29.08.2016 - The probability of falling markets businesses increased after the speech by Janet Yellen
American stock indexes on Friday showed a strong rise in volatility, which was associated with the speech of the Fed chief at symposium in Jackson Hole. Janet Yellen noted the positive dynamics of the labor market and the strength of the economy, which is the basis for the continuation of the normalization of monetary policy-making process. It is worth noting that the deputy head of the Federal Reserve, Stanley Fischer, said about the likelihood of the two interest rate hikes this year, which will negatively impact on the stock market. Important data on personal income and consumer spending in the US (12:30 GMT) will be published today. The main event of the week will be the publication of statistics on the labor market in the US in August, leading to strong movements on the market. Our medium-term outlook remains negative.
The main European stock indices show fall today after statement of Janet Yellen on Friday which heightened fears of the beginning of a strong correction in equity markets in the near future. The UK market is closed today. Tomorrow, on the dynamics of trading will affect the news on the consumer price index in Spain and lending in the UK, but the focus will be on the speculation on the timing of the Fed raising interest rates. On Wednesday will be released important news on inflation and unemployment in the euro area. We forecast a drop in European markets in the medium term and the near future.
Markets in the Asia-Pacific region showed a decrease today following the US markets. The exception was the Japanese market, which is supported by the fall of the yen against the US dollar after the speech of Janet Yellen, which increased the likelihood of the Fed raising interest rates in September. In addition, the head of the Bank of Japan Haruhiko Kuroda said that he is ready to strengthen the incentives if necessary. Tomorrow, the focus will be on the statistics on unemployment and retail sales in Japan. Our medium-term outlook remains negative, but the growth in Japan can continue amid weakening the yen.