Market's evolution 24 of October to 28 of October 2016

Market's evolution 24 of October to 28 of October 2016


The week was finished with the publication of the latest US GDP data, meanwhile the focus this week is located at the meetings of the major central banks that are to be held over the coming sessions. The published figure beat market expectations being placed at +2,9% compared to the compared +2,5% expected by all analysts, (in contrast to the previous update of +1,4%).

No big news highlighted for last week, the attention was focused on the figure of gross domestic product in the United States which led to downward turns in face of the increase in the probability that the Fed will carry out a rate hike in view of the improvement of the growth data. In the same vein, the earnings season is being generally good, with a 75% of the companies beating the forecasts estimated by the market. The closures resulted with cuts for the main indices (-1,28% in the Nasdaq Composite, which is now trading around the 5.190 and -0,69% in the S&P500 now at levels of 2.126). As for the currency, despite the rebound of the dollar after the country's growth data in the Euro weekly balance it benefited respect the US dollar closing at 1,0983 EUR/USD (-0,93%).

Positive outlook for the Eurozone as well. The composite PMI data for October led to increases in growth expectations since the advanced indicator rebounded presenting expansionary rates at 53,7 with respect to the 52,8 expected. In this line, the confidence indices also showed improvements reflecting an environment of progress. However, the German finance minister placed special emphasis on the inability that the Eurozone is showing to resolve internal "small crises" as the Brexit, associating it to the need of consolidating internal stability to be strengthened in terms of foreign policy.

Regarding the UK, it was announced that English banks are about to fear greater restrictions of access to the single market in case that the Brexit goes ahead. In contrast, macroeconomic data remained positive. The last, the GDP data which stood at +0,5% with respect to the expectations of +0,3%.

Parks ended the week mixed. While the IBEX 35 went up by +1,11% up to the 9.201, the German DAX went down to levels of 10.696 (-0,14%).

The Outlook in Japan improved after getting a slower decline in exports (-6,9% now) and the consequent rise in the leading indicator of manufacturing activity (51,7 respect previous levels of 50,4).

The Japanese markets rebounded to levels of the 17.446 (+1,52%) animated by the good macroeconomic data and the support shown by the BOJ. Instead, the Hang Seng suffered cuts of a -2% in a semi-festive week in which no reference data was published.

Regarding commodities, the protagonist was the barrel of Brent again after failing to maintain levels of 50 USD/Brent. Since the Minister of Energy from Irak ruled out the possibility of introducing cuts in the production levels pushed down the price of the crude, closing around the 49,71 USD/Brent.

The main references highlighted for the next week will be: the meeting of the Bank of Japan (Tuesday), the Federal Reserve US (on Wednesday), and the Bank of England (next Thursday). In addition, US jobs data and the leading indicators for major economic regions are important indicators that are about to be published within the following sessions.