US stocks rose on Friday for the 3rd straight day. Investors shrugged off the economic data playing off the Fed decision to increase the interest rates this year only two times instead of four. So the gross hike will be lower. Higher rates may increase the credit burden on the US companies and affect negatively their stocks. Meanwhile, the US dollar edged lower on the Fed decision. AS a rule, the currencies strengthen in case of the interest rakes hikes. Market participants disregarded the contracted consumer confidence index by Michigan University. The S&P500 and Dow indices are rising for the first time since New Year, having edged up by 0.3% and 1% respectively. The hi-tech Nasdaq 100 index is still 4% below the year opening. Today at 15:00 СЕТ the existing home sales data for February were released, the data being worse than expected.
European stock indices are on the rise today. The world leader in seed industry, US Monsanto, may acquire the agricultural subdivision of the Germany’s Bayer for $30bn. Thanks to that Bayer stocks are rising by 4.2% today. The Germany’s DAX 30 stock index edged up by 0.9%. No significant data is expected today in Eurozone. DAX is still 6% below its opening level at the start of 2016.
Nikkei continued edging up amid stronger yen. The US dollar fell to the 17-month low against the Japan’s currency on Friday. Investors are worried the strong yen may worsen the financial performance of the Japanese exporters. The Nikkei index has lost already 12% since the start of the year. The Japan’s markets will be closed on Monday due to the Spring Equinox holiday. On Tuesday early in the morning the manufacturing PMI for March and many other economic indicators will come out.
Gold fell on Monday for the 3rd consecutive day amid slight dollar strengthening. Some market participants may shift to the growing stocks. It is hard to tell yet whether such a trend is to last. Last week the golden assets of New-York-based SPDR Gold Shares ETF rose by 11.9 tonnes. Since the start of the year the inflow reached 176.6 tonnes which is far above the last year’s 40.8 tonnes in the relevant period. Since the start of the year the gold prices edged up by 17.3% already on super-low and negative rates in major developed countries and the outlined US inflation increase. On Saturday the 19-day strike of the jewelers ended in India. The jewelers lifted their voices against the 1% tax on jewellery. India imports around 1 thousand tonnes of gold a year. Its overseas gold purchases fell from $2.91bn to $1.44bn in February. After the strike the gold imports to India are expected to rebound.
Copper is edging up on the news its imports to China rose by 55% in February compared to the same month of 2015 to 328.6 thousand tonnes. The additional positive came from the comments of China’s officials on the signs of rebounding high-pace economic growth. This happened mainly due to the high savings ratio in China that exceeded 46% of the GDP by the end of 2015 and the low capital outflow. Last year the China’s economy edged up by 6.9%. The China’s officials predict the GDP to increase this year by 6.5-7%. No significant economic data are expected to come out in China till the end of March. They will be released after April, 1.
Cotton prices significantly fell on Friday on the news China will start selling it from its state reserves in mid-April. China disposes of 11mln tonnes of cotton which is about half of global cotton stocks.