Monday's trading session on the U.S. markets ended with a slight increase. The reason for optimism was the data on the growth of the manufacturing PMI of New York to 19.3, which is 0.3 better than the previous figure, the growth of industrial production in May by 0.6% and increase the index of business activity in the housing market to 49 in June from 45 in May. The growth was restrained by fears about the situation in Iraq, where militants seized large areas in the north. Dynamics of trading today will depend on the data on the housing market in the U.S. (12:30 GMT). We expect a further decline on American stock markets.
European stock indexes fell yesterday amid fears of worsening situation in Iraq and the termination of deliveries of Russian gas to Ukraine. Termination of supply threatens the energy security of Europe. Further relations of Russian and Ukrainian sides will be resolved in international courts. Investor sentiment today will be affected by data on inflation in the UK (8:30 GMT) and the index of business confidence of the Eurozone (09:00 GMT). ECB measures against the low inflation may support the European markets, but considering the weakness of the bulls, we expect the fall on the stock markets in Europe in the medium term.
Stock indexes in the Asia Pacific region declined due to pessimism on Western stock markets and a decline in China's real estate. The Japanese stock market continued to rise after yesterday's announcement by Prime Minister of Japan Abe to lower corporate taxes that appear positively on investment attractiveness of Japanese companies. On the other hand it is worth noting that only about 30% of Japanese corporations pay corporate tax. The Australian market declines following the prices on iron ore on the world markets. The growth in the Japanese market may continue in case of further devaluation of the yen, but the Chinese and Australian markets will probably decline in the medium term.