TODAY THE NEXT MEETING OF THE US FED WILL BE HELD - 31.1.2018

No rate changes are expected, but the Fed representatives may reveal their monetary policy plans for the current year. 10-year Treasury yields updated the 4-year high of 2.7% in annual terms. Yesterday Trump delivered his first address to the Congress. He stressed the obvious success of the US economy - the lowest unemployment in 17 years (4.1%) and the GDP growth by more than 3% in the Q3 and Q4 of 2017. Nevertheless, his speech had almost no effect on the market dynamics, as he spoke little about the possible changes in the economic policy. Investors focused on negative corporate news. The S&P 500 Healthcare index fell by 2.1% on the background of the creation of a new insurance company for the employees of Amazon.com, Berkshire Hathaway and JPMorgan Chase. MetLife stocks fell by nearly 9% after the report that the U.S. Securities and Exchange Commission is going to investigate its activities on pension payments. The stocks of Harley-Davidson fell by 8% due to the news about the Kansas factory closing. Apple stocks fell by 0.6%. The U.S. Department of Justice and the Securities and Exchange Commission are going to investigate the legitimacy of slowing some iPhone models to protect aging batteries. Today at 14-15 CET, the ADP data on the labor market for January and at 16-00 CET, existing home sales will be released in the US. At 20-00 CET, the Fed meeting minutes will be published. No rate changes are expected. The next Fed meeting will take place only on March 21, 2018, and no meetings are expected in February. Currently, the futures on the US stock indices are rising slightly. The US dollar index has been declining for the second consecutive day, but it has not yet updated its recent 3-year low. In January of this year, the dollar index has fallen by 3.5%, which may be the highest monthly decline since March 2016.

An additional negative for the market was the weak earnings reports by the Italian Defense company Leonardo (-8%) and the Swedish cash managing company Loomis (-7.6%), as well as the telecommunications giant Ericsson (-8.5%). Today, the drop in the European stock indices was halted thanks to positive earnings reports by Electrolux (+ 7.2%), Volvo (+ 4%) and Elisa (+ 5.9%). Investors expect the publication of the eurozone data on unemployment and inflation for January at 11-00 CET. Preliminary forecasts are neutral. The euro has been growing for the second day in a row, but it has not updated its recent high. USDX did not update its recent low.