Today FED meeting will take place

11/12/2019

The investors are nervous ahead of December 15

On Tuesday the prices of American stocks decreased the second time in a row. Market participants fear that USA will increase duties on Chinese goods once again. The event was previously scheduled for December 15, 2019. But there is still a possibility, that it would not happen. The indices S&P 500 (-0,11%), Dow Jones Industrial Average (-0,1%) and Nasdaq (-0,07%) were closed in negative zone yesterday. From the beginning of the current year the S&P500 stock index has risen by 25%. The main reason for that was 3-fold decrease in US Federal Reserve’s rate. Due to this the loan burden of American corporations was lightened, and the bonds attractiveness was decreased as an alternative to stocks. No further rate cuts are expected, but US stock index futures are traded at higher prices. Today the inflation data for November will be published as well. According to forecasts, it may record a slightly higher rate than in October. ICE exchange dollar index is rising this morning, as the increase of inflation rate reduces the chances of FED monetary policy softening.

European stock indices are stucked in the expectance of British elections

Starting from Friday European stocks have been traded within a narrow range. Investors are waiting for early parliamentary elections in Great Britain on December 12, 2019. The results of these elections may have a strong impact on Brexit conditions. It’s worth mentioning, that Great Britain exit from EU is scheduled on December 31, 2020. The British FTSE has risen by 0,2% today. The EUR/USD exchange rate is slightly decreasing awaiting ECB tomorrow meeting. Significant statistics publication in Eurozone is not expected today.

11/12/2019 Market Overview IFC Markets chart

Nikkei decreased slightly by 0,08% today

Asian indices are trading steadily today. Hang Seng of Hong Kong even rose by 1%. U.S sales representative Larry Kudlow said, that US hasn’t made any decision on increasing duties on the import of Chinese goods yet. It was scheduled on December 15 and involved products amounting $160 billion annually. The BSI Large Manufacturing indicator for the 4 quarter was published in Japan this morning, which was negative. Tomorrow another Japanese indicator Machine Orders will be published for October, which may decrease in annual terms. Such macroeconomic data may hinder the growth of Japanese stocks.

Brent has been traded within a narrow range 3 days in a row

Brent futures prices are stucked in expectance of December 15. The increase of tariffs on Chinese goods from the US may be negatively perceived by market participants, since the escalation of trade war may slow down the growth of the global economy. But up to now a positive factor for oil prices in the form of additional restrictions from OPEC for the next year – 500 thousand barrels a day, up to 1,7 million, is balanced by a significant increase in US reserves. In addition, Exxon Mobil Corp and Hess Corp American companies announced their plans of starting oil export from Guyana and increasing it up to 750 thousand barrels a day. 2 years ago the Payara oil field was discovered on the shelf of Guyana in the Atlantic Ocean.




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