Yesterday consolidation mood prevailed in the European markets. No significant news or statistic data was published, as investors consolidated their position close the local maximums amid continuing story of Italian Monte dei Paschi and gradually declining trading activity. The production volume in GB manufacturing sectors fell by 0.9% for the month. High volatility continues to be seen in European banking sector. However, indexes losses were insignificant. (DAX + 0,03%, FTSE 0.04%, CAC- 0.3%)
The US market dropped slightly more on technical factors- indexes retreated from highs in anticipation of the long holiday weekend. Investors are taking profits, reviewing their positions at the end of the calendar year. (DOW -0,1%, SP 500 -0,2%, NASDAQ -0.2%)
Today, European stock indexes traded mixed, while remaining near the opening levels. The energy and mining sectors traded in the red as oil and metal are still under pressure. US futures are traded slightly in the red pointing to more neutral Wall-Street opening.
Yesterday, the oil market retreated from important $55 level, and dropped to $ 54.30 area on the back of strong crude inventories official data- inventories rose by 2.2 mln. barrels though markets had expected decline according to API. Even without the data, Brent oil looked vulnerable to a decline due to technical factors. The active phase of trading this week is over, so the range of $ 53- $ 55 remains in force.
Gradually investors are moving to the position relocation leading to minor correction and the subsequent consolidation before the holiday weekend. Contrary to our expectations, yesterday the concern of banking sectors led Europe in the red. However, trading activity is low- most of the major players already out of the market and growth drivers are also absent. Today we expect the surge of volatility which might be last in this year - large block of US economy data to be published, among which the US GDP data for the 3rd quarter and durable goods orders seem to be most important. Until now, macrostatistic remained favorable on both sides of the Atlantic. Today's data will form the sentiments investors to leave for the weekend. Oil prices remain stable in the range of $53-55 so no surprises are likely to appear from this side. On FOREX US dollar is correcting- on the background of a "thin" market, as today data may trigger a significant increase in volatility. Most players are likely to stay out of the market however on a strong data we expect some US dollar gains.