United States
After reaching its weekly high at 2075, following good news from Facebook earnings, the S&P 500 fell to a low of 2033 and finished at a mid 2053 the end of earnings’ season. The Fed Once again proved to be Dovish and incapable of raising rates which drove the dollar index to its fifteen months low this week at 92.626 and finished the week at 93.8, 0.8 higher than last week. According to ADP data, the economy failed to reach the expectations of adding an additional 200k jobs in April 2016, releasing a figure of only 160k, the lowest in 7 months. Despite that, the employment rate is steady at around 5%.
Brent, which closed last Friday at a 48.17 high since January, was down to 45.32 at the end of this week. Although supply uncertainty helped the oil regain a bit from its intra-week low of 44.35, the tragic fire in Canada didn’t cause a rally as US showed a strong position in oil stocks.
EU
After EUR/USD reached a 6-month high of 1.1593, it finished the week at 1.1404 following uncertainty regarding the Eurozone as a whole.
Euro Stoxx 50 fell to 2896 at the end of this week, after opening this week at a high of 3041.
Next round of Greek negotiations are around the corner. As the motto of the new film “My Big Fat Greek Wedding 2” is “People change. Greeks don’t” we can surely expect that on July the 20th, maturity of a 2bn € worth bond, Greece and the Eurozone whole economical and political situation will become come back as a daily concern. But as some economists note the threat of Grexit isn’t back: it was never really out.
Focusing on periphery, the troubled Italian banking system is now held on the shoulders of the 4.3bn € fund Atlante. Designed to be a rescue fund for the financially weakest Italian banks, it includes a stake sale in the 10th biggest Italian bank Banco Popolare di Vicenza. Italian market reacted skeptically and the spread between Italian and German government bonds widened closing on Friday at 1.35 percentage points, after having touched 1.37, the most since February.
UK
This week hasn’t been positive for UK with Purchasing Managers’ Indexes in Manufacturing, Construction and Services for April scoring all below expectations; in particular, with a reading at 49.2, also lower than the previous 50.7, the Manufacturing sector appears to be under contraction. Services and Construction also show figures lower than the ones for March, but remain slightly above the 50 threshold.
These disappointing data led to a depreciation of the GBP, which opened the week at 1.46 against the US Dollar and closed at 1.443. This week’s euro depreciation softened the effect of UK’s disappointing results in the GBP/EUR exchange rate, however it still lost ground closing at 1.2652 down 0.5% from the opening.
FTSE 100 dropped by about 1% during the week closing at 6125.70.
Labor Party candidate Khan’s victory for London’s mayor elections was a strong signal towards a NO vote in the Brexit referendum of June.
Rest of the World
This week, after a holiday start in China and Japan, saw a plunge of Asian markets on the back of Nikkei 225 0.3% fall. Shanghai Composite dropped 2.8% closing a 2913.25 together with Hing Kong’s Hang Seng Index which lost 1.7% to 20109.87.
US traded Chinese companies that announced their intention to go back home also closed the week on a negative note following the announcement of Chinese regulators’ potential measures following the recent surge in the number of companies seeking relisting in their mainland.
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