ECB meeting may become key event this week

ECB meeting may become key event this week

Last week the US stock market indices edged up and the US dollar strengthened. Since the start of the year S&P 500 managed to gain only 1.8%, while the dollar index dipped 3.5%.

The start of the week was not optimistic at all. The stocks edged lower on Monday together with the US dollar index on forecasts the total earnings of S&P 500 components are to contract by 7.8% in the 1st quarter this year. The US currency continued edging lower as market participants doubt the Fed is to raise the rates soon.

Energy stocks advanced on Tuesday as global oil prices rose to the 4-month high. The Dow Jones industrial average index edged up by almost 1% which is its record monthly increase. No significant economic data were released but the US dollar managed to close higher.

On Wednesday среду strong external trade data were released in China. Its export exceeded forecasts in March having increased by 11.5%. The additional positive was the news the quarterly earnings of JPMorgan bank exceeded the market’s expectations. The US macroeconomic data were negative. The March retail sales slumped which makes the chances of the April rate hike long. Nevertheless, the US dollar index edged higher.

On Thursday the US currency and stock indices continued advancing. Like in the previous day, the economic data were rather negative. The US inflation fell in March which may postpone the Fed rate hike under current conditions. This was the positive for the stock market and it continued advancing.

On Friday the US economic data fell short of expectations for the 3rd straight day. That was too much for some investors and the US dollar slightly edged lower together with the stocks. The industrial production fell in March for the 6th time in recent 7 months. The Michigan University consumer confidence index fell to the lowest since last September. Moreover, iPhone sales and Apple stocks dipped 2%.

This week such large US companies as Alphabet (former Google), IBM, Intel, Starbucks, Coca-Cola and others. On Tuesday and Wednesday the US real estate market data will be released. On Friday the industrial PMI for April will be released. We believe the EBC meeting results on Thursday may become the key event of this week.