Market's evolution 28 of November to 02 of December 2016

Market's evolution 28 of November to 02 of December 2016


It happened again, last night we went to sleep with the non-expected news. Matteo Renzi announced his resignation following the defeat in the constitutional referendum held, leading the common currency to fall until the 1,0534 EUR/USD following the statements made. We hope that, as during last week, Draghi will appear to calm the market feeling and in order to send a message of tranquility and support.

Even so, the data we learned last week was generally positive for the Eurozone as a whole. Activity indicators remained strong in expansion areas (in expansive levels of 53,7), the unemployment rate improved by two tenths (now by +9,2%) and production price levels rose by +0,8% Compared to the +0,2% expected.

Equity markets closed with generalized falls of -1,75% in the DAX30 (being around 10.513) and -1% in the STOXX50, in levels of 2.191. Regarding the IBEX35, it closed at levels of 8.607, accumulating a fall close to -10% so far this year.

At a global level, we highlight the improvement in the forecasts of world GDP growth for 2017 to +3,3% showing a more optimistic sight about the US economy.

The most expected figure for last week in the US was the creation of non-farm employment for the month of November. The index surpassed market expectations after announcing the creation of 178.000 new positions from the expected figure of 175.000 and the previous one of 148.000. Positive also indicators of activity (manufacturing ISM at expansive levels of 53,2), but it will not be until December 14th that the Fed announces whether the rate increase will take place.

Weekly closings on Wall Street were also negative with the exception of the Dow Jones that closed flat at levels of 19.170 (+0,10%). In contrast, the Nasdaq Composite ended the week with falls of -2,65% (trading at 5.255) and -1% at the S&P500 (around 2.191).

Stability in the Asian continent, one more week without relevant news. Nonetheless, growth levels maintained a positive trend, with activity indicators in expansion rates and rebounds of +13% in vehicle sales in Japan. Also, the OCDE kept expected growth rates for China stable at +6,4%.

The selectives closed the week flat, the Hang Seng at levels of 22.564 (-0,70%), while the Nikkei225 did around the 18.426 (+0,24%).

Finally, we highlight the rebound of the Brent after the agreement of freezing of the levels of production reached by the OPEC members. In this way, production will be cut by 1,2 million barrels per day for 6 months from January. The gains led the commodity to close at levels of 54,53 USD/Brent (+15%), breaking up significant resistances. The next date will be December 10th, as a meeting in Moscow of OPEC members and non-OPEC members will be held in order to reach agreements on global production levels.