Anchor resume from 31 of August to 7 of September 2018
Friday, 07 of September 2018
This week focus
A week full of macroeconomic data ended, the activity indicators no longer show the synchronized growth at the beginning of the year, while the factors of political and commercial uncertainty become more acute as the days go by.
In the Euro Zone, GDP grew 0.4% in the second quarter of 2018 compared to the previous period, although the year-on-year figure was below the estimates given the low growth of countries such as France and Italy, meanwhile, Spain, growth above the average by 0.6%. The contribution of the sector was negative as well as the weak household consumption; the last figure of retail sales, a decrease of -0.2% in July, to the previous month, being little encouraging in the face of future consumer publications.
For its part, the manufacturing and services PMI for the month of August was in line with the consensus to the weakness of these indicators in the large economies such as Germany and France.
In general, Germany have remained below expectations, in addition to the decrease in the composite PMI, industrial production contracted in July -1.1% (estimated + 0.2%), while exports decrease to -0.9% ( estimated + 0.2%).
Therefore, it is not ruled out revisions in growth prospects by the European Central Bank at its next meeting, in which the entity is expected to maintain its position, with the measures of special rates, which are purchases reduced to 15,000 million of euros euros from this month until the end of December.
In the United States we have mixed data, protectionist measures have already begun to weigh on the trade balance registering a deficit of -50,100 million dollars, while the deficit with China reached the maximum of -36,800 million dollars. The manufacturing PMI was surprised to the upside while the data of employment remained solid in 3.9% the line with the expectations of the market.
For its part in China, the PMI composed of Caixin yielded up to 52 points, with an expected decline in the manufacturing sector as a result of trade difficulties with the United States, however the weakness in the services sector surprised the consensus that expected better result .
With regard to monetary policy, we will be attentive to the meetings of the ECB and the BOE that will take place next week, no modifications are expected from either of the two entities. Notwithstanding the BOE, after having adjusted the rates at its August meeting by + 25 bps, could change its rhetoric given the recent inflation figure that stood at + 2.5%, the entity in its statements confident that the price index will converge to target of 2% in a period of two years. Notwithstanding the depreciation of the pound given the fear of a hard Brexit, it will generate continuous fluctuations in the British CPI.
Despite the proximity of the monetary policy meetings, the fixed income market did not show greater variations except for the Italian debt, which reached a 10-year IRR close to 3% prior to the presentation of the general budgets which could lead to an increase in public spending placing the risk premium above 260bps.
On the contrary, the equity market had strong movements throughout the week. In Europe the bearish days continued, the IBEX35 fell to 9,160 points with a drop of -2.64% while the DAX had a variation of -3.31% and the Eurostoxx50 of -2.86%.
On Wall Street, the main indices corrected after reaching highs in the previous week, the S&P500 to 2,760 points -0.81%, the Nasdaq to 7,453 points, down -2.63% while the Dow Jones finished flat at 25,990 points.
The Asian markets failed to escape the bearish tone, the Hang Seng dropped -3.28% while the Nikkei225 retreated 1.65% and the Sensex -1.04%.
The EUR / USD finished around 1.162 dollars per euro, with an appreciation of the single currency of 0.19%. Meanwhile, commodities ended the week down, Brent benchmark oil at levels of US $ 76.50 / barrel and gold around US $ 1,199 / oz.