Anchor resume from 15 to 22 of June 2018

Anchor resume from 15 to 22 of June 2018


The statements of the central bankers in the framework of the Sintra symposium captured the attention of the markets throughout the week, not because of the news regarding monetary policy, but for their speeches in relation to risks to the economy, especially commercial tensions and the Italian political organization.

The leaders agreed that the trade conflicts between the United States and China and the European Union would be a detractor of growth in the short term. Jerome Powell said that trade policy could cause the FED to change its economic outlook, since uncertainty can cause companies to postpone their investment decisions, however he made it clear that so far this has not happened; On the other hand Mario Draghi maintained his narrative maintaining the confidence in a gradual recovery in the inflation of the Euro Zone emphasizing the importance of maintaining the monetary union.

For its part Nowotny of the ECB, in relation to the political situation in Italy, considered that any effect should be limited, noting that the risks to financial stability lie more in political factors than in the economy itself, as happened throughout the week with the appointment of Alberto Bagnai in the finance committee of the Italian Senate which generated a setback in the debt markets.

The Italian risk premium registered a rise of 20.8bps and infected Spain and Portugal. The investors decided to reduce their positions in the face of the risk posed by the arrival of the Euroskeptic ideas of Bagnai, who has repeatedly spoken out against the budgetary restrictions of the European Union.

In this sense, aversion to risk was a constant, leading to German debt at levels of 0.33% for 10 years, while American treasuries did the same, reaching levels of 2.89%.

For its part, the bonds of the United Kingdom were also valued with a change of -5bps in rate after the decision of the Bank of England to maintain stable reference rates. In this regard, it should be noted that a greater number of committee members considered an increase to be appropriate, which soon anticipates movement by the entity, boosting the Pound sterling at 0.8760 levels against the euro.

In the equity market the main driver continued to be the commercial conflict unleashed by the United States. American companies with business exposure in China are already starting to see declines in their prices, while European export companies weighed the stock indices of the region.

At the end of the week, the falls in the DAX and the CAC40 were in the order of -2.7% and -3.1% respectively, pushed by the industrial sector. On the other hand, the IBEX35 fell to 9,779 points as a result of the decline of the financial sector, while the EUROSTOXX50 ended the week at around 3,450 points with a decrease of -1.6%. Trend that I can not refute the publication of the PMI composed of the Euro Zone that exceeded expectations to stand at 54.8 (expected 53.9)

In the United States, the weakness of the industrial sector, which depends to a greater extent on world trade, led the Dow Jones to a drop of around -2.0% weekly, while the S & P500 finished around 2,760 points, decreasing -1.0%.

The Asian markets also closed in negative, the Hang Seng lost 30,000 points with a weekly variation of -3.34%. while the Nikkei 225 ended the week around 22,693 points with a drop of -0.69 points.

On the other hand, the prices of raw materials fell back in a generalized way, investors have remained cautious while waiting for the OPEC announcements after the meeting that is taking place today, in which an increase could be decided. in the production. The benchmark Brent oil, at the time of writing the report, was trading at around 73.95USD / Barrel, while gold was at 1,266 USD / Ounce.

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