Wednesday stock indices closed the trading session in a green zone, on a single dynamics. The Dow Jones rose by 0.36% (21012.42), S&P 500 added 0.25% (2404.39), the Nasdaq increased by 0.40% (6163.02). European stocks have not shown dynamics and closed mixed. The German DAX fell by 0.13% (12642.87), British FTSE 100 rose 0.40% (7514.90).
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 01:00 MSK FOMC member Kaplan speaks
At 01:30 MSK FOMC member Kashkari speaks
At 11:00 MSK a Speech the Deputy head of the RBA Debelle
At 11:30 MSK UK GDP for the first quarter
At 13:00 MSK OPEC Meeting
At 15:30 MSK balance of external merchandise trade for April
At 15:30 MSK the Number of initial applications for unemployment benefits USA
At 17:00 MSK FOMC member Brainard speaks
At 20:00 MSK the Statement by the member of the ECB, Constancio
The main event of yesterday in USA was the publication of minutes of the FOMC last meeting. Members of the Commission as a whole suggests that it would be prudent to wait for additional evidence pointing that the recent slowdown in economic activity was temporary, before taking the next steps on monetary policy. As one of the conditions of a rate hike the participants of the meeting called the stabilization of inflation around 2%. Market participants considered minutes as a sign of increased caution of the fed against tightening monetary policy.
Today investors will pay attention to the publication of data from the labor market and will assess the prospects of the draft budget presented by the administration of Donald Trump.
Yesterday the broad market index S&P500 reached a new historic high and closed near to it. Now risks regarding record levels of multipliers with a limited number of shares, which mainly help in the growth of the American indices, become increasingly evident. Cautious investors are already providing part of the funds to the European markets. The improvement in the political situation in connection with the election of the new President of France and the economic growth in general in the region create additional appeal. Yesterday was published PMI, according to which the level of economic activity reached a maximum in six years.
Oil prices remain at high levels. Market participants are waiting for the results of the OPEC meeting, which will bring decision of the agreement extension of the production cut. Now the main intrigue is the period for which the renewal will apply. The final version can be between 6 and 12 months. This will depend on the further movement. Buyers also were supported by yesterday's data on the inventories reduction published by the EIA for the volume, which exceeded expectations.
Sincerely, Global FX chief analyst Sergey Melnikov.