17.10.2016 - Volatility will rise this week
American stock indexes showed little change on Friday, despite positive quarterly results of Citigroup and J.P. Morgan Chase & Co., as well as strong data on retail sales in the US, which rose by 0.6% in September, in line with expectations. On the other hand, investors were disappointed by the data on the index of consumer confidence in the United States by the University of Michigan, which fell to 87.9, against the forecast of 92.1. Today, the dynamics of trading will affect data on US industrial production (13:15 GMT) and the speech of the deputy head of the Federal Reserve Stanley Fischer (16:15 GMT). Activity in the market will be restrained because of expected publication of important statistics on the consumer price index in the US, which strongly affect investors' expectations regarding the timing of the Fed raising interest rates. We maintain our medium-term negative outlook for American equity markets and expected strong movements this week.
European stock indexes began the week with decline against the background of falling oil prices, as well as due to the anticipation of the publication of important statistics this week. Today, it is worth paying attention to the data on the index of consumer prices in the euro area (09:00 GMT) and the index of leading economic indicators in the United Kingdom (13:30 GMT). Particular attention should be paid to the speech of ECB President Mario Draghi (17:35 GMT). Tomorrow in the UK will be published important data on inflation and on Wednesday is scheduled the release of the report on the labor market in the country. We also expect a decision of the ECB on monetary policy on Thursday and in case of hints to reduce the volume of quantitative easing in the euro area, the country's main stock indexes will show a decline. Our medium-term outlook remains negative and we expect a strong price movement after the current consolidation.
Major stock indexes in Asia and the Pacific showed multidirectional movement. The high probability of the Fed raising interest rates in December, has a negative impact on the stock markets in the world. The Japanese market adversely affected the data on industrial production in the country, the volume of which increased by 1.3% in August against the expected increase of 1.5%. On the other hand, the weakening of the yen has a positive effect on investors’ sentiment. The main focus this week will be on statistics from China's GDP growth and industrial production. Our medium-term outlook remains negative and we expect a strong movement on the markets of the region after the current consolidation.