Dax 30; Ftse 100; SP 500 - Market View

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In the pre-opening, the European markets negotiated in different directions. The main theme of the day is the US Federal Reserve meeting, but whose outcome will only be known after European markets close. However, political developments in Europe will continue to be in the spotlight. With regard to the United Kingdom, the leader of the DUP, the Irish unionist party that Theresa May counts on to guarantee the parliamentary majority, said yesterday that the negotiations are “going well” and there should be an agreement “sooner rather than later.” The BBC also said that the agreement could be sealed today. In terms of business, the Spanish company Inditex today presented its results for the first quarter of the year. Net income rose 18% to 654 M. €, in line with analysts’ estimates. Sales were slightly above expectations (€ 5569 M.) and EBITDA stood at € 1113 M., against the expected € 1103 M. €. In terms of economic indicators, industrial production relative to the Euro Zone will be published.

 

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US stocks dropped while the dollar advanced as traders digested the more hawkish tone from the Federal Reserve. The British pound swung to a gain after a split among policy makers over the path of interest rates unexpectedly deepened. The Fed raised interest rates for the second time in 2017 and Chair Janet Yellen suggested the strength of the U.S. labor market will ultimately prevail over recent weakness in inflation.

 

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In the pre-opening, the European markets negotiated in positive territory. The influence of the markets should be the agreement on Greece, while political developments, especially in France, should return to attract attention, since on Sunday is the second round of the elections to Parliament. Meanwhile, oil prices are close to the low of the last six months, in the face of continued fears of over-production and despite OPEC's efforts to reduce supply. The final estimate of inflation in the Euro Zone for May will be published today, which should confirm a correction of 1.90% to 1.40%, due to the general fall in prices in the main countries of the region. It should be recalled that price behavior will be decisive in shaping market expectations regarding the ECB's monetary policy.

 

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Asian stock markets ended on a positive note as attention turned once again to the European political landscape, including the negotiations on Brexit.

 

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Oil dropped to the lowest level in seven months, pulling energy stocks down, amid growing concerns that OPEC-led output cuts are failing to ease a global supply glut.

 

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After a long wait, Chinese equities will finally be part of the MSCI Emerging Markets Index. Thus, 222 listed companies in China will integrate this index which is the benchmark for many international fund managers. It is important to note that China already had a weight (26%) in the MSCI Emerging Markets through companies listed on the Hong Kong stock exchange.

 

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The European stock indexes ended without major fluctuations, although they traded most of the day in negative territory.

 

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Attention will now be focused on the behavior of oil and developments in Washington regarding the discussion of the new health system law.

 

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Asian markets closed higher, led by oil companies. In addition, there was a purchase of the sectors that had been penalized the most last week. It should be noted that several markets, such as Indonesia, Singapore, Malaysia, India and the Philippines, were closed because of the end of Ramadan.

 

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Asian markets do not present a common trend. Unlike yesterday, the appreciation of oil could not trigger a sustainable rise.