In the first trading session of October stock indices continued to rise in a single dynamics. Dow Jones industrial average up for 0.68% (22557.60), the S&P 500 increased by 0.39% (2529.12), Nasdaq rose 0.32% (6516.72). European markets also moved up. The German DAX is growing at 0.58% (12902.65), British FTSE 100 gaining 0.90% (7438.84).
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 04:30 MSK building Permits in Australia in August
At 06:30 MSK the RBA Decision on interest rates in Australia in October
At 06:45 MSK the Auction on placement of 10-year bonds Japan (JGB)
At 11:30 MSK the Index of business activity in the UK construction sector in September
At 15:30 MSK FOMC member Powell
At 17:30 MSK the Index of prices New Zealand by GlobalDairyTrade
At 23:35 MSK Weekly crude oil inventories according to the American petroleum Institute (API)
The main news for the stock markets of Europe was a referendum in Catalonia. According to the results, there was more than 90% of the population who voted for independence. The tension of the situation grows as the constitutional court of Spain and the European Commission recognized the referendum as illegal. This may expose the integrity of the European Union, which puts pressure on the Euro. The attractiveness of assets of the Old World is growing, and unlike America, the potential for that is much greater. It is also clear that investors had considered the mood of the population which was known and they had already been placed to the price. Likely impact of the referendum on economic processes will soon disappear and it will remain in history, as a surge of sellers.
Apparently the incident with the shooter in Las Vegas did not affect the mood of the invertors in the United States. Amid rising yields of government Treasury bonds and weakening the Euro, the dollar peaked a month and a half. Growth of the American markets also contributed to the positive macro statistics. The index of business activity in the manufacturing sector showed a rise to 53.1 points in September. Also, the US currency is pushing to increase the apparent hawkish rhetoric of the Fed and a continued rally in the stock markets. The combination of these factors indicates to greater likelihood of raising the key rate at the December FOMC meeting.
Overbought of oil was the reason of a correction in yesterday's trading session. Triggers were the number of news that indicates the growth of supply. Saudi Arabia in September has increased the production capacity by 60 thousand barrels a day. Kuwait raised production by 50 thousand. In addition on Friday evening, was published the number of drilling rigs from Baker Hughes, which was 750, it has been showing growth of 6 pieces. Today, market participants will consider the data of the American petroleum Institute API weekly stock changes.
Sincerely, Global FX chief analyst Sergey Melnikov.