Anchor resume from 19 to 26 of May 2017

Anchor resume from 19 to 26 of May 2017

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The meeting of Greece with its creditors, the agreement between OPEC and non-OPEC members of production quotas, the FED’S minutes, the downgrade of China's sovereign credit rating, and the appearance of Mario Draghi were some of the references that marked the weekly evolution of markets.

As we were advancing, throughout the week we have had significant appointments at a global level. Especially within the Eurozone. Although the start of the week was not very positive in view of Greece's inability to reach agreements with the Eurogroup and to get the last tranche of 7.000 million Euros, Draghi confirmed the consolidation of EU’s growth ruling out strong inflationary pressures and confirming that a gradual withdrawal of stimuli will be carried out. Likewise, at the highly expansive rates reflected in the latest composite PMI data (56,8% vs 56,6%), Markit confirmed the positive and solid vision of the economy within the Euro Zone.

In this way, the European markets closed mixed; The IBEX-35 rose a +0,63%, finishing at 100 points to the 11.000, while the DAX-30 and STOXX-50 closed the week at around 12.600 (-0,29%) and 3.579 ( -0.22%) respectively.

From the United Kingdom, one of the most significant events has been the fall in the quarterly GDP rate to +0,2% compared to the +0,3% expected and previous data, which increased the falls in the pound. The loss of support from the Conservative Party in recent polls over the British elections has dampened the pound, now at levels of 0,8596 EUR/GBP (+1,52% in favor of the common currency).

During Wednesday's meeting, the minutes of the last FOMC meeting were made public. They considered the need to ensure that the slowdown from the 1st quarter of 2017 has been a transitory factor in order to continue applying monetary standardization. However, analysts' likelihood of a third rate hike in 2017 (after March and expected in June) was reduced to 47%. GDP rates for the 1Q17 stood at +1,2% (+0,9% expected vs +0,7% previous), while the leading indicator for manufacturing PMI continued to deteriorate to the (still in expansive) levels of 52,5 with respect to expectations of 53.

Weekly closures were settled with new highs recorded on the S&P500 and the EUR/USD pair making a technical rebound to 1,204 EUR/USD (-0,20%). Breakthroughs in the major US selectives were widespread, with the S&P-500 at 2.415 (+1.43%), while Nasdaq Composite went down by a -2% up to the 6.210.

As for the Asian continent, the focus was set on China due to the downgrade of the sovereign credit rating of the country to A1 from Aa3 with a stable outlook. While in Japan, we were attentive to trade data in the face of falling exports to (+7,5% from the previous data of +12%).

The market closures appeared to be flat in the selective NIKKEI-225 at 19.686 (+0,49%), while the Hang Seng did so with gains of + 2% around the 25.639.

The commodity markets were marked by the OPEC’s meeting. The price of crude lost a -2,72% reaching the 52 USD/Brent after the disappointment caused by the agreement to extend crude oil cuts. As discussed, the participating countries agreed to an extension of the current reduction agreement in production for another 9 months by 1,8 million barrels per day.

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