Yesterday the trade volume on American stocks was 6% below the monthly average. Compared to a relatively quiet session on share market, US Dollar Index marked sizeable growth, underpinned by positive macroeconomic data. Durable Goods Orders for January gained better-than-expected 2.8%. In December the indicator dropped 3.7% making a number of investment banks cutting GDP forecasts. Now with orders rising they may reconsider. Our analysts believe the yesterday's dollar upsurge to be excessive as specialists have recorded Consumer Prices Index (CPI) falling for the first time since 2009. This may postpone the Fed rate hike. Recently Janet Yellen, FRS chair, stated that while inflation is below 2%, there is no need to be hasty about pushing the rate. Today at 14:30 CET Personal Consumption and Q4 GDP (second reading) will be released in the US. Chicago PMI for February is expected at 15:45. The tentative outlook is negative. At 16:00 University of Michigan Confidence Index will become public in tandem with Pending Home Sales. They are expected to be good. We suppose that the data, announced at 14:30 CET, are more important. The indicators may affect market, if they turn out to be even worse than the current negative estimates.
European stocks continue growing today. The beginning of the current year has become the most successful since 1986. So far about two thirds STOXX 600 companies have reported Q4 corporate earnings, of which 55 percent have met or beaten profit forecasts. The overall profit estimated is 14.9%. It may hit the 3.5-year high. In our opinion, European stocks have been expanding in prospect of the euro emission and recorded the 7-year maximum. Now it is looking slightly overvalued. STOXX 600 companies' Price to Earnings ratio amounts to 16, being highest since 2004. Today at 14:00 Consumer Price Index will be issued in Germany. The forecast is moderately positive.
Nikkei has risen together with global indices due to last night good macroeconomic news. January data recorded a slight drop in inflation and surge in industrial production. In February Nikkei rallied 6.4% (maximum since September, 2013). In our view, the expansion is driven by continuing emission of the yen by Bank of Japan. Its president Haruhico Kuroda announced this morning that there are no obstacles to money emission. According to bank's estimates, inflation in the country is only 0.2%: officials take National CPI Ex-Fresh Food (which equaled 2.2% in January) as the basis and deduct 2% (it is the VAT increase in April). To be noted, due to yesterday's positive statistics the yen strengthened towards the euro and eased up losing to the dollar. At 2:35 CET on Monday Purchasing Managers Index will be announced in Japan by Markit and JMMA, together with less important indicators.
At 1:45 on Monday PMI for February will be released in China. Analysts believe it to remain at January level (50.1). If it doesn't happen, commodity futures may react substantially. Recently they have been advancing with oil prices. Copper showed a fair upturn as we highlighted in our previous reports.