This morning, most of the news headlines are focused on economic developments in China. On the one hand, state planning authorities expect the economy to grow by 7.5% (the lowest target since 2004) – this is a signal of a soft slow-down in growth. On the other hand, business activity in the services sector has declined sharply (the PMI index has fallen from 52.9 to 48.4).
It is also noteworthy that the interpretation of reduced growth target for the Chinese economy seems to be negative, but the need to slow down the rate of growth is a necessary and expected event. Thus, media comments more likely reflect the correction sentiment prevalent today, rather than represent a meaningful analysis of actual news content.
As for us, we interpret this to mean that the start of trading on the Ukrainian market is unlikely to take off against the background of the growth in global indices, which will only put further pressure on an already weak appetite for risk in Ukraine. At the same time, we expect that there will be no sharp drop in stock prices, since stock markets are only coming close to major support levels.
This upcoming week will be primarily of interest to those following the U.S. economy due to the publication of two series of labour market data – on Wednesday and Friday. In the first half of the week, stock markets should come under pressure from vendors, and a key argument on the part of pessimists will be the formation of an ‘overbought’ situation for markets.
