Dax 30; Ftse 100; SP 500 - Market View

[psaTrading]

Today US oil reserves will be released. In recent weeks, there has been a fairly volatile and distant readings forecast of economists. Despite this volatility is possible to trace a pattern, characterized by a much smaller increase in oil reserves and a sharp increase in gas reserves. Economists estimate that crude oil reserves have increased 2.6 M.USD and gasoline 1.9 M.USD.

 

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For a more enduring reversal of investor sentiment, the statements of Mario Draghi do not seem to be enough. To attend a recovery of stock markets, it should be confirmed any of the following conditions:
– The decline in fears about a devaluation of the Yuan (which has already been happening)
– The stabilization of the Chinese markets
– The oil recovery

 

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he value of crude oil was undoubtedly the main catalyst of Wall Street’s rise on Friday. Oil posted the largest daily increase since August of last year valuing up 9%.

 

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from a technical point of view, while the S & P stays above 1800 points, there remains a reasonable probability that the stock markets entering into a recovery.

 

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The meeting of the Fed today will not bring major changes in relation to what was broadcast to the market at its December meeting. Last month, the oil retreated over 25%, with a negative impact on inflation and hindering the task of driving the Fed to levels close to 2%. Given this trend, investors will monitor the reference of the Fed for inflation, it is not excluded the minutes to reveal the apprehension of the members of the Central Bank, which would lead investors to believe not only that the Fed will not raise rates at the March meeting as the number of increases may be smaller than anticipated by the Fed members (4 increases of 0.25%).

 

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In the European session will be the scene of two opposite forces: a negative reaction from Wall Street to the Fed decision and the appreciation of oil in the New York session.

 

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Asian markets closed with sharp gains, due to the somewhat surprising decision by the Bank of Japan. Challenging economists’ forecasts, which point to an extension of the asset purchase program, the Bank of Japan decided to reduce the interest rate on deposits which the Nipponese banks have with this institution to -0.10%. This measure is not innovative but takes the surprise character in that Governor Haruhiko Kuroda recently to have shown skeptical to the adoption of negative interest rates.

 

[psaTrading]

Regarding the potential of the ongoing recovery, this will depend on the behavior of oil and Chinese financial markets. From a technical point of view, and considering the DAX as a sample of European markets, the first obstacle relevant to the rise of the German index is located in the zone of 10170-10270. The recovery is expected to be much more volatile than in the last years. It is not excluded that this upward movement is interrupted by negative sessions, in which may occur sharp devaluations.

 

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It seems that the GBP/USD move to the downside is over for now.

 

[psaTrading]

Perhaps the overperformance of the Chinese market was due to the approach of the New Year festivities and the possibility (purely hypothetical) that the Bank of China to surprise the financial markets during this period with some monetary measure