Main topics of the day in the markets of Europe: independence of Catalonia deferred crude oil prices moderately rose after report of OPEC surprises from the minutes of the FOMC is not expected



Leading stock indexes of Europe on Wednesday, moving mixed amid some easing of political uncertainty in Spain.

By 15:45 GMT the pan-European Stoxx Europe 600 fell 0.1%, compared with yesterday’s closing level amid the decline of the British FTSE-100 index 0.1 percent, the German DAX down 0.02%, France’s CAC 40 down 0.3% and the growth of Spanish IBEX-35 1.3%.

The Euro paired with the US dollar on Wednesday morning rose to 12-day high of 1.1845, but later, after the speech of the Spanish Prime Minister, Mariano Rajoy, is receded to the level of 1.1800. At the moment EUR/USD is trading in the region of 1.1835.

President Generalitat Catalonia Carles Pujdeme the night before, declared independence of the region according to the results held on 1 October referendum. However, he announced the suspension of the separation of Catalonia from Spain to negotiate with the Central government. Later in the night of Wednesday Pujdeme signed the Declaration of independence of Catalonia.

The Prime Minister of Spain Mariano Rajoy during a Wednesday speech following an emergency meeting of the Council of Ministers said that Spain requires management of Catalonia to clarify the meaning of the Declaration of independence, signed on Tuesday evening by regional authorities. He said that the Spanish government will determine its next steps depending on the response of Barcelona. Rajoy did not rule out the use of article 155 of the Spanish Constitution, which allows you to enter in this area direct management of the suspension of the autonomy and activities of the regional government. This article of the basic law was never taken in the history of democratic Spain.

According to European political analysts, now the head of Catalonia Carles Pujdeme talks with international mediators, without waiting for assistance from representatives of the European Union, as its relations with European Commission President Jean-Claude Juncker leaves much to be desired.

The leader of the national party of Scotland Nicola Sturgeon said at the party conference on Tuesday that Brexit has strengthened the arguments for holding a second referendum on Scottish independence. Earlier, British Prime Minister Theresa may announced that the EU and the UK is “very close” to signing an agreement about the rights of expats who will be staying in the UK after Brexit. Today Theresa may plans to hold a meeting with the leader of labour’s Jeremy Corbin on the eve of this season’s first parliamentary session “Questions to the Prime Minister.”

In the course of trading on European stock markets on Wednesday among the leaders of decline were the shares of producers of basic materials. The index for the sector fell by more than 1%. Shares in South African paper and packaging Mondi fell by 8% after a report that at the end of the current year profit and earnings may be worse than previously expected, despite the increase in underlying profit in the third quarter by 8%.

Shares of British financial services company Provident Financial fell 5.1% after the investment rating downgrade of the company by analysts at Barclays to “Underperform” from “on a par with the market.”

Shares of German engineering company GEA Group rose by 6.2%, having earlier in the course of trading six-month high after the announcement the hedge Fund Elliot Management on the purchase of shares of GEA Group.

The Ministry of economy of Germany today published fresh forecasts, saying he expects growth in German GDP in 2017 of 2.0%, but the slow expansion of GDP to 1.9% in 2018. As expected, the growth of exports in 2017 and 2018 will amount to 3.5% and 4.0%, respectively, while import growth, respectively 4.4% and 4.7%. Consumer inflation in Germany, according to the forecast of Ministry of Economics, will be in 2017 1.8% 2018 1.6%.

On Wednesday, the Organization of countries – exporters of oil, OPEC published its monthly report, which raised the forecast for world oil demand in 2017 – 2018, the city expects to OPEC, demand for oil supplied by the OPEC countries in 2017 will grow by 0.6 million barrels. per day compared to the previous year and will amount to 32.8 million barrels. a day, and in 2018 the demand will amount to 33.1 million barrels. in the day, which is 0.2 million barrels. higher than the previous forecast.

The aggregate global demand for oil, according to OPEC forecasts, in 2017 will grow by 1.5 million Barr. a day that was 30 thousand barrels. above the previous forecast.

According to OPEC, oil production by the countries of cartel in August of the current year decreased by 88 thousand barrels. a day to 32.75 million barrels. per day on average. Oil production by Saudi Arabia in August decreased by 0.7 thousand barrels. a day to 9.975 million barrels. As reported by OPEC in September, world oil supply declined by 0.41 million barrels. to 96.75 million barrels.

At the end of November will be held in Vienna OPEC meeting, which will consider the possibility of extending the agreement to limit oil production after the agreed on date, the date of completion of the transaction in March 2018. As expected, the agreement will be extended through an appropriate agreement between the king of Saudi Arabia Salman and Russian President Vladimir Putin, reached in early October.

Since June the price of Brent crude oil rose more than 25%, reaching $ 57 per barrel. amid reports about increasing oil demand and lower forecasts for oil production in shale deposits in the United States. The current middle futures for Brent oil trading in the region of us $ 56.8 per barrel. up by 0.4% compared to yesterday’s close.

On Wednesday after 23:00 GMT will be published report by the American petroleum Institute API about change of stocks of oil and oil products in the United States last week. Thursday, 18:00 GMT will be published the official report of the energy information Administration of U.S. Department of energy (EIA) on stocks of energy at the end of last week.

Russian ruble to the current time had declined moderately against the Euro and the U.S. dollar, reaching respectively marks 68.43 and 57.80. The pressure on the ruble having the necessity of return of the banks on Thursday, the foreign currency deposits of 1 billion posted at the end of September the Ministry of Finance in a short-term shortage of foreign exchange liquidity. However, support for the rouble has approaching tax period, which will be held from 16 to 25 October.

Markets awaited the release at 21:00 GMT minutes of the meeting of the Federal open market Committee fed (FOMC), which took place on 19-20 September. According to experts, in December may be another increase in the Federal funds rate by the fed, and the protocols can be reflected the views of regulators on this decision. Analysts believe that the published in last Friday’s key report on the US labor market, reporting an increase in the average hourly wage in the country in September by 0.5% compared with the previous month, probably will not be taken into account by regulators. This is because the data of the September NFP report was distorted by the influence of the hurricane Irma and Harvey.

Some pressure on the dollar have speculation about the possible suspension of the tax reform plan of U.S. President Donald trump. Recall, trump proposes to reduce the number of income tax rates from seven to three – 12, 25 and 35% (the maximum rate for the wealthiest Americans is 39.6%); to cancel a tax on inheritance of family business; to reduce income tax from 35 to 20% and enter the same rate for small business; to reduce the tax on the return to the USA the profit of multinational companies; to abolish the tax of 35% upon receive the overseas profits of American companies.

On Tuesday, trump said that his differences with Senator Bob Coker will not affect plans for tax reform. Trump also denied the words of Coker that he leads US to a third world war. Earlier, the Senator said that trump refers to his work as to participate in a reality show, and could trigger world war III. According to the Senator, from the reckless actions of the President only to stop the Secretary of state Rex Tillerson and the Minister of defence James Mattis.

In the markets continue to be debated rumors that the current fed Chairman Janet Yellen might change in this post Kevin Warsh, who previously served on the Board of governors and was known for his hawkish attitude. During the financial crisis of 2008 – 2009 Kevin Warsh was the only representative of the fed, which did not support the idea of more monetary stimulus. In late September, the US President Donald trump said that he would take a decision on the candidacy of the head of the fed within two to three weeks.

Prepared using materials MarketWatch and CNBC.




Main topics of the day in the markets of Europe: independence of Catalonia deferred crude oil prices moderately rose after report of OPEC surprises from the minutes of the FOMC is not expected 11.10.2017

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