12.09.2016 - Investor sentiment sharply worsened
American stock indices have shown a sharp decline after a long consolidation. The trigger for the start of sales was the speech of head of the Federal Reserve Bank of Boston Eric Rosengren, in which he stated about the need to tighten monetary policy to avoid overheating of the economy. Raising interest rates negatively displayed on the global stock markets. We recall that this issue will be discussed at a meeting of the Federal Open Market Committee on 20-21 September. This week, the focus of investors will be of the speeches by the Fed’s officials, and the publication of important statistics on retail sales on Thursday and CPI on Friday. Our medium-term outlook remains negative and we expect a fall in the near future.
European stock indices show a decline following the fall on US stock market. It should be noted that the negative dynamics intensified on fixation of positions after prolonged growth and consolidation. Today, in the region will not be published important statistics and sentiment will depend on the news from the US. Tomorrow we should pay attention to inflation data in the UK, which will affect the decision of the Bank of England on monetary policy on Thursday, as well as statistics on employment in the euro area. We maintain our medium-term negative outlook for European stocks, but do not rule out short-term correction after the recent decline.
Markets in the Asia-Pacific region showed a decrease on the background of the negative impact of speculation regarding the Fed raising interest rates in September, which will have a negative impact on the stock markets in the world and the region. In addition, the Japanese market has been negatively affected by the strengthening of the yen and the Australian market fell against the backdrop of falling prices for oil, gold, and other export products. Investors are waiting for tomorrow's publication of important statistics on the volume of industrial production, retail sales and investment in China, which could lead to a strong movement on the market. Our medium-term outlook remains negative and we look forward to increased volatility this week.