Volatility in the Financial Markets Has Grown Significantly

Yesterday, a number of economic reports was published in the US, the Eurozone and the UK. The dollar was supported by the data released on Monday, which indicated that the activity of the US service sector accelerated. The index of business activity in the nonmanufacturing sector from ISM increased from 56.0 in December to 59.9 last month. The US dollar index (#DX) closed in the positive zone (+0.60%) yesterday.

Economic data from the Eurozone was mixed. According to the Statistical Office of the European Union (Eurostat) data on the activity in the services sector and the construction sector of the Eurozone was revised upwards, but retail sales in the Eurozone fell by 1.1% compared to the previous month. The statements of the ECB President Mario Draghi did not have an impact on the currency.

The pound showed the worst results yesterday. Investors took a waitandsee position before the release of the report on inflation and the decision on monetary policy from the Bank of England. Financial markets participants are concerned that the regulator will be less optimistic about the slowdown in activity in the manufacturing and construction sectors, as well as in the services sector. The index of business activity in the services sector fell to 53.0. Also, the pound is under pressure due to the fact that Britain has ruled out the creation of a сustoms union with the EU.

The Reserve Bank of Australia, as expected, kept the key interest rate at the previous level of 1.50%. The regulator noted the stability of the labor market. At the same time, some officials are concerned about the weak growth of wages.

The “black gold” prices continue to fall. Futures for the WTI crude oil are testing $ 63.60 per barrel.

Market Indicators

Yesterday, the US stock market collapsed: #SPY (4.18%), #DIA (4.57%), #QQQ (3.94%).

The 10year US government bonds yield began to decline. At the moment, the indicator is at the level of 2.74%.

Trade balance in the US at 15:30 (GMT+2:00);Trade balance in Canada at 15:30 (GMT+2:00);The number of JOLTS job openings in the US at 17:00 (GMT+2:00);Index of business activity from Ivey in Canada at 17:00 (GMT+2:00);Report on the labor market in New Zealand at 23:45 (GMT+2:00).

by JustMarkets, 2018.02.06