19, May 2017

At the end of the week, global markets are trying to win back losses

On Friday, European equity indices show signs of stabilization at the end of a stormy week, when investors faced political crises in Washington and Brazil. Positive sentiment on the market was supported by strong economic data from Germany and the continuing gains in the price of oil as well as by US official statement.

Today, President Emmanuel Macron held the first meeting of the new French government at the Elysée Palace. The cabinet of ministers created by him included representatives of conservatives, socialists, centrists and newcomers.

At the meeting, the priorities of the new government were announced and the priority issues were discussed. In particular, the reforms of labor legislation and budget were discussed.

Yesterday, US indices closed higher after a brutal sell-off of the previous session, as positive economic data and positive assessments of the economy from Mester and Mnuchin led to a glimmer of optimism among investors.

The index of manufacturing activity from the Federal Reserve Bank of Philadelphia in May unexpectedly jumped to 38.8, while analysts had expected the index at 19.5.

During yesterday's speech of the FRS resident, Cleveland Loretta, Mestre repeated the remark that she expects a strong growth in consumer spending in the near future and supports further increase in interest rates of the Fed.

In his speech, US Treasury Secretary Mnuchin said that the Trump administration is determined to carry out a tax reform before the end of this year. He also added that work is continuing to attract investment and infrastructure projects.

Significant support for the indices was the growth of the 3 largest companies by the market capitalization of Apple Inc. + 1.52% Amazon.com Inc. + 1.45% and Facebook Inc. + 1.94%.

On FOREX, the European currency jumped on the back of positive economic data from Germany, while the pound continues to grow after strong economic data coming out Wednesday and Thursday. The German producer price index in April rose by 0.4% compared to the previous month, with a growth forecast of 0.2%.

Crude futures rose on Friday, as investors showed some optimism about the meeting of the Organization of Petroleum Exporting Countries next week. The meeting is expected to decide on the extension of the agreement to reduce oil production. This week, representatives of the oil industry of Saudi Arabia and Russia signaled the extension of the agreement for nine months.