Anchor resume from 27 of October to 3 of November 2017

Anchor resume from 27 of October to 3 of November 2017

Ana Martínez

During the last week we have had important references. Especially, the main Central Banks meetings, which monopolized the attention of the investors.

One of the most followed events has been the meeting of the Federal Reserve Committee where, although the new rate hikes whas expected, Janet Yellen announced that the interest rates remained without any changes within the range of + 1%, +1,25%. , leaving the door opened for a new interest hike for the next meeting in December.

The main US speculators maintained maximum levels, the S&P500 rose up to levels of the 2.580 benefited by a good season of results that is coming to its end. By the moment, about 75% of the companies have published their profits, of which 75% have exceeded their profit forecasts.

In terms of macroeconomic developments, it also favored the latest advances in the selective ones. Especially, the data of the ISM manufacturing, with levels of expansive exonomic activity (now at levels of 58,7), also, the ADP employment report confirms the strength of the labor market (with the creation of 235,000 new non-agricultural jobs).

At a political level, Donald Trump announced the next president of the FED. This decision did not surprise the market since Jerome Powell figured as one of the alternatives anticipated by the market. His incorporation as president of the Fed will take place during the next month of February. There are no major changes in the applied monetary policy, since its position is very close to that of Yellen (dovish).

The EUR/USD remained around levels of 1,165 without significant changes. For the next week we expect to know more about the collaborators of the election campaign of Donald Trump, accused of maintaining ties with Rusia alterating the result of the US presidential elections. As well as the tensions with North Korea, after they flew two bombers near the Asian country along with Japanese and South Korean warplanes.

From the Euro Zone, the results season presented good news as well; with 66% of companies exceeding growth forecasts. We counted with the publication of important macro data, which benefitted the vision for the region. Especially, regarding the confidence of the companies and the consumers, which maintained in average levels of 114 (with respect to the 113.4 expected), the rates of growth of the GDP stood at +2,5%, surpassing forecasts and previous data of + 2,1%. However, we still do not observe increases in the price rates after the last data of the CPI, which stood at +1,4% with respect to the +1,5% expected and previous.

In the United Kingdom we also had the Bank of England's meeting. As expected, a rate increase of 25 basis points up to +0,50% was carried out. However, expectations of a new monetary tightening was reduced, the expectation of observing the path taken by the Brexit. The impact this had on the pound was immediate, pushing down the British currency to 0,88 EUR/GBP.

While in the Asian continent, at the Bank of Japan meeting, the forecast is changed in monetary policy and in the reference rates, the forecasts of inflation for the year in the course were also cut. Establishing the CPI target of +0,8% for the fiscal year of 2018 and increasing growth forecasts to +1,9%. As a main reason for the reduction in growth forecasts, special emphasis was placed on the weakness of domestic consumption. However, the latest data on manufacturing activity presented a good performance of Japanese activity (now around the expansive rates of 52.8). On the contrary, in China, the indicator suffered a slight drop to levels (still expansive) of 51,6.

In terms of raw materials, it is worth noting the latest advances in the price of crude oil, especially due to the sharp drop suffered by the IEA oil inventories -2.43 mlns vs. -1.75 million consensus.

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