Dax 30; Ftse 100; SP 500 - Market View

[psaTrading]

In terms of economic indicators in the United States, new orders to industry increased in January for the second consecutive month, suggesting that the recovery of the sector is gaining momentum, as the rise in commodity prices increases demand for machinery. Thus, orders for goods to industry rose 1.20%, after the increase of 1.30% in December. Economists estimated an increase of 1.00% in January.

 

[psaTrading]

This week, another risk factor that may weigh on the global economic growth: the downward revision of Chinese growth estimated by the prime minister. Briefly, a more optimistic speech may be adopted, supported by the release of economic information aimed at strengthening activity, while in terms of inflation the ECB should maintain a cautious discourse.

 

[psaTrading]

Yesterday the price of crude fell by more than 5 percent after the Energy Department revealed last week that oil inventories increased by 8.2 million barrels, compared to an expected increase of just 1.2 million barrels.

 

[psaTrading]

For the asset purchase program launched in 2015, the ECB indicated that it will continue to make acquisitions at a monthly pace of 80 000 M.€ until the end of March and from April onwards the purchases will be at a rate of 60 000 M.€ until the end of December, or later, if necessary. The main novelty was that the ECB had withdrawn from the statement the phrase about whether the ECB could use “all instruments available” to apply more stimulus to the economy. Mario Draghi explained that this phrase was withdrawn to “signal that the ECB considers that the sense of urgency, which existed when there was a risk of deflation, has disappeared.”

 

[psaTrading]

This week, in addition to the Fed meeting, the focus will be on the political front as in a few months begins important electoral events in the Eurozone and whose results may aggravate the uncertainty and fears to the current European project: legislative elections in the Netherlands next Wednesday (15 March), presidential elections in France (1st round on 23rd April and 2nd round on 7th May) and legislative elections in Germany (24th September).

 

[psaTrading]

Many traders are already thinking about fresh strategies and the market forces which will shape the 2nd quarter of 2017. With that in mind, now is a good time to revisit and reconsider our individual trading styles and faults, and to see what we can improve.

 

[psaTrading]

Financial markets will now be faced with two important events: the Dutch elections and the Fed meeting in the US. As a matter of curiosity, the longest record to form a government (208 days) was in Holland and dates from 1977.

 

[psaTrading]

In the foreign exchange market, the Euro is still appreciating agains the dollar after the impulse candle from Tuesday of more than 1%.

 

[psaTrading]

Construction permits declined 6.20% in February to 1.21 million, which may be a sign that higher interest rates are actually driving Americans to rethink their plans for housing.

 

[psaTrading]

As far as the banking sector is concerned, Deutsche Bank informed yesterday that it will start a capital increase of 8 000 M.€ after two consecutive years of losses. According to a press release issued by the institution, 687.5 million new shares will be issued, with a unit value of 11.65€, a value that represents a discount of 35.05% against the € 17.83 that the bank’s securities ended on Friday.