Investors take their profits ahead of Fed meeting
Yesterday's trading session ended with the fall of the major stock indexes in Europe and America. The reasons for the negative sentiment on the markets were the news about the slowing industrial production in China, as well as expectations of another reduction of the quantitative easing program by the U.S. Federal Reserve. The decline in inflows from the United States will lead to withdrawal of funds from emerging markets.
Euro continues to consolidate below 1.37, waiting for signals from the U.S. Today we should pay attention to the durable goods orders (13:30 GMT) and consumer confidence index in the U.S. (15:00 GMT).
British pound almost restored losses of yesterday's trading session. The growth of the pound was due to expectations increasing of the funds rate. Thus, the Bank of England may be the first between central banks of the largest economies in the world, which will raise interest rates. Today we should pay attention to the preliminary data on the growth of GDP of Great Britain for the 4th quarter of 2013.
After a strong decline, quotes of USD/JPY started to correct. Information that the price index for corporate services in Japan rose in December by 1.3%, at the forecast 1.1% had no significant impact on the course of trading.
Australian dollar continues to decline gradually in a downtrend. We maintain our negative outlook for the Australian dollar quotations, because of the loose monetary policy of the Reserve Bank of Australia, aimed on the devaluation of the Australian dollar and support of non-mining sector.
Despite the decline on global stock markets, gold prices are also falling. Probably, traders prefer to fix the profits before the Fed decision on the future fate the quantitative easing program, which will be announced tomorrow at 19:00 GMT.
Reduction of prices for Light Sweet crude oil was due to weak statistics on the U.S. housing market. Thus, sales of new homes declined to 414 thousand in December, at the forecast 457 thousand In addition, investors are concerned that the reduction of quantitative easing will lead to lower prices for both stocks and oil. Quotes of "black gold" continue to be under the pressure of record production of volumes in the U.S., as well as the growth of supplies from Libya and Iran.