World Indices increased in the absence of significant macroeconomic statistics | IFCM
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World Indices increased in the absence of significant macroeconomic statistics - 14.7.2014

Global stock indices rose in the absence of significant macroeconomic statistics on Friday. We are not excluding that this was due to closure of short positions by the U.S. investors. Even taking into consideration Friday's increase during a week, the Dow Jones fell by 0,7% and S&P 500 - to the maximum since April, falling by 0.9% and Nasdaq - by 1.6%.

Shares of Wells Fargo Bank fell by 0,6% after the release of the reporting for the second-quarter before the beginning of trades. It coincided with the forecasts. The trading volume on the U.S. exchanges on Friday was 9.3% below the monthly average. Today there will not be any important macroeconomic data in the U.S. However, before the beginning of trades the large bank CitiGroup will release its reporting. This can affect the investors' sentiments. Let us note that, despite the decrease in the global Oil prices, Berkshire Hathaway, the fund of Warren Buffett, has invested 7 billion in shares of five energy companies. Among them about $4 billion were allocated for Exxon Mobil.

The growth of European stock indices was supported by the growth of Portuguese bank Banco Espirito Santo's shares by 5.6% due to the positive statements of its management. It is possible that, as in case of the U.S., investors were closing short positions. For this week, the Portuguese PSI 20 stock index still fell by 10%. This is the maximum weekly decline in four years. The activity of market participants was not high. Trading volume of securities of companies listed in FTSEurofirst 300 index was 20% below the monthly average. Today information on industrial production in the EZ for May will be released, which is expected to be negative. Nevertheless, European stocks and U.S. future indexes are traded positively.

Nikkei

The Japanese Nikkei rises for the second day in a row within its neutral trend. Besides the positive global trend, qualified data on industrial production for May and the beginning of the two-day BOJ meeting, dedicated to change monetary policy, also contribute to it. Tomorrow morning it will make the corresponding statement. On Tuesday morning the data on orders of industrial equipment and sales of certain types of residential property for June will be released in Japan.

As it was expected, the USDA (USDA) raised its forecast for grain on Friday, which caused a marked decrease in the relevant futures quotations. The Corn plummeted to its lowest level since August 2010. The USDA insignificantly reduced its forecast for the US crop, but increased the forecast of reserves by 8%. Falling prices of Soyb continued for ten trading sessions.. This is the longest continuous decline since July 1973. The USDA raised its forecast for the US production to 3.8 billion bushels and stocks - by 12%. The global soybeans and corn stocks were increased by 3% and by 0.5% for wheat. China raised its forecast for its own aggregate cereal harvest by 3.6% due to increased cultivated areas and productivity.

Cotton prices

The Cotton prices refreshed their two-year low on Friday. The USDA raised its forecast for its world reserves for the end of 2015 by 3 million bales (480 lbs) up to 105.7 million due to possible increase in yield in the United States from 15 million bales to 16.5 million bales and the lower demand in China. According to the U.S. Commission on Commodity Futures Trading (CFTC), investors formed the net short on cotton for the first time since December. The CFTC reported the net long increase on metals such as Gold, Silver and Copper.

Sugar price

The Sugar price increased because of possible drought in India and increase of import duties from 15% to 40%. The price growth was limited by the information of increase in its reserves in the country to 8.8 million from last year's 6.1 million tons. According to the CFTC, Sugar keeps the net long, which, however, decreased last week. Note that Rabobank has released the overview on the Sugar. The global demand is expected to exceed the supply by 2.1 million tons in the next season, starting in October. This may contribute to the rise of the Sugar prices.

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