Macroeconomic data were generally neutral | IFCM UAE
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Macroeconomic data were generally neutral - 2.6.2014

Тhe world stock markets continued to grow on Friday. The U.S. Dow and S&P 500 rose for the fourth month in a row and closed at historical highs. The macroeconomic data were generally neutral. The consumer spending index decreased in April for the first time of the year. In our opinion, this is an important negative factor. The remaining economic indicators were positive.

The consumer confidence index from the University of Michigan in May was lower than expected, but still more than in April. The business activity index in Chicago exceeded the forecasts. The volumes on U.S. stock exchanges amounted to 5.92 billion shares, above the average monthly level at 5.75 billion. Today, we will see the ISM Manufacturing PMI for May and the construction spending index for April coming out in the U.S. at 14:00 CET. In our opinion, the preliminary forecasts are positive. We note a marked decrease in volatility in the U.S. stock market. The VIX index, calculated by the Chicago Board Options Exchange, have been closing below 12 points for the fifth consecutive day. This is observed for the first time since February 2007.

This morning, European stock indexes and the futures on the US indexes are rising thanks to good Chinese economic data. The Manufacturing PMI rose more than expected and amounted to 50.8 points. Today, we expect the same Manufacturing PMI index to come out in the EZ at 8:00 am CET. The outlook is positive for the stock market.

NIKKEI

The Nikkei has reached a 2-month high amid improving economic performance of China. Investors expect that this will have a positive impact on the entire South Asian region. As we have mentioned in previous reviews, the inflation rate in Japan has reached the target level set by the government. Now investors expect better economic performance. The relevant data for Japan this week will be coming out since Wednesday.

Amid rising global stock markets and the U.S. Dollar strengthening, the Gold (XAUUSD) collapsed to the 4-month minimum. According to the U.S. CFTC, the net longs on the Gold also reached its 4-month minimum. And it decreased by 24% last week. Note that there is the net short position for the Silver observed.

Agricultural futures dropped markedly. According to the USDA, world cereal stocks are now at 3-year high. The U.S. farmers expect a bumper harvest this season thanks to good weather conditions.

COPPER chart

The COPPER came significantly more expensive thanks to the good performance of Chinese industry. An additional factor was the decrease in production of the world's largest company (Corporacion Nacional del Cobre (Chile) in the first quarter. Note that the Shanghai Stock Exchange does not work on Monday because of the holidays. Theoretically, this provides a chance for the price growth to continue tomorrow. According to the CFTC, the number of net longs on the Copper reached the maximum in January. Nevertheless, compared to the beginning of the year, it quotes are below 5%.

Oil chart

The OIL, BRENT also has risen today, mainly due to the "Chinese factor". The quotes growth was also contributed to the decline of oil production in Russia for the fifth consecutive month to 10.53 million barrels per day from the December high at 10.63 million barrels per day, or nearly 1%. Russian oil supplies to the world market decreased by 0.64% in May.

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