Yesterday, stock markets continued to decline amid general sentiment deterioration and the return of consolidation mood. The banking sector in Europe has suffered the most and was in the forefront of decline. US indexes reacted negatively to Trump’s migration ban. Political factors increasingly affect the mood of the markets, and investors are more inclined to the conservative and expectant position. It seems to us that the US markets aren’t think about gaining. They want to maintain their current positions. Most Asian markets are closed in observance of the Lunar New Year. The Japanese central bank left interest rates unchanged and expressed confidence that the inflation target is achievable without additional support.
Today, European stock markets moved to partially win back yesterday's losses amid positive economic statistics and corporate reports. The banking sector in Europe remains weak in anticipation of the Fed's two-day meeting results.
Retail sales volume in Germany fell to -0.9% in December, compared to the previous month, while expected growth of 0.6%.
Consumer spending in France fell by 0.8% in December from the previous month, while expected growth of 0.2%.
Consumer prices index in France dropped by -0.2% in December, compared to the previous month, while drop by -0.5% was expected.
The harmonized index of consumer prices in France, dropped by -0.2% in December, compared to the previous month, while drop by -0.5% was expected.
The consumer price index in Spain fell by 0.5% in January compared to the previous month, while fall by -1.1% was expected.
The harmonized index of consumer prices in Spain fell by 0.9% in January, compared to the previous month.
The number of unemployed in Germany in January fell by 26,000, while the forecast was 5000.
The unemployment rate in Germany amounted to 5.9% in January, the forecast was 6.0%.
US indices futures traded in the red today. Consumer spending in the US rose in December, due to the growth in car sales and increased utility costs. At the same time, wage growth points on the robust domestic demand, which can stimulate economic growth in early 2017.
The gradual decline of the oil market continues. Players try to keep Brent oil futures above $ 55 per barrel. However, the risks of decline in the area of the medium-term channel are high ($ 54- $ 53.50). The oil market has traditionally focused on weekly inventories data this week.
Market sentiment in global markets remains restrained - investors take a wait-and-see position. US political and foreign policy factors continue to influence the market picture. The two-day Fed meeting begins today, the general expectation is that the US central bank will leave interest rates unchanged. This means that investors focus on the Fed's comments on the future policies and plans for further stimulus. We can expect some verbal support from the Fed chairman. The global regulators’ action and Trump’s policy remain an important factor for global markets.