Market's evolution 02 of May to 06 of May 2016

Market's evolution 02 of May to 06 of May 2016


"Sell in May and go away", a popular saying from the world of the trading would be perfectly applicable to the first week of May. The markets, saw its cuts intensified after the poor non-farm payrolls data published during Friday in the United States.

Such data, quite followed by all the analysts, led investors to deduct a greater intervention of the Fed and a delay of further rate hikes since the economy has not rushed as expected. In the same vein, the leading indicator of the economic activity, reaching the border of 50, involved a recessive level maintained or stood down. Thus, the selective closed flat at 2.057 levels in the S&P500 and the Nasdaq Composite around 4.736, as well as the US currency was affected negatively by closing with cuts of -0,45% in the EUR/USD closing at 1,14.

The result was not much better in the Eurozone; the IMF highlighting again the high levels of debt that developed countries could reach during 2016. Throughout the week, Christine Lagarde (IMF president), took the opportunity as well to ask ministers of finance in order to retake the negotiations with Greece and to lighten up the burden of debt that this country supports as a condition to receive further an aid packages.

As the Hellenic country, the risk of Brexit continued being in the eye of the storm because in recent surveys the YES has been being the predominant result. In consequence, the cuts were widespread closing at 8.700 levels in the IBEX 35 and around 2.936 the EUROSTOXX50 with falls of -3,60% and -3% respectively. As for currency, the EUR continued making progress regarding the GBP, now trading around the 0,79 EUR/GBP.

From Asia, this week took place the celebration of the Japanese Constitution. However, the markets collapsed after the publication of further deterioration of the economic activity (PMI levels at 48,2) due to further declines in factory orders and production levels. The weekly close of the NIKKEI225 stood at 16.106 after the fall of -3,36%.

Regarding China, the Popular Bank announced that the prudent monetary policy will continue taking place and that it would implement major fiscal stimulus after marking the fifth consecutive month of decline in the manufacturing indicator which was placed back into contractionary ground.

As for the commodity markets, the Barrel of Brent again closed at levels of the 45 USD/Brent after the price of crude oil fell up to a -5,73% without catalysts to overcome the significant upward resistance located at levels of the 50 USD/Brent.