17.06.2015 - The statement the Fed will lead to higher volatility
Major US stock indexes showed gains yesterday on the background of positive statistics on the housing market in the country. Thus, the number of permits for construction of new homes rose to 1.28 million in May, against 1.14 million in April, but the number of housing starts fell to 1.04 million vs. expected 1.10 million. Activity on the M&A market in the health sector also contributed to the growth of indexes. Today, the central event of the day will be the Fed's statement on monetary policy (18:00 GMT). According to analysts, the interest rates will remain stable, but the regulator may hint on a rate hike at the next Fed meeting. We expect increased volatility and falling prices in the near future, but maintain a positive medium-term outlook for the US stock market.
Major European stock markets continue to be under the pressure of the negative impact of the negotiations between Greece and creditors, which should continue tomorrow at the summit of euro zone finance ministers in Luxembourg. Yesterday, the British market was supported by the inflation data which showed growth of 0.1% in May, against a deflation of 0.1% in April compared with the same period of the last year. Unemployment in the UK has remained at 5.5%, in line with expectations, but the average wage increased by 2.7% in April, which is 0.2 better than expected. Investors are waiting for the Fed statement on monetary policy. We keep medium-term positive outlook for the market in the region despite the current problems associated with the Greek crisis.
Markets in the Asia-Pacific region showed moderate growth with the exception of the Japanese market. The data on the trade balance slightly worsened the mood of Japanese traders. Thus, the trade deficit totaled 0.18 trillion in May, compared with an expected decline to 0.17 trillion. The Australian market is negatively affected by lower prices for iron ore, a key export commodity for the country. The investors are in no hurry with actions before publishing the Fed's statement on monetary policy. Our medium-term outlook remains positive.