Market's evolution 31 of October to 04 of November 2016
Monday, 07 of November 2016
Principal Central Bank’s meetings (the Japanese, North American and the English one) monopolized the market's attention due to the possible changes in the interest rate benchmarks and the monetary policies applied. Broadly speaking, we do not highlight significant changes. However, the president from the Federal Reserve Janet Yellen emphasized the possibility that the rate hike finally takes place during the next meeting in December.
The trend in the publication of quarterly business results remained positive. Similarly, macroeconomic data resulted positive as well. As expected, the US maintained the quarterly growth rates at +0,3%, the trade deficit was better than expected (USD 36.440 million compared to the USD 37.800 million expected) and manufacturing activity remained expansive in 53,4. By contrast, the employment data were worse than expected, the Fed members blamed for the situation in the US labor market is close to full employment levels. Even so, the main selectives suffered cuts "concerned" about the outcome of the US elections after Donald Trump would cut differences in opinion polls after be known that the Democratic candidate was being investigated by the FBI.
With all this, weekly closures resulted in declines of -3% in the Nasdaq100 and close to -2% in the S&P500, now at levels of 4.660 and 2.085 respectively.
European markets closed in the red, dragged down by the falls suffered in the US stock markets. The IBEX 35 lost the levels of 9.000 finishing around the 8.791 after suffering cuts of -4,45%. The evolution of the DAX and the Eurostoxx50 was not much more positive; it fell down by -4% ending the week at 10.259 and 2.954.
As the evolution of the Eurozone remained with its positive trend, with the German economy being one of the main engines of the set after upgrading manufacturing activity in levels of 55 (clearly expansive data).
The Bank of England kept the reference rate at +0,25% and QE levels unchanged. As a result, we highlight the blips of 1,30% in the pound trading around the 0,8895 EUR/GBP. In the comments made by the president from the BOE was highlited, the fact that the consumer confidence and business investment were above forecasts. In this line, the growth forecasts increased up to +2,7% from the +2% previously.
For the Asian region, we highlight the decision made by the Bank of Japan to keep monetary policy unchanged and the deposit rate, pursuing the goal of keeping the 10-year bond stable at 0%.
However, markets closed negative following the trend of the United States; with falls of 3% in the Nikkei225 (now at 16.905).
As for commodities, crude oil was again most penalized asset. The reason is found in the threat launched by Arabia Saudi to increase production levels due to Iran's refusal to freeze their production levels. Thus, the barrel of Brent fell back by -8% to 45 USD/Brent.