World Stock Indexes Trading - page 17

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The US stock market yesterday made a pause after the recent valuations. The selling pressure was mainly driven by the drop in oil prices. An indicator of the labor market was published, but it did not have a very significant effect on the stock markets. The number of weekly claims for unemployment benefits fell by 4,000 to 264,000 in the week ended June 4, compared to 270 000 estimated. The data from the previous week were revised up registered another 1,000 weekly claims for unemployment benefits than previously indicated. The dollar depreciated, reaching the minimum in over a month against the Yen. The main exporting companies were favored by this movement of the US currency. Prices of Treasury bonds to 10 years were up, putting their yields to the minimum levels since 11 February (1.673%).
 
Since Thursday there has been a devaluation of the Euro, which possibly indicates that non-European investors (mostly American) are selling European assets. For its part, the European managers take refuge in assets with a lower risk associated as German bonds. In commodity markets, gold and silver in smaller scale have attracted the purchases of several global managers.
 
The uncertainty that characterizes the outlook of the stock markets will continue to generate a risk aversion among global investors. While there is almost a consensus view that the Fed will not change interest rates in its decision tomorrow, the unknown in relation to the statement of the meeting, is from the perspective of investors, an additional risk factor in the current environment. But the factor that seems to be most conditioning the investor sentiment is the UK’s EU referendum. Yesterday, two new polls were released. The first commissioned by Telegraph states that 48% of Britons are in favor of permanence and 49% support the output of the EU. In turn, the Times of London published a poll in which 46% of respondents said they would vote to leave and 36% would vote to remain. But perhaps the most striking news is the position of the newspaper The Sun, the most widely read in England, defending the “Leave”. The Sun is a tabloid that according to many sociologists has a high ability to influence the vote of a portion of readers. Given the recent risk aversion, the technical situation of European markets deteriorated significantly. DAX broke several support lines, being the area of 9480/9500 an important support. From a purely technical point of view and given the speed of recent declines can not be excluded that the German index can at an early stage, halting the falls if that zone is tested.
 
Brexit will change the world economy if it turns true. Meanwhile at Portugal there will be another bank going down. BCP its in trouble and it'll affect portuguese economy even more. 

Let's wait what Draghi will do.  Short on Stock Market we all should be
 
Today the "Brexit" (the possibility of the UK leave the EU) may be overshadowed by the meeting of the Fed. In this context, it is expected that many investors to position their portfolios for this event. Some of these investors are hedge funds which in recent days constituted selling positions on equity markets and also in the British Pound. Thus, it is possible that these investors close some of these positions which will represent a buying impulse in such assets.
 
After the reaction of financial markets to the meetings of central banks, European investors will focus again on the referendum on the permanence of the UK in the EU. Regarding this subject there is a slight discrepancy between the polls and the odds offered by the bookmakers. The latest polls point to a growing advantage of the favorable field outside the EU. However, the bookmakers continue to assign a higher probability to the “Remain”. The reason for this difference is that the bookmakers, based on similar events that occurred in the past, presuppose that the undecided will vote for continuity. Thus, according to this assumption of bookmakers, the undecided tend to vote for the stay. Today will meet the Bank of England and the referendum is undoubtedly the main theme of the press conference.
 
Investors will continue to react to economic data, trying to anticipate what may be the decisions of the Fed. But this pattern has become more complex from the time the Fed began to give greater importance to the behavior of financial markets.
 
The rise in crude on Friday is associated with a recovery of some risky assets (due to a decrease in fears for the Brexit) and a technical reaction to the losses suffered in the previous days. From a fundamental point of view, there is still an imbalance between supply and demand, which although not as pronounced as at the beginning of the year continues to persist. 
 
The devaluation of the price of the dollar boosted commodities, with the exception of gold that had previously attracted purchases from investors because of their defensive nature. Although in Wall Street, investors continue to monitor developments in Europe, the main event of the day will be the testimony of Janet Yellen on the financial committee of the Senate at 15:00.
 
The Asian session was relatively quiet, reflecting the expectations of investors concerning tomorrow’s referendum in the UK. The only exception was the Japanese market, which once again was affected by the appreciation of the yen. The Japanese currency has shown great resilience in relation to other haven assets and has not suffered losses the latter recorded in recent days. The rise of the yen pressured shares of exporters, which in turn, penalized the Nikkei.
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