24.11.2014 - Decrease in interest rates in China supported the stock markets in the world
US stock indexes showed a positive trend against the background statements of representatives of the ECB and the People's Bank of China, which declared their support of the economy. The head of the European Central Bank promised to increase the volume of repurchase assets if necessary, and in China were lowered interest rates. It is worth recalling that the US economy shows steady growth and risks for investors are mainly related to the negative impact of the weakening economies of the EU, China and Japan. Today, it is worth paying attention to data on services PMI (14:45 GMT), and an increase in volatility is expected tomorrow after the publication of data on US GDP for the third quarter. We expect growth of US indexes in the near future.
European stocks showed strong growth in the last trading day of the week in connection with ECB President Mario Draghi at a conference in Frankfurt, where he stressed on the need to stimulate the growth of inflation and inflationary expectations and announced his intention as soon as possible to undertake the necessary measures to boost inflation by using asset repurchase. Today traders sentiment improved due to the data on the index of business confidence in Germany, which in November rose to 104.7, compared with an expected decline to 103.00. Tomorrow the course of trading will be affected by the data on GDP growth in Germany, which is the largest economy in Europe. We expect growth in the stock markets of Europe in the near future, but its potential is limited.
Indexes in the Asia-Pacific region showed strong growth today and continued positive momentum after the People's Bank of China announced the reduction of interest rates for the first time since 2012, as well as provided more flexibility with respect to the establishment of deposit rates for Chinese banks. Thus, the interest rate on loans was reduced to 5.6%, and on deposits to 2.75%. In Japan is the day off, and the Australian market is growing amid expectations of increasing demand for Australian commodities from China. We forecast index growth in the near future due to stimulus measures from China's central bank.