20.10.2014 - Market sentiment has improved, but traders are waiting for data on the Chinese economy
American stock market on Friday showed strong growth on the positive macro data. Thus, the index of consumer confidence from the University of Michigan rose to the maximum in 7 years to 86.4 in October, against 84.6 the previous figure. At the same time, the number of housing starts rose to 1.02 million compared to 0.96 million the previous figure. Today it is not expected to be published the important macro and investors will expect the publication of data from China tomorrow. At the moment, the problems of the world economy continue to put pressure on the American stock markets, and we expect a further fall in the mid-term and maintain a negative outlook.
European stocks showed strong growth against the background of the correction after the sharp decline on the stock markets for 11 years. Support for the indexes had positive data on the growth of the housing market in the United States and the consumer confidence index. At the same time, the ECB board member Nowotny said about the positive impact of low price on the economy of euro eurozone, but pointed out the risks associated with low inflation and urged the governments of the euro area to structural reforms. Today the course of trading will be affected by the data on the balance of payments of the Eurozone (08:00 GMT) and monthly report of the Central Bank of Germany (10:00 GMT). Given the weak economic performance of the euro area, and vague prospects for further growth, we maintain the mid-term negative outlook for the markets in the region.
Markets in the Asia-Pacific region today showed strong growth following the improvement of attitudes of American and European investors. Pension Fund of Japan announced a review of the parameters of the investment strategy according to which will invest in Japanese companies up to 25% from 12% before, and the volume of investments in government securities will decline to 40%, against 60% earlier. The Japanese market has grown by almost 4%, which was also contributed to the decline of the yen. Traders in the region expect tomorrow's publication of a large block of macro data from China's GDP, retail sales and industrial production. We maintain the mid-term negative outlook for the markets in the region.