Anchor resume from 26 of January to 2 of February 2018
Friday, 02 of February 2018
This week focus
The last monetary policy meeting of the Federal Reserve was the main driver of the markets throughout the week. The decision to keep interest rates unchanged did not come as a surprise to investors, however in the statement there are changes that recognize additional improvements in activity as well as improvements in inflation prospects.
With regard to economic activity, the FED noted an advance in household consumption as well as business investment, in addition to the better behavior in the labor market, which follows a more optimistic perspective that would lead to increases in the interest rate for the next meetings. Additionally, at her last press conference, Janet Yellen referred to her replacement in the presidency of the entity, indicating that there is consensus within the committee for making gradual adjustments, and that in the consensus is her successor Jerome Powell.
It is expected that for the March meeting, the FED will increase its rate to the range of 1.50% - 1.75% to the extent that the activity and employment variables continue to show a better performance, and that inflation approaches the target.
Although the Fed's statement had a bullish tone, the depreciation of the US dollar remained a constant and the EUR / USD ended the week at levels of 1.25EUR / USD.
At the political level, the markets were attentive to President Donald Trump's first speech on the State Union before the congress, which did not surprise, maintained its nationalist tone while highlighting the good moment of the American economy. However, he did not refer to issues of interest such as trade relations with the other countries of North America and the Trans-Pacific Agreement.
For its part, in the Euro Zone, we have the publication of GDP for the fourth quarter of 2017, which stood at 0.6%, exceeding market forecasts and recording an expansion of 2.5% for the full year. It is likely that these data lead to an upward adjustment in the growth forecasts of the ECB at its next meeting and that favor a less accommodative language.
In the stock market, the week was marked by a generalized profit taking by investors and an increase in volatility. The IBEX35 and EUROSTOXX50 had declines close to - 3% during the last week.
For its part, in Germany the DAX ended around 12,842 points with a decline of -3.73%, the German index has been heavily penalized by the appreciation of the currency that affects exporting companies, as well as negotiations between the The government and the Social Democrats will not have results until the end of March, so the uncertainty will remain latent.
In the United States and Asia, the behavior was not different, and the main indices ended in negative territory. The S & P500 cut its gains by -1.8%, while the Dow Jones did 1.6%. On the other hand, in Asia, the Nikkei225 finished at levels of 23,274.53 points, decreasing -1.51% and Hang Seng at 32.601 points (-1.6%).
As for raw materials, the prices of gold and crude ended the week without major movements. Oil closed at around USD 69 / barrel, while gold stood at USD 1,349 / oz.