On Monday the stock markets of the US and the UK were closed due to national holidays. At the end of last trading session on Friday the Dow Jones declined by 0.01% (21080.28), S&P 500 added 0.03% (2415.82), the Nasdaq rose 0.08% (6210.19), the British FTSE 100 index grew by 0.40% (7547.63). By the end of Monday the Frankfurt stock exchange DAX has grown on 0,21% (12628,95).
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 02:30 MSK the Index of household expenditure Japan
At 04:30 MSK building Permits Australia
At 09:45 MSK French GDP for the first quarter
At 12:15 MSK speech by a member of the ECB Liikanen
At 15:00 MSK the consumer price Index (CPI) of Germany in may
At 15:30 MSK Base price index of personal consumption expenditures for April
At 17:00 MSK Index of consumer confidence of America in may
At 19:00 MSK speech of the ECB representative Novotny
At 20:00 MSK FOMC member Brainard speaks
Thin market during the closed main stock sessions did not bring special surprises in the futures contracts. S&P 500 Futures dipped slightly by 0.10% in comparison with Friday. Today's opening stock section should be expected with a small gap down. The main reason can be the continued strengthening of the dollar, last week it reached a minimum for last six months. It is likely that the greenback will continue correctional growth this week on the upcoming publication of monthly data from the labor market on Friday. If the news is positive this will strengthen the confidence of investors in the interest rate hike following the meeting on June 14.
Yesterday ECB President Mario Draghi in the European Parliament said that while the Eurozone economy is improving, inflation remains low, which requires extremely accommodative monetary policy. Draghi also noted that “economic growth is becoming increasingly solid”. Though his statement did not contain specific information about the ECB plans to change monetary policy, but in his words "the need in additional stimulus measures taken by the regulator remains." The next monetary policy statement can be expected on 8 June.
On the background of statements of the President of the ECB, the Euro fell markedly against major currencies. Pair of EUR/USD step back from its high of Monday of 1192 to 1.1115 and that trend continues. The nearest support is at 1.1000, where the pair probably will reach in the coming days.
Thin market of Monday did not lead to significant changes in the energy market, increased volatility was not observed. At the moment it is possible to see parity of growth factors and reduction in prices for black gold. On the one hand is the extension of the agreement OPEC+ up to March 2018 on the other hand the continued expansion of shale producers. But soon another one may add this is an increase of demand for fuel due to beginning of the driving season in America, which may swing the balance toward buyers. Usually the beginning of the season starts after the Memorial Day, which was yesterday. The effectiveness of this factor can be evaluated basing on the change in inventories of petroleum products.
Sincerely, Global FX chief analyst Sergey Melnikov.