02.10.2014 - Investor sentiment deteriorated significantly

American stock market yesterday showed a strong decline amid deteriorating sentiment in connection with the completion of the quantitative easing program, concerns about the state of the Eurozone economy and the worsening data on the manufacturing PMI to 56.6, versus the expected 58.6. At the same time, construction spending fell in August by 0.8%, which is 1.3% less than the projected figure. Today investors will not rush to accumulate positions ahead of tomorrow's release of data on the labor market in the United States in September. Today we should pay attention to the statistics on the labor market (12:30 GMT) and factory orders (14:00 GMT). We maintain a medium-term negative outlook on the American market.

European stocks ended the trading day yesterday with decline due to weak data on the manufacturing PMI in the Eurozone and the UK, which fell to 50.3 and 51.6, respectively, which was worse than analysts' forecasts. It is also worth noting the negative impact of the news on the revision of the forecast of GDP growth in Italy to reduction by 0.3% this year, against a previous forecast of growth by 0.8%. Today investors will be focused on the speech of the ECB President Mario Draghi after the ECB meeting. Traders expect statements regarding further measures of supporting the economy of the region and dealing with low inflation. We maintain a medium-term negative outlook for the markets in the region.

Markets in the Asia-Pacific region is reduced due to the negative external background and pro-democracy protests by demonstrators in Hong Kong. Chinese markets are closed today due to the holidays. Strengthening of the yen has made Japanese assets less attractive to investors. The Australian market today also fell despite an increase in the number of permits issued for construction of houses by 3% in August, which is 1.9% better than expected. Country's trade deficit narrowed in August to 0.79 billion. We expect the decline of stock indexes in the region in the medium term.

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