Market's evolution 30 of November to 04 of December 2015
Tuesday, 08 of December 2015
The measures announced by Mario Draghi after the ECB meeting had a devastating impact on the financial markets worldwide.
As we mentioned, the focus of the week was set on the monetary policy changes announced by the European Central Bank after the meeting. Those measures consisted in a reduction up to -0.30% for the deposits of the bank rates from the previous levels set at +020%, their intention was to increase the levels of liquidity in the economy. In addition, the QE program was extended till the end of 2017 with a possible increase in the total monthly debt bought up to 70.000 million EUR. These measures had a negative impact on markets causing sharp falls in European equity markets and firing up yields on government bonds as the market discounted greater measures than those that had been carried out.
The trail followed by the United States was also negative since the measures carried out were perceived as moderated and made the investors increase the likelihood of normalizing the interest rates in the next meeting of the FED. This fact caused sharp falls in the main equity markets. The good macroeconomic data published concerning the labour market would support this action too.
In Asia it’s necessary to highlight the bad data published in China about the PMI manufacturing activity remaining for the ninth consecutive month in shrinkage levels which could mean that the region has difficulties on sustaining previous levels of growth and may be anticipating a recession of its economy.
As for Japan, the latest data that we have known, showed a favourable outlook of the economy as the consumer confidence improved into a considerable way although the advanced levels of PMI have been lower than expected, but they are still higher than the levels of 50 showing expansion of the economy and positive growth.
Thus, European stock indexes closed the week with losses. The Ibex 35 was down -2.25%, while the Eurostoxx 50 ended the week a -4.53% below the previous one. In the United States, following a sharp rebound on Friday, the S&P500 ended the week flat (+ 0.10%). In Japan, the Nikkei 225 also lost ground with a weekly return of -1.91%
In Forex, the EUR appreciated in the week against the USD, closing at 1,088.
As for commodities, the oil was in the spotlight since the rumours after the OPEC meeting pointed out to increases in the levels of production agreed, causing a devastating effect on the price of raw materials by dropping to low levels. The week closed at $ 43.21 leading to a drop of -3% in prices.