Market View; World Stock Indexes; Trading Journal

Yesterday the price of crude fell by more than 5 percent after the Energy Department revealed last week that oil inventories increased by 8.2 million barrels, compared to an expected increase of just 1.2 million barrels.

For the asset purchase program launched in 2015, the ECB indicated that it will continue to make acquisitions at a monthly pace of 80 000 M.€ until the end of March and from April onwards the purchases will be at a rate of 60 000 M.€ until the end of December, or later, if necessary. The main novelty was that the ECB had withdrawn from the statement the phrase about whether the ECB could use “all instruments available” to apply more stimulus to the economy. Mario Draghi explained that this phrase was withdrawn to “signal that the ECB considers that the sense of urgency, which existed when there was a risk of deflation, has disappeared.”

This week, in addition to the Fed meeting, the focus will be on the political front as in a few months begins important electoral events in the Eurozone and whose results may aggravate the uncertainty and fears to the current European project: legislative elections in the Netherlands next Wednesday (15 March), presidential elections in France (1st round on 23rd April and 2nd round on 7th May) and legislative elections in Germany (24th September).

Many traders are already thinking about fresh strategies and the market forces which will shape the 2nd quarter of 2017. With that in mind, now is a good time to revisit and reconsider our individual trading styles and faults, and to see what we can improve.

Financial markets will now be faced with two important events: the Dutch elections and the Fed meeting in the US. As a matter of curiosity, the longest record to form a government (208 days) was in Holland and dates from 1977.

In the foreign exchange market, the Euro is still appreciating agains the dollar after the impulse candle from Tuesday of more than 1%.

Construction permits declined 6.20% in February to 1.21 million, which may be a sign that higher interest rates are actually driving Americans to rethink their plans for housing.

As far as the banking sector is concerned, Deutsche Bank informed yesterday that it will start a capital increase of 8 000 M.€ after two consecutive years of losses. According to a press release issued by the institution, 687.5 million new shares will be issued, with a unit value of 11.65€, a value that represents a discount of 35.05% against the € 17.83 that the bank’s securities ended on Friday.

In the currency market, the Dollar depreciated against some currencies, after reinforced the perception that the Fed will not accelerate the pace of normalization of interest rates.

In the pre-opening, the European markets negotiated slightly higher, despite the uncertainty that stems from the terrorist attack in London. The Pound depreciated to the lowest of the last six days against the US Dollar. Investors, however, should monitor developments in the US political-economic landscape.

In March, the main US indices did not show any progress but also did not suffer any correction. After the sharp fall on the 21st March, some doubts seem to be emerging.

With regard to the real estate market, sales of new homes increased from 6.10% in February to 592,000, the highest of the last 7 Months. Estimates pointed to the 564,000 houses sold.

According to a study conducted by Bank of America in the week ending March 13, stock funds have been redeemed in the order of 8900 M.USD, the highest amount in the previous 38 weeks.

European markets closed higher, with concerns about US policy developments dwindling.

The financial sector, one of the most penalized in recent days, as well as the energy sector, helped by rising oil prices, helped to sustain market gains. Oil rose again, albeit mildly, after news of the collapse of production in Libya over conflicts with armed rebel factions. The Dollar recovered from recent declines that drove the US currency to a 4-month low over fears about the Trump Administration’s difficulty in delivering the anticipated, fiscal measures with an expected positive economic impact.

Asian stock markets closed lower, with investors showing some uncertainty over the Brexit process and its impact. The Yen appreciated affecting the main exporting companies.

Governor of the Bank of France, Villeroy de Galhau, said this week that the acceleration of inflation is not enough to remove Quantitative Easing and added that ECB policy will continue to evolve according to economic circumstances.

The number of weekly applications for unemployment benefits has decreased by 3000 to 258 000, thus maintaining the longest series since 1970 from a level of this indicator below 300 000.

Over the past month, European stock markets have reached a clear overperformance when compared to their US counterparts. In fact, during the month of March, the Eurostoxx50 appreciated 5.45%, the DAX 4.03%, while the S & P remained practically unchanged.

The Fed’s minutes have pointed out that the policy of reinvestment of the assets acquired under the Quantitative Easing programs will continue until the reference interest rates are at a standard level, possibly close to the level of Long-term equilibrium. The publication of the oil reserves (3.30 pm) which may still be an important point of the session.