American stocks expanded on Friday. Our analysts believe there were no special reason for this. It is probable that market participants started buying shares, believing that a pullback had already been over, since FRS was not going to raise rate in the near future. Macroeconomic data were worse-than-expected. Construction spending hit its 6-month low. Gilead biotechnological shares added 5.2% due to good quarter earnings, boosting S&P healthcare index 1.3%. US Dollar Index have been increasing for two consequent trading days on the back of estimated surge in Factory Orders (the indicator will be released at 16:00 CET). General Motors and Ford reported rising sales on Friday. According to Autodata agency, the overall car sales increased 4.6% to 1455 mln. in April.A number of European stocks, including the British one, have a day off today due to May holidays. The operating venues show a slight growth. Positive April PMI indices have been released today in Germany, Italy and eurozone. The euro have been retreating due to the growing yield of German government bonds, which has hit the high since 2013. Investors anticipate rising inflation because money emission by ECB. There is another risk factor: to grant financial aid to Greece Germany may issue additional bonds. No important macroeconomic statistics are expected today in the EU.
Japanese stocks have a day off til May, 6. It is worth mentioning that tomorrow Australian central bank will hold a meeting. The representatives will discuss rate reduction from 2.25% to 2%. For that reason the Australian dollar have been weakening for four straight days. If the rate is raised, the Australian currency may rebound. Important macroeconomic data, including Trade Balance, will be published tomorrow in Australia.Weak PMI indicator for April was announced today in China. It slumped to a 12-month low and made 48.9 points, as compared to 49.2 in March. Negative PMI undermined some commodity futures. A part of investors have doubts that the Chinese economy is able to rise 7% in the second quarter as it did in the first one.
Oil quotes disregard the probable economic slowdown in China and do not record a sharp fall. However, there are concerns about oil production. Saudi Arabia informed market participants about restructuring the largest state oil company Saudi Aramco. As reported by Baker Huges, the operating rigs number in the USA have been reducing 21 consequent weeks, hitting its low since September 2010 – 679 drillers. To be noted, 1609 rigs were operational last October.
Corn futures have been declining further. Corn quotes have hit a 6-month low because of positive crops forecasts and good weather in the USA. More than that, China is going to sell 3.4 mln. tons of corn from state reserves. Despite the deal is carried out within the domestic market, it reduces the overall demand for grains among Chinese companies.
Sugar quotes have shown a slight increase for several last weeks. Asian agricultural company Wilmar International spent $546,7 mln. To buy 1.9 mln. tons of sugar at ICE Futures US. This is the biggest deal since 1998. The corporation didn't report why it needed such amount of sugar. However, according to Commodity Futures Trading Commission, hedge funds have reduced their sugar net shorts to the yearly minimum just in case.