In the last trading day of last week, stock markets in America showed a single rising dynamics and closed in green zone. Dow Jones added 0.29% (22268.34), the S&P 500 increased by 0.18% (2500.23), the Nasdaq rose 0.30% (6448.47). European markets were down in the single dynamics. The German DAX dipped 0.17% (12518.81), British FTSE 100 fell by 1.10% (7215.47).
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 10:00 MSK the President of the Bank of England's Carney
At 12:00 MSK the Basic index of consumer prices in the Eurozone in August
At 12:00 MSK the Eurozone CPI for August
At 15:30 MSK the Volume of foreign investments in the stocks of Canada for July
At 17:30 MSK the speech of the member of the ECB Lautenslager
At 18:00 MSK the President of the Bank of England's Carney speaks
At 23:00 MSK the volume of long-term USA securities purchases by TIC in July
For the stock markets of Europe, the main factor of pressure was the growth of the single currency. Also on the side of the sellers was negative geopolitical background, i.e. the new tests of missiles of North Korea. In response to these actions, emergency military exercises were carried out by their nearest neighbor South Korea, by launching two ballistic missiles.
The British pound continues to rise against other world currencies for several consecutive sessions. The main impulse was received on Thursday after the publication of the quarterly report and the publication of the monetary policy Committee statement about a possible solution of the refinancing rate hike at the next meeting. The pound has reached the resistance at level of 1.36 against to the dollar and now it is likely will be in consolidation. This rise has exerted strong pressure on the national index, which went down to the levels of the spring of this year. Today it is scheduled the speeches of the monetary authorities of the country on the basis of which it can be understandable the seriousness of the intentions to increase rates.
In America during the trading session of Friday it were published a variety of macroeconomic indicators, which are mostly not talked about the health of the economy. Industrial production in August fell by 0.9%, while expectation of analysts was a rise by 0.1%, it is the biggest decline for 5 years. The volume of manufactured goods in August fell by 0.3%, while the growth was forecasted by the same amount. The preliminary consumer confidence index of Michigan University has not showed the growth. In September the indicator fell by 1.5 points to 95.3 points, although exceeded the forecast of 95.1 points.
In general these values can be explained by the effects of hurricane Harvey, which swept through industrial Texas. Despite all the negative macroeconomic statistics the benchmarks of America managed to grow mainly due to the fact that reduced expectations of tightening monetary policy at the next meeting this week. Thus, the index of wide market S&P 500 managed to reach the target zone at the level of 2500 points.
The price of oil has not changed much in the previous session under the influence of different economic factors. They are the weakening of the dollar and profit-taking after rising for all days of the previous week, which amounted to more than 5%. Now oil has reached the resistance and might consolidate, although there are still opportunities for growth up to $ 50,75 per barrel for WTI.
Sincerely, Global FX chief analyst Sergey Melnikov.