Profitability Reports of our clients from September 2017

Profitability Reports of our clients from September 2017

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GLOBAL MACRO PANORAMA

EURO ZONE: The OECD increased the growth forecasts from the Eurozone to +2,1% from the +1,8% previously forecasted. 

The published activity rates presented levels of strong economic expansion, benefited especially by a greater demand.

The ECB is expected to announce the start of the tappering process within the next meeting.

The German elections were settled with the victory of Merkel despite of the rise of the Ultra right party. So, the German chancellor will need to govern with coalition. Agreements are not expected before Christmas.

Disciplinary proceedings against Greece became closed, confirming the country's recovery. Growth forecasts are slightly below +1,5%.

In Spain we remain attentive to the path that can take the unilateral declaration of independence and the application of the article 155 by the Spanish government. 

UNITED STATES:  

After the last meeting from the FED, the reference rates within the range [+1% - +1,25%] remained unchanged, and the beginning of the reduction of the balance sheet was settled to October.

In the minutes subsequently published negative effects on the economy due the passage of Hurricanes Harvey, Irma and Maria were ruled out in the medium term. In addition, growth forecasts increased to +2,4% from +2,2% previously predicted.

The latest published ISM data (current 60,8 vs. 58 expected) led companies to increase profit growth forecasts in anticipation of increases in demand.

We maintain the conflict with North Korea in the spotlight.  

UNITED KINGDOM: The BOE Committee maintained rates at +0,25% and QE levels unchanged. Nevertheless, the minutes took a more Hawkish tone, after mentioning forthcoming withdrawals of stimuli that could be faster than the market has already discounted.  

The uncertainty generated by the Brexit justified the waiting attitude of the Bank of England in order to implement changes into its monetary policy decision, despite the fact that the CPI of August reached its highest rate of inflation within the last 5 years. To this we must add the recent loss of support of the British Prime Minister Theresa May.

JAPAN: The Japanese prime minister announced early elections in the country in order to strengthen his position. Abe is expected to receive such support and to re-elect Kuroda as governor of the BOJ. 

Maintenance of the rates in the -0,1% unchanged due to the weakness in the price levels. 

CHINA (Mainland): Standard & Poor's reduced China's rating to A+ anticipating greater economic and financial risks.  

Economically, the economy continues to consolidate activity expansion rates (manufacturing PMI September 52,4 act vs 51,6 exp. and 51,7 prev.).

There were falls in the trade with North Korea, motivated mainly by the application of the ONU’s sanctions against the Pyongyang’s government.

From yesterday and during the next days we will follow very closely the evolution of the XIX National Congress of the CPC, from which political and economic measures will be derived for the Chinese economy which will have impact on the global economy. 

FINANCIAL MARKETS (as of 01/09/2017)

European factories became weakened by the Catalan crisis, especially the IBEX-35. Likewise, the EUROSTOXX-50 remained on the threshold of surpassing the levels of resistance located in the 3.600 levels weighted by the Spanish financial equity. On the other hand the selective DAX-30 went up reaching levels of historical maximums.

In the US, the advances became generalized, the technical view of the selective supports the upward trend of the main indexes as well as the flows and the macro view. In case Donald Trump succeeds in approving the tax reform, we expect further progress, while in the opposite case, we might find ourselves facing sharp declines.

The Asian markets also made important progress, especially the NIKKEI-225 (+5%), which has broken the resistance located around the 21.000 and the projection levels are located at 23.000.

At the sectorial level, progress was generalized with the exception of utilities, gold and precious metals, and non-cyclical consumption sectors. On the other hand, the greatest advances were recorded within the energetic, financial and industrial sectors.

The drops in the pound were maintained, motivated by the high probability that the Brexit will finally lead a tough outcome.

The Brent Barrel has strengthened psychological levels of the 55 USD/Brent in the face of the conflict in Kurdistan and the stoppage of crude production from the recent hurricanes in the United States.