Anchor resume from 6 al 13 of October 2017
Friday, 13 of October 2017
This week focus
The latent uncertainty in the consequences of the Catalan conflict and in the direction it takes, has been determining during the last weeks.
The credit rating agency Standard & Poor's announced that Catalonia will enter a recession if the separatist tension is maintained, anticipating a major economic impact. The first consequences were not expected, because companies like Caixabank, Gas Natural, eDreams or Colonial announced the change of registered address. From the Catalan presidency on the contrary, they expect companies to return expressing their willingness to negotiate with the Spanish state. The impact on the European stock exchanges has been significant, especially in the STOXX-50, being pushed down by the falls in the quotes of the main Catalan banks, which made it difficult for the index to overcome the existing resistance at levels of 3.600.
At a global level, growth rates have been maintained in the Eurozone. It was also confirmed by the International Monetary Fund after announcing stronger growth rates for the current year (+2,1%), thanks to a revival of the world economy. As far as the European Central Bank is concerned, we won’t know the direction of monetary policy in the region until next October 26th, however, some members of the ECB have announced that the time has come to put an end to the monetary stimulus.
The second focus was set on Brussels, where negotiations are taking place between the European Union and the United Kingdom. As of today, no agreements have been reached and no significant progress has been made in the discussions. In addition, we learned that the UK could join the North American Free Trade Agreement (NAFTA) if the country does not reach a trade pact with the European Union, making negotiations with the European Union even more difficult.
From the United States we could witness new tensions with North Korea in the face of recent events and after the sighting of six US military aircraft in Korean airspace. On the contrary, at a macroeconomic level, the outcome of the week was highly positive, highlighting the publication of weekly requests for unemployment benefits which appeared better than expected (243.000 vs. 251.000 expected and 258.000 earlier). We also started the third quarter earnings release season, for which we expect an average corporate profit growth in the third quarter of +3,6%. Yesterday we attended to the results of J.P. Morgan and Citigroup which outperformed the market expectations. While today we hope to know how the Bank of America and Wells Fargo did.
On the contrary, doubts about Donald Trump's ability to implement the tax reform weakened the dollar to 1,18 EUR/USD levels.
In Asia, we have monitored the 19th meeting of the Chinese Party Congress, where decisions about monetary policy are made, and what is associated with a better evolution of the Chinese economy. The Hang Seng is now at maximum levels of 28.476. In the same line, Japan's main selector (Nikkei-225) managed to break the existing levels of resistance in the 21.000 thanks to recent advances, the projection is set over levels of 23.000.