Market's evolution 28 of September to 02 of October 2015

Market's evolution 28 of September to 02 of October 2015


There are too many analysts who speak about the need for a catalyst to alleviate the negative sentiment prevailing in the markets. Despite the disappointing start of the last week, the main selectives closed in positive territory on Friday, offsetting in some cases weekly losses. Despite this, we have a lot of opened fronts: China, interest rate decisions, profit warnings, ...

The week in Europe was marked by the publication of the leading indicator of manufacturing sector, despite showing continued growth, selective advances were mixed without relevance. Conversely, bad data concerning the IPC, affected positively bringing about increases after discounting rises of the QE by the ECB. Note the improvement in the forecasts published by the rating agency S & P concerning the growth for Spain during the 2015 to + 3.2% from + 3% previously.

The possibilities to carry out the rise in interest rates during the month of October in the United States walked away. After the disappointing data released last Friday concerning the labor market, the main upward reacted selective closing in positive territory after deducting that out would not carry a rate hike immediately. These data pointed to a decline in non-farm employment and could impact negatively on the interest rate decision taken by the FED.

In Asia, the focus continued being manily China, where the manufacturing PMI data appeared to be stabilized, while Caixin private survey showed the opposite (with the worst data being published for 6 years). Reported earnings in industry were reduced by 8.8% in August after falls of the commodity prices. In the same vein, according to analysts at JP Morgan, Japan would be in recession after the poor data published by cutting production projections Q3 GDP to -1%.

More and more investors have decided to reduce exposure in riskier assets. After a start of a week that seemed to incurre into losses, finally stock markets ended on Friday mixed in Europe and in positive territory in the US. While the German DAX closed with cuts above -1.41%, the IBEX35 closed in positive with a + 1% of progress. In the US, stock markets closed the week with gains of up to + 1% in the major indexes.

In the currency market the EUR scored slight gains against the US dollar in recent sessions after trading between 1.11 and 1.13 EUR/USD.

In the commodities market, cuts in the price of the Brent again trading around $ 48.13 USD/Brent after the publication of the World Bank concerning that the price of crude were revised downwards its price forecasts and maintaining high volatility.

For this week, we expect to know the first results published for the main companies in the US and hear the words of Draghi after the ECB meeting on Thursday, 8th. We will be aware of published news about it since both factors could significantly affect the existing market sentiment.