On Tuesday, US markets continued to gain, after a positive start of the trading week on Monday. It is characteristic that on the positive sentiment the SP 500 broad market index has finally strengthened above the level of 2,675 points, a positive technical factor. Asian markets also showed positive dynamics, but today.
On Wednesday, European stock markets strengthened for the second consecutive session, as geopolitical tensions and fears of a potential trade war in the US continued to weaken and markets focused on the corporate reporting season instead.
The market news background remains favorable for maintaining positive dynamics; as geopolitical risks were leveled at the weekend and left the news agenda, while the corporate reporting season of US corporations on the contrary creates positive drivers for the growth of equities. Yesterday, the demand for high-tech sectors of the US market intensified amid strong Netflix reporting as well as Amazon news (US Supreme Court is not ready to give individual states the right to collect taxes from online retailers). Yesterday, US market was supported by statistical data, which were unexpectedly strong, industrial production in the US rose by 0.5% compared to March (analysts expected growth of 0.3%-0.4%), capacity utilization in the country reached 78%, the maximum since 2015 of the year. In addition, positive data came from the real estate market in the US, the number of new buildings grew by 1.9% over the last reporting month. Today, in addition to speeches by FOMC representatives the market will focus on the release of the Fed's "Beige Book", which is likely to reflect the good state of the American economy, and should influence positively on USD dollar. Also in the focus of attention - traditional weekly information on oil reserves in the United States.
Yesterday USD dollar moved to a strong growth. US dollar index strengthened to the level of 89.50 points, but today the US currency is being adjusted. Weak data from ZEW stopped the upward movement in the pair EUR / USD and put pressure on the main currency pair of the FX market. Germany's economic sentiment index went down to the lowest level since 2012-8.2 points, experts expected a decrease to -0.8. The index of economic sentiment for the EU as a whole is also actively declining and has already come very close to the zero mark of the breakdown which will reflect pessimism regarding the further development of the region's economy, the fact is 1.9, forecast 7.3, March 13.4. Nevertheless, the pair remained above 1.23 and this fact persists positive expectation.
Today in the focus of market’s attention in Europe - important data on inflation. Judging by the published data, the ECB will continue to be very limited in its capabilities because the basic level of inflation in the region remained at 1.0%, and the consumer price index decreased from the previous 1.4% to 1.3%, which will put pressure on euro, which is already evident in the initial reaction of the market.