06.11.2015 - Investors are waiting for data on unemployment in the US
US stock indexes finished yesterday's trading session around the previous close due to the desire of investors to play it safe before today's publication of an important report on the labor market. The improvement in new jobs and unemployment will encourage the Fed to raise interest rates in December, which is negative for the stock market, but on the other hand will indicate the strength of the US economy. Our medium-term outlook for US indexes remained positive, but after long-term growth and bringing prices to historic highs, we may see a drop on the markets in the near future.
Stock markets in Europe show a moderate decline today in anticipation of the release of an important report on the US labor market. It is worth noting that the volume of industrial production in Germany in September fell to 1.1%, which was significantly worse than expected growth of 0.6%. Positive for the UK market was the news of the reduction of the trade deficit in September to 9.4 billion pounds against the forecast of 10.7 billion. At the same time, the volume of industrial production fell in September by 0.2%, compared with an expected drop of 0.1%. We expect a strong increase in volatility today and maintain the medium-term positive outlook on the major indexes in Europe.
Markets in the Asia-Pacific region show different dynamics. Support for the Japanese stocks had the continued decline of the Japanese yen. Also today, the Bank of Japan chairman made a speech in which he noted the intention to continue the quantitative easing in order to reach the inflation target of 2.0%. In addition, Haruhiko Kuroda said that the main risk for the Japanese economy is slowing growth in China. Reserve Bank of Australia lowered the forecast for GDP growth to 2.25% in 2015, which is 0.25% less than the previous forecast, which was published in August. The forecast for core inflation in 2016 has been lowered to 1.5-2.5% vs. 2.3% expected previously. We expect growth in the markets of the region, but in the near future may see a corrective decline.