Stock market indices are in the phase of a downward correction after an extended uptrend. The leaders of the decline were the shares of technological companies. The downward correction was facilitated by the escalation of tensions between the USA and China.
The US Dollar made an upward correction on the background of the weakening Euro – the major component of the US Dollar index. The single currency came under pressure as a result of statements by ECB officials, who expressed concern over the strengthening of the Euro, which is a negative factor for European exporters.
The ECB meeting will take place on Thursday. Market participants do not expect the regulator to change the interest rate and the amount of the quantitative easing program, however, the focus will be on the following issues:
- Updated macroeconomic forecasts.
- The possible verbal intervention aimed at the weakening of the Euro.
- Possible change in the ECB’s rhetoric due to deflationary processes in the Eurozone.
The oil price fell to a 2-month low due to the following factors:
- Saudi Arabia will provide the biggest price cuts on oil since May for its Asian customers in October, which indicates expectations of decreasing demand for the resource.
- Many refineries are closing for maintenance, which will reduce demand for oil.
- In the United States, fuel demand declines in the fall due to the end of the driving season peak.
Main events of the current week
- On Wednesday, data on job openings in the United States will be presented. The Bank of Canada will hold a meeting, at which no changes in monetary policy are expected.
- On Thursday, data on US jobless claims, producer price index, and crude oil inventories will be presented. ECB will hold a monetary policy meeting.
- On Friday, data on GDP and industrial production in the UK, as well as the consumer price index in the US will be presented.
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