Market's evolution 09 of May to 13 of May 2016

Market's evolution 09 of May to 13 of May 2016


Equity markets extended another week without changes, being aware of the publication of important macro data last Friday.

In Europe, the Hellenic country monopolized the attention. Greece approved again a package of tax and pension reforms and obtained extensions in the repayment terms of the debt, which had an immediate effect on the bond market driving down risk premiums. Nonetheless, the Eurogroup asked for major reform measures and required to reach an agreement with its creditors before the 24th of May.

Leaving aside the political uncertainty, macroeconomic data was generally negative. The levels of growth slowed to a rate of +1,5% from the previous figure of +1,6% without price levels progress. Because of this reason (and the absence of new catalysts), the European equity markets closed without progress. The German DAX ended the week flat at levels of 9.952 (+0,84%), and the EUROSTOXX50 around the 2.956 after trying to break upside resistance at levels of 3.000.

From the UK, we continued pending the statements made by major global organizations and surveys in UK concerning the risk of Brexit. In recent days, the Bank of England left rates unchanged and lowered growth forecasts up to +2% from the previous figure of +2,2%.

On Wall Street, the weekly balance in equity markets was more negative, with the Dow Jones closing at levels of 17.535 (-1,16%), while the S&P500 and Nasdaq composite closed flat (around the 2.046 and 4.717 respectively). In the same vein, the macro data was mixed, the retail sales was the most expected by investors, and surprised on the upside (the rise was of +1,3% compared with the previous figure of +0,8%). However, price indices were below than expected.

No news of importance from the Asian economies, markets were mixed with advances in some selective like Japan (now around the 16.412 with an rise of +1,90%), while decreases were of -2% in the selective Chinese Hang Seng.

Without large fluctuations in the currency markets, both the dollar and the pound marked progress regarding the euro (now around the 1,1305 EUR/USD and 0,7871 EUR/JPY). However, the yen lost ground against the euro (now at levels of 122,80 EUR/JPY).

Regarding raw materials, crude made an increase of +5,42% scored (now trading around the 47,83 USD/Brent) after new data pointed to a decline of nearly -6% in production of the commodity so far this year.