04.12.2015 - Investor sentiment deteriorated after the decision of the ECB

The US stock market yesterday showed a decline after weaker stimulus from the ECB than was expected. In addition, the Fed chief said about a possible increase in interest rates at the meeting on 15-16 December. Statistics on the growth of factory orders in the US by 1.5% in October failed to improve market sentiment. Today will be the released the report on the labor market in November, which will have a key influence on the decision of the Federal Open Market Committee concerning raising interest rates. Raising interest rates will increase the cost of money and will force closing market positions. We expect growth on the US market in the medium term, but we can see a significant correction this month.

European stocks fell sharply yesterday after the statement of Mario Draghi on the parameters of monetary policy of the ECB. Thus, interest rates on deposits was reduced to -0.30% vs. -0.20% previously, the amount of the monthly asset purchases under the program of quantitative easing will remain at 60 billion euros, despite the expected rise to 75 billion euros. At the same time the term of the quantitative easing program was extended to March 2017. The forecast for GDP growth in the euro area has been improved by 0.1% to 1.5%. Today, investor sentiment will be influenced by the news from the US. We expect the resumption of growth in Europe and maintain the medium-term positive outlook.

Markets in the Asia-Pacific region fell following the decline in European and American stock markets after the ECB decision on monetary policy has disappointed investors. It is worth noting that the increase in the yen against the US dollar is also negatively displayed on the shares of export-oriented Japanese companies. On Monday, investors will assess the current statistics on the US labor market and the market's reaction on it. In addition, a strong influence on the course of trading at the beginning of next week will have data on the trade balance in China and the growth of Japan's GDP. Our medium-term outlook remains positive, but may be revised in the near future.

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