06.08.2014 - Ukrainian crisis puts pressure on the markets

American stock indexes fell, despite the positive data on non-manufacturing PMI, which rose to 58.7, compared with an expected 56.6, and the growth of factory orders in July by 1.1%, which is 0.5% better than expected. Improved macroeconomic performance brings closer the time of raising the interest rate of the Federal Reserve, which has a negative impact on investor sentiment. In addition, the market looks overvalued and requires a substantial correction. We maintain a medium-term negative outlook and expect further correction by 10-15%.

Major European stock indexes showed a slight increase on the background of the positive statements of a number of European companies, and in anticipation of tomorrow's ECB statement on monetary policy. Positive for the UK market has become a strong data on the service PMI, that reached 59.1, which is 1.0 better than the forecast. That in the euro area fell by 0.2 to 54.2. Data on factory orders in Germany, which fell by 3.2% in June, against the expected growth of 0.5% disappointed investors. Also today, we should pay attention to the data of the retail PMI of the euro area (8:10 GMT) and industrial production in the UK (08:30 GMT).

Markets in the Asia-Pacific region continues to decline following the American futures, as well as the rising tensions around Ukraine, near the borders of which according to reports of the West continues to increase the number of military forces of Russia. The Japanese market is falling despite the yen and stable growth of the index of leading economic indicators of the country in June to 105.50% versus 104.80% in May. Tomorrow in Australia is scheduled the release of statistics on the labor market. The Chinese market dipped slightly after the strong growth in the previous days. We maintain a medium-term negative outlook for the markets in the region.

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