Anchor resume from 15 to 22 of December 2017

Anchor resume from 15 to 22 of December 2017


Political events continue to be the main orientation of the markets towards the end of 2017. The elections in Catalonia, the approval of the fiscal reform in the United States and the negotiations for the formation of a coalition government in Germany, kept the attention of the investors throughout the week.

In Catalonia the results of the elections expand the uncertainty in the region, the difficulties in governance and the tension between the parties remain. Given this scenario, investors maintain prudence and remain attentive to the next movements of the different political forces and the Government of the nation. For the moment, the impact on European indices has been limited with mixed movements at the end of the week. The Ibex 35 retreated to 10,100 points, while the Dax ended at levels of 13,074, while Eurotoxx50 did so in the area of ​​3,551 points.

Continuing with the political issue, the fiscal reform in the United States that has catalyzed the markets during the last weeks, has finally been approved as one of Trump's main triumphs during his term. The markets see positive a softening of the fiscal policy; which includes, in general terms, the reduction of corporate tax, additionally proposes incentives for the repatriation of extraterritorial profits of companies and for individuals will have a decrease in the tax rate that presupposes an upward effect on retail consumption.

The final consent of the House of Representatives was applauded by the investors leading the selective North Americans to close at levels of 2,684.25 points for the S & P 500 and around the 24,780.65 points for the Dow Jones.

Meanwhile in Germany, the conservatives of Angela Merkel and the Social Democrats set the maximum date to reach an agreement on January 12, 2018, until no progress is announced, markets will continue with uncertainty about the country's governance. This feeling has been transferred to business confidence as confirmed by the Ifo index that has fallen below expectations (Current 117.2) in December after having reached its maximum level the previous month.

The most relevant macro data of the week were: in the United States, the publication of the GDP for the third quarter which was 3.2% without reaching the market expectations (Expected and previous 3.3%), with a remarkable performance of corporate benefits. In addition, we have the current account data which fell more than expected in the third quarter to levels of -100,600 million USD.

Regarding monetary policy, the period of Central Bank meetings ended this year with the announcement of the Bank of Japan to maintain its stable reference rate and its current stimulus program. Although the economy is already on a recovery path with favorable activity data and a positive trade balance data with a surplus of 113,400 million yen, even consumption does not suggest improvement, so the decision was based on the inflation figure which remains far from its 2% target (Current 0.7%). Additionally, the Nippon government approved the budget for 2018 which increases defense spending and spending on the pension system. To achieve its objective, it will resort to issuing debt for 33.92 trillion yen.

These measures suggest a more accelerated economic growth for next year, which has already been discounted by the markets placing the Nikke225 at levels of 22,832 points without major variation in the week.

In the commodity market, the Brent barrel ended the week around USD 64, driven by a drop in US crude reserves above expectations. For its part, gold ended with a slight advance in levels of USD 1,270.

Related News

Dec 27

Anchor Research

Market's from 15 to 22 of December 2017

Dec 27

Economic Calendar

Economic Calendar from 25 to 29 of December 2017