Market's evolution 17 of October to 21 of October 2016

Market's evolution 17 of October to 21 of October 2016

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During the last days the markets fluctuated following the updates of macroeconomic data, the last debate of the two main applicants for the presidential seat in the US and the meeting of the European Central Bank.

As expected, throughout the week we have witnessed ups and downs in the markets (especially in the Euro Zone). Thus, we highlight the consistent recovery in consumer price levels which maintained the positive tone advancing a +0,4% in line with previous estimates. As for the findings of Draghi in his appearance after the ECB meeting, they did not follow what the market expected since despite leaving unchanged the reference in the +0%, they did not specify cuts (tappering) or extensions at current levels of QE. Also, the ECB President announced that December’s meeting will be much more decisive as to the implementation of changes is concerned.

In result, widespread advances were made for the main selectives with a +3,79% in the IBEX 35 (closing around 9.100), a +1,79% in the STOXX50 (now at 3.077 levels) and the DAX went up by +1,23% (around the 10.710).

As for the British pound, the currency continued moving downwards with regard its main peers (especially the dollar) following the statements made by Theresa May in which she acknowledged that an exit from the European Union could lead the region to go through difficult times in first instance. However, during the last week it regained some ground against the Euro, closing around the 0,8898 EUR/GBP.

From the United States the main market mover was considered the victory of the Democratic candidate Hillary Clinton after the televised debate against Donald Trump. Secondly, although it was not followed so closely, we have noted the publication of the Fed Beige book where the favorable decision of the economy again highlighting the strength of the labor market and consumer spending remained. Macroeconomic updates accompanied as well with new advances in production levels (+0,1% from -0,4% previously) and price levels (with a +0,3% from the previous +0,2%).

The markets closed flat despite good corporate results published so far. The Nasdaq Composite was the selective that starred the biggest advance closing around the 5.257 (+0,83%). While the S&P500 finished the week at levels of 2.141 (+0,38%).

Widespread progresses were made in Asian selective. The new liquidity injections from the Popular Bank of China boosted the markets as well as the maintenance of growth rates at +6,7% did. Mixed data from Japan; while industrial production stood at levels lower than anticipated by the market (+1,3% from the forecasted +1,5%), the Tankan Manufacturing indicator of activity stood at levels of 10 from the +5 updated in September.

As for the commodity markets, the Brent closed with slight losses in the absence of catalysts to confirm cuts or freezes in production levels trading at 51,78 USD/Brent. As for the ounce of gold, advances of +1,30% trading at levels of 1.266.