U.S. stocks declined yesterday amid speculation of an earlier interest rate hike by the Fed. The reason for such fears has become strong data on the U.S. labor market. The market expects the publication of minutes of the previous meeting of the Fed and the beginning of corporate reporting season, which starts on Alcoa's report on Tuesday evening. Today the mood of traders may be influenced by data on the index of small business optimism (11:30 GMT) and the volume of consumer lending in May (19:00 GMT). Medium-term view, despite a possible rise in the near future remains negative.
European markets considerably slipped yesterday due to the fall in industrial production in Germany by 1.8%, although the expected increase was by 0.3%. Germany is the largest economy in Europe and deterioration in the country negatively affects the mood of investors across the EU. Industrial production data will be published today in the UK (8:30 GMT). Also, we should pay attention to the trade balance surplus of Germany which rose to 18.8 in May, and France, whose deficit increased by 0.8 billion to 4.9 billion. We maintain a medium-term negative outlook for European markets.
Markets of the Asia-Pacific region declined slightly due to negative sentiment in the United States. The strengthening of the yen contributed to the fall of Japanese stocks. Central news on the Chinese market was the approval by the Chinese government of purchase from IBM a server production by Chinese manufacturer of computer technics Lenovo. The Australian market fell following the other markets. The weakness in iron ore prices also contributed to the fall. We maintain a medium-term negative outlook for the Chinese and Australian markets. Japanese stocks may continue to rise on the background of the yen devaluation and reduction of corporate taxes.