06.11.2014 - ​Investors are awaiting the ECB statement

US stock indexes showed improvement in investor sentiment in the market due to the results of the midterm elections in the US, which allowed the Republican Party to get a majority in Congress. This event was interpreted positively in relation to the expectation of support of business from Republicans. It is also worth noting that the statistics on the labor market where, according to the ADP number of jobs grew by 230 thousand, compared with an expected 214 thousand. Non-manufacturing PMI fell by 1.5 in October to 57.1. Today it is worth paying attention to data on the US labor market (13:30 GMT), and tomorrow will be published data on unemployment, which will lead to an increase in volatility. We maintain a medium-term negative outlook on the US stock indexes.

September 17, 2014 USSPX Graph

European stock markets yesterday showed strong growth on the back of improving investor sentiment in the US, as well as in connection with a positive corporate reporting of European corporations. It is worth noting that about half of European corporations reported for Q3 and 64% exceeded or met forecasts for profit of companies. Today, the central event of the day will be the statement of the ECB and the Bank of England. Investors do not expect a change in the parameters of the monetary policy, but the comments of central banks can lead to a significant increase in volatility. We maintain a medium-term negative outlook on the markets in the region.

Markests in the Asia-Pacific region fell amid expectations of the ECB statement on monetary policy, moreover, investors decided to fix position before tomorrow's publication of data on the US labor market. The yen after another fall started to correct, which was negative for the market. At the same time, the Bank of Japan noted the positive impact of cheap yen on the economy. The Australian market is under the pressure of the fall in iron ore prices to the lowest level in 5 years. In the coming days, the dynamics of the Chinese indexes will depend on the data on the trade balance of the country. We forecast a decline of indexes in the region except Japan, which will be supported by the increase of the Japanese companies in the portfolio of public pension fund in Japan.

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