Macro economics

Market analysis for February 22, 2017

Stock indices continued to rise on Tuesday in a single dynamics and closed in the green zone. The Dow Jones rose by 0.58% (20743.00), S&P 500 added 0.60% (2365.38), the Nasdaq rose 0.47% (5865.95). European markets closed yesterday's session mixed. The German DAX jumped by 1.18% (11967.49), British FTSE 100 decreased by 0.34% (7274.83).

Today it is expected the number of publications of the macroeconomic data and the speeches of the monetary authorities that could affect investors ' decisions during the trading sessions.

At 00:30 MSK Speech by head of RBA Lowe.

At 12:00 MSK the IFO business climate Index Germany.

At 12:30 MSK UK GDP for the 4th quarter.

At 13:00 MSK the consumer price Index (CPI) for the Eurozone for January.

At 16:30 MSK the Basic index of retail sales Canada in December.

At 18:00 MSK on Sale on the secondary housing market in the US in January.

At 21:00 MSK FOMC member Powell speaks.

At 22:00 MSK the publication of the FOMC protocols.

Following the results of trading session of Tuesday, investors are still in a state of optimism after the election of a new President. The market participants ignore the risks of possible course acceleration on the rate hike by the Fed, and also the risks associated with the tightening of foreign policy, the increased protectionism and the introduction of new taxes on imported goods. However, the rally in the U.S. market continues gaining momentum. After the weekend, the buyers decided to catch up. The index of wide market S&P 500 opened with a gap and rushed to new heights, if this trend continues the next level for stop and consolidation may be at 2450. Meanwhile, cost of funding for marginal and simple long positions grows and can dramatically jump when refinancing rate will be increased. Just only this circumstance can drastically reduce appetite of buyers.

Yesterday's statements of the FOMC representatives did not give a clear picture of the Fed's plans for further rate increase. Patrick Harker in his speech made clear that the rate is likely to be raised at the next meeting, scheduled for March 15. At the same time, the President of Minneapolis fed Neil Kashkari argued that the labor market still has room to grow and improve their performance, and so rates will increase much slower. Today investors ' attention will be focused on the publication of the "minutes" of the Fed, which will take place at 22:00 MSK.

During today's Asian session this morning oil has opened with a gap up beyond consolidation, in which it traded more than three months. Now the price of futures contracts came close to a year and a half highs. Positive news was brought by the statement of the Secretary-General of OPEC on the intention to continue reducing offer on the market. The commission which started to work today in Vienna, will evaluate the result of effectiveness of the cartel can be a driver for continuing of purchases.

 

Sincerely, Global FX chief analyst Sergey Melnikov

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Interest rates

Country Rate Value
USA Federal Funds 2,50 %
Switzerland 3 Month LIBOR Range -0,73 %
United Kingdom Repo Rate 0,75 %
EU Refinancing Tender 0,00 %
Japan Overnight Call Rate -0,10 %
New Zealand Official Cash Rate 1,75 %
Australia Cash Rate 1,50 %
Canada Overnight Rate Target 1,75 %
All rates

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