience of customers. Judging by the dynamics, it was sold to a large volume of contracts by big players. Now oil is trading near the lower boundary of the sideways range which started to form early last December.
Sincerely, Global FX chief analyst Sergey Melnikov.