Profitability Reports of our clients from September 2016

Profitability Reports of our clients from September 2016

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PANORAMA GLOBAL MACRO

EUROZONE: the reference rate and the deposit rate remained unchanged (at + 0% and at -0.4% respectively). Similarly, despite the rumors of cuts in the QE, the main members from the ECB assured that this will remain until March 2017 with possibility of extension.

  • Growth expectations stood at +1.7% for 2017 (from the previous + 1.6%).
     
  • It was requested as well support to implement further fiscal stimulus.

USA: prudent growth forecasts published by the OECD (+1.4% forecast for 2016 from the previous +1.8%). In the same vein, the Fed kept the interest rates unchanged despite the increasing support to standardize types.

  • So far, the strength of the labor market, improvements in wages and domestic consumption have not been enough to make rises in the reference rates due to the low inflation levels.
     
  • But it was the upturn in the manufacturing ISM which could anticipate a change for the next rate decision the Fed that will take place in November

UK: the British Chamber of Commerce reduced growth forecast to +1.8% and anticipated UK will be in recession in 2017.

  • Several members of the BOE were opened to implement further easing in monetary policy despite the reference rate remained in +0.25%.
     
  • The leaders of the UK remained firm in carrying out of the European Union and even the group notices this would entail the output of the common market.

JAPAN: aggressive monetary policy expansion will remain for an unlimited time according to the BOJ. In this line, there is speculation about the extent of rates into negative territory.

  • Kuroda announced that deflation is defeated, so the main objective would be focused on control of the bond yields at levels close to + 0%.

CHINA: China's situation appeared to be stabilized, the new forecasts of the Chinese Academy of Social Sciences held a positive view anticipating a growth of + 6.7% for 2016.

  • During the month, improvements in data published showed a rise in retail up by + 10.6%, industrial production by 6.3% and 52.1 in the services PMI.

FINANCIAL MARKETS

  • The weekly balance in equity markets was generally negative. In Europe, the IBEX 35 was down -3% (hovering around the 8.624), while the STOXX50 did a -2.57% (in 3000), while the FTSE100 rallied up by + 2% boosted by the increase in exports due to the depreciation of the pound.
     
  • Similarly, markets from the US and Asia finished mixed; while the S&P 500 was down by -1.20% (around the 2.153) and -0.39% in the NIKKEI225 (remaining at levels of 16.860), the Nasdaq Composite managed to score a +0.80% and the Hang Seng went up by +2.51% (closing around the 5.292 and 23.851 respectively).
     
  • Board cuts at sectoral level. We highlight the falls of -5% in the Telecommunications and Utilities, the exception being the energy sector which rose by + 2%.
     
  • As for volatility, we are witnessing a rise of + 12.52% in the VIX in view of the upcoming elections in the US, the ineffectiveness of monetary policies, weak economic data and recent corporate scandals (as the fine imposed on Deutsche Bank).
     
  • The pound continued losing ground and benefiting from a cheaper currency in relative terms. The rebound of the euro against the British currency was + 7% (closing around 0.90 EUR / GBP). Meanwhile, Yen continued to strengthen him (now at 115.24 EUR / JPY).
     
  • In fixed income markets we find widespread upturns animated by the rumors concerning a cut of the QE in Europe IRRs.
     
  • As for commodities, blips of +10% in the price of crude overcoming the resistance of 50 USD/Brent, while the ounce of gold went down by -5%.