03.12.2015 - Incentive measures in the euro area could support the growth of the stock markets

The US market corrected yesterday after statements of the Fed chief Janet Yellen and President of the Federal Reserve Bank of Atlanta Lockhart. In their speeches, Fed officials were optimistic about the prospects for US economic growth and showed hawkish attitude regarding the monetary policy of the Fed. As a result, confidence in the Federal Reserve raising interest rates after the meeting of 15-16 December rose. Beige Book pointed to the growth in consumer spending in almost all districts. Today, the dynamics of trading will be affected by the data on volume of factory orders in the US (15:00 GMT) and the statements of Fed officials. The main attention will be drawn to the decision of the ECB on monetary policy. We expect increased volatility and maintain the medium-term negative outlook.

European stock markets showed moderate optimism before today's decision of the ECB on interest rates (12:45 GMT) and possible revision of the quantitative easing program, which can be extended to the end of 2016, and the amount of monthly purchases may be increased from the current 60 billion to 70-80 billion. Interest rates on deposits may be reduced by 0.10-0.25% as compared to the current level of -0.20%. It is worth noting that at 15:00 GMT will be the press conference of the ECB President Mario Draghi. Data on retail sales in the Eurozone (10:00 GMT) will not affect the course of trading. We expect strong price movement today and maintain the medium-term positive outlook for the European markets.

Markets in the Asia-Pacific region shows a mixed performance before today's announcement of the ECB decision on monetary policy, and tomorrow's publication of statistics on the US labor market. Yesterday's drop on the US stock markets, which adversely affected investor sentiment is likely to be offset by the positive effect of the stimulus measures in the euro area. Today was published statistics on the weak trade deficit in Australia, which in October reached 3.31 billion against the expected 2.61 billion, while sales of new homes fell by 3.0%. We expect strong movements on the markets of the region in the near future and their dynamics can be multidirectional.

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