Market's evolution 01 of February to 05 of February 2016
Monday, 08 of February 2016
The declines in yields on European government bonds were not accompanied by rallies in equity markets as it would be expected. The weak economic data and poor financial situation through which Italian Banks are passing, hardly penalized those European indices.
The German Bund, with IRRs at historic lows, was the clearest reflection of the uncertainty in the global outlook. Draghi for his part, conveyed tranquility due to weak price levels arguing that growth prospects are rising, even so, pointed to the need for structural policies to support economic recovery.
In Europe the possibility of Brexit remained being the subject that focused the attention of investors because of the negative effects it could have on the output of both; the United Kingdom and on the European economies. The aim of Cameron (UK Prime Minister) would agree on a reform before calling a referendum.
The balance was negative for the entire US economy. Bad data published on Friday in reference to labor market worried the markets after suffering a sharp drop in nonfarm payrolls in January. This could delay the expected rate hikes in the US and would anticipate a reduction in the levels of economic growth.
For Asia, we include the statements of the Chinese Economy Planner, which said that global conditions would adversely affect China as global growth was showing very low rates. Even so, they expect to achieve levels of growth of between +6.5% and +6%. In Japan, the message of Kuroda went on line to support the economy through monetary policy.
The equity markets suffered again deep cuts, especially at the banking sector in Europe since it was known that Italian banks did not capitalized as required by the EU. In addition, the worrying situation of many companies in the energy sector and mining as Arcelormittal, which decided to carry out a capital increase worth in USD 3,000 million with the objective of reducing debt, turned on the alarm lights of the investors. Setbacks in Europe were up to -5.5% in the Eurostoxx50 losing its support in levels of 3.000, and -5,20% in the German selective. In the same vein, in the US the falls went up to -6% in the Nasdaq100, now trading around the 4.024.
As far as currency is concerned, we highlight the rise of the EUR against the USD discounting that rate hikes will not take place in the US economy in the short term, the weekly close stood at 1,11 EUR / USD after scoring a + 3%. As for the pound, it continued to lose positions on the EUR closing the week at around the 0,77 EUR/USD.
Crude oil managed to maintain price levels above 30 USD/Brent despite seeming impossible to conduct a meeting between OPEC and non-OPEC members. Otherwise, gold benefited from the latent uncertainty markets trading around the 1,173 USD/oz. after scoring a +5%.