Anchor resume from 20 to 27 of July 2018
Friday, 27 of July 2018
This week focus
Central Bank of the Republic of China,
Business results and economic appointments marked the pace of financial markets throughout the week; in the Euro Zone we have the meeting of the governing council of the European Central Bank, while in the United States the commercial escalation continued to be news with the meeting between Donald Trump and the president of the European Commission Jean Claude Juncker after which it would have arrived to a commercial approach; However, with China, tensions have intensified and the differences between Washington and Beijing have become increasingly radical.
After the meeting of the ECB its president, Mario Draghi did not surprise investors by confirming that interest rates will remain stable until the summer of 2019, additionally he was optimistic about the economic outlook, in terms of inflation he acknowledged that he remained moderate , but trusts that it will move towards its objective, additionally affirmed that the risks of a commercial conflict would not change the normalization plan of the entity. Draghi's statements had no major impact on the European debt market, the 10-year German bond ended at 0.405% with an increase of 3.20bps in rate, while risk premiums remained stable.
Meanwhile, in the United States, 10-year Treasuries rose again to 2.97% reflecting investors' interest in safe haven assets in the face of growing commercial uncertainty; On the one hand, the meeting between Trump and Juncker resulted in a principle of agreement that will prevent commercial war, although the summary of the meeting was not very detailed, within the key points it was agreed an increase in imports of soybean and liquid gas by part of the EU, as well as the review of tariffs recently imposed on steel and aluminum and industrial products by the United States. Despite the optimism generated by the rapprochement between the two economic blocs was overshadowed by the intensification of tensions with China, after the Asian country adopted new expansive fiscal and financial policies that have triggered a depreciation of the Yuan, while representatives Chinese and Americans presented to the World Trade Organization increasingly distant positions on the role of the state in the economy.
In the area of variable income, business results were the main drivers of the market, compared to the previous week the trend remains: 70% of American companies have exceeded estimates while in Europe it has 60% of the publications. However, we see with special attention that important companies by capitalization have defrauded the market, such as the case of Boeing commercial aircraft sales, the slower pace of growth of Facebook and the cut in General Motors forecasts, which generated negative intraday in the main indices. However, with respect to the previous week, the markets recovered their optimistic tone.
The IBEX 35 finished at around 9,860 points with an advance of 0.61%, while the Eurostoxx50 advanced 1.2% to 3,509 points. On the other hand France and Germany, added gains in the order of 1.6% and 2% respectively, driven by the industrial sector to benefit from negotiations with the United States.
On Wall Street, despite the fall of Facebook, the main indexes settled in green week. The Dow Jones advanced close to 1.8%, the S & P500 ended the week at around 2,760 points + 1.27% while the Nasdaq limited its gains to 0.4% at 7,852 points.
In the Asian markets the Hang Seng advanced 1.97% compared to the previous week while the Nikkei225 finished at 22.586 points, decreasing 0.49%.
In the currency market, the EUR / USD closed the week at 1.1641 -0.66%, while the Chinese currency continued to depreciate after the People's Bank of China liquidity to the banking system. On the other hand, commodities presented a mixed behavior, Brent reference oil was revalued 2.1% to 74.54USD / barrel and gold dropped -0.74% to levels of 1,222USD / ounce.
The next days will be determined by the first estimate of the US GDP which will be published today at the end of the day, we will also know the GDP of the Euro Zone of the second quarter; In addition, the markets will move the evolution of the commercial escalation and the new decisions of China in the exchange field.