U.S. Federal Reserve said that the discount rate will not increase for the foreseeable future | IFCM
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U.S. Federal Reserve said that the discount rate will not increase for the foreseeable future - 22.5.2014

As it was expected, the U.S. Fed said on Wednesday that the discount rate will not increase for the foreseeable future. The same opinion was contained in the Fed Minutes. The stock market reacted to this very positively.

The daily growth of the U.S. Dow Jones index was the highest for the month and made 1%. The round turn on U.S. exchanges yesterday amounted to 5.2 billion, less than the average monthly level of 6 billion. Note that in general, American corporations are well reported in the first quarter. The financial figures of 96% of the firms from the S&P 500 are already known. Their total revenue increased by 5.5%, return - by 2.8%. Most of market participants expect the aggregate income growth of 8% for the full year. Thus, the statements in the first quarter significantly exceeded forecasts.

Trox, Weekly

Shares of the Tronox (Trox) chemical company, which is also involved in the titanium manufacturing, rose by 7.7%. Now it is difficult to say what have caused this growth. Perhaps this is due to the trial with the oil and gas group - Anadarko Petroleum, which the company may pay more than $5 billion fine. The Tronox financial indicators in the first quarter were not brilliant, there was a decrease in return.

Nikkei, Weekly

European and Asian indexes followed the U.S. equities and also rose on Wednesday. An additional positive factor was the consumer confidence increase in the EZ in May. This morning, European stock markets were supported by the good Manufacturing PMI data from China, which exceeded forecasts. We do not rule out that this information can also help to increase the commodity futures quotes: the Oil, Copper, Wheat, Soyb and the Corn. Japanese Manufacturing PMI rose not bad too that contributed to the positive Nikkei dynamics. Its growth was the highest for the month.

Today we will see the weekly unemployment data coming out in the U.S. at 12-30 CET , the secondary real estate market data at 14-00 and the leading economic indicators for April. In our opinion, the forecasts of economic indicators are not bad for the stocks in general. Especially if the number of unemployed per week does not exceed market expectations. The Eurozone has already released a few satisfactory PMI’s for different economic areas. Accordingly, European stocks are traded slightly positive now.

XAGUSD, Daily

The Gold (XAUUSD) and Silver (XAGUSD) has declined due to strengthening of the USD and rising global stock markets. In our opinion, this suggests that there is a good demand for precious metals. As a rule, they are regarded by investors as safe heaven assets and move into the opposition from financial instruments. The world's largest Gold fund SPDR Gold Trust announced the sale of 3.3 tons of metal last week that had no impact on prices. Now its stocks fell to the lowest level since December 2008 - 776.9 tons. Note that the Central Bank of India has issued an import permit for physical Gold to seven private companies, noting the high demand for the metal in the country. Market participants believe that the legal monthly gold imports to India may increase by 10-15 tons, in addition to the current 20 tons. We do not exclude the growth in quotations of precious metals in the case of downward correction in global stock markets.

As it was expected, the Oil, Brent prices continued to rise. Its official reserves in the U.S. fell by 7.2 million barrels due to lower imports to a minimum of 17 years. Note that the reduction of supplies from foreign countries in the U.S. comes from the fact that there were too many hopes on shale oil. Today we will see the data on gas reserves in the United States coming out at 14-30 CET. The monthly report of the American Petroleum Institute (API), which may affect the quotation of hydrocarbons is to be appeared at 19-00 CET.

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