European markets finished last week in a negative way, continuing to take lose their ground. Investors waited for the main event of the previous week - Sunday's referendum in Italy. (FTSE -0,33%, CAC -0,7%, DAX -0,2%) On Friday US markets traded without a clear dynamics,as trading activity remained below average. Important unemployment data was ignored by markets, but a sharp decline in wages (-0.1% on expectations of + 0.2%) is a negative factor for US economy assessment.
Earlier, Asian stock indexes in the region dropped, led by banks, as markets reacted with restrained worries on the results of Italy referendum and Trump's latest comments on China, that increase the risk of geopolitical tensions. The crisis of power in Italy continues. Today, the Italian Prime Minister Renzi stated desire to retire after defeat in the vote on the constitutional reform. Nikkei Stock Average -0,80%, Shanghai Composite -1,21%.
In the FOREX market US dollar began a new week with continuing gains. Amid signs of political instability in Italy, the single European currency is under pressure as the US dollar index finally consolidated above the level of 101 points.
Positive continues to dominate on the oil market. The previous week, oil futures closed above 54 dollars per barrel level. Market focus is kept at upcoming OPEC meeting. In our view OPEC optimism is rather speculative nature and may be overheated. Nevertheless, until the end of the week the oil market looks strong and likely to continue to trade in the region of 53-54 dollars per barrel. From a technical point of view, Brent reached important resistance level of 55 dollars per barrel. Confident consolidation above $55 will allow to speak about possible end of midterm sideways trend since the beginning of 2016.
The situation in the global stock markets remains mixed with no clear trend. However, the US currency positive trend remains in force, as well as speculative positive on the oil market. Friday labor market data did not have an impact on investors' confidence in upcoming rate hike so it was at a maximum. Reaction to the Italian referendum results is also restrained. This week the focus will be on ECB's as today economic calendar is relatively empty.