Fundamental analytics

Equity markets are again in the red, safe-haven assets - gold and the Japanese yen continue to gain

On Monday, global stock markets gained and pulled back from local minimums amid a better general market sentiment and a return to risk appetite. USD dollar fell under weak pressure and retreated from the levels reached last week. (DAX: + 1.4%, CAC40: + 1.2%, FTSE100: + 1.2%).

US indices opened a new week in a positive way and completed the session with growth. Yesterday's trading day allowed the indices to remove technical oversold and rebound from local lows in the conditions of renewed government funding and the announcement of a program of infrastructure reforms by Trump. All sectors of the market moved to growth, the growth leaders were IT and Industrials sectors.

The start of a new week brought markets a decrease in volatility and some return of apatite to risk. The main driver and the factor of improved sentiment were news about the announcement of the initiative on a large-scale infrastructure reform of $ 1.5 trillion by D.Tramp, amid the lack of other news and statistics.

Today, despite positive trading on Monday, global markets returned to the red. Futures for US indices lost a little less than a percent while European stock indexes lost half a percent. Against this background, so-called risk-off assets today are in demand on the market. This is the Japanese yen and gold.

However the main events of this week will be held on Wednesday. Tomorrow we are waiting for a large economic data block, which will contain important news from both the EU and the United States. In Germany and the EU tomorrow, important data on GDP for the 4th quarter of 2017 will be published, and a representative of the ECB will make a speech.

In the US, the calendar is even more intense and important, as data on the consumer price index and retail sales will become known. Low inflation expectations are now the main deterrent for the Fed in the matter of more aggressive actions on the interest rate hike. The labor market and the level of inflation in the country are the two key factors upon which the FOMC look . Data above the forecast level will have a strong support for the USD dollar, as the expectations for the rate increase will significantly increase at the next March FOMC. Conversely, weak data will reduce investors' expectations about the prospects for rate hikes at the forthcoming FOMC meetings and will put pressure on the dollar.

Today, the economic calendar is almost empty, and as tomorrow we are expecting very important statistical data, the markets will likely be cautious and will trade in inactive way.

At FOREX, EUR / USD pair in Asian trading conducted an assault of round level at 1.2300. It is still early to speak of a solid fixation above this level, however, the very fact that the local maximum is now near 1.2337, this is a positive signal for further upward dynamics.


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