World stock markets have been slightly corrected downwards on Tuesday | IFCM
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World stock markets have been slightly corrected downwards on Tuesday - 4.6.2014

The world stock markets saw a slight decline in prices on Tuesday. Perhaps it was due to lower liquidity. Trading volumes on the U.S. stock exchanges amounted to 5.1 billion shares, below the average monthly level of 5.75 billion.

Yesterday's rise in industrial orders in the U.S. for April exceeded the forecasts of 0.7%. It has been continuing for the third consecutive month. However, this information could have a significant positive impact only on automakers such as General Motors (GM) and Ford Motor (F), which rose by almost 1%. Compared to last year, car sales in the U.S. rose by 11.4%. Today, we expect a negative trade balance for April and productivity for the first quarter coming out in the U.S. at 12-30 CET. Prior to that, we will see the employment report from the ADP at 12:15, which can also be weak. Now the U.S. futures indexes are traded "in the red zone". Later we will see the ISM non-manufacturing coming out at 14-00 CET and the "Beige Book" economic review at 18-00 CET. We do not exclude that they may be moderately positive.



The data lowered inflation level for May were released yesterday in the EU. This increases the likelihood of reduction in the interest rates at the ECB meeting tomorrow, more significant than it was previously assumed. Moreover, the deposit rate may become negative. Some investors believe that if this does not happen, the Euro may strengthen above 1.4. In our opinion, the rate reduction can support European stock indices (DAX, CAC40, FTSE100). Note that the EU is interested in weakening its currency, not in strengthening it. Theoretically, the ECB can also have the (LTRO) long-term refinancing operations started along with lowering the rates which implies monetary emission. Today we will see the first quarter GDP and the producer price index for April coming out for the EZ at 9:00 am CET. These are important indicators, but since the preliminary forecasts are neutral, they may not have a noticeable effect on the stock price.

Japanese Nikkei has grown slightly due to the positive PMI from the Markit, but later it moved to the neutral trend. We believe that the Nikkei will move in line with the global trend, formed after the ECB decision and after the U.S. labor market data at the end of this week.



The Copper prices dropped due to a possible resumption of its exports from Indonesia. Foreign companies willing to agree to pay additional fees for the Government budget of this country, but the negotiations have not been completed. The Copper export was suspended for almost five months for solving this problem. Indonesian Copper production in the amount of 97% belongs to U.S. companies, Freeport-McMoran Copper & Gold Inc and Newmont Mining. Tomorrow morning, we will see the Chinese PMI for May from the HSBC bank coming out at 1-45 CET, that could affect commodity futures quotes.

The Gold (XAUUSD) stabilized around multi-month lows in anticipation of important economic data from the U.S. and Europe. We do not exclude the probability of the price growth in case of correction in the U.S. stock market. Theoretically, it is possible to use the composite personal instrument. Note the decline in gold futures trading volume in the major exchanges. Now it is about 50% less than the average for the three months.



The Oil, Brent has come more expensive for the second consecutive day in anticipation of the weekly data on its reserves in the United States. The figure is expected to decline by 1.4 million barrels in general, and by 300 thousand in the Cushing storage unit (Oklahoma). The official information will be announced at 14-30 CET. An additional factor of the growth in the Oil quotations is possible strike in Norway and the fighting in eastern Libya.

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