20.01.2016 - The fall of oil negatively affects investors’ sentiment
Futures on US stock indexes after a correction caused by expectations of new stimulus measures by the Chinese authorities, resumed their decline following the price of oil. Lifting of sanctions against Iran has led to an accelerated decline in oil prices and may continue in the near future. Corporate reports yesterday supported the bulls, but could not change the general negative sentiment in the market. Today will be published important statistics on inflation in the US (13:30 GMT), which will greatly affect the market expectations regarding a possible increase in interest rates of the Fed in March. In addition, we should pay attention to the statistics on the housing market in the US (13:30 GMT). Our medium-term outlook remains negative.
European stocks continued to fall after a correction. The reason for the pessimism was the fall in Asia. At the same time, yesterday the head of the Bank of England Governor Mark Carney said about the greater vulnerability of the UK’s economy in comparison with the American. Today, the mood of investors was supported by the British data on unemployment, which in November fell by 0.1% to 5.1%. Number of unemployed persons decreased by 4.3 thousand, compared with an expected 4.1 thousand. Tomorrow will be published on the ECB's decision on interest rates, after the press conference of the ECB President Mario Draghi, which can lead to increased activity on the market. The current decline is likely to continue until the situation will be stabilized on the Chinese market and fall in oil prices will not stop.
Major stock indexes of the Asia-Pacific region continued to fall amid concerns about further growth in industrial production and GDP in China, as well as due to lower oil prices. As a result of growing concern among investors, increased demand for yen as a defensive asset. It is worth noting that the decline in growth contributed to the decline in foreign direct investment in China to 6.4% in December, against 7.9% in the previous month. Given the volatility on the market, we expect a continuation of the negative dynamics of the indexes in the near future.