The situation in the global markets remains vague. Following the clarification of Fed Chairman J. Powell on Tuesday's hearing in Congress that the US regulator will try not to raise interest rates in order to stimulate the recovery of the national economy, the published economic data on Wednesday showed again how difficult things are with this recovery both in Europe and in the United States.
Based on the presented data, the Euro zone's business activity rose in June, while the growth of the manufacturing business activity index (PMI) managed to stay at 63.1 points in May. On the other hand, the values of business activity in the manufacturing sector were significantly higher – from 55.2 points to 58.0 points, which can be explained by the softening of the restrictive measures introduced earlier by European countries.
In turn, the UK's values of the indicators showed an ambiguous picture. The production indicator of business activity came out slightly higher than the forecast of 64.2 points against 64.0 points, but it is still lower than the previous May value of 65.6 points. On the contrary, the value of the index of business activity in the services sector fell from 62.9 points to 61.7 points.
We also have vague indicators in the US. In particular, business activity in the services sector sharply declined from 70.4 points a month earlier to 64.8 points in June, while business activity in the manufacturing sector rose from 62.1 points to 62.6 points.
Analyzing such data, investors might decide to take a break and fix the previously made profit in anticipation of the publication of new economic data. However, it is also possible that buying on the stock markets will resume today. In any case, most European and three American futures on major stock indexes this morning indicate this.
There are almost no dynamics in the currency market. The ICE dollar index only slightly extended, moving just below the 92.0 point mark.
Today, the market's attention will be focused on the publication of revised US GDP data for the 3rd quarter. Strong growth of 6.4% is expected against 4.3% for the previous period under review. Investors will also closely monitor the number of applications for unemployment benefits over the past week. Their output is projected at the level of 380,000 against 412,000 a week earlier.
We believe that there will be a noticeable activity in the markets by the time the US statistics data are published. Positive GDP data and the number of applications will push the demand for company shares again and put pressure on the US dollar exchange rate in the market.
Forecast of the day:
The EUR/USD pair is trading above the level of 1.1915 while waiting for the US economic data. We consider it possible to buy a pair on positive values of indicators with a likely growth target of 1.2000.
Gold may also get support today if the US dollar comes under pressure amid strong American data. Against this background, it can rush to the level of 1813.00.
