The stock market today: forecast

Forecast Trading on the stock market today remains ambiguous

In brief: A large amount of data on macroeconomic reports can significantly affect the trading of the stock market today.

Forecast Trading on the stock market is pretty gloomy today. On Thursday, major stock indexes opened with a significant increase by providing long-awaited support for risky currencies. The reason for this was the People’s Bank of China, in an official statement that was contradicted by information about the possible change in the proportion of foreign exchange reserves, in particular, reducing the proportion of investments in Eurobonds. Recall that a day earlier rumors about the restructuring of the currency diversification of the Central Bank of China was lowered to the level of 1.2150 euros.

Among other things, the document it was noted that the State Foreign Exchange Administration of China supports the anti-crisis policy of the EU and the IMF, as the euro area is “one of the most important investment markets.”

On Thursday, continued upward movement in global stock and commodity platforms, the European platform grew by 3-3,5%, indicators of U.S. stock exchanges have shown an increase of 2,9-3,7% (DJIA index finished near the highs of the day at 10,258.99 points mark ). Oil prices at auction in New York jumped more than $ 3 $ 74.55 per barrel.

China has officially denied the information on the reduction of investments in assets denominated in euro, which has strong support to the market. The opinion of such a level, expressing confidence in the European authorities, allowing for the return of purchase in the markets. Nevertheless, direct European currency some support, not felt: after attempting to climb to a level of $ 1.24 followed by a retreat back to $ 1.23. Now the dynamics of extreme volatility of markets, events, opinions and gossip form the speculative mood, capable of causing large-scale motion in one or the other way.

Statistics, published yesterday, was worse than expected: U.S. GDP for the I quarter has been revised not upward, as expected, but with a decrease to 3%. But these figures have caused a stagnation in the stock markets. On the bond market growth in risk appetite affected by higher yields of U.S. Treasury securities: almost 10 bps increased yield of ten-Treasures.

Thus, rebounding from yesterday’s low (1.2151) euro / dollar easily overcame the resistance of 1.2200, but a foothold above 1.2300 at the first attempt failed. Going back to 1.2200, the euro again rushed up, denoting maximum 1.2394. Pound / dollar, in turn, rising above 1.4400, off about 180 items up and is also rapidly returned to the formed support. Second approach was to “British” is more successful: most of the day was 1.4606. At the same time, the return of interest to the risk of weakening the position of the Japanese yen: starting bid below the level of 90,00, the course pair dollar / yen rose more than 100 points and recorded a maximum of 91.07. A pair of dollar / franc rose to a maximum of 1.1654, but then returned to the area of 1.1500, denoting a minimum of 1.1484. Little support for the dollar have data on employment in the U.S.: the number of initial claims for unemployment benefits fell by 14,000 compared with the previous reporting period and amounted to 460 thousand

On Friday, traders should pay attention to the publication of the trade balance of Switzerland, the change of income and expenditure in the U.S., business activity index Chicago PMI and consumer confidence indicator from the Univ of Michigan. In addition, the impact on rates of the major currency pairs can affect the development of the situation on the Korean peninsula and in the euro area. In particular, the U.S. and South Korea are already planning a military cooperation in case of aggression from North Korea, and Spain and Greece are still far from resolving their debt problems. Accordingly, the euro / dollar is likely to continue downward trend and will go to the level of 1.2250, the resistance level will be 1.2400. Pound may rebut the resistance down to 1.4600 and 1.4500. The purpose of a pair of dollar / yen will be the level of 90,50, and the dollar / franc will continue to trade in a range 1,1500-1,1600.

Ukrainian Globalist
2010-05-28 10:36, Economics.

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