Negative sentiment returns to markets

4 April, 2018

After strong sales on the first day of the week, on Tuesday US markets showed a positive trend on technical rebound. US indices added on average + 1.5% - the index of the broad market SP 500 returned above the mark of 2,600 points. The yield of US bonds continued to grow, which turned out to be a positive moment for the US currency. In general, the situation on the markets on Tuesday improved locally against the background of technical factors and the absence of negative news about China-American trade confrontation. However, there are new negative news about this issue on Wednesday - it became known that China is preparing a new portion of the response and can publish them in the coming days.

In the FOREX currency market, the strengthening of the US dollar has slowed. Apparently, USD dollar is again under pressure against the background of the possible development of the China-US trade confrontation. The dollar index rested at the level of 90 points, which is the upper limit of the sideway mid-term range. (88-90). It is curious that on other currency instruments, the weakening of the dollar index has not yet strongly affected.

EUR / USD continues to trade under pressure, at European session the pair is trading at $1.2277. A large block of European statistics has not had a significant impact on the pair, the data came out mixed and ambiguous. Data on unemployment and the consumer price index coincided with the expectations of experts, the first indicator fell from the previous 8.6% to 8.5%, and the second rose from 1.1% to 1.4%, but the core consumer price index remained at the level of 1,0% as experts predicted its growth to 1.1%. Judging by the primary reaction of prices, market participants are confused and can not yet unequivocally evaluate the published data.

Probably, US data on employment from ADP, which is most expected bunch of Wednesday statistic will set up the further direction for Eur. It is expected  the number of employees to reduce from 235K to 208K. Also in focus there is US PMI in non-manufacturing sector, according to which experts also predict a decline from 95.5 points in last month to 95.0 in the current.

Unlike the euro, the British pound is trading more steadily against the US currency. Today, GBP / USD showed a propensity for growth, but later published data on the PMI of the construction sector had a deterrent effect on the currency pair, even despite the sharp weakening of the US currency. Indicator was significantly below the forecast, only 47.0 against the expected 50.9 and previous 51.4 points. In addition, ahead of the pair there is a strong resistance level - the level of 1.4070.

Pressure on the oil market remains, Brent fell below $67.68 and continued to decline to $66. Statistics from the API showed a decline in crude oil reserves by 3.3 million barrels. Today, the data on reserves from the US Department of Energy is in focus. More decline and movement in the area of ​​65-66 dollars per barrel is quite possible amid preserving the negative sentiment on global markets.

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