Markets advance as dollar rebounds - 19.5.2015

US stocks ended higher on Monday as weaker than expected recent economic data led investors believe the Federal Reserve will likely not raise interest rates in near term. The S&P 500 gained 0.3 percent and closed at its third straight record high at 2,129.2 points. Investors have pushed back the expectations about when the Fed will hike the interest rates after data indicated slowing of economic expansion as evidenced by mere 0.2 percent first quarter GDP growth, as well as sluggish wage growth and flat retail sales in April. Chicago Fed President Charles Evans reinforced these expectations as he said on Monday it likely will not be appropriate to begin raising the fed-funds rate until sometime in early 2016, citing weak first quarter data. The trading volume was about 5.3 billion shares, about 17 percent below the monthly average. The National Association of Home Builders Monday report indicated home-builder confidence declined two points to 54 in May. Despite weak economic data, US dollar traded higher as Treasury yields rose, with the ICE US Dollar index climbing 0.9% to 93.9550. Today at 13:30 CET April Housing Starts and Building Permits will be released in US. The tentative outlook is positive for the dollar.

European stocks rose on Monday as euro weakened against the dollar and news reports indicated international creditors appear to be making progress in talks with Greece. The Stoxx Europe 600 gained 0.4%. Greece’s Athex Composite rose 1.6% after news reports that European Commission President Jean-Claude Juncker submitted a proposal to break the stalemate between Greece and its international lenders. Earlier International Monetary Fund said it appeared Athens wouldn’t be able to repay 1.5 billion euros ($1.71 billion) due to the fund in June, without further financial aid. Greece's Finance Minister Yanis Varoufakis said Greece has proposed to its international lenders that Europe's bailout fund pay back about 27 billion euros maturing Greek government bonds held by the European Central Bank and the country could then pay the European Stability Mechanism later as a way to overcome a funding crunch. Today at 10:00 CET May ZEW survey results for Germany and euro-zone will come out. The tentative outlook is negative for euro. At 9:30 CET inflation data will be released in UK. The tentative outlook is neutral for the Pound. Tomorrow at 7:00 CET April Producer Prices will be released in Germany. The tentative outlook is positive.

Nikkei rose to a three-week high today following Wall Street's lead and a surge in companies announcing higher shareholder returns. Tomorrow 00:50 CET preliminary estimate of first quarter GDP and Housing Loans will be released in Japan. The tentative outlook is positive for yen.

Oil prices slipped on Monday on concerns of growing oversupply and stronger dollar. Saudi Arabia reported its exports in March rose to highest level since November 2005. Oil prices fell despite increasing tension in Middle East as market participants are concerned US shale production could recover quickly if prices keep rising. Data from Baker Hughes oil- services company showed last week US oil-drilling rig count recorded the smallest reduction in 23 weeks, falling by 8 rigs to 660 rigs.

Gold prices closed higher on Monday for the fifth session in a row at more than three-month high as concerns grew about Greece’s ability to make the next IMF payment due in June.