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IKAR in Mass Media

Economic data in the U.S. turned out unambiguous

09 июня 2014 года

There was no sharp trend in the world market on Wednesday. The U.S. stocks rose up and European stocks fell slightly. The Economic data in the U.S. turned out unambiguous. The number of new jobs in May from the ADP agency increased less than expected and was only 179 thousand, however it did not disappoint investors particularly.

The fact is, the U.S. unemployment rate in April was at the lowest level of five and a half years. Recall that the official labor market data will be released on Friday. Last night, we also saw the PMI non-manufacturing from ISM, which exceeded forecasts and was at 56.3 points. This boosted the U.S. stocks. The S&P 500 updated the maximum once again. Market participants ignored another negative news in the form of weak U.S. foreign trade data for April. The trade deficit increased by 6.9% to $47.2 billion, worse than expected. In this regard, investment banks lowered their forecasts for the U.S. GDP growth in the second quarter, Goldman Sachs – by 0.4% to 3,4%, Morgan Stanley – by 0.5% to 3.5% and Barclays – by 0.1% up to 2.9%. The U.S. futures were traded negatively this morning. We do not expect especially important economic data from the United States, except for weekly unemployment at 12-30 CET.

The Eurozone GDP for the first quarter increased by 0.2%, as expected. This is pretty weak data taken by European stocks with decline. Now they are almost frozen in anticipation of the ECB meeting at 11-45 CET. The discount rate is expected to be lowered from 0.25% to 0.1%. However, market participants do not exclude setting the negative deposit rates at (-0.1%), and even a long-term (LTRO) refinancing operation launching. This is European equivalent of the U.S. "QE".

The NIKKEI refreshed the 3-month high, but then decreased. Its initial growth was caused by slightly positive Chinese PMI data from the HSBC Bank for May. Tomorrow morning, we will see the Japanese Leading Index for April released at 5-00 CET. The forecast is negative in our opinion.

The (Oil, Brent) prices rose yesterday due to weekly reduction in its reserves in the U.S. by 3.4 million barrels, more significant than expected. But then, the Oil prices dropped due to political news. It was known, that Russian President, Vladimir Putin is planning to meet the European leaders and the president of Ukraine in France this week. Market participants have decided that this would reduce the risks(Russia is the second Oil producer in the world). Note that Libya may stop its Oil exports because of the military conflict.

The Grains futures continued to decline. The European Committee raised yesterday its forecast for the crop in the EU for this year to 145 million tons from 142.2 million tons in 2013 and 143.6 million tons, which it predicted in April. Thus, the "good to excellent" Wheat crops now make up 75% compared to 67% in France last year. Russian Research Institute of Agricultural Market raised its Wheat harvest forecast for Russia to 54.5 million tons for this year from 52 million tons in 2013. Its exports may be increased by 1 million tons to 19.4 million tons.

The CORN prices were negatively affected by the USDA data. According to them, the "good to excellent" crops amounted to 76%. This is 6% more than it was expected by market participants.

The Copper comes slightly more expensive today. The LME stocks fell by 54% compared to the last year, reaching the lowest level since August 2008 and amounting to 168.5 thousand tons.

Source: FXStreet.com  |  #grain   |  Comments: 0   Views: 79

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