04.02.2014 - Stock markets tumbled yesterday

U.S. and European stock markets yesterday showed the negative dynamics. The reason for decrease of the indexes was the statistics on manufacturing PMI. Thus, in the euro area, the figure rose to 54.0, compared with an expected 53.9. At the same time, PMI in the U.S. declined to 51.3 against 57.0 in December and expectations of experts of 56.2. Construction spending in the U.S. in December increased by 0.1% while it was expected that the growth rate will be around 0.3%.

Correction on the U.S. stock markets was long overdue, but we expect that the market will win back a part of yesterday’s losses.

The quotes of euro began to strengthen because of statistics, but it's hard to say how long the growth will last. Price movement of EUR/USD will depend on the ECB's decision on the future monetary policy of the bank, which will be published on Thursd

At the same time, weak data on manufacturing PMI of the UK has led to lowering of prices of the British pound. Today the course of trading will be affected by data on the index of business activity in the construction sector of the country (9:30 GMT). We recall that on Thursday will be issued a statement of the Bank of England in which will be announced further plans for economic stimulus. We expect the Bank of England not to tighten its policy, and leave it unchanged.

Japanese yen continues to strengthen against the U.S. dollar. The monetary base of the country in January increased by 51.9% compared to the same period last year, although it was expected that the figure will grow only by 47.2%. Despite the outflow of capital back to the U.S., we keep long-term bullish outlook for the pair USD/JPY.

Depreciation of the U.S. dollar led to an increase of the Australian currency. Besides, bulls were supported by the RBA statement which stressed that the interest rate remained unchanged at 2.50% and further reduction of interest rates in the near future is not expected. Growth is limited by the upper boundary of the descending channel.

The price of gold has increased inside the rising channel on the weakening of the USD and lower indexes. In periods of volatility, investors prefer to keep their money in defensive assets like gold. In case of further decline of stock indexes, the price of gold can overcome the strong level of 1265-1270 dollars per troy ounce.

Quotes of Light Sweet crude oil continue to decline. Statistics on industrial production does not stimulate the increase of fuel prices. Today and tomorrow will be released the statistics on changes in inventories of crude oil and petroleum products in the U.S. We maintain a bearish outlook for the oil price.

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