Market's evolution 12 of October to 16 of October 2015

Market's evolution 12 of October to 16 of October 2015


Throughout the week, the financial markets were affected by the publication of those economic data that could shed some information that would affect the interest rate decision from the Fed. The focus was set in the risk of global deflation remained present after the recent declines in major price indices in Asia, USA and Europe.

There is growing concern that central banks have the inability to create inflation. In addition, in Europe, we paid special attention to the possible Brexit, concerning whom Angela Merkel spoke in a conciliatory tone after declaring their willingness to work constructively with the UK in order to avoid leaving the Eurozone.

In the US, the confusion regarding the rate hike is still present in the spotlight following the increasing divergence of opinions. While the president of the FED considered that it should be done raising rates before the end of the year, other members as the governor of the Federal Reserve is positioned on the opposite side. As for the economic health of the region, in the publication of the Fed Beige Book revealed that growth, although positive, was being moderated after the weakening of consumption and manufacturing activity and poor wage growth.

The external environment remains complex and unstable, especially after the latest data concerning the Chinese economy. In response, the Chinese government announced new interventionist measures in which they pretended to reorganize the telecommunications industry reforming state enterprises. In addition, investors anticipated new interventions that could give out between Monday 26th and Thursday 29th of October, the date on which will take place on Chinese National Congress.

Usually, the main stock markets ended mixed in Europe despite the bad start of the week. The German DAX at levels of 10.104 (+ 0,08%), the EUROSTOXX50 closed at 3.264 (+ 0,45%), while the IBEX 35 ended Friday's session at levels of 10.231 with  cuts above the -0,76%.

Conversely, in the US, the week was closed in positive reaching increases up to a +1,16% the NASDAQ COMPOSITE and the S&P500, while in Asia, Japan's selective NIKKEI225 closed with cuts of -0,80%.

The Euro turned down over the week on expectations that the ECB will carry out further expansionary measures. While the EUR/USD ended the week flat at levels of the 1,13 the EUR/GBP did on 0,73.

As for commodities, the fall in the price of Brent still present after finishing the week at levels of $ 50.46 / Brent, placing the maximum and minimum weekly on 48 and 53 USD / Brent. Expectations for crude remains bearish after be known that OPEC crude oil production increased in September.