On Monday, European markets continued to develop the success of the previous week. Pan-European EuroTOP100 returned to the levels of March 2015. US markets also moved to gain - indexes updated historical highs amid growing appetite for risk and general market sentiment improvement on the back of tax regime change in the country.
Today, European stock indexes began trading mixed, but were able to return into the green zone. Also today, European corporate reporting data appeared to be mixed as well as as economic data. Positive economic data from China helped to keep demand for mining sectors and the returned high oil prices helped to restore demand for energy companies. The data published today showed accelerated growth of the German economy in the fourth quarter of 2016. In the fourth quarter, GDP grew by 0.4% relative to the third quarter. In the third quarter, GDP grew by 0.1%. In 2016, GDP growth in Germany was the strongest, over the past five years.
Today, Fed Chairman, Yellen, will start a two-day testimony before the US Congress. Investors are trying to remain cautious in fear of Yellen recalling the plans of the central bank to raise interest rates in the near future. Amid these factors US futures are neutral.
Brent crude oil trades within middle-term range of $54.40-$57. This time Brent bounced upward off the channel balance level - $ 55.55. The technical picture suggests a possible upward impulse and breakout through resistance level of $ 57- $ 57.30. If today, the market will be able to stay in the green and in the upper half of the channel, conditions for the strong upward momentum will be created. But this is technical picture on the market. On the fundamental front, the main event of the first half of the week was OPEC monthly report. The report showed that oil production of the cartel in January fell by 0.8 million barrels / day - to 32.14 million barrels / day. This is almost 95% of the production cut agreement. However, growth in the US shale oil production is becoming increasingly real threat to oil, which has a medium-term pressure on share prices. This week, in addition to the official data on inventories in the US, markets will also analyze OPEC commission meeting for oil production (Friday-Saturday).
World markets on Monday were able to maintain the positive sentiment amid appetite for risk on expectations of improving tax regime for US corporations. Markets are waiting to see the details of the plan announced by the end of February. European investors have ignored the political risks, and amid strong oil, opened longs as well. FOREX market is trading steadily amid lower activity in yesterday ranges. FED head is eyed, as well as ECB last meeting information.