The second week of October brought an increase in probability of the American interest rates raise. The minutes from the last meeting of the FOMC turned out to be slightly less hawkish than expected. Nevertheless rising oil prices caused a growth in the inflationary expectations. Moreover, in October most of the economic data readings did not fail. Last week investors learnt the PPI - it stood at 0.7% y/y vs 0.4% expected. Furthermore, the dynamic of the retail sales amounted to 2.7% y/y. The result was in line with market consensus. Therefore, despite the fact that the latest data from the American labor market turned out to be quite disappointing, the FOMC seemed to be in favour of monetary tightening.

Despite the significant volatility in the financial markets, the first week of October brought slight changes of the major global stock indices. During the whole week, British FTSE250 grew by 0.7%, French CAC40 increased by 0.04% and German DAX declined by 0.2%. In the US, the S&P500 fell by 0.7%, while the NASDAQ and the DJI went down by 0.4%. This time investors focused on macroeconomic data from the US. The readings of the manufacturing ISM (51.5 pts.), the non - manufacturing ISM (57.1 pts.) and the dynamic of the factory goods orders (0.2% m/m) exceeded projections.

The economic calendar was very rich last week. Investors paid special attention to the data from the American economy. This was very important due to the investors’ expectations concerning the interest rate raise by Fed. This time readings did not fail. The publications of the Conference Board index (104.1 pts.), the Richmond Fed index (-8 pts.) and the Chicago PMI (54.2 pts.) turned out to be higher than projections. In addition, the final reading of the annualized GDP growth for the second quarter stood at 1.4% vs 1.3% expected. Meanwhile, there were releases of the confidence indices for the Eurozone. They surprised investors positively. It is worth paying attention to the unemployment rate in the Euroland as well.

In the first part of the past week investors were looking forward to the Fed’s decision on the interest rates. Most of them did not expect any hawkish changes because plenty of economic data readings from the US had failed. However, the earlier appreciation of dollar against euro could have indicated that the market did not rule out a possible change of the cost of money. Nevertheless, the FOMC did not modify its monetary policy. As a result, global major stock indices started to grow dynamically, especially in the US.

The past week was marked by significant volatility in major global stock exchanges. In Europe, the market sentiment was extremely bearish. During the whole week, French CAC40 declined by 3.5%, German DAX went down by 2.8% and British FTSE250 fell by 0.2%. Meanwhile, the US stock indices managed to end last week in positive territory – the NASDAQ rose by 2.3%, the S&P500 went up by 0.5% and the DJI increased by 0.2%. Investors focused on economic data from the US. The readings disappointed once again. The dynamic of the retail sales stood at -0.3% m/m vs -0.2% projected.