Market's evolution 28 of December to 01 of January 2015-2016
Monday, 04 of January 2016
Happy new year.
The year has been closed with all the focus of attention placed on changes in the commodity prices. This situation should not surprise us if we consider that during the last week we could not have publications of relevant data, that the holidays are usually accompanied by lower trading volume in the markets, that the holidays are accompanied by lower trading volume in the markets, and that the oil price is at its lower price levels since 2004.
For the Eurozone, the references were scarce and there has been no significant events during the week. Moreover, on Thursday equity markets traded part-time and closed on Friday because of the celebration of the New Year. The most important data published has been positive for Spain with an improvement in the trade balance, however, price levels did not achieve any improvement and it suffered drops in retail sales levels.
In the US, we witnessed declines high volatility in the TIRs of the 10 year bonds. Regarding publication of macroeconomic data, we included the lower trade deficit because there was a drop in the imports and we noticed an improvement in the investor confidence (now at levels of about 96,5 versus the 93,8 expected).
No doubts that the statements of Lagarde (IMF president) warned investors after announcing that for this year, global growth would be disappointing and noting weakness in the financial sector. This worried by the possibility that the Chinese economy suffered a slowdown. In this regard, on Friday we did not notice improvements in the Chinese levels of PMI still in levels below 50 (49,7), maintaining levels of economic contraction, and Japan, lower industrial production, factors that seriously concern the investors. This has resulted in sharp declines at the close of Asian equity markets and caused significant cuts in the opening of European markets.
As a result of the emerging economies handicap, we have seen further declines in metal prices since its demand is lower. As well, after the increase in the US crude oil stock announced and the statements made by the oil ministry from Arabia Saudi regarding no reductions in production of oil, the crude lost the ground gained during last week trading at 37,27 USD/Brent (-1,62%). The price of gold, like most commodities, continues losing ground after closing at 1,060 USD/Oz.
According to the equity markets, closures were flat (with slight cuts) except for the Spanish selective IBEX35 which suffered cuts of -1,50% closing at levels of 9.544. Similarly, closures in the US suffered cuts of -0,83% in the S&P500 as well as the technologic Nasdaq Composite (now at levels of 2.043 and 5.007 respectively). In Asia, we must highlight the rally of the Nikkei225 which closed at 19.033 after scoring +1,40%.
As far as currencies are concerned, the EUR continues losing value on the leading pair now around the 1,0858 EUR/USD after falling -1,05%.