Anchor resume from 27 of April to 4 of May 2018

Anchor resume from 27 of April to 4 of May 2018


We start the month of May with intense days in macroeconomic publications and with the meeting of the Federal Reserve that was not surprised to keep its interest rate unchanged. The decision was based on the fact that inflation has not yet achieved the 2% target, despite the underlying CPI accelerating to 1.9% year-on-year, which reinforces the probability of an increase in the June meeting.

Regarding the economic outlook, in the statement the FED stressed that the fixed investment of companies continued to grow at the same time as the labor market has strengthened, unemployment is at minimum levels with a rate of 4.1%, the good performance of The economic data warns of an upward movement in prices, however in the statement the FED shows its intention to continue tightening monetary conditions as data continue to advance.

Thus, while in the United States the macroeconomic data disturbs investors by suggesting a faster than expected advance in the economy and thus inflationary pressures, in the Euro Zone the lower rate of progress in the indicators is a source of concern. The preliminary reading of the CPI for April fell back to 1.2% year-on-year; as well as the rhythm of growth for the first quarter, which stood at 2.5% (previous 2.7%).

The composite PMI continued in an expansive zone, although it declined for the third consecutive month to a level of 55.1, while retail sales increased at a slower pace with a monthly variation of 0.1% (after 0.3%, estimated 0.5%). As for the unemployment figure, it was in line with the estimates, standing at 8.5% for the month of March.

At the political level, the approaches between the United States and China to establish agreements on tariffs printed days of volatility especially in the technology sector, where the concerns of the US government have been concentrated, for the moment the results of the meeting are not known, however the parties are expected to limit the unilateral measures of tariffs, which would give part of tranquility to the markets.

The disparate macroeconomic publications added to the uncertainty due to the state of the commercial relations, diverted the attention of the investors with respect to the business results that, at a general level, continue exceeding the expectations; As a consequence, the main stock indexes ended the week with mixed closures.

In Europe the IBEX35 led the weekly gains overcoming the barrier of 10,000 points with an advance of 1.18%, was followed by the DAX that ended around 12,748 points adding 1.0%, while the Eurostoxx50 and the FTSE100 barely varied 0.29% and 0.01% respectively.

On Wall Street, the Dow Jones retreated -1.57% to levels of 23,930 points, while the S & P500 closed around the 2,629 points with a fall of -1.5%, penalized by the appreciation of the US dollar against its peers in the expectation of monetary tightening by the FED. In addition, we watch a change in equity flows towards the bond market, which has generated a slight downward movement in yields at a rate of 2,946 for the 10-year treasury.

In Asia, we have the PMI Manufacturing (Caixin) publication for the month of April, which exceeded the market consensus up to 51.1 from the previous 50.9, while in Japan the composite PMI was 53.1 from 51.3 in the previous month. The favorable activity data encouraged the stock market to close positive, the Hang Seng advanced 0.11% to 30,313 points, while the Nikkei ended the week at 22,472 points adding 0.02%.

In the commodity market, oil moderated the rise of the previous week and stood at around 73.62 USD / barrel, a fall attributable to the increase in inventories in the United States that reached 435.96 million barrels, the highest figure during this year, while gold fell -0.81% to levels of 1,311 usd / ounce.

For the next week we will be attentive to the results of the trade negotiations between the United States and China, we will also have a monetary policy meeting by the Bank of England and with the publication of the inflation data in the United States.

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