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    S&P500: the index has won back the losses incurred since the beginning of the year on 31.03.2016

    Since mid-February the price of the index S&P500 has been growing. By today, the price has won back the losses incurred from the beginning of this year after the decline of the global stock indices caused by the fall of Chinese stock market and devaluation of the Yuan. Recovery of the global stock markets and American stock indices including S&P500 is largely contributed to the efforts of the Chinese authorities aimed at stabilization of the Chinese stock market and the Yuan and softer monetary policy of the US Fed.

    At the meeting on 15-16 March the US Fed left interest rates unchanged and lowered forecast of monetary policy tightening for this year and until 2018.

    Now it is expected that the US Fed will increase interest rates twice this year, up to 0.875%. Earlier it was planned that the key interest rate will be raised up to 1.375% by the end of 2016 and to 2.375% by the end of 2017. By the end of 2018 it will be raised up to 3.25%

    In her speech on Tuesday the head of the US Fed Janet Yellen has indicated that the interest rate is unlikely to be raised in April, due to economic and financial instability in the world, which creates risks for economic recovery of the US economy. Mrs. Yellen also said that economic situation in the US is stable and capable to resist global economic problems. Next meeting of the US Fed is scheduled for 27 April.

    After such statement of Janet Yellen it will be difficult to restore the purchase of the USD. Mrs. Yellen comments have shown that the US Fed believes that economic situation in the USA is stable and therefore, they are in favour of the softer monetary policy, which may add momentum to the American stock indices triggering them to go to the last year highs.

    Market participants are waiting for tomorrow’s US macro-economic statistics. At 14:30 (GMT 2) on-Farm PayRolls and unemployment rate will become known; at 16:00 index of purchasing managers (PMI) in the manufacturing sector will be released as well as inflation acceleration index from ISM for March.

    In case of the positive data, as per the forecast, the USD will go up and American stock indices will also receive strong support.


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