On Wednesday, major equity markets in Europe showed neutral dynamics. Political risks continue to have a negative impact on the entire region amid France opposition party candidate strengthening. US stocks also closed mixed, in turn, amid financial sector decline, which weighed on the entire market. JP Morgan Chase & Co. , Goldman Sachs Group Inc. and Visa Inc declined yesterday. Asian markets also closed mixed. The continuing rise in prices of commodities, led by copper and iron ore positively reflected on the stock market of Australia. Stock market of New Zealand gained after the central bank decided not to lower the interest rate. Many analysts have concluded that after the present decision to keep interest rates unchanged the likelihood of soon hike is close to zero. Japanese stocks remain in the spotlight before the meeting between US President Donald Trump and Japanese Prime Minister Shinzo Abe on Friday.
Today, European markets are trading in the green zone, while US futures markets remain neutral.
The situation on the oil market is unclear as well. Yesterday, the US Energy Administration reported that crude oil inventories in the US are growing a fifth week in a row. Inventories increased by 13.8 million barrels last week, far more than the forecasts of market experts. However, price is back above $ 55 per barrel in the area of medium-term balance level of specified channel. We assume that the Brent crude oil in the near future will trade in the medium range of $ 54.50- $ 57.
In the FOREX currency market, US dollar gain has stopped today. Currency instruments consolidate in anticipation of the main event of the next day - US and Japan leaders meeting. However, the position of the single European currency still look weak. Spread yields of France and Greece bonds relative to the single European benchmark - 10 year German bonds puts further pressure on the Euro. The Japanese yen has found strong support around the level of $ 111.80 where mid-term demand is concentrated.
Restrained dynamics in global markets persists – as investors keep conservative sentiment. The main risk factors are the political factors, these days on both sides of the Atlantic Ocean. The opposition candidate in France keeps position in favor of weakening the EU power in Europe. Traditionally for the first months of this year, the economic and the foreign trade risks remain in US. Today, the market focus will be on USA-Japan summit at which it is likely to be made relevant comments.