Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets negotiated in positive territory. Influencing the markets should be the agreement on Greece, while political developments, especially in France, should return to attract attention, since on Sunday is the second round of the elections to Parliament. Meanwhile, oil prices are close to the low of the last six months, in the face of continued fears of over-production and despite OPEC’s efforts to reduce supply. The final estimate of inflation in the Euro Zone for May will be published today, which should confirm a correction of 1.90% to 1.40%, due to the general fall in prices in the main countries of the region. It should be recalled that price behavior will be decisive in shaping market expectations regarding the ECB’s monetary policy.
The US stock market ended yesterday’s session low, conditioned by the renewed sales pressure registered by the technology sector. This was the fourth loss session in five days. It should be remembered that since the beginning of the year this sector has been overperforming with a valuation of around 18%, and the second best sector of the S&P500, the pharmacist, only has a gain of around 12%. Penalizing technological companies have been fears regarding the evaluation of the sector. On Wednesday, market expectations were confirmed as the Fed raised the federal funds rate range by 0.25% to between 1% and 1.25%. This was the second increase of the year and the third increase in six months. In addition, the Federal Reserve said it intends to reduce the number of treasury bonds and mortgages, which were acquired mainly during the financial crisis between 2007 and 2009 and in the recession period. According to the statement, “the committee is currently hoping to begin implementing a balance sheet normalization program this year, as long as the economy evolves broadly as anticipated.” In terms of indicators, yesterday’s session saw weekly jobless claims totaling 237,000 and the Philadelphia Fed activity index set at 27.60 in June. On Wednesday, the consumer price index was published, which stood at 1.90% in May (in annual terms), compared to the 2.00% estimated by economists. If we exclude the more volatile goods, such as food and energy, the CPI reached 1.70%, below the expected 1.90%. On the other hand, retail sales fell by 0.30% last month, compared to the forecast of a maintenance of the levels of the previous month. If we withdraw auto sales, this indicator also showed a decrease of 0.30%, compared to an expected increase of 0.10%.
The Asian stock exchanges ended in different directions. In Japan, the market closed higher on the day the Central Bank kept its monetary policy unchanged.