07.01.2016 - The fall in the stock markets of China continued
Futures on US stock indices show a decline on a background of the plunge on the Shanghai stock market and the decline of the yuan, which raises the concern of investors about the growth prospects of the world's second largest economy. It is worth noting that in the minutes of the previous meeting of the Federal Reserve was noted the need for more attention to the inflation in the country. Investors are waiting for tomorrow's report on the labor market in the US in October, which greatly affect investors' expectations regarding future plans for the Fed to raising interest rates. We expect the decline on the markets of the country in the near future.
European stocks showed a negative dynamics due to the negative news from China where the yuan decreased, and trading on the Shanghai stock market was stopped due to fall by more than 7%. Today in the euro area was published contradictory statistics. So, on the one hand, retail sales fell by 0.3% in November, but the unemployment rate unexpectedly fell by 0.2% to 10.5%. In the near future the dynamics of trading on the market will depend on the news from China. Our medium-term outlook remains positive, but the current decline may continue in the near future.
Markets in the Asia-Pacific region continued to decline against the background of a number of negative factors. Thus, the price of the yuan continued to decline, reinforcing investors' concerns about growth prospects for the second largest economy in the world. In addition, the World Bank downgraded the forecast for global GDP growth in 2016 to 2.9%. Statement on North Korea's test of a hydrogen bomb, and the tension between Saudi Arabia and Iran, as well as the fall in the stock markets of China lead to increase in the yen, which is negatively displayed on the Japanese index. We expect a further decline in the markets of the region, but after the recent fall may see an upward correction.