01.02.2016 - Markets are now evaluating the data from China
American stock indexes showed gains on Friday amid the positive impact of the news from Japan, where the central bank decided to cut interest rates to -0.10%, against 0.10% previously. At the same time, data on US GDP growth fell short of analysts' expectations. Thus, the rate of US economic growth was only 0.7%, vs. expected 0.8% and 2.0% in the third quarter. This fact has reduced the likelihood of the Fed raising interest rates in March, which supported the markets. In addition, the Chicago manufacturing PMI unexpectedly rose in January to 55.6, against 42.9 in December. Today, the dynamics of trading will affect the data on personal income and consumer spending (13:30 GMT), the manufacturing PMI and construction spending in the US (15:00 GMT). Particular attention should be paid to the speech by the Fed Deputy Chief Stanley Fischer (18:00 GMT), in which he can tell about the impact of the weak US statistics on further steps of the Fed. Our outlook on the US market in the coming months remains negative.
European stocks rose after the increase on Friday, raising concerns that global economic growth and lower oil prices. Contradictory statistics from China increases the voltage on the market. Today was published the data on manufacturing PMI in Eurozone and the UK, which in January was 52.3 and 52.9 respectively, against forecasts of 52.3 and 51.8. Tomorrow, on the dynamics of trading will affect the news on the labor market in the euro zone and business activity in the UK construction sector. Positive outlook for European markets are supported by expectations of further easing of monetary policy of the ECB, but the uncertainty in the US and Asian markets, holding back purchases.
Major stock indexes in the Asia-Pacific region did not show uniform dynamics today. The strong decline in the Japanese yen after the decision of the Bank of Japan to cut interest rates to -0.10% supported the Japanese exporters. Today, China has published statistics on the manufacturing PMI, which according to official data, in January fell to 49.4 against 49.7 previously. It is worth recalling that the index below 50.0 indicates contraction in the sector. Tomorrow we should pay attention to the statement by the Reserve Bank of Australia. Risks associated with the slowdown of the Chinese economy will continue to put pressure on investor sentiment in the region. A more positive dynamic is predicted in Japan in connection with the recent easing of monetary policy.