Market's evolution 07 of December to 11 of December 2015

Market's evolution 07 of December to 11 of December 2015

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Financial markets ended the week facing high levels of volatility brought about by the existing confusion on the markets. Although published macro data has been scarce, the lack of catalysts, the sharp declines in raw materials prices and the focus placed on the rate decision of the 16th of December, did not favor the evolution of the stock markets, so we have faced further cuts.

In Europe, data about debt levels has been published and has shown weakness and risks for some countries like Spain which levels are around 99%. This led the European Commission to consider carrying out further adjustments in order to cut the deficit. The need of new reforms was also pointed out in order to reduce the high levels of unemployment and to promote investment and credit. As far as the outlook is concerned, inflation forecasts for 2016 suffered a reduction up to +1% from the previously expected levels (at +1,1%).

The published macro data for the US economy has increased the investor doubts to the action that Janet Yellen will take according the standardization of rates. In fact, the focus for the next session will be on the rate decision taken by the FED and the effect that this will have on the markets.

According to emerging economies, those have been severely affected by heavy falls in raw materials (now in minimum levels). As a result, the yuan hit their lowest levels of four years.

European stock markets failed to overcome the recent disappointments that resulted from the actions taken by the ECB. The most affected was the IBEX35 with kicks of -4,55% (now at levels of 9.630), while the German DAX despite having suffered cuts close to -4%, has managed to maintained the bullish channel on the 10.340 levels. English FTSE100 selective was negatively affected by the fall in the oil price, closing the week at levels of 5.952 with cuts of -4,68%.

In the US, the S&P500 lost the bullish channel closing with cuts of -3,87%, falls were also widespread in other American selective like in the NASDAQ COMPOSITE (-4.15%).

As a relevant fact, the recent rises of the EUR with respect to their principal exchange rates afterwards the ECB decided to conduct new measures of monetary policy weaker than expected leading to reach levels of 1,10 EUR/USD (+1%).

As for commodities, Brent prices fell to minimum levels since the OPEC members did not agree in cuts of production leading to a drop of -12,55% in the oil quote in recent sessions. The weekly close was set around 37,36 USD/Brent, and if the trend is maintained, this could lead to defaults in the less competitive oil companies.