Global stock indices were down on Friday due to weak macroeconomic data released in the US. Markit’s Manufacturing PMI and ISM Manufacturing in December appeared to be lower-than-expected. Construction Spending declined for the first time since June, while it was expected to grow. The volume traded on the US exchanges was 23% below the monthly average and reached 5.3 billion shares. Starting today, the majority of world markets are opened on a regular schedule. Futures on US stock indices are currently traded prominently down. Today we don’t expect any important macroeconomic data to be released in the US. USDIDX The US currency has advanced greatly. It was caused by the European data release, the same as it happened on Friday. The Greek parliament failed to elect the president, so it will have to be dissolved and a snap election will be held on January 25. Amid this information there were even rumors in Germany of Greece leaving the European Union. These rumors were disproven later. However, the whole situation has affected the euro. It fell below $1.2 for the first time in four years. Another negative factor was the investor expectation of the ECB to announce the beginning of euro printing at the meeting which will take place on January 22. Due to this news, the US dollar has strongly settled above 90 points. European markets have indicated minor gains in the morning, as the expected euro printing should result in a splurge of liquidity, according to market participants. We don’t exclude that the American and European stock markets and currencies of both regions may be observed in a mixed trading for some time (according to the example of Nikkei and yen). This information may be used for creating a personal composite instrument. The German CPI will be released today at 13:00 СЕТ. In our opinion, the tentative outlook is negative for the euro. Nikkei has dipped today. We deem there was no specific reason for the index drop. However, note that Markit and JMMA Manufacturing PMI index in December has been announced today early in the morning. It proved to be a bit worse than expected. Composite PMI and Services PMI will be released tomorrow at 1:35 СЕТ. The forecast is neutral. Note that the exchange rate of the Japanese yen against the US dollar looks very stable. It is still difficult to predict whether it remains for a long time or not. Economic data will be reported in Japan on Friday morning. Brent crude oil prices Crude oil prices reached the lowest level over five and a half years. Some oil-producing countries are forced to increase the production level in order to offset the fallen revenues due to lower prices. Russia’s production rose 0.7% in 2014, up to 10.58 million barrels a day. According to the Russian Ministry of Energy, oil production is expected to fall to 525 million tons in 2015, from 526.6 million tons in 2014 due to the depletion of a number of deposits in Western Siberia. But meanwhile, it is a matter for the future. Russia produced 10.67 million barrels a day in December, more than the country’s annual average. In December Iranian oil exports climbed to the highest level since 1980 (2.94 million). In January it may reach 3.3 million barrels a day. Natural gas prices As expected earlier, $3 per million BTU has become a kind of “support level” for the US natural gas. However, it was not the result of investor sentiment, but due to the Arctic front and cold weather forecasts, according to National Weather Service. The US natural gas reserves shrank 133 million cubic feet a week, while the demand upped 21%, to 100 million. It has also affected the prices. Today the majority of commodity futures are going up again after severe losses as negative Chinese data on manufacturing production was released last week. The Chinese statistics will be released tomorrow morning, on Wednesday and Friday. In our opinion, all the forecasts are neutral.
Posted on: Mon, 05 Jan 2015 14:22:58 +0000
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