Since the opening of today European session European stocks has been declining, following the example of the American indices. A two-day rally caused by the decisions of the Bank of Japan and the US Fed is fading away. Yesterday S&P500 rose by 0.65%, Nasdaq Composite by on 0.84%, and on the day before the closing price of the index reached the highs for the eighth time this year.
The index Dow Jones Industrial Average, which incorporates 30 largest U.S. companies, has grown by 0.54% at the end of the session on Thursday.
Fed’s statements that the increase in the interest rates will be conducted stage by stage, gave positive momentum to the American stock market.
Janet Yellen said at a press conference on Wednesday that there are strong grounds of the rate hikes, however, the Bank decided to wait for a new evidence of further progress in achieving our goals.
According to the futures on the Fed’s rates, investors estimate probability of the rate hike in December, at 57% vs. 58% prior to the announcement of the outcome of the meeting of the Fed in September. The Fed also acknowledged that due to the economic slowdown, interest rates may be lowered, and this fact will cause the decline in the U.S. currency, but will support stock markets.
With the opening of today's trading day the USD is regaining in the market, may be also due to the profit-taking in short positions at the end of the trading week.
Since the opening of European session, major European stock indices are going down. At the opening session the index EuroStoxx50 fell by 15 points and is trading now at the level of 3034.0 which is crossed by important support level (see "Technical analysis").
Today the will be a lot of American news including: at 16:45 (GMT+3) - Markit index of purchasing managers (PMI) for September, which is an indicator of business activity in the U.S. manufacturing sector, as manufacturing sector is an essential part of the country's GDP. Rghe rise in the index above 50 indicates economic growth and strengthening in the USD (forecast is 51.9). If the data will be better than expected, the USD will receive additional upward momentum at the end of the trading week, while the global indices will be under additional pressure.