Fed Meeting Significant Event, Policy Change Unlikely

In the European markets, trading dynamics on Friday were rather different. Indices of the peripheral countries were decreasing. The Spanish IBEX 35 lost 1.01%, the Italian FTSE MIB decreased by 1.45%, and the others were bargaining without almost any change.

Last week was full of statistics, which were moving markets in different directions, due to the fact that the presented data had not been supporting any trend. The index of business climate of IFO in Germany in October, unexpectedly decreased for the first time in half a year, from 107.7 points to 107.4 points. In the US, the volume of orders for durable goods in September grew by 3.7%. Final value of the index of consumer confidence of Michigan university decreased to 73.2 points, which was below preliminary data and forecasts.

However, despite the statistics, the main American indices on Friday continued careful growth, having added about 0.4%. S&P 500 had just little to go in order to reach a new historical maximum, having increased by 0.44%, and traded on the level of 1759.77 points. Partly it was promoted again by corporate reporting.

The main event of the week will become the announcement of the results of the FED meeting. Nevertheless, from the American regulator nobody expects any changes in the monetary policy. Supposedly, the program of monetary easing will not change. Volumes of purchases of securities within the program of quantitative easing will be kept at the level of 85 billion a month. Since September, not enough data was published that was capable to change the macroeconomic picture in favor of the need to begin the reduction of monetary incentives. Moreover, the report on the labor market for October was slightly worse than expectations, which is an additional limiting factor.