Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded slightly higher. In the first hour of trading, investors will focus on producers of raw materials, following the fall in prices of metals and crude subsequently diverting their attention to more macroeconomic issues. The price of oil recorded a downward trend before the exaggerated rally observed during August. The proposed freezing of its production, currently close to its highest levels, will not be a strong support in this market characterized by oversupply. In addition, Bloomberg points to possible increases in oil supply from Nigeria and Iraq. The publication of the PMI index for the euro area and its major economies can influence the stock markets via foreign exchange market. Although is expected a slight correction of these indicators compared to the readings of the last month, due to the effects of the uncertainty associated with the Brexit. If that does not happen and if they signal a business recovery in the eurozone is likely that the Euro is valued, limiting the recovery capacity of some European sectors such as industrial, automotive, technology, etc. Recently, the economic sentiment and confidence indicators in the euro zone have proven resilient. To remember that despite the outcome of the British referendum, the IMF revised upwards by 0.1 percentage point growth of the eurozone for 2016 to 1.6%, with consumption remaining a major growth support.
The US market ended without major fluctuations, with investors without macroeconomic references to support their decision making and to reveal some caution regarding the outcome of the symposium of central banks to be held in Jackson Hole on Friday. On Sunday, Vice President of the Federal Reserve, Stanley Fischer, revealed his concern for the country’s economy in the long run, but was more optimistic about the short-term economic situation. Fischer noted that employment growth has been solid and inflation, although less than the Fed target of 2%, is close to this level, suggesting he shows available to raise interest rates this year. The oil price drop pressured the market, mainly the stocks of the energy sector. In turn, shares of Pfizer fell 0.40% after the pharmaceutical has confirmed that it has agreed to buy Medivation biotechnology company by 81.50 USD per share, thereby adding to their medicines another very crucial in the treatment of cancer. In turn, the Medivation appreciated by 20%. Today’s macroeconomic agenda will reveal sales of new homes during the month of July, with forecasts pointing to an increase from 551,000 in June to 565,000 in July.
Asian markets finished mixed. The Japanese market closed with a slight low, pressured by the appreciation of the yen and falling oil prices. The appreciation of the Japanese currency detracted from the performance of the leading exporting companies, specially automakers (like Honda and Mazda). The liquidity was lower, with investors waiting for the conference in Jackson Hole. However, investors are waiting for the Governor’s speech of Japan’s Central Bank, Haruhiko Kuroda at a conference scheduled for the end of the day.