Anchor resume from 2 to 9 of March 2018
Friday, 09 of March 2018
This week focus
We end the first week of March with recoveries in the main stock markets. The focus of attention of investors at the beginning of the week was the results of the elections in Italy and Germany, then the focus was on the monetary policy meeting of the ECB and, finally, on the new tariffs announced by the USA.
In Germany, the political landscape no longer worries the investors, the Social Democratic party voted in favor of the coalition agreement with the party of Angela Merkel, in a consultation with a high participation rate. Thus, the country will emerge from the political blockade that had suffered since the September elections.
For his part in Italy, the general elections demonstrated the strong division among the citizens. As a result, no political force reached the absolute majority and now the country faces the need to form a block of government that accelerates economic growth and faces the debt; if we take into account that with regard to the latest data from the GDP of the Euro Zone, all the countries in the region show a synchronized growth and the recovery has exceeded the levels prior to the last crisis; The exception has been Italy that despite showing the lowest unemployment rate over the past five years and sustained quarterly growth, is still lagging behind the other Euro countries.
In any case, the Italian political uncertainty was not an impediment for the FTSE MIB to move about 500 points with a 2.03% weekly change leading the winnings of the area. The DAX, for its part, won 1.66% by rounding the 12,312 points, while the Ibex35 ended the week with a positive variation of 0.48% and the Eurostoxx50 recovered by 1.75%.
The good performance of European equities was supported by the robustness of macro data published: PMIs in the expansive zone and annual GDP growth of 2.7%, in addition to the favorable position of the Central Bank regarding the economic growth of the area, as announced by the president of the entity Mario Draghi.
Following the recent monetary policy meeting of the ECB, no changes were announced, in line with expectations, the level of purchase of assets will remain the same as interest rates, however, the statement does not allow the possibility to expand The stimulus program beyond September, as in previous meetings had been pointed out, given that the economy is moving faster than expected. However, it is clear that inflation is still far from the objective, which suggests that the entity's accommodative position will be maintained for more than one year.
On the other side of the Atlantic, the main indexes also recovered ground. The S & P500 advanced 1.75% around 2,740 points while the Dow Jones stayed close to 24,895 points. The statements by the US administration to exclude from the tax on imports of aluminum and copper to Mexico and Canada were held by investors, who were also positive about the possibility of extending these exceptions to other allied countries. Additionally, it has been announced that there would be a meeting between President Trump and North Korean leader Kim Jong which has released the optimism of the markets during the last day of the week, fading the fears of commercial and geopolitical conflicts.
However, in terms of macro data, the scenario was different, this week we met the US trade balance, which surprised negatively (Current -56.6Billions, estimated -53Billions) reaching maximum levels of 10 years. We will also be attentive to the employment data that will be published at the end of the week.
The good behavior of the American and European market contagious the Asian continent of optimism with advances of 1.36% in the Nikkei225 closing in 21.469 points and an advance of 1.35% in the Hang Seng. The Japanese GDP data above expectations was the main catalyst at 1.6% per year, just like the position of the Bank of Japan that announced its monetary policy unchanged.
In the currency market the EUR / USD pair ended the week around 1.23, losing value over the previous week. Regarding comodities, Brent declined near - 63.3usd / barrel while gold closed the week around 1,322 USD /onz.