Anchor resume from 12 to 19 of May 2017
Monday, 22 of May 2017
The latest news coming from the United States and the growing geopolitical tensions caused changes in the main selectives due to a new flight to quality.
During recent weeks we have been reiterating the low levels in the VIX volatility index. For now, the situation appears to have experienced a change after the rebound of +15% up to 12 (levels still well below the historical average) due to the impeachment that the president of the USA could face. After it became known that Donald Trump could have provided secret information to Russia and that this could mean his dismissal, fears that the policies presented by the US president would not be carried out and the negative effects that this would entail in the markets were raised. With all this, we witnessed slight setbacks in the US stock markets, which ended with the S&P-500 around the 2.381 (-0.38%), while the Nasdaq Composite did so within the 6.083 (-0,61%).
The effects were also negative for the dollar which closed at 1,12 EUR/USD with a fall of 2,53%, in benefit of the Euro and the Yen that acted as safe assets.
The week was also a bit turbulent in Brazil due to the scandal raised by country president Michel Temer, accused of bribing a witness in a corruption investigation. The falls were of -8%. This could be an investment opportunity as macroeconomic data continue to support the recovery of the economy and falls could be reversed.
From the Eurozone, the ECB’s minutes did not present changes, the speech we were already hearing (the withdrawal of stimulus seems to be close but there are still no agreements on timing to be applied) remained the same as weeks before. Macroeconomic data met expectations, annualized GDP data maintained the +1,7% expected and consumer price rates stood at +1,9%. As for the political area, Merkel's victory in the Rhineland regional elections along with Emmanuel Macron's willingness to increase cohesion within the EU reinforced sentiment within the Eurogroup.
With this, government bond markets acted as safe assets with declines within TIRs, while markets fell slightly. The IBEX-35 closed around 10.835 (-0,57%), followed by the DAX-30 (now in the 12.638) with -1% falls, and the EUROSTOXX-50 (in levels of 3.587) which Fell by -1,40%.
Generalized cutbacks also in Asian markets. The latest news regarding Japan suggests that Kuroda could follow another year under the BOJ. Macroeconomic data was also positive for the region thanks to the recent pick-ups in machinery orders (+34,7% compared to the previous 22,8%) and the stabilization of industrial production (-1,9% versus the previous -2,1% above). The Japanese NIKKEI-225 dipped back to 19.590 after falling about -1,50%, while the Hang Seng remained unchanged at 25.174
As for commodity markets, the price of crude oil continued to recover from the recent declines. Expectations at the next meeting between OPEC and non-OPEC member countries to extend production cuts led the Barrel of Brent to pick up a +5,45% to the 53 USD/Brent. And as with the rest of safe assets, the gold ounce became benefited by the latent uncertainty in the market, leading the commodity to recover a +2% ending the week at levels of 1.255 USD/Onz.