Market's evolution 18 of April to 22 of April 2016
Monday, 25 of April 2016
Throughout the week we had numerous references.
For the Euro Zone we followed statements made by Mario Draghi closely after the ECB meeting. Regarding the measures defined about economic policy, there were no changes carried out about the reference rate (currently set at +0%) or the deposit rate (-0,40%). Even so, they left the door open to the possibility of an increase in the amount of bond purchases, as well as an expansion of the investment universe which could include corporate bonds with high credit ratings.
As for the economic development of the region, despite the optimism shown by Draghi, the ECB Survey of Professional growth forecasts for 2016 were reduced to +1,5% from the previous +1,7%. Also, Greece could be in the eye of the storm because of the probability of leaving the Eurozone due to the difficulties that the economy is going through.
In the United States, we will be waiting until the 27th when the Open Market Committee takes place to know Yellen's vision of the economy. Opinions are mixed on the market since despite the recent reduction of weekly requests for unemployment (currently at 247.000), manufacturing indices pointed toward a contraction of -1,6% activity during the month of April. We emphasize therefore the publication of weekly data of GDP forecasts and the evolution of the American consumption that will be announced during next Thursday and Friday.
The number of analysts and investors who would point to the existence of a bubble in China are increasing, this could be formed by real estate, debt and equity markets. Alarms jumped to the latest data published about new construction starts and the high level of existing debt in the Asian economy, which led to parallels with the situation in Europe and the US in 2007.
As far as for Japan is concerned, the governor of the BOJ in recent papers referred to the probability of carrying out further stimulus that would achieve the inflation target of +2% showing concerned about the recent appreciation of the Yen. Also, the latest advance manufacturing data fell to 48 (in contractionary levels) which could point to further weakness of the Japanese economy.
The European equity markets closed with rises up to +4,31% for the IBEX 35 (now trading around the 9.232) and +3,20% in the DAX. In general, markets were helped by the rally that the barrel of Brent was marked after the publication of a reduction in US crude inventories and rumors that Russia might be planning a meeting with members of the OPEC in May.
From the US, corporate results managed to beat the benefits expected by analysts in the 70% of cases that were published. The weekly close on Wall Street ended with mixed sign; -1,52% in the Nasdaq Composite (now at 4.474 levels) and a + 5,52% the S&P500 (at levels of 2.091).
Regarding currencies, the pound and the dollar recovered ground against the common currency closing at levels 1,1230 EUR/USD 0,7792 and EUR/GBP.