S&P500: Positive Dynamics Continues

S&P500: Positive Dynamics Continues

14 April 2016, 16:52
Roberto Jacobs

S&P500: Positive Dynamics Continues

Dynamics of the global stock exchanges has supported expectations of the positive outcome of the upcoming meeting of Big 20 and a meeting of the large oil producing countries in Doha. The rise in the American stock indices triggered the rise in the USD, despite poor US price indices and retail sales data released yesterday.

Today, positive data on Chinese trade balance also supported the rise in the world stock markets. Chinese economy is the second largest in the world after the American economy; therefore, positive Chinese data add momentum to the financial market.

Chinese exports rose in March for the first time in the past nine months, which is a positive fact for the Chinese economy. This fact also reduces concerns about slowdown of the second largest economy of the world which may impede the economic recovery of the other countries.

Today, the rise in the USD has been also supported by the weakening in the Yuan. The People’s Bank of China set the lowest average rate of the national currency since 7 January at the level of 6.4891 against the level of 6.4591 on Wednesday.

However, tomorrow at 04:00 (GMT+2) important Chinese macro-economic data will be released including GDP for Q1, volume of retail sales and industrial production. Tomorrow, Chinese National Bureau of Statistics will hold a press-conference devoted to the current financial and economic situation in the country. Outcome of this press-conference will affect all financial markets of the world. In case of negative information investors may prefer safe haven assets, such as gold and the Yen, which will cause the decline in the stock indices.

Positive information will increase investors’ optimism, which will cause the rise in demand for the risky assets, such as stocks. This fact will have a positive effect on the prices of commodities and commodity currencies.

To date, the index S&P500 has regained all the losses since the beginning of the year. The decline in the index was caused by the fall of the global stock indices due to the decline of the Chinese stock market and devaluation of the Yuan.

The rise in the pair may continue up to 2108.0 (highs of November, December 2015). Today’s news will include US data at 14:30 (GMT+2) and speeches by Fed representative Mr. Lockhart and FOMC member Mr. Powell at 16:00

The material has been provided by LiteForex - Finance Services Company - www.liteforex.com

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