20.07.2016 - Investors are waiting for tomorrow's ECB decision
American stock indexes slightly changed against the background of conflicting news. Thus, the IMF worsened the forecast of growth of the world economy against the background of the risks associated with the exit of the UK from the EU. At the same time, yesterday was published positive data on the housing market in the US, where the number of housing starts increased by 0.05 million to 1.19 million in June, indicating the positive dynamics in the construction sector. This fact also increases the likelihood of the Fed raising interest rates this year, which is negative for the stock market in the country. Our medium-term outlook remains negative, but the current growth may continue in the near future.
Major European stock markets today show a positive trend after yesterday's decline. Positive for European markets was the unexpected data on the balance of payments surplus of the euro area that has made 30.8 billion euros in May against the forecast of 24.9 billion euros. The unemployment rate in the UK fell by 0.1% to 4.9%, which supported the local market. Investors are waiting for tomorrow's ECB decision on monetary policy and a press conference by ECB President Mario Draghi. We expect a soon resumption of the negative dynamics, but in the coming days is expected the increase in volatility on the markets.
Markets in the Asia-Pacific region showed different dynamics. Japanese investors took profits after recent gains and before tomorrow's ECB decision on monetary policy. In Australia was published the weak data on the index of leading economic indicators, which fell by 0.2% against the forecast of growth by 0.2% in May. Tomorrow we should pay attention to the statistics on the index of business activity in Japan. According to our estimates in the near future there is a possibility of significant growth in volatility after the current consolidation and the Japanese market will continue to be strongly influenced by the yen. In the near future, growth may continue, but we expect the resumption of the negative dynamics in the medium term.