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The world stock markets have not had any sharp trend two days in a row - 17.6.2014

The world stock markets have not had any sharp trend two days in a row. The U.S. indexes grow and the European indexes get reduced. A part of the Asian indices, particularly in Japan and India rose yesterday, as Chinese and South Korean indexes have dropped. The United States had the positive economic data on Monday, and it immediately was known about the four major mergers absorption between different corporations.

The N.Y. manufacturing activity index for June unexpectedly rose to its highest level of four years and made 19.3 points. The Industrial Production for May rose 0.6% after the 0.3% decline in April. Taking into account the fact that there was the positive information on inventories coming out a week earlier, some market participants started counting on the U.S. GDP growth of 4% in the second quarter. Depending on the published indicators the economic growth estimations vary from 2.8% to 4%. An additional support for quotations yesterday came out from the home builders confidence index by the National Construction Association (NAHB) risen to 49 points. This is was more than expected. In addition, the U.S. has no plans for large-scale operations in Iraq, which also had a positive impact on the U.S. stock indexes. The trading volume on the U.S. stock exchanges was 8.3% below the average of the month and amounted to 5.28 billion shares. Note that the IMF cut the growth forecast for the U.S. GDP this year to 2% from 2.8% in April due to the weak performance in the first quarter, when the GDP fell by 1%. Market participants ignored this information for now. Since the economic growth data for the second quarter are no expected to be released soon,only on July 30th.

The U.S. futures indexes and European stocks are in the black this morning. The significant positive inflation data and slightly negative information on real estate market for May are expected to be released from the U.S. at 12-30 CET.

Yesterday's inflation data on the EZ in the second reading did not bring any surprises, and were in line with the forecasts. European stocks rose in anticipation of a positive index of investor confidence from Germany for June, which will be released at 9:00 am CET. It is expected to increase for the first time this year.

The Nikkei rises this morning within a narrow neutral trend with a minimum trading volume of two months. Japanese parliament will begin to discuss the legalization of casinos tomorrow. Some investors believe that it can revive the economy. Tonight, at 23-50 CET, we will see the report on the BOJ meeting in May, as well as the Merchandise Trade Balance and the export-import figures.



The Copper rises in price for the third consecutive day on improved industrial performance in the United States. In addition, market participants expect that the measures to support the economic growth in China may contribute to increased demand for the Copper as a lending security asset. Yesterday, Chinese Premier, Li Keqiang has confirmed that this year's GDP will grow by 7.5%.

The Wheat futures are trading highly volatile due to reports of the Australian Bureau of Meteorology. The growth in prices is changed by a sharp fall. The Office stated that there is only 70% chance of El Niño developing this year. And the worsening weather is likely to come in September.



The Corn and the Soyb prices fell. The USDA has estimated 76% of corn as "good to excellent". This is the maximum percentage of 20 years. The 73% of soybeans were also evaluated as "good to excellent". As we have mentioned in previous reviews, the important factor of cheaper beans is the sale of Chinese strategic soybean stocks in the domestic market. Because of this, imports fell sharply. The sale price at the last auction was $650 per ton, higher than the stock prices. Since early May, there were 1.284 million tons of soybeans sold from state reserves out of 3 million tons planned.



The Coffee has gone down slightly. India, the third manufacturer in Asia, increased the crop forecast of this year by 7% to 300 thousand tons. This was reported by the Coffee Exporters Association. Note that this is still less than last year's crop in India that was 318.2 thousand tons. The Mercon Group Agency raised its forecast for Brazilian coffee crop to 50.5 million bags from 49.5 million previously expected.

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