Fundamental analytics

A difficult week for equity markets, Wall-Street opened in the green

Yesterday, the decline in the US stock market resumed – SP 500 index of the broad market fell by 100 points, and DOW lost 1000 points, which led to a new massive sale-off in Asia on the Friday session. The decline of the Pan-Asian index MSCI Asia Pacific for the week amounted to 6.7%.

Today, European markets continue the negative trend and are traded the red, but losses are more modest than earlier amid some positive American dynamic - US futures traded in the green zone and the opening of markets also occurred in positive territory. At the opening of Wall-Street European markets are down by 0.2% -0.3%.

Today it is worth noting several economic data. First, a statement on monetary policy from the Reserve Bank of Australia mitigated the outlook for inflation and job growth, the regulator suggested that it would take more time before its goals are achieved. Separately, December mortgages fell 2.3%, more than double of the expected decline, and the November data was revised to 1.6% from 2.1%.

China reported CPI and PPI indices. The January CPI rose by 1.5% compared to the same period last year, the December value was at the level of 1.8%. PPI slowed to 4.3% from 4.9%. Meanwhile, PBOC set the base rate of the dollar-yuan at 0.59%.

Europe, France, Italy, and the Great Britain reported industrial production in December. Recall that earlier this week, Germany reported a decline in industrial production by 0.6%, and in November revised stronger growth. In France, the situation is quite the opposite. Industrial production in December 2017 increased by 0.5% (the average forecast in the Bloomberg survey was 0.1%), and the decline in November was up 0.3% from 0.5%. French production grew by 4.7% in 2017. This is the highest mark since 2010.

In the UK, industrial production in the country declined by -1.3% in January, with a forecast of -0.9%, production in the manufacturing industry is equal to the forecasted figure of + 0.3%, and the trade balance was fixed at -13.58V with a forecast of -11.50V.

On FOREX, USD dollar is traded mixed today. EUR / USD is consolidating at new levels around 1.2250. The British pound returned to decline. The pair GBP / USD lost all yesterday's growth and fell to 1.3800 area.


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