Market's evolution 16 of May to 20 of May 2016
Monday, 23 of May 2016
The week has been marked by the publication of the minutes from the last FOMC’s meeting. This document showed the positioning in favor of a rate hike in June; Most Participants Judged That if incoming data was consistent with economic growth picking up in the second quarter, labor market conditions Continuing to Strengthen, and inflation Making Progress Toward the Committee's 2 percent objective, then a it likely would be Appropriate for the Committee to Increase the target range for the federal funds rate in June.
Again, the decision will be relegated to the publication of macroeconomic data that supports positive growth levels. However, the market quickly discounted that possibility, leading the dollar to recover ground against its major pairs (closing around the 1,1222 EUR/USD). Similarly, yields on US government bonds rose up driven by higher expectations of a rate hike.
As for the equity markets is concerned, Wall Street closed with slight gains among which we highlight the advance of +1,10% of the Nasdaq Composite (now at levels of 4.769), while the S&P500 continued flat, incapable of breaking the upside the resistance levels located at 2.110.
In Europe, despite following closely the statements from the different members of the Fed, the evolution of Greek and British outcome continued concerning economists and investors. As for the German finance minister ruled out another Greek crisis, the IMF could be pushing for Greece's creditors to fall behind 2040 the start of debt payment, and to extend maturities until the 2080.
The minutes made by the ECB, maintained a positive tone as well after decreasing the anticipated risks. Members pledged as well to boost inflation to its target of + 2%. In contrast, levels published in the latest update prices remained negative without making any progress (-0,2% yoy) and the bulk of production continued contracting (-0.9% vs. -0.6% previously present).
The main selective ended the week mixed with kicks of -0,37% in the German DAX (now around the 9.916) and slight gains in the Spanish selective (now at levels of 8.771).
Regarding Asia, equity markets maintained its positive tone, with rises up to a +2% in the Japanese index Nikkei225.
In his last appearance, the president of the BOJ announced the possibility that new expansionary measures were carried out in July after reducing their inflation expectations. Regarding China, further falls were recorded in the indices of business sentiment (-0,9%) and fears of a new bubble continued after the last price spike in new housing.
As for commodities, the Brent remained at levels of 48 USD/Brent without further cuts after Goldman Sachs published an analysis of the oil market in which it was pointed out to the end of the oversupply of the raw material.