Anchor resume from 22 to 29 of December 2017
Friday, 29 of December 2017
This week focus
Theresa May ,
We ended the last week of the year making a global balance of 2017, which in general was marked by the good performance of the markets. In Europe, the main index performed better than in the previous year despite the political issues that occupy the investment focus: Brexit and Cataluña. In the United States, the selective ones advanced exceptionally, with new historical highs driven by the good results of the companies and the recovery of the economy for the last year. Asia, in line with the trend of global exchanges, advanced dramatically while raw materials recovered ground against previous years.
As for currencies, the Euro was the winner in 2017 with advances of over 13% against the dollar, a behavior that surprises markets with the latest movements of central banks. On the one hand, the FED raised interest rates three times and began to reduce its balance sheet while the European Central Bank has kept rates at minimum. However, other factors have weighed more on the weakness of the dollar as the continued uncertainty in the Trump mandate and the slow progress in inflation. Looking ahead to the year that begins, the main drivers of the EUR / USD pair will be the announcements of the European Central Bank regarding the withdrawal of stimuli and the evolution of the economic recovery in the Euro Zone; on the side of the United States will be the inflation data and the political factor.
Thus, the European economy shows a favorable scenario; with a growth higher than expected, a fortified currency, a controlled political environment after overcoming the risks that were seen at the beginning of the year with the rise of nationalist parties within the Eurozone; and although the political uncertainty of Brexit and Catalonia still remains, the main stock indexes do not reflect pessimism in investors and keep the IBEX35 on the 10,000 points with slight drops in recent days but with an annual advance close to 8%, while the FTSE 100 INDEX ends at around 7,622.9 points adding 7% gains in the year. In Germany, the DAX had a positive performance advancing 13% in 2017, overcoming the difficulties of governance after the last elections and in light of the formation of a government coalition.
For its part, the public debt of the Euro Zone has had a slight decrease during the last months in the long term yields. While in the United States and the United Kingdom long-term yields increased, as a result of monetary policy decisions and expectations of further rate increases by the FED and the BOE.
In the United States, undoubtedly the shares of the Dow Jones and the S & P500 were the most valued during the year, with several aspects in their favor, among which we highlight that 77% of the publications of corporate results surprised positively with benefits much higher than the expected, we also highlight the approval of the tax reform proposed by Trump that includes general reductions in taxes that will further increase the profits of companies, which in recent months gave an additional boost to markets with advances of more than 20% in the year.
In Asia, the announcements of the Bank of Japan that suppose the continuity of the economic stimuli before data of inflation far from the objective, the continuous injection of liquidity to the markets on the part of the Issuer in China and the good performance of its economic growth, maintained the markets in the region with significant advances, with an annual + 19.1% in the Nikkei225 at levels of 22,784.0, while the Hang Seng ended at around 29,863.7 points with gains of 36% during 2017.
As regards the commodity market, oil recovered part of the lost ground of previous years and advanced to 66USD / Barrel, driven mainly by OPEC and other countries outside the group, to maintain until the end of the year. 2018 the production cuts, in addition the dynamism of the main economies has favored the demand of the crude and the expectations for the next months. As for gold, like most commodities, it ended up in positive territory in the face of the best prospects for global growth.
Regarding the macro references, we have few publications, however, we highlight the CPI data in Japan which advanced in November by 0.9% year-on-year as a result of the increase in energy prices, this indicator completes almost one year of consecutive increases, but still far from the 2% target; The unemployment figure was also published, which stood at 2.7%, with a 0.1% decrease compared to the previous month. On the part of the United States, we have the consumer confidence index, which fell back to levels of 122.1 units in November (Previous 129). While in the Eurozone the most relevant data of the last days was the growth of the Monetary Mass which was at 4.9% in November (Previous 5%, estimated 4.9%).
For the next week we will be attentive to the publication of the advanced indicators of PMI activity in Europe and the United States. In addition, we will know the interannual variation of the CPI in the Euro Zone (estimated 1.5%), while in the United States the most important reference will be the unemployment rate (estimated 4.1%).