On Thursday, the stock indices showed a single upward dynamics with low volatility. The Dow Jones rose by 0.18% (22381.20), S&P 500 added 0.12% (2510.06), the Nasdaq rose 0.01% (6453.45). European markets were moving up in a unified dynamics. The German DAX grew 0.37% (12704.65), British FTSE 100 added 0.13% (7322.82).
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 core consumer prices in Tokyo in September
At 10:55 MSK the change in the number of unemployed in Germany in September
At 11:30 MSK UK GDP for the second quarter
At 12:00 MSK the Eurozone CPI for September
At 15:00 MSK the speech of the member of the monetary policy Committee of the United Cunliffe
At 15:30 MSK and the speech of the member of the monetary policy Committee of the UK Broadbent
At 15:30 MSK the Canadian GDP for July
At 17:15 MSK ECB President Draghi
At 17:45 MSK the President of the Bank of England's Carney
At 18:00 MSK FOMC member Harker
At 20:00 MSK the Number of drilling rigs from Baker Hughes
Volatility came down in the European markets. Investors reacted poorly to the statements of representatives of the ECB, who did not say anything important. From the data of macrostatistics it was interesting to note the consumer price index for September in Germany, which came in line with forecast of 0.1%, while the consumer climate index for October fell by 0.1 points to a level of 10.8, it is slightly worse than forecasted growth of up to 11 points. In the absence of additional drivers European stocks continued to grow amid a weakening of the single currency of region. Today investors will pay attention to the publication of consumer price index for Eurozone and speach of ECB President Draghi. Both of these events can shed light on the rate of change of the monetary policy of the Eurozone.
At the same time, the U.S. currency strengthened after the publication of data on the final value of GDP, it showed an increase of 3.1% instead of the forecast 3%. Also, the reason was the publication of Donald Trump plans for tax reform that assumes lowering tax on business profits from 35% to 20%. From the statistics it was interesting the number of initial applications for unemployment benefits, it has increased for 12 thousand, which was more than the expected 10 thousand.
The dollar began to weaken after the statements of FOMC members. Eric Rosengren said for regular, but gradual increase in interest rates, as the situation on the labor market threatens to overheat the economy in General. James Bullard said that given the moderate levels of inflation, the fed can keep interest rates at the level at which they are at the moment.
In the oil market yesterday saw a surge in volatility. First there was a sharp decline on the confirm of the capacity restoration of production in the Gulf of Mexico from 60.7% to 84,9%, data of inventories from the US Department of energy given to understand that. Then there was the rise amid increasing of geopolitical tensions around Iraqi Kurdistan. But then followed a correction, which may continue today, the purpose of which is level of 50,75 dollars per barrel for WTI.
Sincerely, Global FX chief analyst Sergey Melnikov.