Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European markets were trading slightly lower, on a day when all the attention will be focused on Donald Trump’s inauguration as US President. Meanwhile, markets will continue to react to the ECB’s statement yesterday, while in the business world the focus is on commodity producers, who may be influenced by the revealed data on the Chinese economy, and the news that the Luxury goods company LVMH is expected to acquire 10% of the Italian group Marcolin. As expected, at the first monetary policy meeting in 2017, the European Central Bank kept the interest rate at 0%, a historic low set in March 2016. At the press conference following this meeting Mario Draghi stated that the ECB “continues to expect key interest rates to remain at current or lower levels over an extended period and well beyond the horizon of net asset purchases.” As regards non-conventional measures, ie the asset purchase program at the rate of 80 000 M.€ per month up to April, and 60 000 M.€ per month from that date until the end of the year, the Governing Council says it is to comply to the end, confirming that “no reduction of stimuli was discussed”. With the absence of substantial news, some expectations that the stimulus could end in the next few months have faded, so that the Euro devalued. In fact, Mario Draghi devalued the rise in prices in the Euro Zone and attributed the effect to the evolution of energy prices, noting that he “sees no convincing signs of a rising trend in underlying inflation.” On Wednesday Eurostat confirmed that inflation in the Eurozone rose from 0.60% in November to 1.10% in December, boosted by fuel prices, keeping the initial estimate advanced at the beginning of the month.
On the eve of Donald Trump’s inauguration, the stock market closed on negative ground. The Dow Jones reported the fifth consecutive day of losses. Oil prices rose slightly on the day the US Department of Energy unveiled its weekly inventories. Crude inventories increased by 2,347 million barrels, up from 128.3 thousand barrels, while gasoline reserves rose 5.95 million, more than the expected 2 million. In terms of economic indicators, homes under construction increased by 11.30% in December to 1.21 million homes, compared to an expected growth of only 9%. However, building permits, considered a barometer of the real estate market, decreased 0.20%, against an expected increase of 1.10%. With regard to the labor market, the number of weekly applications for unemployment benefits reached 234 000, a level close to the minimum reached 40 years ago and lower than the estimates of 252 000. And today has one of the most anticipated moments of the week , the inauguration, of Donald Trump. Since 1953, the S&P500 has valued on average 1.60% during the first 100 days of the first term of a new US President. relegated to secondary position are today the speeches by Fed Chairman Janet Yellen and the Presidents of the New Jersey Fed and San Francisco Fed. In the business field, the results of General Electric will be known before the opening. At a time when uncertainties loom over the global economy, GE’s quarterly accounts are of additional importance. Because of the diversity of its activities (and its geographical exposure), this conglomerate is a reliable sample of the global economy and is therefore closely monitored by investors.
Asian markets ended in different directions as investors waited for Donald Trump’s takeover and digested data on China. GDP in China during the fourth quarter grew by 6.80%, thus exceeding forecasts of 6.70%. In the year 2016, the economy grew by 6.70%, in line with previous estimates, with consumption accounting for 64.60% of GDP last year.