The Тranscript causes market-optimism

Released last week weak NFP turns expectations for the first increase of US-rates for 2016. The not make changes decision of the Fed from September 16 to 17 came in strong volatility in the markets, concerns about global economic growth, especially China. After the the Fed minutes, investors concluded that the increase in interest rates probably will not be this year.

The staff viewed the uncertainty around its September projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The risks to the forecast for real GDP and inflation were seen as tilted to the downside, reflecting the staff's assessment that neither monetary nor fiscal policy was well positioned. Yields on short- and longer-term nominal Treasury securities were modestly higher than when the Committee met in July.The staff projected that consumer price inflation would move down over the near term by more than in the previous projection.Members agreed that labor market conditions had improved considerably since earlier in the year. Members anticipated that economic activity was likely to continue to expand at a pace sufficient to lead to a further reduction in under utilization of labor resources. Headline inflation continued to be held down by the effects of declines in energy and commodity prices, and the year-over-year increase in core PCE inflation remained below the Committee's objective. Members anticipated that the declines in oil prices and the appreciation of the dollar over the inter meeting period were likely to exert some additional downward pressure on inflation in the near term. Members expected inflation to rise gradually toward 2 percent over the medium term as the labor market improved further.

The US market took these facts positively, with increased risk appetite for investments in shares and growth in indices such as S & P closed above MA50 for the first time since August 18. .Simultaneously USD weakened against major currencies. This momentum has spilled over into Asia and the declining dollar is beneficial to emerging markets.

European markets reacted the same way. Risk factor for Europe remains wandering towards political refugees. Migrant crisis could allow EU budget rule-bending and could allow some countries wiggle room in terms of their budgetary commitments."The refugee crisis is not only a huge humanitarian crisis," Dombrovkis told CNBC in Lima, where global leaders are gathered for the International Monetary Fund and World Bank annual meeting. The measures, which are controversial for some countries in eastern Europe, are designed to ease the pressure on Greece, Hungary and Italy where migrants have tended to arrive or use as conduits to get to the more prosperous northern European countries. "It also has its fiscal implications in the member states...”

Today there are no visible reasons to general market sentiment to change, but at the end of the day will be possible profit taking and short corrective movements.

G.Hristov / Head of Fundamental Analyzes