Market's evolution 29 of February to 04 of March 2016
Monday, 07 of March 2016
After the G20 meeting, we cannot highlight relevant agreements, the week in the Eurozone began with the Euribor with negative sign and, as for the US, with a large battery of macroeconomic data.
The number of investors who question and criticize the effectiveness of monetary policies being carried out by the central banks is increasing after the poor results obtained with the recent measures implemented (known as QEs). More specifically, for the Euro Zone, it was highlighted the need to establish a mutualisation of the debt and the risks that would lead to a lack thereof for the viability of the European Union. As far as the evolution of the economy is concerned, despite having published economic data in line with expectations, the pace of expansion of the activity slackened highlighting the data French PMI below the levels of expansion, so we could say that the activity of the French economy fell down to contraction levels (below the reference value of 50).
The United States continued surprising with improvements in the labor market, although the trend was not the same for the manufacturing sector which showed weakness due to the reduction in demand in the energy sector and the strong dollar, resulting in a deterioration of the trade balance for January (45.680 million USD against the expected 44.000 million). As a result of the disparity in the results of activity and employment, messages from different Fed members were in many cases opposed, so we will wait until March 16th when it will take place the Open Market Committee to know what measures monetary policy to be taken and forecasts for the US economy.
Since China carried out further cuts in RRR (requirement ratio for bank reserves) in order to brake the outflow of capital from the country and promote the flow of money into the economy, and announced reductions in the production of iron ore driving up the value of the commodity. On the contrary, the vision of the Chinese economy is still negative given the low credibility in stabilizing the Yuan and the publication of Moody's assigned a negative to debt issued in the country Outlook.
Equity markets were boosted by expectations of further actions by major Central Banks, closing the week with gains of +5,54% in the IBEX35 at levels of 8.811, it was followed by the EUROSTOXX50 now around the 3.037 ( + 3,69%). In the United States rebounds were quite moderated; a + 2,76% the technological NASDAQ COMPOSITE (4.717) and + 2,67% in the selective S&P500 (around the 1.999). The NIKKEI225 However, went up +5,10% despite the mixed data released for the area discounting further intervention from the Central Bank of Japan.
As for currency, levels between 1,08 and 1,10 EUR/USD remained with no important changes. As to highlight, the pound rebound -1.87% from the Euro, recovering positions and closing the week at levels of 0.7730 EUR/GBP.
Undoubtedly the week was also positive for commodity markets highlighting the rise of + 10% in the price of a barrel of Brent (38.75 USD/Brent) on rumors of a possible agreement between oil producers.