On Thursday, the stock indices continued the upward trend and grew, showing a single dynamics. Dow Jones up 0.25% (21948.10), S&P 500 up 0.57%(2471.55), the Nasdaq added 0.95% (6428.66). European markets also continued to increase in the unified dynamics and closed in positive territory. The German DAX rose 0.44% (12055.84), British FTSE 100 added 0.89% (7430.62).
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 industrial activity AIG Australia in August
At 10:30 MSK the consumer confidence index of Switzerland for August
At 10:55 MSK the Index of business activity in the manufacturing sector (PMI) in Germany for August
At 11:30 MSK the Index of business activity in the manufacturing sector in the UK for August
At 12:15 MSK speech by a member of the ECB, Constancio
At 15:30 MSK nonfarm payrolls for August
At 15:30 MSK the unemployment rate for August
At 16:45 MSK the Index of business activity in the U.S. manufacturing sector in August
At 17:00 MSK the Index of business activity in the U.S. manufacturing sector by ISM for August
At 17:00 MSK the Index of consumer expectations from the University of Michigan, USA in August
At 17:00 MSK the Index of consumer sentiment from the University of Michigan, USA in August
At 20:00 MSK the Number of drilling rigs from Baker Hughes
After a significant drawdown in the previous days, European stocks moved to the stage of positive correction. This is happening even in the background of not very impressive macroeconomic data in the Old World. The consumer price index of the European Union showed a slight increase of 0.2% to 1.5%, while the forecast was 1.4%. Retail sales in Germany fell by 1.2% against the forecasted of reduction by 0.4%. The number of unemployed decreased by 5 thousand, which is also less than expected 6 thousand. The main driver for the growth of indexes in this situation was the weakening of the Euro against the dollar. The EUR/USD come down from multiyear highs during the second trading session in the row.
Unlike Europe, the statistics of US came out much better, which contributed to continued growth. The index of business activity of the University of Chicago has retained its position at the level of 58.9, despite the fact that it was forecast to fall. The income of U.S. citizens increased by 0.4%, and expenses rose 0.3%. Evaluation of the growth rate of the U.S. GDP in the 2nd quarter was +3% higher than the forecast of 2.7%. The number of initial claims for unemployment benefits for the week amounted to 236 thousand which is slightly better than expectations 237 thousand.
Despite the scandals around the President of the country and geopolitical tensions, macro statistics comes out better than expected for a long time. It shows the growth of the economy, which should push the fed to tighten monetary policy. But this is not reflected in the rhetoric of representatives of the regulator. These circumstances will significantly increase the probability of change of the rate. The key statistics on the labor market will be published today, which is expected by investors. If data will be positive, then fed will have less reason to shy away from commenting on their plans.
Yesterday crude oil made a sharp turn and moved up. Investors seemed to be woken up and seen the effects of hurricane Harvey, which were obvious. The primary signal of problems in the industry came from the US Department of energy, which decided to use 500 thousand barrels of strategic reserve. Oil will be directed to Phillips 66 refinery to avoid shortages of gasoline. Today, the main driver for black gold will become statistics from labor market in the United States and publication of rig count from Baker Hughes.
Sincerely, Global FX chief analyst Sergey Melnikov