Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets traded with gains. On this first day of June, and just a few days before the UK elections, politics remains one of the topics that most attracts the attention of investors. In fact, the issue of European integration is a subject that remains on the agenda, so the interventions of some of the heads of the European Central Bank will be closely monitored. The European Commission presented yesterday a discussion paper on the deepening of economic and monetary union, which proposes that an agreement be reached by 2019 on the two remaining mechanisms to complete the banking union: the single bank resolution fund and the fund European deposit guarantee. In addition, the oil price trajectory has also been monitored at a time when, according to Reuters, concerns remain that production cuts agreed by OPEC are being hampered by the various countries that are excluded from the agreement. Yesterday, the price of this raw material reached a minimum of three weeks, after Libya increased production. In sectoral terms, commodity producers and the banking sector will continue to be the focus of investors.
On the last day of May, the North American market closed lower, mostly under pressure from the financial sector, after a 15% reduction in JPMorgan Chase’s revenues from trading was announced. In addition, the 10-year Treasury Bond yields have also not helped this sector, which has lately been conditioned by the expectation of Donald Trump’s downgrade. Investors reacted to the economic indicators revealed and remained for much of the session waiting for the publication of the Fed’s Beige Book. According to this document, most regions of the US continue with slow to moderate economic growth but optimism Has been declining, in part due to concerns with the Trump Administration. The Beige Book is based on information collected by the 12 regional units of the Federal Reserve between 10 April and 2 May. This information will form the basis of the FOMC discussions, which will be held on 13 and 14 June. Simultaneously, Fed Chairman in Dallas Robert Kaplan said he does not expect the recent weakness in US inflation to persist and reaffirmed the expectation that the institution will continue to raise interest rates gradually and steadily. Meanwhile, the price of oil has fallen again and conditioned the energy sector. Today the Department of Energy will publish the weekly inventories of oil and gasoline. In terms of economic indicators, real estate purchase and sale contracts decreased in April for the second consecutive month: this indicator fell 1.30% in relation to the previous month and 3.30% in relation to the same month of the previous year. This was the first annual drop since December. On the other hand, the Chicago PMI activity index fell from 58.30 in April (the highest of the last 28 months) to 55.80 in May. Two indicators on the labor market will be known today: the number of weekly unemployment benefit applications and the ADP report, which measures job creation in the private sector. This indicator does not have a reliable correlation with the official employment report (to be published Friday), and is more widely used by economists to improve their estimates for the latter indicator. On the political front, today’s news reports that President Donald Trump will announce his decision on the global climate deal.
Asian markets closed without a single direction in a session marked by the release of more data on China and appreciation of the Yuan. The PMI index for the manufacturing sector fell in May to 49.60, the lowest of the last 11 months, compared to the estimates of 50.10. Before the markets opened, the People’s Bank of China set the Yuan’s daily rate against the Dollar at 6.7894. According to Reuters, this is the highest level of the last seven months and is seen as an intention of the Central Bank to promote the internationalization of the currency and attract more investment.