11, January 2017

Markets brakes all eyes on Trump press conference. What is next?

On Wednesday, despite European exchanges attempts to gain, the current market dynamics and global sentiment involve certain risks. Brent oil corrected below 55 dollars per barrel and the first of the elected President suggests a significant decline in risk appetite and sticking to waiting position.

Press-conference will be held today in the Trump Tower in New York - York, at 11 am, Eastern Time. We have already mentioned how much investors have priced in on Trump presidency and his speech today should confirm expectations, otherwise, we can see movement to further correction. The trading day is expected to be volatile in the stocks and oil as well as in foreign exchange instruments. US currency index returned above the level of 102 points, which is a kind of indicator for investors these days as long-expected medium-term US dollar longs seem to be returning to the market. In Asian trading, the dollar continued to weaken, but then in the middle of day session US currency moved to sharp gains. This reflects that traders wander before Trump takes center stage.

Europe and the US

Yesterday, US stock markets ended the day mixed, amid wait-and-see sentiments and restrained trading activity. Investors are looking for current market levels confirmation after November-December rally on the background of the unexpected victory of Republican Party candidate.

The statistics published in the United States showed the number of vacancies in the labor market from Jolts:  5,522 million in November, at the forecast 5.555 million.

The National Federation of Independent Business US NFIB said that the optimism index rose 7.4 points to 105.8, the highest value since 2004.

In Europe, stock markets showed no clear dynamics, and overall trading day ended neutrally. The UK market continues to gain at a moderate pace as GBP keeps on weakening.

Oil

Yesterday Brent crude oil futures broke through our target support level ($ 54- $ 54.40) and declined significantly. The news was published that oil ministers of major OPEC countries would meet on Friday. This kind of news might involve higher risks for oil speculate traders.  Today, we will focus on official US Energy Department inventory data. From a technical point of view, Brent bounced back from a strong support level where 200 day moving average runs ($54). We assume a possible short-term technical rebound from these levels in the area of ​​$ 55 per barrel.

In general

This day will be marked by the first Trump press conference. We expect volatility to increase in the beginning of the American session. In the second part of current week, the players' attention will switch to the start of the US earnings season.

chart 01.2017

chart 01.2017

chart 01.2017